DEMOCRATIC REPUBLIC OF CONGO
1
PRGSP
POLICY, PLANS AND PRIORITIES
The Poverty Reduction and Growth Strategy Paper (PRGSP) and the Government
programme for the period 2007 – 2011 as detailed illustration of the PRGSP are
the two documents guiding the economic and social development of the country.
The PRGSP builds on five strategic pillars:
(i) promoting good governance and consolidating peace;
(ii) consolidating macroeconomic stability and macroeconomic growth;
(iii) improving access to social services and reducing vulnerability;
(iv) combating HIV/AIDS; and
(v) promoting community activities.
The Government Medium-Term Programme (2007-2011) has then developed a
strategy with five priority areas, namely: infrastructure, employment, education and
health, water and electricity. With these two documents, Government intends to
restore the rule of law and to rebuild the country with access to basic social
services for the majority of the population. In June 2007, Government furthermore
agreed on a Priority Actions Programme (PAP) to promote growth in the country
and reduce poverty.
Regions of Priority
The Investment Code defines 3 economic regions that have been classified
according to their degree of economic development. Incentives for investors have
been developed depending on the region they invest in:
Region A:
Region B:
Region C:
Priority Sectors
City of Kinshasa
Bas Congo, Town of Lubumbashi, Town of Likasi, Town of Kolwezi
Bandundu, Equator, Eastern Kasai, Western Kasai, Maniema, Kivu
North, Kivu South, Eastern Province, Katanga
ANAPI and the government have identified investment opportunities and
encourage investments in the following sectors:
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Mining and Hydrocarbons;
Agriculture, Forestry, Farming and Fishing;
Industry: Manufacturing & Basic metallurgic industries;
Electricity and Potable Water;
Banking;
Infrastructure;
Tourism;
Transport & Harbours;
Telecommunications;
Building, Public Works and Habitat (civil engineering).
Even though ANAPI is not responsible for approving investment project in all
sectors listed above, a completed file with all relevant project information has to be
provided to ANAPI.
National Reform
Process
Based on the negative ranking in the World Bank Doing Business report 2009
placing DRC at the last position out of 182 countries, and diverse complaints from
the private sector, the Government initiated an overall reform process reviewing
national legislation and procedures in diverse sectors. Committees have been
created consisting of key ministries and the private sector and chaired by the Prime
Minister. The described legislation is, hence, reformed in the upcoming years.
ANAPI
2
INVESTMENT PROMOTION
2.1
Institutions
The National Agency for Promotion of Investment (ANAPI) has been set up by the
Investment Code, Law no. 004/2002 from February 21, 2002. ANAPI is a public
technical institution with legal status that is placed under the provision of the
Ministries of Planning and Portfolio. The official statutes, functions and
organisational settings are defined in Decree no. 065/2002 from June, 5, 2002.
ANAPI is set up as a One-Stop-Shop for public, private and semi-public
investments in DRC.
The aims of ANAPI are: a) to receive investment projects for approval within the
framework of the Investment Code and investment projects governed by laws
according to the Investment Code, or to provide technical advice in regard to the
other laws; and b) to ensure the promotion of investments in DRC within the
country as well as abroad.
According to Decree no. 065/2002, Article 3, the functions of ANAPI include:
 Popularise the laws and regulations which grant tax and special tax incentives
as regards investments;
 Make use of means which should eradicate barriers or red tape to operations of
setting up, extending and modernising enterprises;
 Receive, analyse, and evaluate, in due approval period, applications for eligible
investment projects to the advantages of the Investment Code and submitting to
the Ministers the Plan, Finances and Budget of these projects for approval or
rejection, with advices/notices conform to the eligibility conditions and
advantages of the Investment Code;
 Receive and review the documentation files of Investment projects which should
be realised in sectors governed by particular Laws and giving technical advice
on the said investment projects on behalf of the Government;
 Search and promote domestic or foreign Investments, public, private or semipublic ones in accordance with the Law no 004/2002 of February 21, 2002, the
Investment Code, and particular laws applicable to some business sectors;
 Carry out surveys and making useful suggestions either for a better application
of the Investment Code, or for the incentives entitled to promote public, private
or semi-public investments, or for improving the settlement/welcoming
conditions for domestic, foreign, public, private or semi-public investments in
various economic regions of the country;
 Constitute a data bank on the potentials and investment opportunities existing in
the different economic regions of the country;
 Carry out all operations linked directly or indirectly to its mission.
ANAPI is responsible for promotional activities and approval of applications in all
sectors of economic activity, except to some sectors in which ANAPI only
intervenes through providing its opinion for respective projects as required.
