Doing Business in Chad
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doing business in Chad country profile international treaties and memberships government Executive: The president is the chief of state and the prime minister is the international African Continental Free Trade Area Agreement structure head of government. The president is directly elected by absolute majority and regional African Development Bank popular vote, in two rounds if needed, for a five-year term and is eligible organisations African Union for a second term with no limits to the number of subsequent terms. and customs Bank of Central African States (Banque de Développement des États de Cabinet is appointed by the president. unions l'Afrique Centrale (“BEAC”)) Legislative: Chad has a unicameral national assembly. Central African Economic and Monetary Community (Communauté Judicial: The highest courts are the Supreme Court and the Constitutional Économique et Monétaire de l’Afrique Centrale (“CEMAC”)) Council. The subordinate courts are the High Court of Justice, courts of Community of Sahel-Saharan States appeal, tribunals and justices of peace. Development Bank of Central African States Next presidential elections: April 2027. Economic Community of Central African States Group of 77 economic Nominal GDP (USD billions): 12.01 International Monetary Fund data GDP per capita (USD): 710.17 International Organisation of the French-speaking World (Organisation Inflation rate (% change): 3.01 internationale de la Francophonie) Government revenue (% of GDP): 16.28 Lake Chad Basin Commission Government gross debt (% of GDP): 44.35 Organisation of African, Caribbean and Pacific States *Source: IMF (May 2021) Organisation of Islamic Cooperation Organization for the Harmonization of Business Law in Africa (“OHADA”) Chad’s economy is mainly driven by oil, which provides about 60% of United Nations export revenues, and agriculture. World Bank Group Chad’s main export partners are China, the United Arab Emirates, India, World Customs Organization the United States, France and Germany. The main export commodities Chad receives preferential treatment under the following agreements: include crude petroleum, gold, livestock, sesame seeds, gum arabic and http://ptadb.wto.org/Country.aspx?code=148 insect resins. bilateral Chad has bilateral investment treaties in force with Germany, Italy and Chad’s main import partners are China, the United Arab Emirates, France, investment Switzerland. the United States and India. The main import commodities include delivery treaties Treaties have been signed with Benin, Burkina Faso, China, Egypt, trucks, paints, packaged medicines, aircraft and broadcasting equipment. Guinea, Lebanon, Mali, Mauritius, Morocco, Qatar and Turkey but these risk ratings World Economic Forum global competitiveness index (2019): 141/141 have not yet entered into force. World Bank ease of doing business (2020): 182/190 investment- African Growth and Opportunity Act Corruption perception index (2020): 160/179 related Cotonou Agreement agreements / Multilateral Investment Guarantee Agency institutions World Trade Organization dispute Convention on the Settlement of Investment Disputes (ICSID Convention) resolution OHADA United Nations Commission on International Trade Law (UNCITRAL) intellectual A comprehensive list of IP-related treaties signed by Chad is available at: property (“IP”) http://www.wipo.int/wipolex/en/profile.jsp?code=TD treaties See the trade marks section below for further detail. 1 doing business in Chad legal regime prohibited The Act prohibits horizontal and vertical anti-competitive practices and applicable legal Chad’s legal system is based on French civil law and customary law. practices agreements, concerted actions or express or tacit coalitions which as their regime object or effect are likely to distort or impede competition (i.e. price fixing, dispute The OHADA treaty provides an arbitration procedure. Disputes relating to market allocation, etc.). resolution the general Uniform Acts, or any other business dispute, can be submitted The Act prohibits abuses of dominance. to the OHADA arbitration procedure. Where the National Competition Commission (“NCC”) concludes that a All national legislation has been superseded by the Uniform Act on company has entered into an agreement which results in anticompetitive Arbitration. effects or an abuse of dominance, such agreement shall be null and void. Fines for anticompetitive agreements or cartels may be applied by the land Foreigners may acquire an interest in land through a long-term lease NCC, however, the Act does not provide an indication as to the maximum acquisition, agreement. amount likely to be applied. In this regard, the Act provides that non- planning and