Frequently Asked Questions
1. What are the major short-term measures taken by the Government of the Democratic Republic of the Congo on the sidelines of the health crisis caused by the COVID-19 pandemic in favor of the economy in general and businesses in particular?
The main measures taken are as follows:
(a) Suspension for a period of three months of the collection of domestic VAT on the production and sale of basic necessities upon signature of the Decree by His Excellency the Prime Minister;
b) Suspension, for a period of 3 months, of all tax control missions on the spot, except for cases of flagrante delicto affecting the interests of the Public Treasury, and this, after having previously referred the matter to His Excellency the Minister of Finance;
c) Suspension of actions for the forced collection of tax arrears;
d) Taking into account as a deductible expense in the accounting result of the financial year 2020, the contributions of companies to the Fund to support the response. These expenses must be justified by the documents listed in the current Tax Law;
e) Exemption for a period of six months from all taxes, duties, fees and charges on the import and sale of pharmaceutical products and medical equipment.
f) Suspension for a period of three months of the application of penalties in the event of delay in the customs clearance of goods and basic necessities, of the payment of tax on rental income to be paid by companies, and of certain fiscal, parafiscal and economic control missions in companies, etc.
2. What are the priority industrial sectors of the DRC?
Answers: the priority industrial sectors of the DRC are: (i) agro-industry, (ii) building materials, (iii) mining and metallurgy and (iv) packaging as a support sector.
It should be stressed that investors are free to target another sector of their choice, and such investment will always be welcome and will benefit equitably from all the advantages provided for under the DR Congo's investment policy.
3. Does the DRC have a specific policy in the industrial sector? If so, what are its main articulations?
Answer: The industrial policy for DRC is documented in the Industrial Policy and Strategies Document, DPSI in acronym. This document is the declination of the Poverty Reduction and Growth Strategy Paper, second generation (PRSP 2) and the National Strategic Development Plan (PNSD) for the industrial sector.
The vision of this policy is to provide the country with a dynamic, competitive, environmentally responsible and sustainable development industrial fabric based on the expansion of the value creation chain for more decent jobs in order to contribute to the emergence of a diversified and competitive economy.
It should be pointed out that the DPSI covers the period from 2019 to 2023. At the end of this five-year period, the DRC has set itself the following objectives in relation to the industrial sector:
a) Increase the share of the external market of the manufacturing industry from 0 to 15%;
b) Increase the number of industrial units from 525 to more than 1000 units;
(c) Increase the share of industry in GDP from 18.3 per cent to 28 per cent, etc.
4. Does the DRC have a Special Economic Zone? If so, what advantages are granted in this Zone?
Answer: DR Congo has a pilot Special Economic Zone in Maluku, which is being set up. In the short term, the developer recruited and having already signed the contract with the Congolese Government should recruit and start with the construction of the infrastructures of the said Zone. In the Government policy, through the Ministry of Industry, several other sites for the erection of other Special Economic Zones have already been identified and are seeking investors (developers). These are as follows:
(a) Equatorial Space;
b) Eastern space;
c) Katanga Space;
d) Equateur Space.
With regard to the Prime Minister's Decree n° 20/004 of March 5, 2020, the following advantages are granted to developers or companies that have to operate within the Special Economic Zone:
1. For the developer
Ø Total exemption from property, furniture and business tax on profits for 10 years, renewable once after evaluation;
Ø 50% reduction of the fixed tax rate from the 21st year;
Ø Total exemption from import duties and taxes on machinery, tools and equipment, new or used, capital goods... for 10 years...
2. For the company
Ø Total exemption from property, furniture and business tax on profits for 5 years, renewable once after evaluation;
Ø 50% reduction of the fixed tax rate from the 11th year;
Ø Application of the exceptional depreciation system;
Ø Total exemption from import duties and taxes on machinery, tools and equipment, new or second-hand, capital goods... for 10 years;
Ø Exemption from export duties and taxes on finished products for 10 years...
5. What is the current state of the insurance sector in the DRC?
Since 2015, this sector has been liberalized through Law n°15/005 of 17 March 2015 on the Insurance Code. This law gave birth to the Insurance Regulation and Control Authority (ARCA).