Accordingly, the Investment Code is not applicable to the following sectors as they
are handled by separate laws:
 Mining and hydrocarbons (see Mining Code, Law no. 007/2002 from July 11,
2002);
 Banking;
 Insurances;
 Production of munitions and activities related to the military;
 Production of explosives;
 Assembly of military equipment and paramilitary security services;
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Production of munitions, military and paramilitary activities or security services;
Commercial activities.
2.2
General Incentives
Investment and Export Incentives
Investments accepted to qualify for the Investment Code shall benefit from
advantages referred to below for a period of:
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Three (3) years in economic Region A
Four (4) years if in economic Region B
Five (5) years if in economic Region C
The Government grants various customs and tax advantages when investment
projects are approved to qualify according to the Investment Code.
Customs Incentives
Customs advantages are stated in Articles 10-12 of the Investment Code:
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With the exception of the administrative tax (5 %), a full exemption from duties
and taxes on import for machinery, new tools and equipment, new spare parts
not exceeding 10 % of CIF value of the said equipment for public utility
investments ;
Exoneration from duties and taxes on export for all or part of finished products,
carved or semi-carved in good conditions for the balance of payment
Second hand heavy engines, ships and aircraft are allowed a total exemption.
Exemption from fees and taxes at importation can only be granted if one of the
following conditions is fulfilled:
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The concerned goods are not manufactured in the DRC.
The price before tax of the local product is 10% higher than the price of the
same imported product.
Approved investments, which envisage the exportation of all or part of their finished
products, processed or semi processed goods under conditions that are favourable
for the balance of payment shall benefit from exemption from fees and tax at
exportations. This exemption applies from the first exportation with exportation
documents proving so. (Article 12)
Summary of Customs regime on imports
Equipment, machinery, plant, tools,
heavy vehicles
Agricultural and breeding inputs
Raw Materials
Pharmaceutical inputs
Spare parts
Other
inputs
and
intermediate
products
Restrictions
Common Law
8%
5%
5%
5%
10%
10%
Investment Code
Exemption
(5%
administrative charge
not exempted)
5%
5%
5%
Exempted
10%
According to Article 32 of the Investment Code, any material, equipment, goods
and tools imported under the benefits of the Investment Code are not allowed to be
transferred, leased or used for other purposes other than the initial purpose within
a period of 5 years. However, an exception can be granted by the Ministry of
Planning and after notification by ANAPI. A reason for granting such exception
could be that lease, transfer or envisaged use could improve the development of a
disadvantaged region.
2.3
EPZs, Freeports and other Special
Economic Zones
The previous Law no. 86-028 of April, 5 1986 on Investments and the Regulatory
Law No 81-010 of 2 April 1981 instituting the system of the Free Industrial Zones
has been abrogated by the new Investment Code. The new Investment Code does
not state any details on Free Industrial Zones which means they do not apply
anymore. Advantages and guarantees acquired by the previous laws remain
however valid.
2.4
Tax Incentives
Tax incentives provided under the Investment Code are the following:
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The benefits realised by new approved investments are completely exempted
from professional contributions on revenue preempted in Title IV of regulatory
law N0 69OO9 of 10 February 1969, as modified to date;
Investments in socioeconomic infrastructure such as schools, hospitals,
sporting facilities and roads realised under approved projects are redeemable
according to the regulations on degressive repayments (sliding scale of
charges);
Full exemption from professional tax on income for profits made by approved
investments ;
Exemption from land tax (on land concessions and developed properties) ;
During their constitution or the increase of their share capital, approved limited
liability companies are exempted from proportional rights/fees preempted in
article 13 of the decree of 27 February 1887 on commercial companies, as
modified to date. Approved companies, other than those mentioned above, are
exempted from fixed rights/fees preempted in article 13 of the Decree quoted
during their constitution;
Exemption from ad valorem duty on the constitution or increase of the share
capital of Limited Liability Companies (SARL);
Approved enterprises that buy equipment/material from local producers and
industrial inputs manufactured in the DRC or solicit the services of workers on
immoveable property, are exempted from paying tax on the turnover on these
products and services. (Article 17);
Benefits for SMEs / SMIs are furthermore :
o Full exemption from duties and taxes on import of machinery and
equipment, event second hand tools (besides the administrative tax);
o Possibility of calculating the depreciation according to a degressive
mode ;
o Deduction of expenses made for the training or improvement of the
staff, protection and conservation of the environment from the taxable
income ;
o Exemption from duties on charters and registration fees in the new
trade register.
Depending on the economic region where the investment will take place, the above
stated advantages are granted for a period between 3 and 5 years which starts as
soon as the goods and services produced by the approved company are on the
market.
2.5
International Trade & Export
Promotion
DRC is eligible under the African Growth and Opportunity Act (AGOA) as well as
the Everything But Arms (EBA) initiative as LDC country.
Laws and regulations covering trade are Law No. 73/009 of 5th January 1973 and
its three departmental Acts (No. 015/CAB/004/73 of 7th September 1973,
No.015/CAB/006/73 of 39th November 1973, No. 015/CAB/008/73 of 10th
December 1973) and Law No. 74-014 of 10th July 1974 which is amending and
completing the special law on trade. Accordingly, import, local manufacture of
fabric, household products and certain food items, electrical appliances and
household appliances are reserved to Zairians (Congolese) natural persons or
legal entities (with Congolese controlling the major capital share). If products are
acquired for investment purposes, or as raw materials and/or for production, they
are not affected by this restriction. However, the legal situation is not clear; please
see Mutombo (2005) for more information.
Within the overall review of national legislation and administrative processes, a
review of trade laws and regulations has been initiated replacing the outdated laws.
Reform of existing cumbersome areas are, for example, the period for trade
registry which is aimed to be shortened from 15 days to a maximum of 5 days, the
abandonment of compulsory trade licenses and a review of existing export/ import
procedures.
2.6
Promotion of Local
and Regional
Entrepreneurs
Other Issues
The Investment Code (Law no. 004/2002) has provisions for the promotion of
Small & Medium Scale Enterprises (PME) and Small & Medium Scale Industries
(PMI).
They are economic entities constituted either in the form of an individual enterprise
or in form of a shareholding company. In an individual company, priority is given to
a natural person as head of the enterprise which ensures financial and
administrative managerial functions. A shareholding company is a company that
employs at least five workers. The condition of acceptance onto the PME and PMI
in the general system is fixed at a minimum of the equivalent of US$10.000 and at
a maximum of an equivalent of US$200.000.
Special advantages and exemptions granted to SMEs and SMIs are specified in
the Investment Code (Article 19 – 22) and are:
“Article 2O: With the exception of administrative tax, PME and PMI which
realise a programme of investment under the conditions stated in article 2,
paragraph “h” above, benefit from total exemption from fees/rights and taxes at
importation, for machinery and material, even second hand tools, spare parts
not exceeding 1O% of the CIF value of the said equipment, as well as for
industrial inputs necessary for the realisation of the approved investment.
Article 21: The PME and PMI admitted into the general system of the code are
authorised on the one hand to deduct from their profit amounts spent on the
training and upgrading of the enterprise manager and his personnel, on
protection and conservation of nature and on the other hand to calculate their
repayments on a sliding scale of charges.
Article 22: PME and PMI also benefit from exemptions on fees on constitution
act for companies or cooperatives and on registration fees into the New
Commerce register.”
Investment
Legislation and its
Reasoning
3
ACCESS AND ADMISSION OF
FOREIGN INVESTORS
3.1
Foreign Investment & Capital
Mobility
The Government modified its political and economic approach since 2001 and
therefore also decided to adapt its legislation to comply with the new vision and
strategies for the economic development of the country. The old investment law
from 1986 was replaced in 2002 by the new Investment Code, Law no.004/2002
from February 21, 2002.
The following main objectives are pursued with the new legislation:
a) To advance the establishment of civil engineering companies that will
construct and maintain highways and streets, but also target the public
transport of people and goods in terms of transport on soil, water and in
the air;
b) To advance investments that will develop the agricultural sector and agroindustry through mechanisation in order to assure food self-sufficiency
which will reduce import of basic goods at the same time as increasing
income of rural communities, improve the supply of primary materials to
the agro-processing industry, and enlarge the national market of consumer
goods in circulation;
c) To advance/ attract investments in the heavy industry to secure a stable
industrial basis on which economic growth can be based sustainably;
d) To advance investments which add value to national primary resources in
order to increase value-added within the country and export volumes.
Investor Definitions,
Requirements and
Obligations
The Investment Code (Law no.004/2002) defines the different terms relevant to
investment operations in Article 2.
Direct Investment:
All Investment coming from the field of application of this law envisaged through a
new enterprise or existing enterprise whose objective is to put in place a new
capacity or to increase production capacity; expand the range of products or to
improve the quality of products and services.
Direct Foreign Investment:
All Investment whose foreign participation in the share capital of an enterprise in
which the investment realised is at least equal to 10%.
Direct Investor:
All natural persons, public or private doing direct investment in the DRC.
Direct Foreign Investor:
All natural persons who are not of Congolese nationality or of Congolese
nationality and resident in a foreign country and all natural persons public or private
whose cooperate headquarters is not within the Congolese territory and is carrying
out a direct investment in the Congo.
Requirements &
Obligations
Every investor/ investment that wants to qualify for benefits under Law no.
004/2002, the Investment Code, has to fulfil the following requirements:
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Being an economic entity of Congolese rights;
Should have a minimum amount equivalent to 200.000 American Dollars;
Do respect the laws as far the protection of the environment and nature is
concerned;
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Engage in training local personnel for specialised technical posts, and
management posts;
Guarantees a value added rate equal to or more than 35%.
Once approved, investors have to follow certain obligations stated in Article 31,
Investment Code:
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To implement the agreed programme as approved by the system of the code
according to the description and within the periods agreed by the Decree;
Maintain regular accounting, which is conform to the General Congolese
Accounting Plan;
Accept all inspections conducted by the relevant department;
Ensure the training and promotion of personnel according to the agreed
programme;
Respect the regulations on foreign exchange and the protection of the
environment as well as nature conservation;
Submit half-yearly relevant data to ANAPI that indicates the degree of
realization of investment and exploitation while the company is under the
system of the code;
Respect the regulation in force for employment, i.e. to give first preference to
nationals;
To be compliant to local and international standards on quality of goods and
services produced.
Empowerment of nationals, training and skill transfer is an important aspect of the
new policies. The Investment Code states explicitly in Article 31 the obligation for
investors to employ preferably nationals over expatriate workers, train and upgrade
the skill levels of nationals to specialised positions and management level.
Implementation
Delay
If the investor has not started the investment project within a year after the official
start as stipulated in the Decree and cannot provide valid reasons causing the
delay, the withdrawal of the license will be pronounced by an Interministerial
Decree from the Ministries of Planning and Finance (Investment Code Articles 35,
34).
3.2
Investment
Application
Foreign Investment Establishment,
Registering and Licensing
Processes
The Investment Code (Article 5) specifies that all investors that want to take
advantage of benefits granted under the Code need to provide a complete file
including all relevant project information and proofs according to the prescribed
format (see “Fiche d'évaluation du niveau de réalisation d'un projet agréé “ on the
ANAPI website) to ANAPI. ANAPI will examine the project proposal and transfer it
to the Ministries of Planning and Finance for the issue of the approval in form of a
Ministerial Decree.
The decision related to the decree shall not take longer than 30 days from the date
of submission of the file to ANAPI. If the investor has not received response until
the end of this period, the decree can be considered as granted (Article 6). In that
case, the authorities are obliged to grant the decree within 7 days. In case of
disapproval, the decision has to be communicated in written form and shall express
the reasons why the application is not eligible (Article 6).
According to Article 7 of the Investment Code (Law no. 004/2002), the
Interministerial Decree should specify:
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The object, the place of investment and the date for the commencement of
activities;
The identification of the investor and his mandate/capacity;
The investment programme, the duration, and the realization plan;
The production objectives which should normally be achieved at the end of the
investment programme;
The nature and duration of advantages granted.
Respective to which kind of investment is intended, the website of ANAPI
describes both in English and French the processes for setting up a company, a
bank, as well as how are the processes for investing in Mining and Forestry. The
website is: http://www.anapi.org/.
Please note that even though ANAPI is not responsible for approving investment
project in all sectors of investment, a completed file with all relevant project
information has to be provided to ANAPI.
Registering a
company
The process for registering a company/ business in DR Congo is considered
complex and time-consuming. Accoridng to the World Bank Doing Business Report
2010, it takes on average 149 days to start a business and involves high costs.
Hence, DRC is on rank 154 out of 183 countries. The US Commercial Service
(2009) recommends to engage a local competent lawyer for the process.
Furthermore, numerous information on commercial rules and practices shall be
collected as regulations can change quickly and without official publication.
The steps to undertakt to establish a business are the followings:
(1) The foreign investor has to acquire a rade license from the General
Secretary of the Ministry of Commerce & Industry. The related fees are
US$1,000 for a Societé, and US$500 for an Établissement. This
requirement only applies to foreign investors.
(2) Certification of Business to be received from the Municipality where the
business is located at the cost of US$35.
(3) An authentification of the Statutes (the Memorandum and Articles of
Association) has to be obtained from the Nothary office for a cost of
US$50.
(4) The investor may register with the New Trade Register at the clerks office
of the Municipal Court (Greffe fu Tribunal de Commerce). This registration
costs US$800 for businesses with majority of foreign ownership, and
US$200 if Congolese nationals own the majority share.
(5) Publication of the company statutes in the Official Journal, the Governmen
Gazette through the office of the Official Journal. Costs involved in this
step are US$0.25 per line.
(6) A national identification number is to be obtained from the Office of the
Secretary General of the Ministry of Economy which costs US$200 for
companies (societes) and US$100 for Établissements.
(7) Acqiusition of an import-export number from the Secretary General of the
Ministry of Commerce. The fees for this number is US$250 for companies
and US$125 for Establishments.
(8) The final step then covers the registration with the Office of the Tax
Authority (DGI) to acquire the tax number (free of charge).
Documents that will be required in the process are, among others:
 A copy of the identity cards;
 Extract of the criminal record from the Criminal Investigation Body;
 A non-civil servant certificate from the commune.
Establishing a Bank
For the establishment of a bank, one can state the process as following:
On the legal level:
1. Formation of a limited liability company (SARL) ;
2. Company’s shareholders and managers should be in harmony ;
3. Get approval from the Central Bank of Congo.
On the economic level:
Approval is granted on the conditions hereafter:
1. Provide evidence for payment of the capital of: US$1,500,000 ;
2. Present a coherent and reliable feasibility study.
On the practical level
1. Submission of completed file by the investors without the Presidential
Order granting the legal status ;
2. Setting up the bank into a Limited Company (SARL) ;
3. Registration of the bank on the list of banks.
Official fees for the process are.
1. Project Study fee of US$300;
2. Agreement fee (Governor of the Central Bank acceptance of the project)
US$2,000;
3. Final agreement fee (Presidential decree) 1% of the share capital.
Investing in the
Mining Sector
Relevant laws for the banking sector are Law no. 002/2002 on the applicable
dispositions to Thrift Institutions and Credit Cooperatives, Law no.003/2002 relating
to the activity and control of Credit Institutions, and Law no.005/2002 relating to the
constitution, organization and functioning of the Central Bank of Congo. The
Central Bank of Congo is responsible for oversight of the banking sector and the
regulation of banks, credit unions, and other financial services.
The basic law in the Mining Sector is Law no. 007/2002 from 11 July 2002 stating
the Mining Code. In addition to this law, different Ministerial Decrees and Orders
were issued for specifications. Please see the website of the Ministry of
Environment, Nature Conservation and Tourism which is the authority in charge of
this sector, for more details and all laws and amendments relevant:
http://www.mecnt.cd/index.php?option=com_content&task=view&id=64&Itemid=27.
Mining Prospecting
The company must be registered under Congolese law. A prospecting permit shall
be acquired from the Mining Land Registry (CAMI) for a fee of US$2.55 to
US$124.03 per square metre. Conditions for this license are that the company is
eligible according to the mining laws, can prove his/her financial capacity equal at
least ten times the total amount of annual superficiary duties per square to be paid
for the last year of the 1st validity period of that duty; and that is has prepared and
got approval for the buffering/ lightening and rehabilitation plan within the six
months of delivery of the prospecting permit.
Mining Exploration
The company must be registered under Congolese law and obtain a prospecting
permit from the Mining of Land Registry (CAMI). Conditions for this license are that
the company can show evidence of the existence of an economically exploitable
deposit (providing a feasibility study); the company can proof the necessary
financial resources, and that it has obtained a prior approval of the environmental
impact study and of the plan of project environmental management. The cost for
this license will be US$195.4 to US$679.64 per square meter.
Gold Desk
A company registered under Congolese law needs to receive an Approval Order
from the Direction of Mines in the Ministry of Mines. For that, the investor has to
show evidence of a bank account held in an approved bank, the registration letter
from the Central Bank of Congo, and pay the annual tax :of US$50,000.
Diamond Trading
post
Being a company registered under Congolese law, an Approval Order from the
Direction of Mines in the Ministry of Mines is required. It can be obtained by
providing an evidence of a bank account held in an approved bank, a registration
letter from the Central Bank of Congo, payment of the guarantee :at US$25,000,
and payment of the annual tax of US$200,000.
Investing in the
Forestry Sector
The basic law for the forestry sector is the Law from 29 August 2002 stating the
Forestry Code. In addition to this basic legal document, diverse decrees,
amendments and ministerial orders were issued on specified topics. Please see
the website of the Ministry of Environment, Nature Conservation and Tourism for
these
laws
and
related
amendments:
http://www.mecnt.cd/index.php?option=com_content&task=view&id=59&Itemid=27.
For forest exploitation, an investor has to register an enterprise under Congolese
law, obtain a forest operating permit from the Forest Management Department, in
the Ministry of Environment, Nature Conservation and Tourism, and pay the forest
concession tax of US$0.10 to US$0.50 per hectare.
Companies engaging in Timber Export require a timber purchase contract and
have to pay a tax which varies between 1-2% of the FOB value. Please see the
Forest Management Department of the Ministry of Environment, Nature
Conservation and Tourism for more details.
Investors pursuing reforestation need to hold a concession contract, pay the timber
felling tax of US$2/ hectare and the reforestation tax of:
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4 % of ex-works value per m3/rough timber
2 % of ex-works value per m3/exported rough timber (tola and other species to
be promoted).
