TerraLex Cross-Border Guide to Cross-Border Guide to Business Investment in Africa

Under the OHADA (Organisation for the Harmonisation of Business Law in Africa) A foreign investor can set up several legal entities in Senegal, depending on the nature of the targeted activities. The most common business forms are:

• Sole Proprietorship which is an economic unit involving the use of human and material resources for production or distribution, based on a pre-established organization.
• The Public Limited Company (SA) is a company in which the shareholders are liable for the company's debts only up to the amount of their contributions, and whose shareholders' rights are represented by shares. The Public Limited Companies are generally used for large-scale projects. The mode of administration is determined by the articles of association, which choose between: Public Limited Company with Board of Directors and Public Limited Company with Managing Director.
• A Limited Liability Company (SARL) is a company in which the partners are only liable for the company's debts up to the amount of their contributions, and whose rights are represented by shares.
• A Simplified Joint-Stock Company is a company set up by one or more partners, whose bylaws freely provide for the organization and operation of the company, subject to the mandatory rules of the Uniform Act on Commercial Companies and Economic Interest Groups (Uniform Act on Business Companies and General Interest Group (GIE).
• General Partnership is a company in which all partners are merchants and are jointly and severally liable for the company's debts.
• A Limited Partnership is a company in which one or more partners who are jointly and severally liable for the company's debts, known as "associés en commandite", coexist with one or more partners liable for the company's debts up to the limit of their contributions, known as "limited partners”, and whose capital is divided into company shares.
• it is however, for advisable for foreign investors to set up Public Limited Company or a Limited Liability Company.

These legal entities are governed by the Uniform Act on the Law of Commercial Companies and GIE of January 30, 2014, and the Uniform Act on General Commercial Law of December 15, 2010.

The process of registering a company under Burkinabe law is governed by the relevant local law. Burkinabe companies are governed by the Code of Commercial Companies and Economic Interest Groups (CSC-GIE). The process for registering a company under Burkina Faso law may vary depending on the type of company you wish to set up. The most common types of company in Burkina Faso are as follows: A limited liability company (SARL), The public limited company (SA), General partnership (SNC), A limited partnership (SCS), Joint venture (SP) and Economic Interest Grouping (GIE).

To register a company, you need to take the following steps:

• Obtain a negative certificate from the Centre des formalités des entreprises (CFE).
• Draw up the company's articles of association and have them signed by all the founders.
• File the articles of association with the CFE.
• Pay the registration fees and obtain a receipt.
• Publication in a legal gazette.

For the Public Limited Company, the minimum share capital is FCFA 10,000,000. For Limited Liability Companies, the minimum share capital is FCFA 1,000,000 FCFA. However, with the recent amendment, this minimum capital requirement for Limited Liability Company has been abolished. Henceforth, any interested party may set up his or her own company without the minimum share capital requirement.

For other companies, the law sets neither a minimum nor a maximum.

Exchange control rules are set out in regulation n°09/2002/ CM/WAEMU of September 26, 2022, relating to the freedom of capital transfers within WAEMU member states. This regulation sets out the conditions and procedures applicable to capital transfers between WAEMU member states and between these states and third countries.

Burkina Faso has no specific legal requirement for a certain number of locals (Burkinabe nationals) to be directors of companies incorporated in Burkina Faso.

There is no legislation specifically obliging legal entities to comply with specific quotas based on demographic criteria such as gender, ethnic origin, or disability.

Periodic statutory reports must be filed with the clerk of the Commercial Court in which the company is registered. The reports are as follows: - Annual financial statements

• Annual reports
• Tax returns
• Value-added tax (VAT) declarations
• Employee reports
• Commercial and customs declarations

• Law 028-2008/AN on the Labor Code in Burkina Faso
• The Interprofessional Collective Agreement of July 9, 1974
• Decree 2021-0337 promulgating Law N°004-2021/AN of April 06, 2021, on the social security regime applicable to salaried and related workers in Burkina Faso

Foreigners need work permits to work in Burkina Faso. There are several types of work permits for foreign investors and employees. Work permits are issued by the Ministry of Civil Service, Labor, and Social Protection. The types of work permits available are as follows:

• Temporary work permit: This permit is intended for foreigners wishing to work in Burkina Faso for a limited period. It is valid for a maximum period of 12 months and can be renewed.
• Permanent work permit: This permit is intended for foreigners who wish to work in Burkina Faso for an indefinite period. It is valid for a maximum of 5 years and may be renewed.
• Work permit for investors: This permit is intended for foreigners wishing to invest in a business in Burkina Faso. It is valid for a maximum period of 5 years and may be renewed. Work permit for employees: This permit is intended for foreigners who have been hired by a company in Burkina Faso. It is valid for a maximum period of 12 months and may be renewed.

