Lex Africa Guide 2012 Full - Afrer.org

BURKINA FASOJOHN FFOOKS & CO PROJECT FINANCE AND NATURALRESOURCES ADVISORY FIRMFirm InformationWebsite address: www.jwflegal.comLanguages spoken: English, Malagasy, FrenchContacts: John Ffooks and Richard GlassTelephone: +261 20 224 3247Fax: +261 20 224 3248Email: burkina.faso@jwflegal.comCountry InformationFormerly called the Republic of Upper Volta, Burkina Faso is alandlocked country located in the middle of West Africa’s”hump”. It is geographically in the Sahel - the agricultural regionbetween the Sahara Desert and the coastal rain forests. Most ofcentral Burkina Faso lies on a savanna plateau, 200-300 metersabove sea level, with fields, brush, and scattered trees. Thelargest river is the Mouhoun (Black Volta), which is partiallynavigable by small craft.Its size is 274 200 square kilometres with an estimatedpopulation of 16.7 million (2011), 19% of whom are thought tobe urban. It is characterized by warm, dry winters and hot, wetsummers. Its landscape is mostly flat but hills dot the west andsouthwest regions of the country.Political SystemThe constitution of 2 June 1991 established a semi-presidentialgovernment with a parliament which can be dissolved by thePresident of the Republic, who is elected for a term of sevenyears. In 2000 however the Constitution was amended to reducethe presidential term to five years.The Parliament consists of one chamber known as the NationalAssembly which has 111 seats with members elected to servefive year terms. There is also a constitutional chamber,composed of ten members, and an economic and social councilwhose roles are purely consultative.Latest GDP FiguresGDP per capita: US$639GDP: US$ 9.612 billion.Inflation Rate (consumer prices)2% (2011 estimate).Investment ClimateLike many other African states, the mining sector is of greatinterest to investors. American, Australian and South Africancorporations have recently been granted mining permits. Taxexemptions applying to investments in addition to theenactment of the investment code offer an attractive climate toforeign businesses. Moreover, fully owned foreign ownership ofcompanies is allowed.There is a Chamber of Commerce which conducts feasibilitystudies and helps develop business links. There are also threelarge commercial banks with correspondent relationships withAmerican banks.Forms of BusinessThe Organisation pour l’Harmonisation en Afrique du Droit desAffaires (OHADA) has a Uniform Act on Companies which setsout various forms of business vehicles available to domestic andforeign investors, such as: a société en nom collectif (generalpartnership), a société en commandite simple (limitedpartnership), a groupement d’interêt économique (economicinterest grouping), a société à responsabilité limitée (limitedliability company) and a société anonyme (specific limitedliability company). However the following business vehicles arethe most attractive for investors:a société anonyme (SA) is a limited liability company witheither a board of directors or a unique shareholder. Theminimum share capital required is at least CFA10 000 000(approx. US$21 000). Share transfers to third parties areunrestricted unless otherwise stated by the company’sstatutes which may require either the consent of the Boardof Directors or the general assembly of shareholders.a société à responsabilité Limitée (SARL) is administered byone or more directors called “gérants”. The minimum sharecapital required is at least CFA1 000 000 (approx.US $2 100). Share transfers are regulated by the company’sstatutes and may be performed freely betweenshareholders but transfers to third parties require the priorconsent of the majority of shareholders.joint ventures are often formed in the mining and theagricultural sectors.Formation of a CompanyBelow are the processes and estimated times (where applicable)to incorporate a company:deposit subscribed capital in a bank (2 days);conduct background criminal check of manager (1 day);have the declaration of capital subscription notarized anddeposit the two acts at the notary office within three days;register at the Centre des Formalités de Entreprise(CEFORE) for a company registration, tax number (IFU), andsocial security number;a single application form must be submitted to completethe company registration with the Trade Register andPersonal Credit Bureau (RCCM), to obtain the fiscal and theprofessional license at the Ministry of Commerce;once the form is submitted, CEFORE organizes theregistration with the court and other authorities.Companies are assigned a unique company identificationnumber for company registration, fiscal identification andsocial security affiliation.The official time for the completion of the registration process inthis procedure is 7 working days. However because CEFOREforwards the documents to the relevant authorities, in practice ittakes longer. Publication can be done directly on the CEFOREwebsite (www.me.bf) for a fee of CFA10 000 (approx. US$21).Costs for completing the formalities for theincorporation are CFA 47 500 (approx.US$96).Exchange ControlsForeign investors are entitled to transfer any11