Please see the Forest Management Department at the Ministry of Environment,
Nature Conservation and Tourism for more details and the acquisition of the
concession contract.
3.3
Foreign Employment & Residence
The Ministry of Labour is in charge of expatriate/ foreign labour permits.
It is allowed to employ a maximum of 5% foreign workers (expatriates) of the total
staff. For any additional expatriate employed an extra tax is charged and it is
required to provide a justification for the higher percentage of foreign workers. With
this regulation, the hiring of local employment is encouraged.
3.4
Foreign Investor Access to Land
and Property Rights
Land issues and processes are regulated by the Law No. 73-021 of 20 July 1973
stating the Ownership of Land, Property, Constructions and Securities which is
completed by Law No. 80-008 of 18 July 1980.
4
FOREIGN INVESTMENT
OPERATIONS
4.1
Employment
Constitution of DRC
The new Constitution as amended in 2006 covers matters on labour such as the
right to employment, the right to free association, establishment of labour unions
and the right to collective bargaining and strikes.
Labour Law 2006
The Labour law, Law No. 015/2002 from 16 October 2002 stating the Labour Code
covers is the basic law covering labour issues in DRC. It contains regulations on
contracts, professional training and education, rights and obligations of employers
and employees, remuneration and forms of salary payment, the general work
conditions, administration, the regulations on employment of minors, women and
handicapped workers, leaves, and additional allowances such as the provision of
meals and transport allowance. Chapter VII covers relevant regulations on health
and safety standards at the workplace, and chapter XII the rights and regulations of
collective bargaining and other professional relations.
The US Commercial Service (2009) states the following on the labour provisions:
“The code provides for tight control of labor practices and regulates recruitment,
contracts, the employment of women and children, and general working conditions.
Strict labor laws can make termination of employees difficult. The code also
provides for equal pay for equal work without regard to origin, sex, or age. The new
code formally permits a woman to gain employment outside of her home without
her husband’s permission.
Employers must cover medical and accident expenses. Larger firms are required to
have medical staff and facilities on site, with the obligations increasing with the
number of employees. Mandated medical benefits are a major cost for most firms.
Employers must provide family allowances based on the number of children, and
paid holidays and annual vacations, based on the years of service. Employers
must also provide daily transportation for their workers or pay an allowance in
areas served by public transportation.”
4.2
Business Taxation
The Value Added Tax (VAT) is known as CCA and currently rates at 13% with the
exemption being granted to petroleum-related activities of companies approved by
the Hydrocarbons Code. Staple foods are also mainly exempted.
The highest marginal corporate income tax for corporations is 40% and for
individuals 50%. The tax rate on income, profits and capital gains is 32%.
4.3
Environment
Environment, Physical Planning,
Health & Safety, Consumer
Protection
Article 31 of the Investment Code obliges any investor to fulfil the national
regulations covering environmental protection, conservation of the nature and
employment. The legislative framework on environmental matters consists, among
others, of the Forestry Code law No. 011/2002 from 29 August 2002, and
Ordonnance Law No. 69-041 from 22 August 1969 in respect to the Conservation
of the Nature.
Health & Safety
Standards
The Labour Law No. 015/2002 from 16 October 2002 prescribes in chapter VII
regulations and obligations relevant to the health and safety at the workplace.
4.4
Competition Policy & Law
There is no comprehensive competition policy in place. Some aspects are covered
by the current regulatory framework that dates from 1994. Its covers: pricing
regimes for products, goods and services of all kinds; market transparency; trading
standards; anti-competitive practices (although these provisions have not yet been
implemented); stockholding, and the investigation and repression of fraud.
Prices are generally determined by the free play of competition. Some exceptions
exist for staple foods. Authorization for maximum selling prices can be obtained by
the Ministry responsible for trade.
Consumer protection is also part of the existing laws and regulations and focuses
on market transparency and product quality.
4.5
Transfers
Monetary Policy, Foreign Exchange
and Foreign Investors
International transfers that are linked to investment operations are regulated by the
Investment Code, Law no. 004/2002, in Articles 27. They are guaranteed by the
state as long as they are conform to exchange regulations. If the government
applies restrictions to this liberty, foreign investors are, however, granted the
following benefits (Articles 28-30) of the Investment Code:



Dividends and revenues generated by reinvestments in the company are
guaranteed;
Transfer of royalties, loan payments, interests and other charges that a
Congolese company admitted to this Law has to pay in order to service a loan
or obligations abroad for financing this investment are guaranteed;
Without prejudice to the dispositions of the regulation on foreign exchange, all
payments due to foreigners are transferable as indicated in Article 27.
The central bank is responsible for foreign exchange and trade regulations.
Exporters and importers have to be licenses by the Central Bank and declare their
foreign exchange transactions. Importers also have to declare their currency at
commercial banks. The Central Bank maintains a relatively liberal system of
payments for trade which is finances through commercial banks.
