doing business in

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 , , China, Egypt, trucks, paints, packaged medicines, aircraft and broadcasting equipment. , Lebanon, , , 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.

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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.

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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 apply and prevail over domestic  From 1 January 2020, a 50% reduction in registration fees and law provisions. corporate income tax base for newly created companies operating in  The various regulations of the CEMAC also apply to investments in Chad. agriculture, breeding, renewable energies and information  The National Agency of Investments and Exports (Agence Nationale des technology and telecommunications, in the initial five years of their Investissements et des Exportations (“ANIE”)) is in charge of companies’ activity. In addition, during the same five-year period, these administrative procedures and formalities, which are carried out by the companies are exempt from business licence duty, minimum lump- one-stop shop (Guichet Unique). sum tax, payroll tax and apprenticeship tax;  a time-limited exemption from corporate tax for new industrial, registration /  Companies must register with the ANIE. mining, agricultural and forestry activities; licensing  In addition, companies must register with the following agencies at the  a tax reduction equal to 40% of a new minimum investment of requirements Guichet Unique: F.CFA60-million, provided that the investment is equal to a minimum  the Commercial Registry (Registre du Commerce et du Credit of 10% of the fixed assets of the company; and Mobilier’ (“RCCM”));  tax incentives granted by the CEMAC Investment Charter to certain  the Ministry of Commerce and Industry to obtain administrative listed activities upon request to the Minister of Industry. authorisation;  the Chad Revenue Authority to obtain a tax identification number exchange  Chad is a member of CEMAC and subject to the CEMAC Currency (“NIF”). A patente must be paid with the Ministry of Finance control Exchange Regulation No. 02/18/CEMAC/UMAC/CM. In terms of the (Direction des Impots) immediately after the NIF is obtained; and regulation CEMAC Regulations:  social security fund (caisse nationale de prévoyance sociale,  the foreign exchange regulations do not apply to transactions (“CNPS”)). between member states of the CEMAC; nor do they apply to the  A company’s Articles of Association must be registered with the Service franc zone, except for measures relating to gold, some loans, direct d’Enregistrement, des Domaines et du Timbre. investments and transactions in foreign securities;  Certain industries such as health services, the security sector,  all other payments can be made freely, subject to a statement for telecommunications, banking and financial services, tourism, education statistical purposes and presentation of the intermediary’s approved and transport may be subject to prior accreditation. supporting documents for amounts that exceed F.CFA1-million per month; and  the transfer of funds abroad exceeding F.CFA100-million requires declaration to the BEAC and to the relevant finance ministry at least 30 days before completion.

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types of  The forms of doing business available in Chad are mainly the following company  There is no requirement to appoint a company secretary in Chad. entities provided for by the OHADA Uniform Act on Commercial Companies and secretary available for Economic Interest Groupings: auditor  SARL and SAS: must appoint a statutory auditor when two of the following foreign  public limited company (société anonymes, SA); three conditions are met at the end of the financial year: investment  simplified limited liability company (société par actions simplifiée,  its total balance sheet exceeds F.CFA125-million; SAS);  the annual turnover exceeds F.CFA250-million; or  private limited liability company (société à responsabilité limitée,  the permanent staff exceeds 50 employees. SARL);  SA: appointment of an auditor is mandatory.  general partnership (société à nom collectif, SNC);  limited partnership (société en commandite simple, SCS); registered  Every company must have a registered office in Chad to which all  joint venture (société en participation); address communication and notices may be addressed and which must be  de facto company (sociétés de fait); indicated in the Articles of Association.  economic interest grouping (groupement d’intérêt économique, GIE);  A company may have its registered address at the offices of its  registered branch of a foreign company; and accountants or lawyers for an interim period.  representation or liaison office. shelf  There are no shelf companies available in Chad. private limited liability company companies minimum  SARL | SA | SAS: A minimum of one shareholder is required. registration  Companies are registered at the ANIE and it takes approximately eight number of  In principle, local shareholders are not required, but may be required in process weeks to complete registration once all required documents have been shareholders certain specified sectors such as mining, oil and gas. submitted.

minimum share  In terms of the OHADA Uniform Act on Commercial Companies and tax capital Economic Interest Groupings, the following minimum share capital tax system  Chad has a source-based tax system in terms of which both residents and requirements apply: non-residents are subject to tax on income earned from a source in Chad.  SARL: at least F.CFA1-million, which shall be divided into equal shares whose face value may not be less than F.CFA5 000; corporate  There is no definition of “resident” in the General Tax Code.  SA: F.CFA10-million; and residence  In practice, any company incorporated or having its management seat in  SAS: no minimum required share capital, but in practice F.CFA10- Chad is treated as resident. million. corporate tax  Resident companies and permanent establishments of foreign companies directors  SARL: must have at least one managing director (gérant). It is rate are subject to corporate income tax at the rate of 35%. recommended that someone who is either based in or regularly travels to  A minimum lump-sum tax (impôt minimum fiscal, IMF) equal to 1.5% of Chad be appointed as managing director, as it is required for such a gross turnover (with a minimum of F.CFA2-million under the standard person to hold a long term visa. There is no requirement to appoint regime and F.CFA1-million under the simplified tax regime) applies. directors / managers in addition to the managing director. capital gains  SA: must appoint a chairman of the board who can also act as general  Generally, capital gains is generally included in ordinary taxable income tax (“CGT”) manager of the company (directeur général). A board of directors with and subject to corporate income tax at the standard rate of 35%. However, three to 12 members, including a chairman, is to be appointed. a number of exceptions exist.  SAS: free to determine its management structure, which should, as a minimum, consist of one chairman. There is no requirement to appoint a board of directors.

