Local and foreign firms can carryout investments under the common law regime or one of the regimes provided for by the investment code. They may engage in this activity individually or in partnership in accordance with ordinary law or with one of the special schedules instituted by laws and regulations in force.
The investment code applicable to economic activity in Cameroon was instituted by ordinance number 90/007 of 09 November 1990 amended by Ordinance number 94/003 of 24 January 1994. Both local and foreign entities are eligible for approval under one of the following schedules of the code which provides extensive fiscal benefits.
- Basic schedule;
- Small and medium sized schedule;
- Strategic investment Schedule.
The investment code management unit is a one-stop-shop facility created to administer the provisions of the investment code. It handles all inquiries by enterprises requesting to benefit from one of schedules for the investment code and provides counseling and follow-up for approved enterprises.
TRANSFER OF DIVIDENDS AND PROFITS
The Cameroonian government guarantees to all persons and corporate bodies not resident in Cameroon the free transfer of all proceeds of all kinds from their invested capital and incase they cease to operate , the income from the liquidation or from the transfer of the investment on condition that they have paid all their taxes.
It is also worth mentioning that all investments approved under the Cameroonian investment code are covered by the guarantee on non commercial risk in compliance with article 15 of the treaty instituting the Multilateral Investment Guarantee Agency (MIGA) ratified by Cameroon.
Furthermore, the state guarantees, in accordance with the laws and regulations governing banking and exchange operations, the right to freely transfer out of Cameroon funds representing normal and current payments for supplies and services effectively performed, particularly in the form of royalties or other remuneration.
All natural or corporate bodies duly established in Cameroon may in compliance with the laws and regulation in force enter into and execute any contract that they consider to be in their interest especially as concerns financial and commercial matters, determine their production, distribution and marketing policies, and in general take any management decisions that are in conformity with the rules and practice of trade in Cameroon.
To qualify for a Permanent business residence permit, the investor must:
- Have been in the Country for an uninterrupted period of not less than six (6) years, and must have a reasonable investment package and comply with the laws and regulations in force.
- Have professional or technical skills and will be requested to obtain permission from the ministry of Employment and Social Security.
The deliverance of a business residence permit is subject to payment of the following fees:
- Foreigner who has a working contract with the state – 120 USD
- Foreigners from Africa – 240 USD
- Foreigner from outside Africa – 500 USD
All application for residence permit must be submitted to the ministry of External relations or to the Delegation of National Security (Department of Immigration).
CUSTOMS DUTIES, EXCISE DUTIES AND THE TAXATION SYSTEM
Cameroon, together with the other member states of the Central African Economic and Monetary Union (CEMAC) undertook in 1994 a regional reform programme to harmonise Excise and Custom duties, and outlined six different tariffs and taxes associated with the importation of goods into the Country; the common external tariff, the temporary surcharge, the excise tax, the value added tax and other services taxes:
The Common External Tariff (T.E.C) groups merchandise into four categories:
CAT 1 – Essential Commodities, rate 5%
CAT 2 – Raw materials and Equipment, rate 10%
CAT 3 – Intermediary (semi-processed goods), rate: 20%
CAT 4 – finished products (consumer goods), rate: 30%.
The temporary surcharge is a tax aimed at protecting the national economy. It contains only some category of merchandise and ranges from 0 to 3 percent.
The Excise Tax, an indirect tax on consumption, covers specific categories of goods defined by ministerial order. Its rate in Cameroon is 25 percent. Social security contributions are paid by employers but do not exceed 15% of gross wage.
The taxation system in Cameroon is governed by the General Tax code of the Republic of Cameroon, instituted by law number 202/0003 of 9 April 2002. The code provides a detailed definition of the various types of taxes and fiscal procedures binding on business persons in Cameroon.
The said law establishes a Company tax, levied at 38.5% on all profits or revenues realized by companies or corporate entities.
The corporate tax is deducted from the profits realized over a period of 12 months, in line with the financial year. However, enterprises that commence their activities within six months to the end of the financial year can draw up the financial report at the end of the Financial year that follows the one in which they started their activities.
Indirect taxation, notably the value added tax (VAT), is the main source of revenue for the state. A value added is charged on all sales and import of consumer goods and services in Cameroon. Services and goods are charged differently: A zero rate for exports, a standard rate of 19.25% including 1.10% of the value of the general tax rate, an overall of 20.35% tax.
An economic operator who carries out several activities will have variable taxation rates, and that on condition that he keeps separate account for each type of activity.
Method of Calculating Taxes
In the calculation of taxes, all taxable profits that are less than 2 USD are not taken into account. The tax rate is 35%, a figure far lower than those in other African countries. However there are a number of tax regimes that provides incentives and waivers to some type of enterprises.
The tax regimes provides for the following benefits;
During the installation phase
- Exoneration from payment of registration and transfer duties.
During the operation phase
- Reduction by 50% of the corporate Tax, tax on industrial and commercial profits and of the Proportional tax on Capital income.
There is a special schedule for companies wishing to process local raw material for the export market. These companies must export at least 80% of the production. This is the free zone schedule.
- Business License
- Proportional tax on income from securities
To protect investors, Cameroon is a member of organization for the harmonization of Business Laws in Africa (OHADA); a signatory of the Overseas Private investment disputes (ICSID) and the Multilateral Investment Guarantee Agency (MIGA).
By these we therefore invite you to visit Cameroon and take advantage of and investment opportunities in our vast unexploited business ventures, where the private sector is the motor of the Economy.
Cameroon is the place to come to if you are looking for an investment destination.
You are very welcome.