Lex Africa Guide 2012 Full - Afrer.org

COTE D’IVOIREANYRAY & PARTNERS LAW OFFICESFirm InformationWebsite address: www.anyraypartners.comLanguages spoken: French and EnglishContact: Mr Ika Raymond Any-GbayéréTelephone: +225 22 444 524Fax: +225 22 449 120Email: lawyers@anyraypartners.comCountry InformationThe Ivory Coast covers an area of 322 462 square kilometres andhas a population of about 20 million inhabitants includingforeign residents. As a former French colony, its official languageis French and its currency is the CFA Franc (FCFA).The population is mainly rural. There are five important ethnicgroups:In the north the Senoufo group;In the north west the Malinké;In the west, the Mandé group and the Wê group;In the south-west and west, the Krou group;In the centre, the south and the east, the Akan group.The north of the country is a grassy savannah, the centre issavannah and the south is forested. In the west there aremountains including Mont Nimba, the highest of the country(1 753m). The climate is essentially tropical, but in the norththere are dry hot winds during November to February. In all theregions there are two seasons, a dry and rainy one.Political System and Investment EnvironmentA civil war began in 2002 between the north and the south andled to serious political instability and economic dislocation. Adisputed election in 2010 plunged the country into a politicalcrisis which resulted in the removal of President Gbagdo and MrQuattara becoming President. The security situation hasimproved and investors are slowly returning. Before the civilwar, the country was one of the largest economies in West Africawith several large local firms (like SIR, Petroci, Port d'Abidjan,Port De San Pédro and Sotra) and multinational investors likeUnilever-Côte d’Ivoire, Orange-Côte d’Ivoire, SGBCI-Côted’Ivoire, BICICI, Nestlé-Côte d’Ivoire, GMA, Bolloré, Total-Côted’Ivoire, Shell-Côte d’Ivoire, Bouygues and SAGA-Côte d’Ivoire.Investment IncentivesIn addition to investment incentives under the Investment Codeof 1995, the following tax reforms have been introduced by theGovernment to promote investment:tax on profits is now 25% for legal entities and 20% forindividuals instead of 35%;Value Added Tax (VAT) is fixed at the rate of 18%;individuals and legal entities which invest a part or all oftheir profits in the country, may obtain a remission of tax onthose profits and these benefits have been extended tocommerce, services and mining. The rates of this taxremission have also been increased. For example, for anyinvestment made in region A (Abidjan and surroundingtowns), the rate has increased to 30% from 25%. In region B(the rest of the country) the rate has increased to 40% from35%;a specific tax incentive scheme is planned for companiescreated from 1 January 2010 to 31 December 2012 andinvolved in agribusiness (especially cotton and cashewnuts) in the centre, north and western parts of the country(which were particularly badly affected by the civil war).These companies must be created, re-established or reopenedbefore 31 December 2012 to benefit from theseincentives which include:#an exemption from VAT on equipment and on firstreplacement parts and an exemption until 2015 (whichis reduced to 75 % for 2016 and 2017) from property tax,business tax, tax on industrial, commercial andagriculture or non-commercial profits and from payrolltax. The exemption from property tax is for 10 years forproperties involved in producing, preserving, packagingand processing food and other agricultural products;#the constitutions of qualifying companies are exemptfrom stamp duties and interest on loans granted byassociated companies are exempt from the tax on debtrevenue until 2012;#credit granted by banks to these companies for theircreation, re-opening and re-establishment are exemptfrom a specific tax on outstanding loans;#companies carrying on product purchasing operationsare exempt from the tax on profits, VAT and business tax,if the value of their purchases do not exceed 15 % oftotal production.certain incentives (see below) are provided tobiotechnology and information/communicationtechnology firms in a free trade zone in Grand-Bassam.PrivatizationAccording to the law on privatization, the Government maytransfer its rights in state owned companies to privateindividuals or entities by a bid process and under the control of aprivatization committee. The privatization may be donethrough:transfer of assets;transfer of shares;renunciation of a pre-emptive right to subscribe for shares;share capital increases;mergers;dissolution or liquidation.The Government may restrict the shareholdings of foreigntransferees or local companies controlled by foreigners.Forms of BusinessPartnership;Co-operatives;Private limited liability company;Private unlimited liability company;Public limited liability company;Sole proprietorship;Joint venture.25