It should be noted that the conditions for obtaining work permits may vary according to the type of permit and individual circumstances.

Foreigners wishing to acquire land in Burkina Faso may encounter land law problems. Burkinabe land laws are complex and can be difficult for foreigners to understand. Foreigners cannot buy land in rural areas, but they can lease land for up to 50 years. Foreigners can buy land in urban areas but must obtain authorization from the Ministry of Urban Planning and Housing. Foreigners may also encounter land ownership problems due to corruption and land fraud.

• Economic Partnership Agreement (EPA) between the European Union and West Africa (Senegal).
• African Continental Free Trade Agreement
• United Nations Convention on the International Sale of Goods.
• Economic Community of West African States (ECOWAS) Trade Liberalization Scheme (ETLS) - the ETLS is a regional trade agreement designed to promote intra-regional trade and investment between ECOWAS member countries.
• World Trade Organization (WTO) agreements – Burkina Faso is a member of the WTO and is party to various agreements that promote international trade.

Burkina Faso is party to various agreements that promote international trade and investment

To encourage investment in Burkina Faso, the government has introduced incentives to attract foreign investors These measures include tax breaks and special investment incentive schemes that grant significant advantages to any investor meeting certain conditions, including exemptions from domestic tax duties and taxes, for periods ranging from 5 to 7 years. The Conseil Présidentiel pour l'Investissement (CPI) was also set up to improve the business environment and promote investment in Burkina Faso. The CPI has published a technical follow-up report on the recommendations and a matrix of measures and actions to be taken by the government to achieve these objectives.

The tax implications of opening and managing legal entities in Burkina Faso are governed by the General Tax Code (CGI) and the Investment Code. Legal entities are subject to corporate income tax (IS) and value-added tax (VAT). Companies are required to file an annual tax return and pay corporate income tax on their profits. Tax rates vary according to company type, sales, and location.

As far as VAT is concerned, companies must register with the Direction Nationale des Impôts (DNI) and collect VAT on sales. VAT rates vary according to the type of product or service sold

LAW N°016-2017/AN on the organization of competition in Burkina Faso. This law defines the provisions governing price freedom and free competition. It lays down the obligations of producers, industrialists, traders, service providers and other intermediaries.

Burkina Faso recognizes alternative dispute resolution mechanisms. The country is a signatory to the New York Convention of June 10, 1958, on the Recognition and Enforcement of Foreign Arbitral Awards. This means that foreign arbitral awards can be recognized and enforced by Burkinabe courts.

Burkina Fassoa promulgated Law N°038-2018/AN Investment Code in Burkina Faso. This law stipulates that foreign investors, foreign companies and their managers benefit from treatment identical to that accorded to companies and managers of Burkina Faso nationality, subject to reciprocity on the part of their country of origin.

Burkina Faso is a West African country that has enjoyed sustained economic growth in recent years. However, the business climate still lags behind international standards. According to a recent assessment, the Burkina Faso government has taken steps to improve the country's investment climate. The results of this assessment show that Burkina Faso has made significant progress in creating an investment-friendly environment. However, challenges remain, particularly in terms of infrastructure quality and corruption as well in terms social and political climate.

Burkina Fasso has taken steps to improve the business climate and boost investment in the country's private sector. Reforms have also been launched to make the economy more competitive. Here are a few promising sectors that offer the greatest chances of profitability for foreign investors in Burkina Fasso:

• Renewable energy
• Agricultural
• Mining
• Agro-industry
• Real estate development

Burkina Faso is a developing country that has enjoyed sustained economic growth in recent years. However, the country faces infrastructure challenges, particularly in the transport and energy sectors. According to the Ministry of Infrastructure and Opening-up, the Burkinabe government has implemented a policy aimed at improving the country's transport and opening-up infrastructures.

Improved infrastructure could have a positive impact on foreign investment in Burkina Faso. Foreign investors are often looking for a business-friendly environment that includes modern, efficient infrastructure. Improved infrastructure could also help reduce production and transport costs, making Burkina Faso more competitive on the international market.

The risks associated with investing in Burkina Fasso include ecomonic vulnerability, low business diversity, underdeveloped infrastructure, political and security concerns, and regulatory challenges. To mitigate these risks, investors need to exercise due diligence, seek out local partners with a good track record, understand the business culture, and obtain legal advice.