Data Collection Survey on Investment Promotion in the Democratic Republic of Congo

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Data Collection Survey on Investment Promotion in the Democratic Republic of Congo Japan International Cooperation Agency Project on Supporting Investment Promotion in Africa Data Collection Survey on Investment Promotion in the Democratic Republic of Congo March 2016 KRI International Corp. Ernst & Young Sustainability Co. Ltd. Disclaimer This report is solely for informational purposes. The information contained herein is current as of February 2016 and is subject to change without notice. It does not purport to contain all of the information users may desire. It is not and should not be construed as advice or as a recommendation regarding any particular course of action. In all cases, users should conduct their own investigation and consult their own professional advisors. In no event shall Japan International Cooperation Agency, KRI International Corp., and Ernst & Young Sustainability Co. Ltd. be liable for any direct, indirect, incidental, special, or consequential loss or damage whatsoever arising out of or in connection with the use of this report, including without limitation negligence. Japan International Cooperation Agency, KRI International Corp., and Ernst & Young Sustainability Co. Ltd. assume no responsibility or liability for any loss or damage even if Japan International Cooperation Agency, KRI International Corp., and Ernst & Young Sustainability Co. Ltd. are advised of the possibility of such damages. Project on Supporting Investment Promotion in Africa Data Collection Survey on Investment Promotion in the Democratic Republic of Congo Project on Supporting Investment Promotion in Africa Data Collection Survey on Investment Promotion in the Democratic Republic of Congo Table of Contents Basic Investment Guide for Japanese Companies Chapter 1 Outline of the Project and the Study .......................................................... 1-1 1.1 Background of the Project ................................................................................... 1-1 1.2 Objectives of the Project ...................................................................................... 1-1 1.3 Implementation Structure of the Project ........................................................... 1-1 1.4 Scope and Methodology of the Study on Investment Promotion in DRC ........ 1-2 Chapter 2 Outline of the Democratic Republic of Congo ............................................ 2-1 2.1 Land ...................................................................................................................... 2-1 2.2 Political Situation ................................................................................................ 2-2 2.3 Social situation .................................................................................................... 2-3 2.4 Economic Situation.............................................................................................. 2-6 Chapter 3 Investment in DRC ...................................................................................... 3-1 3.1 Investment Trend ................................................................................................ 3-1 3.2 Foreign Investment ............................................................................................. 3-3 3.3 Major Foreign Investment .................................................................................. 3-4 Chapter 4 Investment Potentials in DRC .................................................................... 4-1 4.1 Current Situation of the Available Potential Sources of Investment .............. 4-1 4.2 Logistics Networks and Market Access ............................................................. 4-7 4.3 Identifying Investment Potentials ................................................................... 4-12 Chapter 5 Investment Policy in DRC ........................................................................... 5-1 5.1 Investment Policy in DRC .................................................................................. 5-1 5.2 Coherence of Investment and Other Economic Development Policies ............ 5-1 5.3 Transparency of Legal System for Business and Investment .......................... 5-8 5.4 Coordination among Government Agencies for Investment Promotion to Ensure Effectiveness ......................................................................................... 5-10 5.5 Analysis on the Investment-Related Legal System ........................................ 5-12 5.6 Investment Promotion Measures ..................................................................... 5-14 Chapter 6 Analysis of Investment Climete in DRC .................................................. 6-17 i Project on Supporting Investment Promotion in Africa Data Collection Survey on Investment Promotion in the Democratic Republic of Congo 6.1 Overview of Investment Climate in DRC and Method of Analysis ............... 6-17 6.2 Current Situation of Investment Environment .............................................. 6-19 Chapter 7 Analysis on Investment Promotion Agency and its Function in DRC ..... 7-1 7.1 Organization and Function of ANAPI ................................................................ 7-1 7.2 Overview of ANAPI’s investment-promotion activities .................................... 7-5 Chapter 8 Conclusions ................................................................................................... 8-1 8.1 Comprehensive Evaluation for Current Investment Promotion ..................... 8-1 8.2 Recommendations................................................................................................ 8-3 List of Tables Table 2-1 Main Social Development Statistics .............................................................. 2-5 Table 2-2 Nominal GDP of Selected Countries ............................................................. 2-6 Table 2-3 Real GDP and Share by Industry .................................................................. 2-9 Table 2-4 Export by Product ......................................................................................... 2-12 Table 2-5 Import by Product ......................................................................................... 2-13 Table 2-6 Imports and Exports by Country ................................................................. 2-14 Table 2-7 Progress of Regional Integration in RECs .................................................. 2-15 Table 2-8 DRC’s participation in RECs ........................................................................ 2-16 Table 2-9 Basic Stastistics of REC and DRC ............................................................... 2-16 Table 3-1 Investment by Sector ...................................................................................... 3-3 Table 3-2 Patterns of Companies’ Expansion of Abroad ............................................... 3-4 Table 4-1 Production Areas and Deposits of Major Mineral Resources in DRC ......... 4-2 Table 4-2 Major Agricultural Products in DRC and the Production Areas ................. 4-4 Table 4-3 Labor Wage Rate in DRC and African and Asian Countries ..................... 4-11 Table 4-4 Power Tariff in DRC and African and Asian Countries ............................. 4-11 Table 4-5 Power Outage and its Impact in DRC and African and Asian Countries . 4-12 Table 4-6 Factors Affecting Investment Potentials ..................................................... 4-13 Table 4-7 Analysis on the Investment Potential for Selected Regions ...................... 4-13 Table 5-1 Key Recommendations in the Diagnostic Study for Trade Integration ...... 5-3 Table 5-2 Investment Code (Loi n°004/2002) ................................................................ 5-5 Table 5-3 Economic Regions and Duration of Application of Fiscal Incentives ........ 5-14 Table 5-4 Fiscal Incentives by the Investment Code (Loi n° 004/2002) .................... 5-15 Table 5-5 Comparison of DRC and Zambia on Fiscal Incentives ............................... 5-15 Table 5-6 Sector-Specific Incentives in DRC ............................................................... 5-16 Table 6-1 Features of Companies by OHADA Uniform Company Act ...................... 6-19 Table 6-2 Track Record of Incorporation in GUCE ..................................................... 6-20 ii Project on Supporting Investment Promotion in Africa Data Collection Survey on Investment Promotion in the Democratic Republic of Congo Table 6-3 Comparison of DRC and Sub-Saharan Africa for Starting Business ........ 6-22 Table 6-4 Necessary Information for Investment Approval ....................................... 6-24 Table 6-5 Main tax burdens for companies ................................................................. 6-27 Table 6-6 Taxes on the annual net sales for small and medium-sized businesses ... 6-28 Table 6-7 Comparison of Land Registration between DRC and Sub-Saharan Africa ....................................................................................................................... 6-35 Table 6-8 Main payroll taxes and social-security costs by companies in the DRC ... 6-36 Table 6-9 Profile of Commercial Banks in DRC(2014 .............................................. 6-42 Table 6-10 Necessary Administrative Procedures for Exportation from DRC.......... 6-48 Table 6-11 Major Taxes and Government Charges for Import to DRC ..................... 6-48 Table 6-12 Export Duties and Rates of DRC ............................................................... 6-49 Table 6-13 Import Customs Clearance Documents in DRC and other Countries .... 6-50
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