HOW TO SET UP BUSINESS IN CONGO

INTRODUCTION

The Democratic Republic of the Congo (“DRC”) has a great potential in business investments considering its resources, people, and geographical position in Central Africa. However, it is also very complex owing to the need to manage a wide array of regulations and comprehend local customs regarding commerce.

 

CONDUCT MARKET RESEARCH

• It is important to conduct the feasibility study rather carefully. Look first for potential industries, competition, markets for your products or services, and the extent of consumption of the same. The mining, agriculture, energy, telecommunications and even infrastructure sectors have a lot of scope.
• Also evaluate the business environment of DRC, its legal framework, its geopolitical context, and any of the socio-political aspects which might be germane to your business.

 

CHOOSE A BUSINESS STRUCTURE

•  Sole proprietorship, Société à responsabilité limitée (“SARL”), and, Société anonyme (“SA”) are the common company types in DRC. By foreign standards, SARL is the most ‘investor friendly’ form because conceptually, it limits liability and allows greater flexibility.
• Seek legal advice to ensure you choose the most suitable structure, as it impacts taxation, liability, and regulatory requirements.

 

REGISTER YOUR BUSINESS

• Reserve a Business Name: Before companies, businesses or organizations utilize names, they should register names with the Guichet Unique Du Commerce Exteireur (“GUCE”). Check to see if your name is currently registered.
• Obtain a National Identification Number (“IDN”): This number is obtained through the GUCE as it is a prerequisite for tax matters.
• File Incorporation Documents: Incorporation papers that are to be submitted include the articles of association, identification particulars of the directors, form 1 and any other endorsement applications. The GUCE is the focal point for business registration in the DRC, making it easy for the investors to move around the registration maze.

 

OBTAIN NECESSARY LICENSES AND PERMITS

• Depending on the field, one may be required to possess permits from several authorities. For example, mining companies require the Ministry of Mines permits, while telecommunications enterprises seek the Ministry of Post, Telecommunications and New Information and Communication Technology approval.
• Be mindful of permits and licensing which are industry specific as well which may be necessary prior to commencing operations.

 

OPEN A BUSINESS BANK ACCOUNT

•  It is recommended that investors open a corporate account in any local bank and some banks may give a foreign currency account which may be more convenient for cross border transactions.
• Having a local bank account makes it easier to administer the company’s finances while ensuring compliance to the reporting and tax requirements of DRC.

 

REGISTER FOR TAXES

• VAT Registration: Resist the temptation to ignore this registration if your business exceeds the primary revenue threshold. It is a Value Added Tax (“VAT”) registration.
• Income Tax Registration: Register your company in Uganda with the Directorate General of Taxes (“DGT”), apply and be provided with the Tax payer identification number (“TIN”) for corporate income tax.
• Social Security: If you are intending to hire employees, ensure that you register with the national body of social security called the INSS so that the employer and employee contributions are rightly done.

 

CONSIDER EMPLOYING LOCAL STAFF

• As we have stated in the previous sections, hiring local individuals should be compulsory because of the regulatory regime and good community relationships. In this regard, local employees can assist in understanding cultural gaps.
• Take into consideration the laws regarding labour that have been established such as the minimum wage and other employment contracts that are provided by Congolese law.

 

ESTABLISH RELATIONSHIPS WITH LOCAL PARTNERS

• There are also advantages of accompanying fellow local firms or individuals. Local firms will assist in dealing with government red tapes, understanding the appropriate marketing strategies, and developing linkages with distributors and clients.
• Nonetheless, screen potential partners to ensure there is no conflict of interest and develop legal documents to protect your interests.

 

COMPLY WITH REPORTING AND COMPLIANCE REQUIREMENTS

• Remember to keep the business updates with the GUCE on changes to business records and submit yearly and returns to DGT.
• Pay attention to reporting requirements because the DRC government is taking considerable steps towards making the authorities and political activities more transparent and less corrupt, and this is particularly true for the country’s mining and energy sectors.

 

LEVERAGE INVESTMENT INCENTIVES

The DRC has come up with incentives both for local and foreign investors. This is particularly the case for sectors which have been earmarked as critical to the economy’s growth. There is a need to liaise with the National Agency for the Promotion of Investments (“ANAPI”) to understand if there are any tax holidays, custom duties exemptions or other incentives.

 

CONCLUSION

Setting up business in the DRC involves quite some hurdles particularly for those coming from foreign countries who are not aware of the legal framework as well as customs in the country. It may be helpful to engage with local professionals: lawyers, consultants to address relevant issues and ensure effective running of the business.