Business entities in DRC
The Democratic Republic of Congo corporate laws provide for the creation of business entities which are close to those existing in France and Belgium. Business setup requirements are relatively simple and most foreigners use limited liability companies (SARL) or simplified joint stock companies (SAS) to do business in the country. However, entrepreneurs should be prepared for inconsistent regulations, bureaucratic challenges and licensing delays, which Healy Consultants will assist to minimize and overcome.
Doing business in Democratic Republic of Congo with a local entity
The DRC limited liability company (societe a responsabilite limitee or SARL)
- Foreigners can register a limited liability company with only i) one shareholder, investing a minimum of US$1 (CFA1) and ii) the appointment of one director, who does not need to be resident in the country. Because the amount of capital of the entity must be included in all corporate documents (invoices and brochure included), it is recommended to invest higher amounts;
- Before the company is registered, it is necessary to open a capital account with a local bank and to inject the paid up capital of the entity. After issuance of the company numbers, the entity must then register for tax and social security with the Tax authority, the Social Security office and the Ministry of Labor;
- Companies are thereafter required to submit annual financial statements and a tax return every year;
- Best uses for a DRC SARL: a limited liability company can be used for most types of business activities. It can trade with local and international customers, have local manufacturing operations and/or render services.
The DRC simplified joint stock company (societe par actions simplifiee or SAS)
- Since 2014, foreign and local investors can setup simplified joint stock companies, which follow the French business entity of the same name. Such entity is similar to a SARL but offers much more flexibility regarding the governance of the company, notably with regards to the transferability of the shares;
- Like a SARL, a simplified joint stock company can be registered by a single shareholder with only a paid-up capital US$1 to be injected before company registration. Appointment of one director is a mandatory, but without a residency requirement;
- Best uses for a DRC simplified joint stock company: a simplified joint stock company is a good vehicle when multiple investors want to invest in the same business, while keeping an “exit” option by allowing share transfers without the agreement of the other shareholders.
The Democratic Republic of Congo public limited company (Societe anonyme or SA)
- A DRC public limited company can be setup with i) 3 shareholders, who can be of any nationality and does not need to be resident in the DRC ii) a minimum paid-up capital of US$20,000 and iii) a statutory auditor. While it is possible to appoint a single director, the appointment of a management Board including three members is customary;
- Like other business entities, PLCs are required to submit each year financial statements and a tax return to the Tax Authority. The financial statements of a PLC must always be audited;
- Best uses for a DRC public limited company: a PLC is a good vehicle if our Client is planning to form a business with several partners or plans to finance its business through the issuance of equity. In other cases, a limited liability company or a simplified joint stock company are simpler and more cost efficient to maintain.
The Democratic Republic of Congo free zone company (Societe en zone economique speciale)
- The company can then be registered within an industrial park or a special economic zone after review and approval by the relevant authority;
- Criteria for free zone registration will significantly vary according to the project. They usually include a minimum investment (at least US$200,000 recommended) and at least some job creations in the DRC. Projects eligible for free zone registration and also usually eligible for tax benefits. See this descriptive of the DRC special economic zones (only in French) for further details;
- Best uses for a DRC free zone company: Foreigners can register a company in one of Democratic Republic of Congo’s special economic zone when they plan to manufacture and export a majority of their products.
Doing business in the Democratic Republic of Congo with a foreign entity
The Democratic Republic of Congo branch office (succursale)
- No paid up capital is necessary for a branch. Foreign entities can however only register branches in the DRC for a maximum of two years, following which the branch must either be deregistered or converted into a subsidiary;
- Best uses for a DRC branch: registering a branch is usually not recommended, except in regulated industries such as banking, finance and insurance where registration of a foreign reputable entity instead of a subsidiary can ease up the licensing process.
The Democratic Republic of Congo representative office (bureau de liaison)
- Like for branches, local regulations forbid foreign companies to maintain a representative office for more than two years in the DRC. This entity can only engage in i) market research and ii) promotion of the foreign company’s business;
- Best uses for a DRC representative office: registering a representative office is a good option to have a local presence in the DRC, without being subject to local tax and while benefitting from lower reporting requirements. However, such entity is not allowed to trade or conduct manufacturing operations.
Different business entities in Democratic Republic of Congo
|Operations and logistics||LLC||Simplified JSC||PLC||Free zone company||Branch||RO|
|Also known as:||SARL||SAS||SA||Societe ZES||Succursale||Bureau de liaison|
|Doing business in DRC permitted?||Yes||Yes||Yes||Yes||Yes||No|
|Allowed to sign contracts with local Clients?||Yes||Yes||Yes||Yes||Yes||No|
|Allowed to invoice local Clients?||Yes||Yes||Yes||Yes||Yes||No|
|Can register the entity with a virtual office solution?||Yes||Yes||Yes||Yes||Yes||Yes|
|Allowed to import raw materials?||Yes||Yes||Yes||Yes||Yes||No|
|Allowed to export goods?||Yes||Yes||Yes||Yes||Yes||No|
|Accounting and tax|
|Standard DRC corporate tax?||30%||30%||30%||Up to 0%||30%||0%|
|Corporate bank account?||Standard Bank||Citibank||BCDC||Standard Bank||Citibank||BCDC|
|Statutory audit always required?||No||No||Yes||No||No||No|
|Annual tax return to be submitted?||Yes||Yes||Yes||Yes||Yes||Yes|
|Access to DTAAs?||Yes||Yes||Yes||Yes||Yes||No|
|Issued share capital required?||US$1||US$1||US$20,000||US$200,000||None||None|
|Resident director/manager required?||No||No||No||No||Yes||Yes|
|DRC shareholder /partner required?||No||No||No||No||No||No|
|Minimum number of directors/managers?||1||1||1||1||1||1|
|Minimum number of shareholders/partners?||1||1||3||1||Parent company||Parent company|
|Individual shareholders/partners allowed?||Yes||Yes||Yes||Yes||No||No|
|Corporate shareholders/partners allowed?||Yes||Yes||Yes||Yes||Yes||Yes|
|Public register of shareholders and directors?||Yes||Yes||Yes||Yes||Yes||Yes|
|Can the entity hire expatriate staff in DRC?||Yes||Yes||Yes||Yes||Yes||Yes|
|How long to get work permit approved||3 months||3 months||3 months||3 months||3 months||3 months|
|Estimate of engagement costs||US$18,230||US$19,330||US$23,880||US$25,030||US$22,030||US$22,180|
|Draft invoice||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF|