Democratic Republic of Congo company registration

DOING BUSINESS IN DEMOCRATIC REPUBLIC OF CONGO

For over a decade, Healy Consultants Group PLC has assisted our Clients with business registration in DRC. Our services include i) DRC company incorporation ii) government license registration iii) business bank account opening iv) employee recruitment v) visa strategies and vi) office rental solutions.

SummaryLLCFast business setup solutionFree zone LLCSimplified Joint Stock companyPublic limited companyBranch officeRepresentative office
Also known asSARLSARLSociete en zone economique specialeSASSASuccursaleBureau de liaison
Best use of company?All products and servicesAll products and servicesExport oriented businessLarger projectsPublic listingProfessional servicesMarketing & research
How soon can you invoice Clients/sign sales contracts?3 months1 month3 months3 months4 months4 months4 months
How soon can you hire staff?5 months3 months5 months5 months5 months5 months5 months
How soon can you sign a lease agreement?ImmediatelyImmediatelyImmediatelyImmediatelyImmediatelyImmediatelyImmediately
How long to supply corporate bank account numbers?5 months3 months5 months5 months5 months5 months5 months
How long to supply company registration / tax numbers?3 months1 month3 months3 months4 months4 months4 months
Corporate tax rate on annual net profits?35%35%Up to 0%35%35%35%None
Limited liability entity?YesYesYesYesYesNoNo
Resident director/partner/manager/ legal representative required?NoNoNoNoNoYesYes
Minimum paid up share capital?11200,000120,000NoneNone
Corporate bank account location?StandardCITIBCDCCDCStandardCITIBarclays
Can secure trade finance?YesYesYesYesYesYesNo
VAT payable on sales to local customers?16%16%16%16%16%16%No sales allowed
Average total business set up engagement costs?17,230Inquire a proposal25,03019,33023,88022,03022,180
Average total engagement period?5 months3 months5 months5 months5 months5 months5 months

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Accounting and tax considerationsLLCFast business setup solutionFree zone LLCSimplified Joint Stock companyPublic limited companyBranch officeRepresentative office
Statutory corporate tax payable?35%35%Up to 0%35%35%35%None
Legally tax exempt if properly structured?NoNoYesNoNoNoYes
Group HQ tax incentives?YesYesYesYesYesYesNo
Must file an annual tax return?YesYesYesYesYesYesYes
Must file annual financial statements?YesYesYesYesYesYesYes
Must appoint an auditor?NoNoNoNoYesNoNo
Access to double taxation treaties?YesYesYesYesYesYesNo
Withholding tax on payments to foreign shareholders?20%20%20%20%20%20%None
Company RegistrationLLCFast business setup solutionFree zone LLCSimplified Joint Stock companyPublic limited companyBranch officeRepresentative office
Resident director/partner/manager/ legal representative required?NoNoNoNoNoYesYes
Minimum number of director/partner/manager/ legal representative?1111111
Minimum number of shareholders/partners?11113Parent companyParent company
Minimum statutory paid up share capital?11200,000120,000NoneNone
Shelf companies available?YesYesNoYesNoNoNo
Time to incorporate a new entity?3 months1 month3 months3 months4 months4 months4 months
Can easily convert to a PLC?NoYesYesYesYesNoNo
Public register of shareholders and directors?YesYesYesYesYesYesYes
Can have preference shareholders?NoYesYesYesYesNoNo
Business ConsiderationsLLCFast business setup solutionFree zone LLCSimplified Joint Stock companyPublic limited companyBranch officeRepresentative office
Good entity for trademark registration?YesYesYesYesYesYesNo
Can secure an import and export license?YesYesYesYesYesYesNo
Can bid for Government contracts?YesYesYesYesYesYesNo
Government grants available?YesYesYesYesYesYesNo

Sponsorship by a local citizen required?No
Our Client needs to travel to DRC for business set up?No
Temporary physical office solutions available?Yes
Government approval required for foreign owners?No
You need a local resident as bank signatory?No
Can be wholly foreign owned?Yes
The entity will likely be regulated by?Ministry of Justice and Human Rights - Business Registry
Monthly VAT reporting to the Government?Yes
Security deposit to be kept with Government?No
Maximum shareholding for foreigners?100%
Must sign an office lease agreement during incorporation?Yes
Shareholders & directors documents to be attested/translated?Yes
Each foreign director needs a personal income tax number?No
Foreign director needs a residence visa?No
Maximum number of staff allowed?No maximum number for any entity
Expatriate to local staff ratio?None
Can secure residence visa for business owner?Yes
Other useful information
What will be included in my customer sales invoice?Available template
This country has signed free trade agreements?Yes
This country is a member of WIPO/TRIPS?Yes
This country is a member of the ICSID?Yes
Average custom duties suffered?12%
Government foreign investment approval required?Yes
Average monthly office rental? (US$ per sq m)US$30
Minimum statutory monthly salary?60
Average monthly US$ salary for local skilled employees?420
US$ deposit interest rate? (1 year average)3%
Overseas remittance currency controls?Yes
Banking considerations
Multi-currency bank accounts available?Yes
Corporate visa debit cards available?Yes
Quality of e-banking platform?Low
Crowd funding available in this country?Yes

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  • Advantages and Disadvantages

    Advantages of Democratic Republic of Congo company registration

    business registration procedures in DRC

    1. The Congo government has introduced programs to attract foreign investments including:
      • Under the Investment Code, companies will be allowed complete tax exemption for up to 5 years if they i) invest between US$10,000 and US$200,000 in an ANAPI approved project and ii) contribute at least 35% value added to the activity;
      • Logistics companies setup in Congo enjoy certain tax advantages including i) exemption from VAT on intermediate and finished goods ii) exemption from import duties on raw materials and equipment and iii) availability of preferential tariffs for energy usage for a period of at least 4 years;
      • Mining companies based in Congo, participating in government approved projects will not be required to pay any custom duties when exporting products to other countries. Furthermore, other fiscal advantages including exemption from i) land tax and ii) tax on vehicles and tax of road circulation are also available;
      • Companies importing or exporting electrical energy to Congo will benefit from i) exemption of custom duties and VAT on import of inputs for the production process ii) exemption of duties and VAT on import of electrical energy and iii) reduced rate of 1% on the export of energy.
    2. Our Clients can take advantage of the country’s abundant natural resources, such as:
      • The country has the largest untapped deposit of raw minerals in the world and it has established the Mining Code to attract foreign investments to mining activities;
      • It also has the largest freshwater resources in Africa, optimal for Clients that wish to invest in the hydropower industry;
      • According to the World Bank, the country has potential to become one of the richest economy in Africa.
    3. The country has implementing measures to increase the ease to do business. For example:
      • It joined the OHADA treaty in 2014, and it has slowly been implementing measures to straighten its legal framework;
      • It has established the Guichet Unique de Creation d’Enterprise, a one stop shop which has significantly reduced the timeline for company formation.

    Disadvantages of Democratic Republic of Congo company registration

    1. Although there has been some progress, Congo company incorporation is still complex and time-consuming process. In our experience, it requires 3 months for completion. The country is ranked in 96th in relation to starting a business by the World Bank;
    2. Companies incorporated in the DRC are subject to high taxes, including:
      • A DRC company is liable for corporate tax at 35%, with 30% for mining companies;
      • Companies are also liable for VAT at 16%;
      • In addition, dividends, interests and royalties paid to companies domiciled in Congo are subject to 20% withholding tax.
    3. The DRC Government supports local investors over foreign investors, for example:
      • Foreign investors are banned from establishing retail commerce, what is called as petit commerce;
      • Foreign investment in the agricultural sector is limited at 49% ownership;
      • In 2017, a new legislation was approved that bans foreign owned companies from being subcontracted for local projects.
    4. The country still suffers from innumerous problems such as:
      • DRC was negatively ranked as the 156th least corrupt country in the world by Transparency International in their 2016 Corruption Perceptions Index, a global measure of corruption amongst public officials and politicians;
      • Congo was negatively ranked as the 117th freest economy in the Heritage Foundation’s 2017
        Index of Economic Freedom; failure to enforce property rights, high corruption amongst public officials and barriers to free trade were listed as the main reasons behind the poor rating;
      • In the recent years, violence has increased significantly in the DRC, not only in the conflict areas of the east, but also inside the city centers;
      • Lastly, the country has a weak and corrupt judicial system that is unable make a positive impact.
    5. Opening global corporate bank accounts to assist a Congo company can be challenging as the company is unlikely to be viewed favorably by the banks.
  • Best uses for a Democratic Republic of Congo company

    1. The Democratic Republic of Congo is rich is natural resources, making it attractive for starting exploration and mining companies:
      • DRC’s Mining Code has been designed to attract foreign investment by given tax advantages and concessions to companies wishing to explore the mineral resources of the country, and by increasing
      • The Congo economy is heavily reliant on its rich petroleum reserves. New oil discoveries mean that this lucrative industry is only expected to grow over the next few years;
      • Clients that wish to invest in the hydropower industry will likely be successful, as the industry still has much to expand in the country.

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Company registration

  • Time to incorporate: Twelve weeks
  • Cost to set up: US$18,230
  • Minimum capital: US$10
  • Physical office required: No

Required appointments

  • Shareholders: 1
  • Directors: 1
  • Company secretary: Yes
  • Resident director: No

Key facts

  • Corporate tax rate: 35%
  • Corporate tax base: Territorial
  • Shelf companies: Unavailable
  • Main company type: SARL

Contact us

For additional information on our business registration services in Democratic Republic of Congo, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Paavan Chhabra, directly:
client relationship officer - Paavan
Congo UNHCR country operations profile DRC trade and investment chamber DR Congo investment promotion agency DRC minister of justice and human rights