Today, the insurance market has an average penetration rate of about 0.71% of GDP. Since its liberalization, this sector has seen the entry of 6 new companies, 4 of which are insurance companies and 2 as insurance brokers.
6. What are the conditions for benefiting from the advantages provided for in the Law laying down rules on the conditions and procedures for rescuing industrial undertakings in difficulty?
Answer: Any industrial company in difficulty must meet the following conditions:
Ø Guarantee direct and indirect employment;
Ø Adding value to local raw materials;
Ø Guarantee the fiscal contribution to the revenues of the central government, the provinces and the decentralized territorial entities;
Ø Ensure the maintenance of socio-economic impacts on the local and national environment.
7. What is the procedure laid down so that an industrial undertaking may benefit from the advantages of Law No 14/023 of 7 July 2014 laying down rules on the conditions and procedures for rescuing industrial undertakings in difficulty?
In order to benefit from the advantages provided for within the framework of this Law, any industrial undertaking in difficulty which expresses such interest shall be required, for this purpose, to file an application to the National Agency for the Promotion of Investments at the opening or after the opening of the collective proceedings, at the latest before the preventive or recovery composition agreement.
8. What are the advantages provided for in the Law laying down rules on the conditions and procedures for rescuing industrial undertakings in difficulty?
An industrial firm in difficulty admitted under the conditions laid down in Article 4 of this Law shall enjoy the following customs, fiscal and parafiscal advantages, as appropriate:
(a) Total exemption from import duties on inputs, excluding the related administrative fee. The list of inputs is contained in the Annex to the Joint Order of the Ministers in charge of Industry, Planning and Finance respectively;
b) The total exemption from import duties and taxes for new machinery, tools and equipment, spare parts of first endowment not exceeding 10% of the CIF value of the said equipment, after presentation of the request approved by the National Agency for Investment Promotion, excluding the administrative fee;
c) The application of declining-balance depreciation, the rate of which is determined in the program contract, for capital goods acquired.
9. What are the legal forms of companies recognized in the DR Congo?
In application of the provisions of the OHADA Uniform Act relating to the law of Commercial Companies and Economic Interest Groupings (EIGs), the legal forms of companies in force in the Democratic Republic of the Congo are as follows:
- Sole proprietorship (or establishment);
- The Limited Liability Company (LLC);
- The Public Limited Company (SA);
- Simplified Joint Stock Company (SAS);
- The Collective Name Company (CNC);
- The Limited Partnership (LP);
- The Economic Interest Grouping (EIG).
10. What is the general procedure for setting up a business in the DR Congo and what are the costs involved?
a. Procedure for setting up a business
Ø Any investor wishing to set up a company in the DRC should contact the Single Window for business creation.
E-mail: guichetuniquerdc@yahoo.fr / guce@guichetunique.cd
Tel. : +243 822 284 008
Ø However, the investor can ask for ANAPI's support in this process and this, in its capacity of Single Window for investment in the DR Congo.
Address: Crossroads of Boulevard du 30 juin and TSF Avenue, No. 33C, Municipality of la Gombe
Site web: www.investindrc.cd
E-mail: anapirdc@yahoo.fr /anapi@investindrc.com
Tel: +243999925026
b. Documents to be filed with the Single Window for Business Creation (www.guichetunique.cd)
§ Corporate entity
1. Letter of request for the creation of a company addressed to the Managing Director of the Single Window;
2. Articles of Association of the company in 4 copies + an electronic copy of the articles of association for publication in the Official Gazette;
3. Specimen of the manager's signature (plus a photocopy of the validity of the visa in case the manager is a foreigner);
4. Declaration of subscription to and payment of the share capital;
5. Proof of payment of the share capital (Paying-in slip or Attestation issued by a banking or microfinance institution duly approved in the State Party of the registered office). For the Limited Liability Company (LLC), there is no requirement for the amount of the minimum capital even though the nominal value of the contributions should not be less than the equivalent of FCFA 5,000 each (USD 10).
For the Public Limited Company (SA), the share capital must be the equivalent of at least FCFA 10,000,000 (USD 20,000) when it does not go public and FCFA 100,000,000 (USD 200,000) otherwise. In addition to this amount of share capital, in accordance with Congolese tax legislation, a proportional duty of 1% of the value of the share capital (at the creation, and possibly at the increase of the share capital or the extension of the duration of the company) is added.
