doing business in the

country profile international treaties and memberships government  Executive: The president is chief of state and the prime minister is the international  African Continental Free Trade Area Agreement structure head of government. The president is elected by universal direct suffrage and regional  African Development Bank for a period of five years and is eligible for a second term. Cabinet is organisations  African Union appointed by the president. and customs  Development Bank of Central African States (Banque de Développement  Legislative: Central African Republic (“CAR”) has a unicameral National unions des Etats de l'Afrique Centrale (“BDEAC”)) Assembly.  Economic and Monetary Community of (Communauté  Judicial: The highest courts are the Supreme Court and the Constitutional Économique et Monétaire de l’Afrique Centrale (“CEMAC“)) Court. The subordinate courts are high courts and magistrate courts.  Group of 77  Next presidential elections: December 2020.  International Fund for Agricultural Development  International Monetary Fund economic  Nominal GDP (US Billions): 2.49  Organisation internationale de la Francophonie data  GDP per capita (USD): 471.94  Organisation of African, Caribbean and Pacific States  Inflation rate (% change): 2.56  Organization for the Harmonization of Business Law in Africa (“OHADA”)  Government revenue (% of GDP): 18.95  United Nations  Government gross debt (% of GDP): 39.23  World Bank Group

*Source: IMF (September 2020)  CAR receives preferential treatment under the following agreements: http://ptadb.wto.org/Country.aspx?code=140  The Backbone of CAR’s economy is subsistence agriculture, together with bilateral  CAR has bilateral investment treaties in force with Germany and forestry and mining. investment Switzerland.  The agricultural sector generates more than half of estimated GDP. The treaties  Treaties have been signed with Egypt and Morocco but these have not yet main agricultural cash crops are coffee and cotton while diamonds and entered into force. timber constitute the bulk of the export industry.  CAR’s main export partners are France, Burundi, China, and investment-  African Growth and Opportunity Act Austria. The main export commodities include diamonds, timber, cotton related  Cotonou Agreement and coffee. agreements /  Multilateral Investment Guarantee Agency  CAR’s main import partners are France, the United States, India, China, institutions  World Trade Organization South Africa, Japan, Italy, Cameroon and the Netherlands. The main import commodities include food, textiles, petroleum products, machinery, dispute  Convention on the Settlement of Investment Disputes (ICSID Convention) electrical equipment, motor vehicles, chemicals and pharmaceuticals. resolution  OHADA  United Nations Commission on International Trade Law (UNCITRAL) risk ratings  World Economic Forum Global competitiveness index (2019): NA  United Nations Convention on the Recognition and Enforcement of  World Bank ease of doing business (2020): 184/190 Foreign Arbitral Awards (New York Convention)  Corruption perception index (2019): 153/180 intellectual  A comprehensive list of IP-related treaties signed by CAR is available at: property (“IP”) http://www.wipo.int/wipolex/en/profile.jsp?code=CF treaties  See the trade marks section below for further detail.

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doing business in the Central African Republic

