The Ivorian legal system is based on French civil law and customary law.
The Ivorian business environment is also regulated by the International Treaty of the Organisation for the Harmonisation of Business Law in Africa (OHADA), revised on 30 January 2014, the objective of which is the facilitation of trade and investment, and guarantee of the legal and judicial security of business activities.
Legal Structure Under OHADA Law
The different business law areas are governed by several Uniform Acts common to the 17 member states of OHADA.
Investors in Côte d’Ivoire may choose between setting up a branch office, or creating a company. OHADA law provides for several legal forms for commercial companies, the most common of which are:
Companies are created through the investment promotion centre (CEPICI) and are required to register with the Trade and Personal Property Credit Register (RCCM) at the court where the head office is located.
Ivorian Judicial Structure
The Ivorian judicial system is governed by Law No 99-435 of 6 July 1999, amending Law No 61-155 of 18 May 1961, on the organisation of the judiciary at the different levels (courts of first instance, courts of appeal, special courts).
Foreign investors therefore have recourse either to national state courts or to national or international arbitral tribunals (or other methods of alternative dispute resolution).
Ivorian Regulatory Structure
Investments made in Côte d'Ivoire are governed by a specific text, the Investment Code, and its applicable decrees. They are also governed by the regulations on foreign financial relations at the West African Economic and Monetary Union (WAEMU) level, in relation to foreign investments, direct investments, imports, exports, etc.
Generally speaking, FDI in Côte d’Ivoire does not require specific review or approval.
The constitution of foreign investments in a WAEMU member state is free under the WAEMU treaty.
However, all FDI is subject to a declaration for statistical purposes to the Directorate of External Finances and to the Central Bank of West African States (La Banque Centrale des États de l'Afrique de l'Ouest or BCEAO), where it concerns direct investments (pursuant to Regulation No 09/2020/CM on external financial relations).
In addition, the Ivorian Investment Code provides for a certain number of guarantees in favour of any foreign investor, subject to bilateral, regional and multilateral agreements signed by the State. These are guarantees of fair and equitable treatment, freedom to invest in each sector provided for in the Code, absence of restrictions on obtaining the foreign currency necessary for the exercise of the investor’s activities, and freedom to appoint members of the board of directors, general manager or manager, etc.
There are certain specific sectors in which foreign investors will be subject to administrative approval/declarations depending on the activity. This is notably the case in the mining sector (Ministry of Mines and Geology), hydrocarbons (Ministry of Oil, Energy and Renewable Energies), banking (Ministry of Finance and the BCEAO), and telecommunications (Ministry of Digital Economy, Telecommunications and Innovation, and the Telecommunications Regulatory Authority or ARTCI).
In addition, in order to benefit from the advantages provided by the Ivorian Investment Code, particularly in terms of taxation and customs, any foreign investor must submit an application for approval to the investment promotion agency.
Current Climate in Côte d’Ivoire
Côte d'Ivoire has enjoyed dynamic, strong and stable economic growth since 2012 with average annual growth of 8%. The country is the main economic powerhouse of French-speaking West Africa and has real influence in the region, attracting foreign investors.
This is mainly due to the government’s strategy around national development plans in recent years (especially plan 2016–2020), focusing on a policy of attracting domestic and foreign private investment. Several measures have been implemented, which have enabled Côte d’Ivoire to reach 110th position in the Doing Business ranking in 2020 (177th in 2012). According to the 2019 UNCTAD report, Côte d’Ivoire attracts 28% of the FDI within the WAEMU zone, the highest percentage in the area.
Economic forecasts for the coming years are optimistic, and growth impulses are increasingly coming from public and private investments in infrastructure, energy, mining and agro-processing, as well as industrial expansion.
On the political front
The political climate has also improved significantly since the 2011 crisis, with Côte d’Ivoire also ranking fairly well in terms of overall governance (index based on the criteria of security and rule of law, participation and human rights, economic and sustainable development, and human development).
Recent Developments in the FDI Regulation
New Investment Code
In 2018, a new Investment Code was enacted (Ordinance No 2018-646 of 1 August 2018, amended by Ordinance No 2019-1088), containing a set of incentives applicable to direct, domestic and foreign investments in Côte d’Ivoire. Its main objectives are sustainable development, regional development, local content, and business competitiveness (in terms of sustainable job creation, development of local skills and professional training, subcontracting, and capital opening).
This new code has established two tax incentive regimes with different advantages, which are defined according to the investment zone and a categorisation of investments by sector of activities.
The launch of a single investment services portal
The portal is: www.225invest.ci. This reform falls under the dynamics of dematerialisation of the administrative services in Côte d’Ivoire. Finally, the promotion of FDI remains a major challenge of the national development plan 2021–2025, mainly consisting of improving the tools and indicators in place. The IMF estimates that Côte d’Ivoire will continue to benefit from government reforms and will see its FDI volume reach EUR1.1 billion by 2023.
Most Common Structures for Transactions
These are the structures in which the shareholders' liability is limited to their contributions: the limited liability company (LLC or SARL), the joint stock company (SA) or the simplified joint stock company (SAS). They can be held by a single person.
They are two types of public companies.
Key Considerations for a Foreign Investor in Selecting a Structure
The choice of company will take into consideration tax implications, which depend on the nature of the activity carried out as well as:
Transaction Structures Commonly Used for Acquisitions of Companies/Businesses as Compared to Minority Investments
Whether it is for the acquisition of companies or businesses or for minority shareholdings, the foreign investor may incorporate a company. In the case of minority stakes, the company may be wholly owned by the investor. In the case of acquisition of a company or business, the investors may want to group together and buy the company through their holding company.