The Land Law prohibits deprivation of ownership without due process. compliance with the decisions of the NCC shall be subject to a maximum use Under the Investment Charter, 2008 foreign investors are explicitly allowed fine of 5% of the turnover achieved during the previous financial year. to acquire properties and concessions of any kind required for their Furthermore, the Act states that any individual who has taken a fraudulent business activities. and crucial part in an anticompetitive agreement or cartel is subject to a 14-day to one-year imprisonment and/or to a fine ranging from competition F.CFA100 000 to F.CFA10-million. Firms specifically found guilty of resale merger control The Law No. 043/PR/2014 of 24 December 2014 (the "Act") regulates price maintenance are subject to a fine ranging from F.CA100 000 to merger control in Chad. The Act defines a merger as any act that may F.CFA1-million. result in the transfer of ownership or the right to use, all or part of the The Act does not contain any provision with regard to the financial assets, rights or obligations of a firm, or any act that may confer the sanctions applicable to abuses of dominance. possibility, for one or more firms, to exercise decisive influence over one CEMAC regulates anticompetitive agreements and abuses of dominance or more firms. in the common market. Activities in Chad should therefore be conducted A merger is subject to review in Chad where the parties to the transaction with CEMAC in mind. In particular, in terms of the CEMAC regulation, the have a combined market share of at least 30% in the national market or a CEMAC Commission has exclusive jurisdiction to investigate and sanction substantial part of it. anticompetitive agreements and abuses of dominance where trade There are no provisions governing filing fees in the Act. between member states is affected. In terms of the Act, parties who fail to notify a merger to the competition employment authority may be subject to a maximum fine of 5% of the turnover achieved in Chad during the last financial year by the undertakings immigration The employment of foreigners must be submitted for prior approval to the concerned. National Office for Employment Promotion and a labour contract is Chad is a member of two regional competition bodies, CEMAC and required to be stamped by the same office. OHADA. OHADA does not yet have an operational merger control regime In order to comply with both the labour and immigration regulations, all in place, but CEMAC does. Merger activities in Chad should therefore be expatriates working in Chad must hold the following legal documents: conducted with CEMAC in mind. In particular, in terms of the CEMAC an employment authorisation that cannot exceed a period of one regulation, where the parties to a concentration hold a combined market year (autorisation d’emploi); share of more than 30% in the CEMAC common market or where the a work permit (permis de travail); parties together achieve a turnover of at least F.CFA10-billion in the a resident card (carte de séjour); and CEMAC common market, the transaction shall be filed at CEMAC level a long-term visa and a return visa (visa long séjour et visa retour). and the CEMAC Commission will have exclusive jurisdiction to review the merger. local Secondments are permissible in Chad and it is not a requirement for an Furthermore, in terms of the CEMAC regulation, where a concentration is employment vs expatriate to be employed by a local entity. subject to national regulation in a member state that does not have a secondment competition Act and/or a competition authority, the transaction shall be reviewed by the CEMAC regulator. 2 doing business in Chad fixed-term Fixed-term contracts are allowed in terms of Chad’s employment non-industry The following general non-industry specific registrations / licences may contracts and legislation but they should not exceed a period of 24 months. The fixed- specific also be required: temporary term contract may not be renewed more than once. registrations/ employment licences services Labour The company’s Internal Regulation Code must be submitted to the Labour payment in local Remuneration must be paid in local currency. Inspection Office Inspection Office (Inspection du Travail). This procedure is required for currency (Inspection du companies with 25 or more employees. Travail) restraint of trade Non-compete clauses are legally permissible in Chad but it is a industry- Industry specific licences may be required. agreements requirement that they should not disadvantage low-income employees. specific foreign investment regime licences investment The Investment Charter governs investments in Chad. incentives Incentives include: regime The various OHADA Uniform Acts also