INVESTMENT PROMOTION FRAMEWORK
Cameroon has implemented dynamic incentives to attract investments. Such incentives include: the 2008 finance Law on reinvestment, industrial sites, industrial free zone regime, the mining code, the partnership contracts regime and the investment charter.
1) – 2008 FINANCILA LAW
A 5% customs duty is levied on basic commodities, such as frozen fish, maize for use in poultry farming, polished or glazed semi-milled or milled rice, and rough, unrefined and uniodised salt. Customs duty on imported capital goods destined for investment has been fixed at 5%.
2) – INDUSTRIAL SITES
In order to foster the establishment of both foreign and domestic investors an din a bid to minimize capital cost at the start of their activities and so enable quick returns on the investments, the industrial zone development authority (MAGZI) puts at the disposal of economic promoters, in the form of an emphyteutic lease, developed , fully serviced lots at the most competitive rates under secure conditions with guarantee of tenure.
Type of zone |
Rate (m2/annum) |
Totally developed zone |
680CFAF (CAD$ 1.36)m2/annum for Bonaberi
480CFAF (CAD$ 1.36)m2/annum for Bassa
720 CFAF (CAD$ 1.36)m2/annum for Bassa (Free Zone) |
Partially developed zone |
300 CFAF (CAD$ 1.36)m2/annum
Yaounde (Nsam, Mvan), Ombe, Bafoussam, Ngaoundere, Garoua, Kribi |
Undeveloped zone |
A pre-financing agreement is reached between the firm and MAGZI |
3)-INDUSTRIAL FREE ZONE REGIME
A – Commercial advantages
1) – No import or export permit or limitation of quotas.
2) - No control of prices or profit margins
3) – Possibility of selling part of the annual production on the domestic market, subject to the payment of applicable customs duties and charges.
B – Tax Incentives
1) – The Exemption from taxes and charges for a period of ten years.
2) – An overall tax rate of 15% applicable as from the eleventh year and total exemption from all other existing or to be created taxes and charges.
3) – Loss carry over from the ten year exemption period
C – Other advantages related to financial transactions
1) – The right to open accounts in foreign currency (French francs for instance) within the local banking system
2) – No restrictions on the purchase and sale of foreign currency or on commission earned from the transfer of foreign currency
3) – The right to export profits earned or capital invested in Cameroon.
4) – Exemption of imports and exports from all existing or to be created custom duties and charges and from any other direct or indirect charges, registration and stamp duties and present or future taxes.
5) – Exemption from the imports inspection programme (SGS VERITAS)
6) – Exemption from production and sales taxes on all inputs bought within the domestic market.
D – Labour related concession
1) – Wages may depend on output
2) – Right to freely negotiate contracts with employees.
3) Automatic acquisition of work permits for expatriate employees (who may not exceed 20% of the overall workforce of the company after the fifth year of operation).
4) – The right to substitute the National Social Insurance Regime with a private system offering the same or better benefits.
G – Other advantages and concessions
1) The right of companies to install their own electricity generators or systems of telecommunications, where necessary
2) Preferential rates for electricity and port charges.
3) Exemption from all controls concerning rents occupations and prices.
4) Protection of all benefits on account of the general guarantees provided for in the investment code and of the right of appeal proceedings before courts of first instance and the international association for arbitration.
4) – MINING CODE: Law No 001 of 16 April 2001
Cameroon issues two types of permits, namely: exploration permits; and mining permits. Holders of exploration permits benefits from: exemptions from registration fees for mining operations, safe for those relating to lodging leases and rents.
Exemption from the following taxes
- Company tax
- Tax on business profits
- Proportional tax on movable capital incomes
- Special charge on remuneration paid abroad.
As stipulated in the mining agreement, during the mine construction phase, holders of mining permits enjoy the exemption, from custom duties and charges of equipment, materials, inputs and capital goods required for production and of the first consignment of spare parts supposed to accompany the start up equipment but for private passenger vehicles, and office equipment and supplies. They also benefit from:
1) Exemption from customs duties and charges on substitute equipment in the event of a mechanical future and on equipment to be used to extend the exploitation;
2) Total exemption of imported inputs from custom duties and charges till the date of the first commercial production established by a joint order of the Ministry in charge of mines and the Ministry in charge of finance;
3 Total exemption of imported materials and equipment necessary for the construction of buildings, from custom duties and charges, till the date of the first commercial production established by a joint order of the Ministry in charge of mines and the Ministry in charge of finance;
4- Total exemptions of specific lubricants from custom duties and charges.
GENERAL PARTNERSHIP CONTRACTS REGIME Law No 2006 012 OF 29 DECEMBER 2006
A partnership contract is and agreement by which the state or one of the structures under its authority entrusts to a third party, for a given time lapse, depending on the investment redemption period or the agreed terms and conditions, the responsibility for all or part of the following phases of and investment project:
- Designing of public services structures of equipment;
- Financing;
- Construction;
- Transformation of structures of equipment;
- Maintenance of upkeep;
- Operation of management.
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