Finally, carrying out activities in Côte d'Ivoire without creating a structure may entail the risk of requalification of the foreign investor as a permanent establishment, which will lead to a tax adjustment and the investor being subject to penalties for lack of tax declarations.
A foreign investor considering FDI in Côte d'Ivoire must take into consideration the provisions of the OHADA Uniform Act on the Law of Commercial Companies and Economic Interest Grouping (AUSCGIE) and the Regional Regulation No 09/2010/CM/UEMOA governing foreign investments in the WAEMU (or UEMOA, as it is known in French).
In addition to the restrictions related to the transferability of shares in limited liability companies (SARLs), which require the prior authorisation of the majority of shareholders, holding ¾ of the share capital, the AUSCGIE also provides for the possibility of the by-laws of the SA containing pre-emption rights clauses. In this respect, the by-laws of the company may include provisions stating that the transfer of shares to third parties may be approved in advance by the board of directors or an ordinary shareholders' meeting, as well as deadlock, put-option clauses. Also, the by-laws can prohibit the transfer of the company's shares, but only for a period not exceeding ten years.
According to Article 10 of Regulation No 09/2010/CM/UEMOA, FDI operations are subject to a foreign investment declaration for statistical purposes, to the Directorate of External Finance and to the BCEAO.
The professions of medicine, pharmacy, law, notary, accountancy and architecture are reserved for nationals, while legal and accounting services require a partnership with an Ivorian entity. Also, the Mining Code excludes foreigners from semi-industrial and artisanal mining activities. In practice, additional restrictions may be applied, notably when applying for business permits or licences, which are authorisations issued by sectoral ministries prior to the establishment of an enterprise.
Corporate governance rules are mainly provided in the AUSCGIE, which includes good governance principles, such as providing for the appointment of statutory auditors, prohibiting directors from participating in any vote on their own remuneration, considering the failure by directors to submit a company's financial statements within a month of their approval by the shareholders as an offence, etc.
Shareholders may also choose to determine the governance matters in a shareholders' agreement in which they may specify the roles, functions and duties of each body in the company.
Investors may opt for one of the following.
Choosing the appropriate type of company will take into consideration the elements mentioned in 3.1 Transaction Structures.
The AUSCGIE contains several provisions ensuring the rights of minority shareholders. Every shareholder has the right to attend and vote at general meetings and a right to information, with no distinction between majority and minority shareholders in the process of communicating information.
Minority shareholders may also obtain information by questioning the management bodies.
Minority partners may also have recourse to the management expertise procedure. In fact, the members may ask the president of the Commercial Court to appoint one or more experts to submit a report on one or more management operation(s).
Minority shareholders can also exercise actions against the company directors to repair a prejudice committed, through individual or social action.
The quorum and majority required for voting provided under the AUSCGIE cannot be changed for an SA, as they are public policy. Also, some decisions must also be taken unanimously.
Finally, the AUSCGIE penalises the abuse of majority voting.
The Ivorian Investment Code provides for freedom of investment and equality of treatment between natural or legal persons of foreign nationality and those of Ivorian nationality.
Nevertheless, the WAEMU Regulation No 09/2010/CM, of 1 October 2010, provides that the constitution of foreign investments in a WAEMU member state be declared for statistical purposes, to the Directorate of External Finance and to the BCEAO, in the case of FDI.
Commercial companies in Côte d'Ivoire must also abide by the following reporting obligations.
Finally, Circular No 04-2017/CB/C on risk management in the WAEMU, outlines a reporting obligation for credit institutions, banks and financial institutions, to the governing body and to the Banking Commission, relating respectively to the nature and level of exposure to each type of risk, and to the overall risk management system of the institution.
The WAEMU capital market is composed of:
The highest financial market authority is the Regional Council for Public Savings and Financial Markets (CREPMF), which is responsible for organising and controlling public offerings and for supervising operators.
SAs with representation in the WAEMU and with share capital of XOF10 million can only access the markets through a public offering.
Regulations concerning capital markets in WAEMU jurisdictions, including Côte d'Ivoire, require issuers to publish all information enabling the public to form a judgement on the assets and liabilities, activity, financial situation and prospects of the issuer, as well as on the characteristics and purpose of the operation and the related rights, through the preparation of a prospectus, which is subject to the approval of the CREPMF before being distributed to the public.
The prospectus must be renewed at the beginning of each calendar year and resubmitted to the CREPMF. It must be widely published in the WAEMU territory by the issuer as soon as the “visa” (certificate) is granted by the CREPMF, and must be made available to the public.
In all cases, foreign investments and transfers of investments between non-residents must be declared to the Directorate of External Finance and, in the case of direct investments, to the BCEAO.
Foreign investors structured as organisme de placement collectif en valeur mobilière (OPCVM) (investment funds, SICAVs, etc) must file for approval with the WAEMU Regional Council for Public Savings and Financial Markets before starting their activity.
This includes a letter of application, the financial situation of each promoter over the last three years, the draft prospectus, the custodian agreement, the certified financial statements of the management company and the custodian for the last three years, a five-year projection of the evolution of the number of securities and assets of the OPCVM and letters of commitment in conformity with Articles 76 and 77 of the General Regulations. