Investment incentives in Cameroon

Law No. 2013/004 of 18 April 2013 fixing the incentives for private investment in the Republic of Cameroon.

The National Assembly deliberated and adopted, the President of the Republic promulgates the law reads as follows:

General Provisions

Article 1(1) The presence law sets incentives for private investment in the Republic of Cameroon, applicable to natural or legal persons Cameroonian or foreign, resident or non-resident, under the conduct of their business or their equity Cameroonian companies to encourage private investment and increase domestic production.

Common Incentives

Article 4 may be entitled to benefits under the provisions of this Act, any investor whose activities comply with all laws and regulations, which meets one of the following criteria:

  • Jobs for Cameroonians during the operational phase and the size of the company and the sector of activity, up to a job at least for each from five (05) million francs CFA to twenty five (25) million CFA francs planned investments, as applicable;
    • Annual export activity up to 10 to 25% of sales excluding taxes;
    • Use of national resources to the extent of 10-25% of the value of inputs;
    • Contribution to the value added from 10 to 30% of revenue excluding taxes.

Tax Incentives and Customs

Article 5: incentives are granted to the investor during the setup and operation phases.

Article 6: During the installation phase, which may not exceed five (5) years from the date of issue of the approval, the investor receives the following benefits:

  • Exemption from registration fees of acts of creation or increase of capital;
  • Exemption from registration fees leases buildings for purely professional as an integral part of the investment program use;
  • Exemption from transfer duty on the acquisition of buildings, land and essential to the realization of the investment program buildings;
  • Exemption from registration fees of contracts for the supply of equipment and construction of buildings and facilities necessary for the realization of their investment program;
  • Full deduction for technical assistance fees in proportion to the amount of the investment, determined by the total amount of the investment;
  • VAT exemption on services related to the implementation of the project and from abroad;
  • Exemption from registration fees concession contracts;
  • Exemption from tax;
  • Exemption from taxes and duties on all equipment and materials related to the investment program;
  • VAT exemption due to the importation of such equipment and materials;
  • Direct removal of equipment and materials related to the investment program during clearance operations.

Article 7 (1) During the operational phase, which may not exceed ten (10) years, in consideration of the size of investments and expected from these economic benefits, the investor may receive, as appropriate, of exemptions or reductions in payment of taxes, duties and other charges following :

  • Minimum charge;
  • Corporation tax;
  • Income tax;
  • Registration rights relating to loans, loans, advances on current accounts, bonds, increase, reduction, reimbursement and liquidation of the capital, or any transfer of activities, ownership or enjoyment of property, leases or of shares ;
  • Tax on income from movable capital (IRCM) on the occasion of the distribution of income in the form of dividends or other to be specified in the agreement;
  • Special tax revenue (TSR) phase of project development and construction on payments to foreign companies in return for work performed or used in Cameroon, provided that they are billed at cost ;
  •  Taxes, registration fees and stamp duty in connection with the transportation of products from processing;
  • Customs duties and all other fees and taxes for the importation of equipment services for all types of building materials, tools, spare parts, intermediate products, supplies and consumables n ’ having no locally manufactured equivalent, except for duties, taxes and other charges of non-fiscal nature in the nature of a service fee ;
  • Customs duties applicable to the export of equipment for the construction and equipment of plants;
  • Any tax, fee, charge or expense of any nature whatsoever based on the revenue generated by the processing company;
  • Any tax, fee, charge or expense of any nature whatsoever based on the revenue generated by the processing company;
  • Any transfer tax, the purchase or sale of foreign currency, and any indirect consumption tax which the special tax on petroleum products.

(2) The investor may also receive the following benefits:

  • Deferral of losses until the fifth year following the year of their occurrence;
  • The exemption to pay duties, taxes, and customs fees on imports of capital goods to be allocated and used for its investment program.

(3) At the end of the period referred to in paragraph 1 above, the investor is paid back automatically to common law.

Article 8 (1) an investor can benefit from a tax credit provided to fulfill one of the following criteria:

  • Hire at least five (5) graduates of Higher Education per year;
  • Fight against pollution;
  • Develop sporting, cultural or social activities;
  • Develop public interest activities in rural areas.

Article 11: Due to the importance of properly assessed project, the State may exceptionally extend the benefit of some tax and customs exemptions to shareholders, promoters and local contractor’s investor by contract.

Financial Incentives

Article 12: (1) The investor is exposed to the exchange rate regime of the Republic of Cameroon.

(2) Subject to the fulfillment of obligations, particularly with regard to the exchange rate regime and tax legislation, the investor receives the following benefits:

  • The right to open in the Republic of Cameroon and overseas accounts in local and foreign currency and to perform operations;
  • The right to collect and retain freely overseas funds, purchased or borrowed from abroad and freely available;
  • The right to collect and retain abroad freely revenue related to their operations, dividends and any kind of capital invested and the proceeds of liquidation or realization of their assets ;
  • The right to pay directly to the foreign non-residents of goods and services necessary for the conduct of suppliers;
  • Free transfer of dividends and proceeds from the sale of action in case of disinvestment.

(3) The expatriate staff employed by the investor and resident in the Republic of Cameroon has the free conversion and free transfer to the country of origin of all or part of the amount owed, subject to the prior payment taxes and other dues to which it is subject, in accordance with the regulations.

Special Incentives for Priority Areas

. Article 14 – In addition to the above incentives, special incentives may be granted to companies that make investments to achieve the following priorities:

  • Development of agriculture, fishing, livestock breeding of packaging and storage of products of animal or plant origin fisheries activities;
  • Development of tourism and recreation in the social economy and crafts;
  • Development of housing and social housing;
  • Promotion of agro-industry, manufacturing, heavy industry, construction materials of steel metal construction of maritime activities and navigation;
  • The development of the supply of energy and water;
  • Encouragement of regional development and decentralization;
  • Fight against pollution and environmental protection;
  • Promotion and transfer of innovative technologies and research and development;
  • Export Promotion;
  • Promotion of employment and vocational training.

Article 15 – Any company that plans to make the investments to achieve the priority objectives referred to above is entitled, as the case for the benefit of common incentives below. :

  • VAT exemption on loans related to the investment program;
  • Exemption from property tax on buildings built or not, part of the site dedicated to the processing unit and all extensions estate by destination;
  • Live at the request of the investor Removal;
  • Recording the fixed law;
  • Special Temporary Admission of industrial equipment and materials likely to export.

. Article 16 – Businesses with export operations have in their activities:

  • From the exemption from export duty on locally manufactured products;
  • From the inward processing under the customs code.

About The Author

John Muhaise-Bikalemesa (JMB), is the founder of Muhaise.com blog and bigdrumassociates.com company. Learn more about him here and connect with him on his social medias below

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