legal regime  CAR is a member of two regional competition bodies, CEMAC and applicable legal  CAR’s legal system is based on civil law, which is based on the French OHADA. OHADA does not have an operational merger control regime in regime model. place. CEMAC does, however, have operational merger control. Merger activities in CAR should therefore be conducted with CEMAC in mind. In dispute  Business disputes can be submitted to the OHADA arbitration procedure. particular, in terms of CEMAC regulation, where the parties to a resolution  All national legislation has been superseded by the OHADA uniform act on concentration hold a combined market share of more than 30% in the arbitration and awards decided on by this process are binding for all CEMAC Common Market or where the parties together achieve a turnover OHADA member states. of at least F.CFA10-billion in the CEMAC Common Market, the transaction will have to be filed at CEMAC level and the CEMAC Commission will land  Law No. 139/60 of 1964 remains the primary formal law governing land have exclusive jurisdiction to review the merger. acquisition, rights in CAR and the government regulates the acquisition of land and planning and other property rights. prohibited  The Competition Act prohibits horizontal and vertical agreements between use  The following types of tenure exist in CAR: practices individuals and entities which have the object or effect of substantially  private ownership: through registration of their interest as private eliminating or restricting competition in the market. property, an entity can obtain ownership rights to land;  In particular, the Competition Act prohibits agreements or concerted  leaseholds (private and state land): entities can lease land from the practices that inter alia – (i) limit access to the market or the free exercise state or private parties under formal law and customary law. Leases of competition by other players; (ii) prevent prices from being freely of land within the state’s public domain are granted for fixed periods, determined by the market and therefore artificially favouring their increase generally not exceeding 20 years; and or decrease; (iii) limit or control production, markets, investments or  concessions/private ownership: entities may be granted concessions allocate markets or sources of supply; or (iv) organise or create a fictive of land in the state’s private domain. shortage in order to cause a price increase.  Foreign companies buying land or setting up businesses are given tax  The Competition Act also prohibits abuses of dominance. incentives based on the proximity of the project to the capital, with more  Where the Competition Authority of CAR concludes that a company is distant and remote projects earning a more attractive tax incentive in an abusing its dominant position or has engaged in cartel conduct, it may effort to bring development projects to the interior. impose a fine ranging from F.CFA1-million to F.CFA50-million and/or to imprisonment ranging from two months to two years. competition  The Competition Act prohibits restrictive trade practices such as resale merger control  The Competition Law, 2016 (the “Competition Act”), enacted by Law No. price maintenance and discriminatory practices. 2016‐06 of 30 December 2016 on Commercial Law, regulates merger  Restrictive trade practices (resale price maintenance and discriminatory control in CAR. practices) are subject to a fine ranging from F.CFA100 000 to F.CFA10-  A concentration is achieved in CAR where: (i) two or more previously million and/or to imprisonment ranging from one to six months. independent undertakings merge; or (ii) where one or more undertakings  OHADA does not, at present, regulate prohibited practices. acquire, directly or indirectly whether by acquisition of shares, contract or  The CEMAC regulations prohibit abuses of a dominant position and anti- by any other means, control of all or part of one or more undertakings. competitive agreements. Business activities in CAR should therefore be  In calculating merger thresholds, CAR uses a market share threshold in conducted with CEMAC in mind. In particular, in terms of the CEMAC CAR. Mandatory notification of a merger with the Minister of Commerce is regulation, the CEMAC Commission has exclusive jurisdiction to required where the parties to the transaction (or the undertakings investigate and sanction anti-competitive agreements and abuses of economically linked to the parties) have a combined market share of at dominance where trade between CEMAC member states is affected. least 30% in CAR or on a substantial part of CAR. employment  CAR is a pre-implementation regime, therefore approval must be sought requirements from the Minister of Commerce prior to implementation of the proposed transaction. immigration  Expatriates working in CAR must hold a valid work permit.  Any breach of the merger control regulation (including a failure to notify) is  There is no restriction on the number of foreigners that an investor may subject to a fine ranging from F.CFA2-million to F.CFA200-million and/or employ, however, expatriates are expected to be understudied by local to imprisonment ranging from two months to two years. staff and training programmes are to be conducted for local staff.

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doing business in the Central African Republic

local  In terms of CAR’s employment legislation, employees seconded to CAR National Social  Every employer must register with the CNSS. employment vs must be employed by a local company and have an employment contract Security Fund  The registration of employees for social security is no longer completed at secondment or a letter of employment endorsed by the Labour Minister. (Caisse the GUFE. It must be completed directly at the CNSS offices. Nationale de fixed-term  Fixed-term contracts are allowed in terms of the CAR Labour Code for a Sécurité Sociale, contracts and maximum period of two years. (“CNSS”)) temporary employment Regional  The company must file a declaration at the Regional Directorate of services Directorate of Employment following registration, notifying the authorities of the hiring of Employment payment in local  Remuneration must be paid in local currency. employees. currency industry-  Industry-specific licences may also be required. foreign investment regime specific investment  The CAR Investment Charter (Law No. 01-010 of 16 July 2001) provides a licences regime general framework for both national and foreign investments in CAR. incentives  Incentives include:  The one-stop shop for businesses (Guichet Unique de Formalité des  those granted to companies approved under the CAR Investment Entreprises, (“GUFE”)) has been established to to improve the business Charter and Mining Code (Law No. 05-2009); and investment environment in CAR and to provide business formation  those granted under the General Code of Tax Benefits (Code des services. avantages fiscaux de droit commun, GCTB), which include: registration /  Companies must register with the GUFE in order to file an application for  a tax exemption on developed real estate property which may licensing the formation of a company with the commercial registry. be granted for eight years, subject to conditions; requirements  The GUFE facilitates the completion of the company formation and  a tax exemption on undeveloped real estate property which registration administrative formalities, which include: may be granted for a period ranging between three and 10  registration with the Trade and Personal Property Credit Register years, depending on the type of land and subject to conditions; (Registre du Commerce et du Crédit Mobilier, (“RCCM”));  an exemption from two thirds of the business tax which may be  registration with the Chamber of Commerce, Industry, Mines and granted for three years; Craft (Chambre de Commerce et d’Industrie, CCIMC); and  an income tax exemption applicable for a certain period for  obtaining approval for the business from the Ministry of Commerce newly formed companies or companies engaging in new activities; and and Industry.  a preferential tax regime available to corporate headquarters, non-industry  The following general non-industry specific registration/licences may also under which the parent company is subject to a lump-sum tax specific be required: based on gross expenses, instead of the standard corporate registrations / income tax regime. licences exchange  Under the CAR Investment Charter, non-resident individuals or legal business licence  Businesses operating in CAR must obtain a valid business licence from control entities may freely transfer income of any nature derived from capital the relevant municipality for F.CFA10 200. regulation investments, provided all associated tax liabilities have been settled.  CAR is a member of CEMAC and subject to the CEMAC foreign exchange General  Companies must obtain a tax identification number (numéro regulation. Transactions within CEMAC member states and inside the Directorate of d’identification fiscal, (“NIF”)) from the DGID. CFA Franc zone can be made freely, with the exception of payments the Taxes and relating to gold, certain loans, direct investments and transactions in Domains foreign securities. (Direction  Transactions that exceed F.CFA1-million must be disclosed to the foreign Générale des exchange office for statistical purposes and operated through an approved Impôts et des intermediary. Supporting documents are also required. Domaines (“DGID”))