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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 20% up to 800 000 0% 5% (CEMAC residents 800 001 – 2 500 000 10% with at least 25% shareholding) 2 500 001 – 7 500 000 20% over 7 500 000 30% 10% (other CEMAC residents) social security  Both employees and employers must make monthly social security dividends 20% 20% contributions contributions to the CNPS. interest 20% 25%  The employer contribution rate of 16.5% of gross salary (with a maximum monthly ceiling of F.CFA500 000) is made up as follows: 5% (CEMAC residents)  family allowances: 7.5% royalties N/A 25%  old age, disability and survivors: 5% 20% (oil and gas rights)  work injury and occupational diseases: 4%  The employee contribution rate is 3.5% of their gross salary (with a 7.5% (CEMAC residents) maximum monthly ceiling of F.CFA500 000). management, N/A 25% payroll tax  A lump-sum tax on employment income (taxe forfaitaire) is payable by consulting and 7.5% (CEMAC residents) technical service fees employers at a rate of 7.5% on gross employee remuneration.  In addition, an apprenticeship tax is payable at a rate of 0.12% of the total *The withholding tax rate may be reduced in terms of a relevant double tax monthly remuneration. agreement. stamp duty  Stamp duty (droit de timbre) is levied on all official documents and judicial double tax  DTAs are in force with , , Republic of instruments at rates varying from F.CFA200 to F.CFA5 000 depending on agreements Congo, and . (“DTAs”) the size of the document.  Transfer tax at the rate of 3% is payable on the transfer of shares and losses  Losses may be carried forward for a period of three years. other transferable securities.  Registration duty on the transfer of real estate is levied on the indexed transfer pricing  In terms of Chad’s transfer pricing rules, taxable profits for companies official values per district at rates varying depending on the location of the under the control of foreign companies are determined based on a property. comparison with profits of similar local companies.

limitations on  There are no thin capitalisation rules in Chad, however, interest paid on interest shareholders loans may only be deducted insofar as: deductibility  such sums do not exceed half of the free authorised capital of all such shareholders; and  the interest rate does not exceed the central bank’s annual interest rate increased by two percentage points.

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value added tax filing  A certified copy of the priority document (if applicable); (“VAT”) requirements  electronic copy of the trade mark; taxable supplies  VAT is levied on the supply of goods and services in Chad and on the  full particulars of the applicant; and importation of goods and services.  Power of Attorney, in French or English, simply signed.

VAT rate  18% procedure  An application is filed at the OAPI office in Cameroon. Applications are  9% on cement, sugar, oil, soap and products of the local food industry. examined to determine if they comply with formal requirements and in respect of prior conflicting trade marks. If accepted, the registration registration  Any person or business who carries on business in Chad and has an certificate will be issued and the trade mark registration published for threshold annual taxable turnover / expected turnover exceeding F.CFA500-million opposition purposes. must register for VAT purposes. oppositions  Opposition may be lodged within six months following the date of reverse VAT on  A non-resident taxpayer must appoint a VAT representative, resident in advertisement of the registration. No extensions are allowed. imported Chad, who will be jointly responsible for payment of the VAT due. services  If no tax representative is appointed, resident companies are required to duration and  A trade mark registration is effective for an initial period of 10 years and, account for output VAT in respect of imported services rendered by non- renewal thereafter, renewable for further periods of 10 years. resident companies in terms of a reverse charge mechanism. trade marks international  Madrid Protocol conventions,  Nice Agreement treaties and  Paris Convention for the Protection of Industrial Property For more information or assistance please contact: 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. Chad is a member of the Organisation Africaine de la Propriété Intellectuele Professional advice must be sought from ENSafrica before any action is taken based on the information (“OAPI”). OAPI has a central registry in Cameroon which facilitates the central provided herein. This document is the property of ENSafrica and consent must be obtained from filing of IP rights, including trade marks. An OAPI application automatically ENSafrica before the information provided herein is reproduced and/or distributed in any way. covers all member countries, as the member states had to renounce their

national IP laws in order to become members. It is therefore not possible to file LAST UPDATED MAY 2021 individual national applications in any of the OAPI member states. classification  The International Classification of goods and services applies.  A single application may cover any number of classes, however, goods and services may not be included in the same application.

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

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