4.6
Public Procurement
Public administrative reforms as implemented in 2002 allow foreign investors to bid
on government contracts just as domestic investors. No discriminatory terms apply.
It can even occur that foreign firms are favoured as they can access international
insurance funding easier than local firms. A tender Board has been established
that works under the Ministry of Budget. According to the regulation, public
companies and/or parastatals normally do not participate in the bidding process.
4.7
Intellectual Property
In terms of intellectual property rights, the Copyright law No. 24 from 07 July 1982
regulates all copyright processes, and related rights and obligations. The Arrêté
Ministériel 002/CAB/MJCA/94 from 31 January 1994 providing the measures of
execution of the Ordonnance-Law 86-033 from 5 April 1986 covering musical,
literary and theatre, as well as photographic, plastic and arts and folklore.
The Law No. 82-001 from 7 January 1982 sets the regulations on Industrial
Property rights, and patents.
Intellectual property therefore enjoys full legal protection, but enforcing the IPR
regulations is considered virtually non-existent. The Ministry of Industry is
responsible for overseeing industrial property rights and the Ministry of Culture and
Arts for editors, composers and authors’ rights.
WIPO
DR Congo is furthermore member of the World Intellectual Property Organisation
(WIPO) and the Paris Convention for Protection of Intellectual Properties.
4.8
Investment
Protection
Investment Protection and Dispute
Settlement
The Investment Code, Law no.004/2002 from February, 21, 2002 guarantees the
following investment protection rights for investors that apply to ANAPI:
Article 23: Foreign individuals or companies receive treatment that is similar to that
of individuals or companies of Congolese nationality, on condition of application of
the same principle of equal treatment by the State in which the foreign individual or
company is a citizen.
Article 24: Companies or individuals shall receive the same treatment except for
Treaties and Agreements signed by the DRC government with other States.
However this treatment does not extend to privileges that the DRC grants to
nationals or companies from other States, in virtue of their participation or of their
association in a zone of free exchange, customs union, common market or any
other form of regional economic organisation. The dispositions of this article do not
apply to fiscal questions.
Article 25: The Democratic Republic of Congo undertakes to assure a fair and
equitable treatment, in conformity with the principles of the international law, to
investors and investments carried out in its territory and to make sure that the
exercise of this law in not hindered.
Article 26: The rights to individual or collective property acquired by an investor are
guaranteed by the constitution of the DRC. An investor cannot be directly or in part,
nationalised or expropriated by a new law, and/or a decision by a local authority,
which has the same effect, except for motives of public use and subject to the
payment of a fair and equitable compensatory indemnity. The indemnity is
considered fair if it is based on the market value of the assets which were
nationalised or expropriated; this value should be determined in a contradictory
manner before the expropriation or nationalisation, or before the decision to
expropriate or nationalize becomes public.
Constitution of the
DRC
The new Constitution of the Democratic Republic of Congo as amended on 18
February 2006 confirms in Article 32 that every foreigner that is legally on national
territory enjoys personal and property protection according to the conditions that
are set through treaties and laws. Article 34 guarantees the right to private
property. No expropriation should take place except in case of a public interest and
through juridical order by the competent authority in accordance with the law.
Doing Business
Evaluation
Even though the legal framework covers property issues, protecting investors is
weak in enforcement and places DR Congo on rank 154 according to the World
Bank Doing Business Report 2010.
Dispute Settlement
The Investment Code Articles 37 and 38 state the following:
“1. In case of disputes in the interpretation of application of the dispositions of
the Investment Code or the amended Decree, courts and tribunals can be
used according to Articles 159 and 074 of the Code on Congolese Civil
Procedures.
2. In case of differences between the Investor and the DRC related to (a) the
contract or Investment agreement; (b) an investment authorisation granted,
any violation of the investor’s rights and/or investment, an amicable
settlement of the differences is firstly aimed for. If that does not occur within
a period of 3 months counted from the first written notice demanding entry in
such negotiations, the difference shall be settled by following one of the
arbitration procedures:
(i) Adhere to the Convention of March 18, 1965 for the settling of
differences relative to investments between States and Nationals
according to the Convention of the International Centre for the Settling
of Investment Disputes (ICSID), that was ratified by DRC on April 29,
1970; or
(ii) The disposition of the Regulation on Supplementary Mechanism, if the
investor does not fulfil the conditions of nationality stipulated in Article
25 of the ICSID Convention;
(iii) Settling of differences by the International Chamber of Commerce of
Paris.”