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doing business in the Central African Republic

types of  The forms of doing business available in CAR are mainly the following auditor  SARL and SAS: must appoint a statutory auditor when two of the following entities provided for by the OHADA Uniform Act on Commercial Companies and three conditions are met at the end of the financial year: available for Economic Interest Groupings:  its total balance sheet exceeds F.CFA125-million; foreign  public limited company (société anonyme, (“SA”));  the annual turnover exceeds F.CFA250-million; or investment  simplified limited lability company (société par actions simplifiée,  the permanent staff exceeds 50 employees. (“SAS”));  SA: appointment of an auditor is mandatory.  private limited liability company (société à responsabilité limitée, (“SARL”)); registered  Every company must have a registered office which must be indicated in  general partnership (société à nom collectif, SNC); address the Articles of Association.  limited partnership (société en commandite simple, SCSs);  The address of the company’s accountants or lawyers may be used as  joint venture (société en participation); registered address for an interim period.  de facto partnership (société de fait); shelf  Shelf companies are not available in CAR.  economic interest grouping (groupement d’intérêt économique, GIE); companies  registered branch of a foreign company; and registration  representation or liaison offices.  Companies are registered with the RCCM and it takes approximately three process weeks to complete registration once all the required documents have been private limited liability company submitted. minimum  SARL | SA | SAS: A minimum of one shareholder is required. tax number of  Local shareholders are not required, except in certain specified sectors tax system  CAR has a source-based tax system, in terms of which both residents and shareholders such as mining, oil and gas. non-residents are subject to tax on income earned from a source in CAR. minimum share  In terms of the OHADA Uniform Act on Commercial Companies and  Foreign-sourced dividends, royalties, interest and capital gains earned by capital Economic Interest Groupings, the following minimum share capital resident companies are subject to tax to the extent that they are not requirements apply: attributed to a foreign permanent establishment of a CAR company.  SARL: at least F.CFA1-million, which shall be divided into equal corporate  The General Tax Code does not define the concept of “residence”, but shares whose face value may not be less than F.CFA5 000. residence lists entities that are subject to taxation in CAR, i.e. entities operating  SA: F.CFA10-million, divided into shares with a face value of not and/or incorporated in CAR. less than F.CFA10 000.  SAS: no minimum required share capital, but in practice F.CFA10- corporate tax  Resident companies and permanent establishments of foreign companies million. rate are subject to corporate income tax at the rate of 30%.  Companies carrying on agricultural activities are taxed at a reduced rate of directors  SARL: must have at least one managing director (gérant). It is 20% and companies engaged in petroleum operations are subject to recommended that someone who is either based in or regularly travels to corporate income tax at the rate of 50%. CAR be appointed as managing director, as it is required for such a  A minimum tax is due at the higher of: person to hold a long term visa.  0.3% of the annual turnover or F.CFA300 000 for agricultural  SA: must appoint a chairman of the board who can also act as general activities; or manager of the company (directeur général).  1.85% of the annual turnover or F.CFA1 850 000 for other activities.  SAS: free to determine its management structure, which could consist of  The minimum tax does not apply to insurance companies. only one chairman. capital gains  Capital gains are included in ordinary taxable income and subject to company  There is no requirement to appoint a company secretary in CAR. tax (“CGT”) corporate income tax at the standard rate of 30%. secretary

