DOING BUSINESS IN CENTRAL AFRICAN REPUBLIC
Since 2003, Healy Consultants has assisted our Clients with starting their business in the Central African Republic. Our services include i) Central African Republic business registration ii) government license registration iii) corporate bank account opening services in Central African Republic and abroad iv) employee recruitment v) visa strategies and vi) office rental solutions in the Central African Republic.
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Advantages and Disadvantages
Advantages of Central African Republic company registration
- A Central African Republic limited liability company (SARL) can be incorporated with only 1 shareholder and director, who can be of any nationality and are not required to be resident of the Central African Republic. The minimum paid-up capital required is only US$1,800 (FCFA 1 million) and our Clients do not need to travel to complete the engagement;
- Albeit a small market, there are some interesting opportunities for foreigners to invest in the Central African Republic because:
- Foreign investment is unrestricted in a large number of industries. The main exceptions are the forestry and mining industries, in which foreigners are not allowed to form wholly-foreign owned companies in the Central African Republic;
- The Central African Republic offers opportunities for companies in the energy sector: the country has an estimated 2 billion barrels of oil and sizeable available deposits of mineral ore, such as uranium with estimated reserves of 20,000 tons;
- The Central African Republic is also a frontier market for companies offering engineering and construction services: with no railroads, poor road networks, no local air freight, opportunities abound for investors in these sectors.
- The Central African Republic has low labor costs, as demonstrated by a minimum monthly salary of only US$60 per month, one of the world’s lowest levels. Employers can expect to pay salaries below US$100 per month to their unskilled workers.
Disadvantages of Central African Republic company registration
- It is difficult to start and to run a business in the Central African Republic, because:
- First of all, incorporating a Central African Republic company is a difficult and time consuming process, rife with red tape and slowed down by the local administration. For instance it takes i) at least 21 weeks to connect a new electricity line and ii) at least 15 weeks to get a new property registered;
- Central African Republic is politically instable (with a recent coup in 2013) and rife with wide spread insecurity in the better part of the country and rampant corruption in the private a public sectors. Entrepreneurs should be prepared to face difficulties when establishing business in this country;
- Central African Republic being a landlocked country, entrepreneurs will also experience difficulties trading across borders as its takes one month and a half and US$5,490 to export a container and one month and US$6,335 to export the same; as compared to an average timeline of one month and US$2,200 to import/export a container in other sub-Saharan African countries;
- For these reasons, the Central African Republic is currently rated as the worst country in the world for the ease of starting a business, according to the World Bank.
- Taxed are a main problem for businesses registered in the Central African Republic, because:
- High corporate income tax – the corporate tax rates reach up to i) 20% in the agricultural sector and ii) 30% in other industries. Capital gains are also taxed at a 30% rate;
- A 15% withholding tax on dividends, interests, royalties and technical services fees paid to non-resident companies. The country has furthermore signed double taxation avoidance treaties with only six countries, namely i) France ii) Cameroon iii) Congo iv) Gabon v) Chad and vi) Equatorial Guinea;
- For the reasons listed above, the Central African Republic is ranked as the 5th worst place in the world for paying taxes, which reach close to 75% of a business’ earnings, to be compared with a Sub-Saharan Africa average of 46%.
- Our Clients should not expect to sell many of their products in Central African Republic. This country is one of the least developed countries in the world, with a GDP of US$542 per capita. Over 60% of the population is also living with less than one dollar a day.
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- Time to incorporate: Nineteen weeks
- Cost to set up: US$15,100
- Minimum capital: US$1,800
- Physical office required: Yes
- Shareholders: 1
- Directors: 1
- Company secretary: No
- Resident director: No
- Corporate tax rate: 30%
- Corporate tax base: Territorial
- Shelf companies: Unavailable
- Main company type: SARL