For over a decade, Healy Consultants Group 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.

Summary table of Democratic Republic of Congo company registration

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Democratic Republic of Congo business setup summary

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• Advantages and Disadvantages

  Advantages of Democratic Republic of Congo company registration

  

  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 96^th 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 30%, including 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 156^th 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 117^th 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.
  2. The Democratic Republic of Congo is an attractive destination for new investors if they set-up a company through ANAPI. Under the Investment Code, entrepreneurs who submit their business plans to ANAPI are entitled to the following benefits for a 1-month period, given their businesses are approved by the board:
     • 100% exemption from i) property taxes; ii) ad valorem duty and iii) duties and taxes on import of raw materials and machinery;
     • Fully exempt from paying of corporate profit taxes.