MIGA & ICSID
DRC is a member of MIGA as well as ICSID and has ratified the Convention of
ICSID on April 29, 1970 to adhere to its procedures on settling investment
disputes. However, the reality is different. Several claims have been undertaken for
settlement under ICSID which have been won by the investors but never were
implemented on the site of the Government.
4.9
Trade agreements
Regional Groups
International Agreements and
Obligations – Trade and other
Agreements, BITs, DTTs
DRC is member of the WTO, is eligible to AGOA and EBA. It negotiates the
European Partnership Agreements (EPAs) under the CEMAC group, the Central
African Economic and Monetary Community.
In terms of regional organisations, it has triple membership under SADC, COMESA
and ECCAS (Economic Community of Central African States), and it belongs to the
Nile Basin Initiative (NBI).
OHADA
Furthermore, DRC has recently joined OHARA which is the Organisation for the
Harmonisation of Business Law in Africa which will help the country to modernise
its legal standards.
MIGA, ICSID, WIPO
As already stated, DRC is signatory to MIGA, ICSID, and the WIPO regulations.
Please see the tables for BITs and DTTs below.
5
Regional Transport
Corridor
SADC RELATED ISSUES
In a joint initiative, COMESA, EAC and SADC are implementing the North-South
Corridor Aid for Trade Programme which aims to reduce transport costs along two
priority corridors. The two corridors cover the Dar-es-Salaam Corridor linking Dares-Salaam to the Copperbelt, and the North-South Corridor linking the Copperbelt
to the southern ports of South Africa. The later passes through 8 countries which
includes the DRC as well as Tanzania, Zambia, Botswana, Malawi, Mozambique,
Zimbabwe and South Africa. This pilot programme does not only involve
improvement of the physical infrastructure for transport, but also covers the
regulatory environment for trade and transport along the Corridor.
Bilateral Investment
Treaties
Bilateral Investment Treaties with DRC as of 1 June 2009
Partner Country
Date of signature
1
2
3
4
5
6
7
8
9
10
11
12
13
Double Taxation
Agreements
Belgium and
Luxembourg
China
Egypt
France
Germany
Greece
Israel
Italy
Jordan
Korea, Republic of
South Africa
Switzerland
United States
17-Feb-05
Date of Entry into
force
-
18-Dec-97
18-Dec-98
5-Oct-72
18-Mar-69
26-Apr-91
14-May-85
13-Sep-06
23-Jun-04
17-Mar-05
31-Aug-04
10-Mar-72
3-Aug-84
1-Mar-75
22-Jul-71
10-May-73
28-Jul-89
Double Taxation Agreements with DRC as of 1 June 2009
Partner Country
Type of Agreement
1
Belgium
Income and Capital
2
South Africa
Income
3
Spain
Air Transport
Date of Signature
23 May 2007
29 April 2005
14 June 1969
Sources included
African Development Bank Group (2008) Democratic Republic of Congo. Resultbased Country Strategy Paper 2008-2012
African Economic Outlook (2010) Website with analysis on the Democratic
Republic of Congo, http://www.africaneconomicoutlook.org/en/countries/centralafrica/congo-democratic-republic.html
ANIPI (2010) Website of ANAPI including related information, http://www.anapi.org
Central Bank of
http://www.bcc.cd
Congo
(2010)
Information
provided
o
the
website,
Egypt Import-Export (2010) Investing in the Democratic Republic of Congo,
http://www.egypt-import-export.com/en/country-profiles/democratic-republic-ofcongo/investing-3
Government of the Democratic Republic of Congo: different national legislation
IMF (2010) Democratic Republic of Congo: Staff Report for the 20099 Article IV
Consultation Requests for a Three Year Arrangement under the Poverty Reduction
and Growth Facility, and Request for Additional Interim Assistance under the
Enhanced Initiative for Heavily Indebted Poor Countries, March 2010
Mutombo, Thierry (2005) Report on the Study of Coherence between the
Democratic Republic of Congo legal and regulatory Framework and the COMESA
Common Area Investment Draft Framework Agreement, March 2005
NationMaster.com Tax statistics DRC, http://www.nationmaster.com/country/cgcongo-democratic-republic-of-the/tax-taxation
UNCTAD (2010) Bilateral Investment Treaties and Double Taxation Treaties,
http://www.unctad.org/Templates/Page.asp?intItemID=4505&lang=1
US Commercial Service (2009) Doing Business in the Democratic Republic of the
Congo: 2009 Country Commercial Guide for U.S. Companies
US Department of State (2009) 2009 Investment Climate Statement – Democratic
Republic of the Congo, http://www.state.gov/e/eeb/rls/othr/ics/2009/117424.htm
World Bank (2010, 2009)
www.doingbusiness.org/
Doing
Business
Report
2010
and
2009,
WTO (2006) Trade Policy Review. Republic of Congo, Report by the Secretariat