Law No. 2013/004 of 18 April 2013 provides incentives for private investment in the Republic of Cameroon
Two major types of incentives are offered:
- Common incentives and
- Special incentives.
Activity should be in compliance with rules and regulations in force and must meet one of the 4 following conditions:
- Employ during the operational phase, and according to the size and sector of the company, at least one Cameroonian for projected investments ranging from five (05) million francs CFA to twenty five (25) million CFA francs as the case may be;
- Carry out annual export activity ranging from 10 to 25% of sales excluding taxes;
- Use national resources to the extent of 10 to 25% of the value of inputs;
- Contribute to value added to the tune of 10 to 30% of turnover revenue excluding taxes.
Tax and customs incentives are granted to the investor during the set-up and operational phases:
During the installation phase,
- Exemption from registration duties in cases of creation or increase in capital;
- Exemption from registration duties on leases of buildings for purely professional use which are an integral part of the investment program;
- Exemption from transfer taxes on the acquisition of buildings and land considered essential for the realization of the investment program;
- Exemption from registration duties on contracts for the supply of equipment and construction of buildings and facilities necessary for the realization of the investment program;
- Full deduction of taxes applicable on technical assistance fees in proportion to the amount of the investment, determined by the total amount of the investment;
- Exemption from VAT on provision of services contracted from abroad related to the implementation of the project;
- Exemption from registration duties in the case of concession contracts;
- Exemption from business licence tax;
- Exemption from taxes and duties on all equipment and materials related to the investment program;
- Exemption from VAT on the importation of equipment and materials related to the investment program.
- Direct clearing of equipment and materials related to the investment program during customs operations.
During the operational phase
VALIDITY: (10) years, maximum
The investor may enjoy exemptions from or reductions on payments of the following taxes, duties and other related fees subject to the scale of the investment and the expected economic returns thereof:
- Minimum charge;
- Corporation tax;
- Income tax;
- Registration duties relating to credit facilities, loans, advances on current accounts, bonds, increments, reduction, reimbursement and liquidation of share capital, or any transfer of activities, ownership or enjoyment of real-estate property, leases or shares;
- Tax on income from movable assets (IRCM) in the event of the distribution of income in the form of dividends or as shall be specified in the agreement;
- Special income tax (TSR) levied on payments made to foreign companies in return for services rendered during the project design and execution phase in Cameroon provided that they are billed at cost price,
- Taxes, registration and stamp duties levied on the transportation of processed products;
- Customs duties and all other duties and taxes levied on the importation of equipment, on all types of building materials, tools, spare parts, intermediate products, supplies and consumables which have no locally manufactured equivalent, except for duties, taxes and other charges of a non-fiscal nature such as in the form of a service fee;
- Customs duties levied for the exportation of materials for the construction and production plants;
- Any tax, fee, charge or expense of any nature whatsoever levied on the turnover generated by the processing company;
- Any tax levied on transfer, purchase or sale of foreign currency, and any indirect consumption tax, amongst which, the special tax on petroleum products.
- (2) the investor may also enjoy the following benefits :
- Deferral of losses up to the fifth year following the year of their occurrence;
- The exemption from duties, taxes, and customs duties on imports of capital goods intended for use in its investment program.
An investor can benefit from tax credit provided he hires at least five (5) graduates of Higher Education per year; fight against pollution; promote sporting, cultural or social activities; promote public interest activities in rural areas.
Some of the above incentives may be extended to shareholders, promoters and local contractors based on the magnitude of the project.
B – SPECIAL INCENTIVES
Appicable to companies that invest in certain Government priority sectors.
- Development of integrated Agriculture , fisheries, livestock, and animal husbandry, projects
- Big Hospitality , social economy and handicraft projects,
- Real estate development and social housing projects
- Agro- industry, manufacturing, construction ship building and iron and steel complexes.
- Energy and water supply projects
- Regional development and decentralisation projects
- Fight against pollution and environmental protection
- Promotion of innovation and research and development
- Export promotion.
- Promotion of vocational training and employment
SPECIAL INCENTIVES WHICH COULD BE CUMULATED WITH THE COMMON INCENTIVES INCLUDE
- Exemption from VAT on loans related to the investment program;
- Exemption from property tax on buildings or unconstructed land which form part of the site intended for the processing unit
- Direct customs clearance at investor’s request;
- Exemption from fixed duties;
- Exemption from Customs declaration for temporary importation of industrial equipment and materials likely to be re-exported.
- Export oriented companies shall benefit from :
- Exemption from export duty on locally manufactured products;
- Inward processing regime under the customs code.
Existing companies engaged in an investment programme aimed at expanding its production capacity renewal of its assets or increasing its performance can benefit for a maximum 5 years period from the common incentives mentioned above if their investment programme ensures increase in the production of goods or services, or Cameroonian employees by at least 20%.
Financial and administrative incentives.
- The right to open in the Republic of Cameroon and overseas accounts in local and foreign currency and carry out transactions;
- The right to freely collect and retain overseas funds, purchased or borrowed from abroad and make free use of such funds;
- The right to freely collect and retain abroad, revenue related to their transactions, dividends and any kind of capital invested as well as proceeds of any nature from liquidation or realization of their assets;
- The right to directly pay foreign non-resident suppliers abroad for goods and services necessary for conducting their business activity;
- Unrestricted transfer of dividends and proceeds from the transfer of shares in case of disinvestment.
Expatriate staff employed by the investor and resident in the Republic of Cameroon shall benefit unrestricted conversion and transfer to their country of origin, all or part of funds owed them, subject to prior payment of taxes and other dues by them, pursuant to the regulations in force.
FURTHER GOVERMENTS COMMITMENTS TO FACILITATE PRIVATE INVESTMENTS.
- Setting up of a specific visa and reception desk at all the airports of the country and all diplomatic and consular representation abroad to issue on the spot investment visas to investors.
- To be eligible investor just only need to present invitation letter from
- Provided the latter presents a formal invitation from the investments promotion agency or the agency incharge of the promotion of SMES
- Grant residence and work permits to expatriate staff involved in any investment project and employment contracts of more than two years;
- Issue environment compliance certificates relating to the relevant investment project;
- Issue land titles and long-term leases.
SIMPLIFICATION OF APPROVAL PROCESS
Creation of one-stop-shops within the investment promotion agency and the agency for promotion of SME’S which handle all the approval process
A supervisory committee to ensure respect of investment commitments and settle any investment disputes.
Clearly defined process for the application of penalties in case of non-compliance and for dispute settlements.
Clear commitment by government to guarantee the stability of incentives provided to investors by the creation of a joint monitoring committee under the supervision of the PM.
Principle of non-discrimination of investors is clearly enshrined in the law.
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NB: For information on incentives offered in other sectors such as Agriculture, Mining, Forestry, Tourism, Electrical Energy and more others, DOWNLOAD our compendium of investment incentives applicable in Cameroon below.