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doing business in the Central African Republic

withholding tax WHT rate employee taxes The income tax rates applicable to resident individuals are: (“WHT”) rates payment to residents non-residents annual chargeable income (F.CFA) tax rate branch profits N/A N/A up to 378 000 0% dividends 15% 15% 378 001 – 1 680 000 8% 90% of dividends 1 680 001 – 3 360 000 15% qualifying for the participation exemption is 3 360 001 – 5 040 000 28% exempt from tax above 5 040 000 40%

interest 15% 15% social security  Both employees and employers must make monthly social security royalties N/A 15% contributions contributions to the CNSS.  Contributions are calculated on total wages, salaries, fringe benefits and management, 3% 15% employment-related allowances, subject to a monthly ceiling of consulting and F.CFA600 000. technical service fees  Employer contributions rates are: double tax  DTAs are in force with CEMAC (including Cameroon, , Republic of  family allowances (including sickness and maternity leave): 12%; agreements Congo, Equatorial and ) and France.  old age, disability and survivors: 4%; and (“DTAs”)  work injury: 3% losses  Losses may be carried forward for a period of three years.  Employee contribution rate is 3% of gross earnings, including fringe  Deferred depreciation in loss-making years may be carried forward benefits, with a monthly earnings ceiling of F.CFA600 000. indefinitely. payroll taxes  A social development contribution (contribution de développement transfer pricing  In terms of CAR’s transfer pricing rules, transactions entered into between social, CDS) levy is payable by employers at a rate of 10% of a specified related parties must be entered into on an arm’s length basis. percentage of all payments and benefits in kind granted to employees.  A company is an associate of another person if: stamp duty  Variable registration duties (droits d’enregistrement) are levied under the  one of them directly or indirectly holds the majority share capital of Code on Registration and Stamp Duty (Code de l'Enregistrement et du the other company or it is the de facto decision-making authority; or Timbre, CRSD).  a third person participates directly or indirectly in the management,  Registration duty at a rate of 6% is payable on the transfer of shares. control or capital of both companies.  Registration duty on the transfer of immovable property is levied at the limitations on  There are no thin capitalisation rules applicable in CAR, but financial rate of 7.5% on developed urban immovable property and 6% on interest charges are deductible subject to the following conditions: undeveloped urban immovable property and developed rural immovable deductibility  the charges are justified effective charges; and property.  in the case of interest paid on shareholder loans if the interest rate  Stamp duty (contribution du timbre) is levied on all documents requiring on loans does not exceed the BEAC rate plus two percentage points legalization and used as official documents and judicial instruments, and and the loans do not exceed, with regard to all such shareholders, on documents to be used as evidence in court proceedings at rates half of the required free capital. varying between F.CFA500 and F.CFA2 000. value added tax (“VAT”) taxable supplies  VAT is levied on the supply of goods and services in CAR and on the importation of goods and services.

VAT rate  19%  A reduced rate of 5% applies to certain basic necessities.

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doing business in the Central African Republic

registration  Any person who habitually or occasionally carries out economic activities procedure  An application is filed at the OAPI office in CAR. An application is threshold in CAR and has an annual taxable turnover exceeding F.CFA30-million examined to determine if it complies with formal requirements and in must register for VAT purposes. respect of prior conflicting trade marks. If accepted, the registration  Businesses whose turnover is below the registration threshold may apply certificate will be issued and the trade mark registration published for for voluntarily registration, provided any other registration requirements opposition purposes. are met. oppositions  Opposition may be lodged within six months following the date of reverse VAT on  A non-resident taxpayer must appoint an accredited solvent advertisement of the registration. No extensions are allowed. imported representative, resident in CAR, who will be jointly responsible for services payment of the VAT. duration and  A trade mark registration is effective for an initial period of 10 years and, renewal thereafter, renewable for further periods of 10 years. trade marks

international  Madrid Protocol

conventions,  Nice Agreement For more information or assistance please contact: treaties and  Paris Convention arrangements  Trade Mark Law Treaty Celia Becker  World Intellectual Property Organization Executive | Africa regulatory and business intelligence  World Trade Organization [email protected] cell: +27 82 886 8744 *Note This document contains general information and no information provided herein may in any way be construed as legal advice from ENSafrica, any of its personnel and/or its correspondent firms. CAR is a member of Organisation Africaine de la Propriété Intellectuelle Professional advice must be sought from ENSafrica before any action is taken based on the information (“OAPI”). An OAPI application automatically covers all member countries, as provided herein. This document is the property of ENSafrica and consent must be obtained from the member states had to renounce their national IP laws in order to become ENSafrica before the information provided herein is reproduced and/or distributed in any way. members. It is therefore not possible to file individual national applications in any of the OAPI member states. LAST UPDATED SEPTEMBER 2020

classification  The international classification of goods and services applies. A single application may cover any number of class, however, goods and services may not be included in the same application.

categories of  Provision is made for: trade marks  collective marks;  geographical indications; and  service marks.

filing  Certified copy of the priority document (if applicable); requirements  electronic copy of the trade mark;  full particulars of the applicant; and  Power of attorney, in French or English, simply signed.

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