doing business in the Democratic Republic of

the Congo (DRC)

country profile international treaties and memberships

government • Executive: The president is the chief of state, and the prime minister is international • African Continental Free Trade Area Agreement
structure and regional
the head of government. The president is directly elected by simple • African Development Bank Group
organisations
majority popular vote for a five-year term and is eligible for a second term. • African Union
and customs
The prime minister and cabinet are appointed by the president. • Common Market for Eastern and Southern Africa (“COMESA”)
unions
• Legislative: The DRC has a bicameral Parliament. • East African Community (“EAC”)
• Judicial: The highest courts are the Court of Cassation and the • Economic Community of Central African States (ECCAS)
Constitutional Court. The subordinate courts are the State Security Court, • Economic Community of the Great Lakes Countries
Court of Appeals (organised into administrative and judiciary sections), • Group of 24
Tribunal de Grande, magistrates' courts, and customary courts. • Group of 77
• Next presidential elections: December 2023. • International Monetary Fund
economic • Nominal GDP (USD billions): 55.39 • International Organisation of the French-speaking World (Organisation
data Internationale de la Francophonie)
• GDP per capita (USD): 502.83
• Inflation rate (% change): 7.50 • Nile Basin Initiative
• Government revenue (% of GDP): 14.79 • Organisation of African, Caribbean and Pacific States (“OACPS”)
• Government gross debt (% of GDP): 9.27 • Organization for the Harmonization of Business Law in Africa (“OHADA”)
• Southern African Development Community
*Source: IMF (October 2023 estimates) • United Nations
• World Bank Group
• The DRC is endowed with natural resources, which are the country’s main • World Customs Organization
economic resource. Mining accounts for nearly nine-tenths of total exports. • The DRC receives preferential treatment under the agreements listed
The country boasts minerals such as cobalt and copper, significant arable here: http://ptadb.wto.org/Country.aspx?code=180
land, hydropower potential, and immense biodiversity. bilateral • The DRC has bilateral investment treaties in force with the Belgium-
• The DRC’s main industries include mining, mineral processing, consumer investment Luxembourg Economic Union, China, France, Germany, Switzerland, and
products, metal products, processed foods and beverages, timber, treaties the United States.
cement, and commercial ship repair.
• Treaties have been signed with Egypt, Greece, Italy, Jordan, Portugal,
• The DRC’s main export partners are China, the United Arab Emirates,
Republic of Korea, Rwanda, South Africa, Turkey, Ukraine, and the United
Saudi Arabia, and South Korea. The main export commodities include
Arab Emirates, but these have not yet entered into force.
copper, cobalt, crude petroleum, tin, and diamonds.
• The DRC’s main import partners are China, South Africa, Zambia, investment- • African Growth and Opportunity Act
Rwanda, Belgium, and India. The main import commodities include related
• Cotonou Agreement (may be succeeded by the European Union and
packaged medicines, refined petroleum, sulfuric acid, stone processing agreements /
OACPS Partnership Agreement)
machines, and delivery trucks. institutions
• Multilateral Investment Guarantee Agency
risk ratings • S&P Global Overall Country Risk (Q3 2023): 200/211 • World Trade Organization
• Corruption Perceptions Index (2022): 166/180 dispute • Convention on the Settlement of Investment Disputes between States and
resolution Nationals of Other States (ICSID Convention)
• OHADA
• Permanent Court of Arbitration
• United Nations Commission on International Trade Law (UNCITRAL)
• United Nations Convention on the Recognition and Enforcement of
Foreign Arbitral Awards (New York Convention)

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doing business in the Democratic Republic of
the Congo (DRC)

intellectual • A comprehensive list of IP-related treaties signed by the DRC is available • the parties to the concentration hold a combined market share of
property (“IP”) at: 25%; or
treaties https://wipolex.wipo.int/en/legislation/members/profile/CD?collection=treati • the contemplated transaction creates / reinforces a dominant
es position.
• See the trade marks section below for further detail. • The DRC is a pre-implementation regime and failure to notify constitutes a
violation of merger control rules. In terms of the Competition Act, non-
legal regime compliance with the merger control provisions exposes offenders to the
applicable legal • The DRC’s legal system is based on Belgian civil law, as well as temporary closure of the merged entity and/or a fine of up to CDF100-
regime customary law. million.
• The DRC is a member of three regional competition bodies, COMESA, the
dispute • The OHADA treaty provides an arbitration procedure, and disputes EAC and OHADA. OHADA does not yet have an operational regulator and
resolution relating to the general OHADA Uniform Acts, or any other business it is understood that its merger control regime is not yet functional.
dispute can be submitted to the OHADA arbitration procedure. • While the EAC has an operational competition law regime and a partially
• The OHADA Uniform Act on Arbitration Law supersedes all national operational regulator, it is understood that its merger control regime is not
legislation on commercial law. yet functional. It is understood that the attention of the EAC competition
• The DRC also adheres to the rules of the International Chamber of regulator is currently focused on investigating potential anticompetitive
Commerce. practices and undertaking sectoral studies.
• COMESA, on the other hand, has an operational merger control regime.
land • The state exclusively owns land in the DRC; however, it can grant
Merger activities in the DRC should thus be conducted with the EAC and
acquisition, companies and individuals occupancy rights through:
COMESA in mind.
planning and • perpetual concession contracts only available to Congolese citizens;
use or prohibited • The Competition Act prohibits cartels (whether through a formal
• ordinary concession contracts available to foreign investors, practices agreement or a concerted practice) which aim at:
registered companies, and Congolese citizens with 25-year • restricting access to the market by competitors;
occupancy which is renewable. • enabling businesses to carve up markets amongst them or fix prices;
competition • hampering production, outlets, investments, or technical and
merger control technological advances; or
• The Law on Pricing, Freedom and Competition, 2018 (the “Competition • skewing the outcome of a competitive bid.
Act”) regulates merger control in the DRC. • Exemptions may, however, be granted by the COMCO in respect of
• The Competition Commission of the DRC (the “COMCO”) is currently anticompetitive agreements which contribute to promoting economic
accepting merger filings. progress, job creation and maintenance.
• The Competition Act defines an economic concentration (i.e., a merger) • The Competition Act prohibits abuses of dominance and abuses of
as deriving from any act that confers alone or jointly the possibility of economic dependence. It also prohibits restrictive trade practices (i.e.,
exercising control or a decisive influence over one or more undertakings, resale price maintenance, excessive pricing, discriminatory practices,
notably by way of: refusal to supply and sudden termination of established commercial
• transfer of property or ownership on all or part of goods, rights, or relationships).
obligations of another undertaking; • Anticompetitive agreements, cartels and abuses of dominance are subject
• creation of a joint venture; or to a maximum fine of 50% of the profit or 20% of the turnover achieved by
• rights or contracts which confer influence over the composition, the infringing company in the DRC.
deliberations or decisions of an undertaking or a group of • Resale price maintenance is subject to a fine ranging from CDF10-million
undertakings. to CDF50-million.
• A concentration meeting one of the following thresholds shall be subject • OHADA does not regulate prohibited practices. COMESA and the EAC
to review in the DRC: regulate prohibited practices within their respective common markets.
• the turnover achieved in the DRC by the parties to the concentration Activities in the DRC should thus be conducted with these regional
is equal to or exceeds an amount to be determined by Decree of the competition bodies in mind.
Prime Minister upon proposal of the Minister of the Economy (this
Decree has not yet been adopted to the best of our knowledge);

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doing business in the Democratic Republic of
the Congo (DRC)

employment registration / • Companies must register with ANAPI for purposes of obtaining:
immigration • Foreign individuals intending to work in the DRC are required to obtain a
licensing • a Commercial Registry (Registre du Commerce et du Crédit Mobilier,
requirements RCCM) number;
work permit and corresponding working visa, generally valid for two years
and renewable. • a tax number from the Directorate General of Taxes (Direction
• Work permit quota regulations apply to the main industries, including Générale des impôts, DGI);
mining, in the DRC. Work permits cannot be granted in respect of certain • a National Institute for Social Security (Institut National de Sécurité
positions that are reserved for DRC citizens. Sociale (“INSS”)) number;
• a National Office of Professional Training (Institut National de
local • In terms of the DRC’s employment legislation, an employee may be Préparation Professionnelle (“INPP”)) number; and
employment vs seconded to the DRC. However, a secondee may become the local • a certificate of registration from the National Employment Office
secondment entity’s employee depending on certain factors, such as the types of duties (l’Office National de l’ Emploi (“ONEM”)).
performed, the level of control over the secondee and integration into the • Operating permits may also be required from municipal councils.
organisation.
non-industry • See above.
fixed-term • It is legally permissible to conclude a limited or fixed-term contact which specific
contracts and will terminate at the end of a project. Fixed-term contracts are limited to a registrations /
temporary two-year period and may only be renewed once. licences
employment • A contract is presumed to be for an indefinite period unless it is specified
services
industry- • Industry specific licences may be required.
as a fixed-term contract. specific
• The use of duly appointed labour brokers is permitted. licences
payment in local • Immigration rules require, as a condition for obtaining a work visa, an incentives • Incentives include:
currency employee to have a local bank account and receive all or a part of his/her • a preferential tax regime under the Investment Code to promote direct
remuneration under the employment contract in such local bank account. investment in certain regions and in specific sectors or activities,
including exemption from corporate income tax, property tax and
restraint of trade • Restraint of trade agreements are not valid and enforceable and protection import and export duties; and
agreements in this regard must be incorporated into the contract of employment. • various incentives available to holders of mining or quarrying licences
foreign investment regime and their subcontractors under the Mining Code.
investment • The Investment Code (Law No. 004/2002 of 21 February 2002) governs exchange • Exchange control regulations apply in the DRC. Commercial banks are
regime foreign investment in the DRC. control generally authorised, subject to relevant taxes being paid, to transfer funds
• Corporate issues, including formation, incorporation, management, and regulation out of the country.
dissolution of companies, are regulated by the OHADA Uniform Act on • Mining companies are required to receive 60% to 100% of their proceeds
Commercial Companies and Economic Interest Groupings, which from export sales in the DRC and to use such funds for domestic purposes
supersedes all contradictory provisions of national legislation. only.
• An investment one-stop shop (Agence Nationale pour la Promotion des • Any transfer of funds to or from the country is subject to a foreign
Investissements (“ANAPI”)) has been established to facilitate business exchange levy (redevance de suivi de change) at the rate of 0.2% (in
registration and increase transparency in licensing procedures. addition to bank charges).

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doing business in the Democratic Republic of
the Congo (DRC)

types of • The forms of doing business available in the DRC are mainly the following company • There is no requirement to appoint a company secretary in the DRC.
entities provided for by the OHADA Uniform Act on Commercial Companies and secretary
available for Economic Interest Groupings: auditor • SARL and SAS: must appoint a statutory auditor when two of the following
foreign • public limited company (société anonyme (“SA”)); three conditions are met at the end of the financial year:
investment • simplified limited lability company (société par actions simplifiée • its total balance sheet exceeds F.CFA125-million (approximately
(“SAS”)); USD200 390);
• private limited liability company (société à responsabilité limitée • the annual turnover exceeds F.CFA250-million (approximately
(“SARL”)); USD400 780); or
• general partnership (sociétés en nom collectif, SNC); • the permanent staff exceeds 50 employees.
• limited partnership (société en commandite simple, SCS); • SA: appointment of an auditor is mandatory.
• joint venture (sociétés en participation); • SAS: appointment of an auditor is mandatory where an SAS effectively
• de facto partnership (sociétés de fait); controls one or more companies, or where an SAS is effectively controlled
• economic interest grouping (groupements d’intérêt économique, by one or more companies.
GIE); • With effect from 2023, financial statements of companies that are subject
• registered branch of a foreign company; and to the substantive tax regime must be “certified” by a chartered accountant
• representation or liaison office. duly registered to the DRC National Chamber of the Chartered
private limited liability company Accountants (ONEC), in order to be accepted by the tax authorities when
filed with the annual corporate income tax return.
minimum • SARL | SA | SAS: A minimum of one shareholder is required.
number of • In principle, local shareholders are not required, but may be required in registered • Every company must have a registered office in DRC which must be
shareholders certain specified sectors such as mining, oil and gas. address indicated in the Articles of Association.
• In terms of the Subcontracting Law, 2017 more than 50% of the shares in • The address of the company’s accountants or lawyers may be used as
any subcontracting company must be held by DRC citizens and its registered address for an interim period.
management must consist of a majority of DRC citizens.
shelf • There are no shelf companies available in the DRC.
minimum share • The following minimum share capital requirements apply: companies
capital • SARL: F.CFA1-million (approximately USD2 000). The nominal registration • Companies are registered at the Commercial Registry, and it takes
value of each share may not be less than F.CFA5 000 (USD10); process approximately four to six weeks to complete registration once all the
• SA: F.CFA10-million (approximately USD20 000), divided into required documents have been submitted.
shares of a face value of not less than F.CFA10 000; and
tax
• SAS: no minimum required share capital. In practice, a minimum
capital of USD2 000 is usually required by the Commercial Registry. tax system • The DRC has a sourced-based tax system in terms of which both
residents and non-residents are subject to tax on income earned from a
directors • SARL: must have at least one managing director (gérant). It is source in the DRC.
recommended that someone who is either based in or regularly travels to
the DRC be appointed as managing director, as it is required for such a corporate • A company is resident in the DRC if is incorporated in the DRC and its
person to hold a long term-visa. There is no requirement to appoint residence head office and principal place of business are located in the DRC.
directors / managers in addition to the managing director.
• SA: must appoint a chairperson of the board who can also act as general
manager of the company (directeur général). A board of directors with
three to 12 members, including a chairperson, is to be appointed.
• SAS: free to determine its management structure, which should, as a
minimum, consist of one chairperson. There is no requirement to appoint a
board of directors.

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doing business in the Democratic Republic of
the Congo (DRC)

corporate tax • Resident companies and permanent establishments of foreign companies double tax • DTAs are in force with Belgium and South Africa.
rate are subject to corporate income tax at the rate of 30%. agreements
• Small companies (as defined) are subject to corporate income tax on a (“DTAs”)
turnover basis. losses • Losses may be carried forward indefinitely. However, the deduction of
• A minimum tax (impôt minimum) applies to all companies except micro losses brought forward is capped at 60% of the net taxable profit of the
and small companies. Regardless of a company’s taxable profit, the tax particular year in respect of which the loss deduction is claimed.
payable may not be less than 1% of its declared turnover. • A company that fails to submit its tax return on time for a specific tax year
• Companies which do not realise any turnover during a tax year, have to forfeits the right to carry forward the losses incurred in that year.
pay a flat tax as follows:
• CDF2.5-million for large companies; transfer pricing • In terms of the DRC’s transfer pricing rules, where a DRC company is
• CDF750 000 for medium-sized companies; and directly or indirectly connected to / associated with a non-resident
• CDF30 000 for small companies. company, any undue benefit granted to the latter company would be re-
characterised as an abnormal act of management and ignored for
capital gains • Capital gains are generally included in ordinary taxable income and corporate income tax purposes. In order to avoid reassessment in such
tax (“CGT”) subject to corporate income tax at the standard rate. situation, the resident company must provide evidence that the transaction
• The direct or indirect sale of shares in a company holding a mining title is has been carried out independently without any consideration for the
subject to a specific CGT regime. group company’s interest.
• “Associated persons” is broadly defined and includes participation in
withholding tax WHT rate capital or through holdings.
(“WHT”) rates payment to residents non-residents*
limitations on • Interest payments to a direct shareholder of a SARL are not deductible.
branch profits N/A 20% on 50% of after-tax interest • Interest payments to a foreign shareholder or any other related party are
profits deductibility deductible only if the loan is repayable within a maximum period of five
dividends 20% 20% years and the interest rate does not exceed the annual average rate
10% (mining licence 10% (mining licence applied by banks established in the country of the lending entity.
holders) holders) • Interest payments to shareholders that legally or factually have the power
to manage the company are deductible only if the total interest paid does
0% (paid to an active not exceed the amount of the paid share capital.
shareholder in a company
• Specific rules apply to the mining sector.
other than a joint-stock
company) employee taxes The income tax rates applicable to resident individuals are:
interest N/A 20%
annual chargeable income (CDF) tax rate
0% (foreign currency
up to 1 944 000 3%
loans concluded abroad
by mining companies) 1 944 001 – 21 600 000 15%
0% (government and 21 600 001 – 43 200 000 30%
treasury bonds) over 43 200 000 40%
royalties 14% (effective rate) 14% (effective rate)
• The tax is calculated based on a progressive scale and the overall tax
management, N/A 14% shall not, in any case, exceed 30% of taxable income.
consulting, and • A flat rate of 15% income tax applies to the gross remuneration of casual
technical service workers.
fees • In addition to employment income tax, employers are liable for exceptional
*The withholding tax rate may be reduced in terms of a relevant double tax tax on the remuneration of expatriates (impôt exceptionnel sur les
agreement. rémunérations des expatriés) in respect of remuneration paid to

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doing business in the Democratic Republic of
the Congo (DRC)

expatriates at a rate of 25% (12.5% for mining companies during the first reverse VAT on • A non-resident is required to designate a VAT representative in the DRC
10 years of the mining project). imported who will be jointly liable for payment of VAT. Where such non-resident fails
services to appoint a VAT representative, the VAT due is payable by the recipient
social security • Both employees and employers must make monthly social security
contributions contributions to the INSS on the employee’s remuneration, including the of the service in the DRC.
salary, bonuses, the value of fringe benefits and leave pay. trade marks
• The employer contribution rate consists of: international • Paris Convention
• family welfare: 6.5%; conventions, • World Intellectual Property Organization Convention
• professional risk: 1.5%; and treaties, and • World Trade Organization / Trade-Related Aspects of Intellectual Property
• retirement pension: 5%. arrangements Rights (TRIPS)
• The employee contribution rate is 5%.
first-to-file • The first person or entity that applies for a trade mark will obtain
payroll tax • A monthly professional training contribution (cotisation pour l’institut jurisdiction registration and may prevent others from using it. This person or entity will
national de préparation professionnelle) is payable by employers to the have the rights thereto, regardless of whether another has built a
INPP at a rate of: reputation using the mark in that country without trade mark registration.
• 3% for public companies and companies with a workforce of 1 to 50
employees; classification • The International Classification of Goods and Services (Nice
• 2% for companies with 51 to 300 employees; and Classification) applies.
• 1% for companies with a workforce of over 300 employees. • A multi-class trade mark filing system is followed.
• Employers are also obliged to contribute 0.2% of remuneration to ONEM
and cover all the medical costs of its employees and their families.
categories of • Provision is made for:
trade marks • collective marks; and
stamp duty • The DRC does not levy stamp duties. • goods and service marks.
• The transfer of mining shares is subject to 1% tax on the nominal value of
the shares transferred. filing • Power of attorney (in French), simply signed;
• The transfer of immovable property is subject to registration duty at the
requirements • reproductions of the trade mark;
rate of 6% of the price (1.5% in the case of a merger and 3% in the case • certified copy of the priority document, if applicable, with a certified French
of a transfer of business activities). translation; and
• specifications of goods / services to be provided in French.
value added tax
(“VAT”) procedure • Applications are examined as to formal and substantive requirements.
taxable supplies • VAT is levied on the supply of goods and services in the DRC and on the oppositions • No provision is made but an interested party may invoke the nullity of a
importation of goods and services. and non-use trade mark.
cancellations • A registered trade mark may be cancelled on action by an interested party
VAT rate • 16%
if it has not been used for a continuous period of three years after the date
• 8% (specified essential goods including meat, fish, milk, water, and soap, of registration.
as well as the sale of airline tickets on domestic routes)
duration and • A trade mark registration is effective for an initial period of 10 years from
registration • Any person or entity who carries on business in the DRC and has an renewal the date of filing and, thereafter, renewable for further periods of 10 years.
threshold annual taxable turnover / expected annual taxable turnover exceeding
CDF80-million must register for VAT.
• Businesses whose turnover is below the registration threshold would
cease to be subject to VAT from the following year but may apply for
voluntary registration.

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doing business in the Democratic Republic of
the Congo (DRC)

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LAST UPDATED OCTOBER 2023