6. Proof of payment of administrative fees
§ Natural person for the constitution of an establishment
1. Letter of request for the creation of a company addressed to the Managing Director of the Single Window;
2. Title deed or lease contract or occupancy title;
3. Recognized identity document;
4. Extract from the criminal record or sworn statement valid for 75 days;
5. Residence permit -visa (for foreigners);
6. Marriage contract (for foreigners if necessary);
7. Mandate or Power of Attorney (in case of absence of the manager to start the procedure).
c. Cost of setting up the business (legal and natural person):
1. Natural person: 30 USD
2. Corporate entity: 80 USD when the applicant firm presents the notarized articles of association and 70 USD in case of a private subseing presented at the Single Window for business creation (GUCE).
11. What is the structure of export duties and taxes applied in the DRC?
- 1% for coffee
- 1% for fresh water
- 1.5% for artisanally mined gold and diamonds
- 3% for industrial gold and diamond production
- 5% for current electricity
- 5% and 10% for minerals
- 6% for edged wood
- 10% for log wood
12. What is the procedure for obtaining an agricultural concession?
· The right to use land is called a "concession". It is legally established only by a certificate of registration of the land granted by the State. It is unassailable after 2 years from the date of its establishment.
· There are two types of concessions: the perpetual concession, reserved for Congolese (with no time limit) and ordinary concessions, accessible to Congolese and foreigners (for a period of 25 years renewable without limitation).
To obtain an ordinary concession for agricultural use, the following steps must be followed:
a. General steps
· Identification of a land (contact the Ministry of Land Affairs or ANAPI);
· Signature of an agreement with the customary authority of the place, against payment of a sum of money and material goods in accordance with custom;
· Land vacancy survey and demarcation by the competent State services (local services of the Ministry of Agriculture and the Ministry of Land Affairs);
· Signing of the concession contract (Registrar of Real Estate Titles of the jurisdiction);
· Issuance of the registration certificate by the Registrar of Immovable Titles of the jurisdiction.
b. Specific steps
· Depending on the area to be acquired, the following competent authorities will come together to approve the concession contract:
· The contract must be approved by a law for blocks of land equal or superior to 2,000 ha;
· The contract must be approved by order of the President of the Republic for blocks of land greater than 1,000 ha and less than 2,000 ha;
· The contract must be approved by the Ministry of Land Affairs for blocks of land larger than 200 ha and not exceeding 1,000 ha;
· The contract must be signed by the Governor of the Province for blocks of land equal to or less than 200 ha. The Governor of the Province may delegate his powers to the Registrar of Real Estate Titles for land of less than 50 ha.
13. What is the rate of taxation on profits in the DR Congo?
· The tax rate on profits and gains in the DR Congo is 30%. Still with regard to the tax on profits and gains, it should be noted that the taxpayer pays 1/100 of the declared turnover when the results are in deficit or profitable but are likely to give rise to lower taxation at that time.
· In addition, under no circumstances may the minimum tax payable under the Tax on Profits and Gains (IBP) be less than 750,000 Congolese francs for medium-sized enterprises and CFAF 2,500,000 for large enterprises. This minimum tax is only due for 1/12th or fraction of a month if the taxpayer started his activities after the month of January.
· Small enterprises are taxed on the basis of turnover and depending on the sector of activity. :
- 1% for sales activities;
- 2% for service activities.
In the event that the taxpayer carries out both sales and service activities, the respective turnovers are aggregated and taxed at the rate for the main activity.
14. What are the advantages granted to investors in DR Congo under the strategic partnership on the value chain and the conditions of eligibility?
Advantages:
· Suspension of value added tax, both domestically and on import, on construction materials, equipment, spare parts, inputs and raw materials intended exclusively for the project;
· Suspension of value added tax on the supply of services provided in the context of the operation directly related to the project;
· Suspension of value added tax on intermediate and/or finished products and services produced by the company;
· Exemption from import duties and taxes on goods, inputs, raw materials and equipment intended for the project;
· Reductions of taxes collected at the initiative of the various Ministries and services at the central, provincial and local levels by way of interministerial order referred to in Article 11 of this decree;
· Reduction of the costs of remuneration for certain services within the institutional framework referred to in Article 11 of this Decree;
· Eligible for the status of privileged partner vis-à-vis the tax authorities;
· Application of preferential energy tariffs per Kilowatt/Hour.
Eligibility requirements:
Firms, which may benefit from the tax scheme in question, must meet the following criteria:
- Be constituted under one of the forms of commercial companies recognized in Congolese positive law;
- Conclude beforehand a partnership agreement with the Government within the framework of the Strategic Partnership on Value Chains;
- Present a global investment program of an amount equivalent in Congolese francs to at least USD 15 million;
- Commit to creating a number of jobs equal to or greater than 100;
- Submit proof of investments and the effective fulfillment of obligations subscribed to within the framework of preferential regimes acquired through the Investment Code and/or other exceptional measures, in particular program contracts.
15. What exemptions are granted to investors under the Investment Code, the Mining Code and the Agricultural Law?
Ø Types of benefits granted under the Investment Code
- Exemption from income tax;
- Exemption from property tax;
- Exemption from import duties on equipment and other materials;
- Exemption from exit duties on finished products.
In addition, SMEs and SMIs benefit from the specific advantages set out below:
- Exemption of entry fees for second-hand equipment and other materials;
- Exemption from import duties on industrial inputs necessary for the implementation of the approved investment;
- SMEs and SMIs admitted to the General Regime of the Code are authorized, on the one hand, to deduct from their taxable profit, the sums spent on training, further training of the head of company or his staff, protection and conservation of nature and, on the other hand, to calculate their depreciation according to a digressive mode;
- Calculation of depreciation on a declining-balance basis.
Ø Types of benefits granted under the Mining Code
Ø Customs benefits
- Total exemption from customs duties on the export of commercial products;
- Payment of fees and royalties for services rendered on export within the limit of 1%;
- Customs duties at 2% before the actual exploitation of the mine, and 5% after;
- Customs duties of 3% on fuels, lubricants, reagents and consumables.
Ø Tax benefits
- Exemption from property tax;
- Exemption from vehicle tax and special road traffic tax.
- Exemption from personal property tax;
- Taxation at the rate of 10% of dividends; 30% of the rate of tax on profits and profits;
- 10% of the rate of the exceptional tax on expatriates' remuneration (IERE).
Ø Types of benefits under the Farm Act
- Deduction from the taxable base of the charges relating to the maintenance of the road section linking the farm concession to the public highway.
- Preferential tariff in favor of farmers in the consumption of water, electrical energy and petroleum products.
- Authorization to set up a tax-exempt provision not exceeding 3% of the turnover for the financial year, for the purpose of rehabilitating exploitable arable land and preventing major risks and agricultural disasters.
16. Does the Investment Code cover all sectors?
No, the provisions of the Investment Code do not apply to the following sectors:
- Mining and hydrocarbons;
- Banking;
- Insurance and Reinsurance;
- Production of armaments and related military activities;
- Production of explosives;
- Assembly of military and paramilitary equipment and materials of security services;
- Production of armament and military and paramilitary activities or security services;
- Commercial activities.
Specific laws regulate investments in the above-mentioned sectors. Notwithstanding the specific provisions governing each of these sectors of activities, any investor is required to deposit a copy of his investment file at ANAPI.
17. What are the conditions for admitting a project to the benefits of the Investment Code?
Investors are eligible for the General Regime of this law under the following conditions:
- Be an economic entity under Congolese law;
- Be for a minimum amount equivalent to 200,000 US dollars;
- Undertake to comply with regulations on environmental protection and nature conservation;
- Commit to training national staff in specialized technical, managerial and leadership functions;
- Guarantee a rate of added value equal to or greater than 35%.
18. What are the main common law taxes and duties collected in the DRC?
The main ordinary taxes and duties levied in the DRC are those listed in the table below:
| TAX NAME | LEGAL BASIS | REGIME CONTENTS | OBSERVATIONS |
|
|
- Ordinance-Law No. 69/006 of 10 February 1969 on real taxes (amended and supplemented several times) |
|
Provincial Jurisdiction Tax (Variable rates by province) |
|
|
Ordinance-Law No. 69/009 of 10 February 1969 on schedular taxes on income |
Rate: 20%.
|
Tax under provincial jurisdiction (Traditional rate: 22%)
Taxes within the competence of the Central Government
Idem |
|
|
|
Taxation of supplies of goods, services and imports Rate: 16%. |
Idem |
| Ordinance-Law No. 10/002 of 20 August 2010 on the Customs Code (amended and supplemented several times) |
| Idem
|
|
|
Order-Law No. 18/002 of 13 March 2018 on the Excise Duties Code |
Specific taxation of the import or local production of certain products (Alcohol, alcoholic beverages, lemonades, tobacco and cigarettes, petroleum products, telecommunications, plastic products, vehicles, etc.). |
Rate: 5%, 10%, 15%, 20%, 24%, 28%, 45%, 60 % et 80% |
(NON-TAX RECEIPTS) |
|
| Rates set by interministerial orders |
19. What is the procedure for hiring and firing expatriate workers in the DRC?
The procedure for the hiring and termination of expatriates is as follows:
- Submit the job offer to the National Employment Office "ONEM" beforehand;
- Submit the expatriate candidate's file to the National Commission for the Employment of Foreigners in order to enable the Commission to decide on the application for employment and the granting of the work permit for foreigners.
20. What are the DR Congo's priority industrial sectors?
· Building materials sector;
· Agro-industrial sector;
· Mining and metallurgy sector;
· Packaging sector
21. What are the main taxes to which companies are subject in the DRC?
| N° | Types of taxes | % |
| 1. | Business income tax (corporate income tax) | 35% |
| 2. | Rental tax | 20% |
| 3. | Personal income tax (on dividends) | 20% |
| 4. | Value Added Tax (domestic and import) | 16% |
| 5. | Value Added Tax (export) | 0% |
| 6. | Business tax on remuneration (see details below) :Income less than CDF 72,000: 3%.
|
|
22. What are the social contributions and contributions due on earnings in the Democratic Republic of the Congo?
| N° | Types of taxes | Number | Rate |
| I | Business and exceptional taxes on remuneration |
|
|
|
| Casual Staff |
| 15% |
|
| End-of-contract staff (nationals) |
| 10% |
|
| Staff at the end of their contract (expatriate) |
| 10% |
| II | Employers' contribution to the National Employment Office |
|
|
|
| Tax base |
| 0,2% |
| III | Social contributions to the INPP |
|
|
|
| Public |
| 3% |
|
| Private and others | 1 to 50 | 3% |
|
| Private and others | 51 to 300 | 2% |
|
| Private and others | Over 300 | 1% |
| IV | Social contributions to the CNSS |
| 18% |
|
| Pensions branch: 10% of which 5% is charged to the Employer and 5% to the employee |
|
|
|
| Branch of family benefits: 6.5% at the exclusive charge of the Employer |
|
|
|
| Professional Risks Branch: 1.5% at the exclusive charge of the Employer |
|
|
23. What is the structure of import duties and taxes in the DR Congo for the following products?
5% of customs duties for:
- Capital goods
- Raw materials
- Agricultural and livestock inputs
- The CKD assembly collection
- Pharmaceutical inputs
- Automatic machines for information processing
- Milk and other preparations for the feeding of children
10% of the customs duties for
- The MKD assembly collections
- Consumer food products
- Spare parts, spare parts and accessories
- Industrial inputs
20% for other finished products.
24. What is the difference between ANAPI's attributions and those of the Fund for the Promotion of Industry?
ANAPI is the Single Window for investments in DRC; it is the advisory body of the central and provincial governments in charge of investment promotion and improvement of the business climate. It is the only structure empowered to implement the Investment Code in terms of granting customs, fiscal and parafiscal incentives.
The FPI, on the other hand, is a non-bank financial institution responsible for collecting taxes from industrial enterprises and granting credits to the same industrial enterprises.
25. What is the difference between ANAPI's attributions and the unit in charge of the Business Climate under the supervision of the Presidency of the Republic?
ANAPI is the technical body whose mission is to propose reforms relating to the improvement of the business climate and the general investment environment in the DRC. On the other hand, the Unit in charge of the Business Climate is the relay structure that promotes the institutional appropriation of the said reforms at the level of His Excellency the President of the Republic, Head of State, in accordance with his development program that makes the issue of business climate its twelfth pillar.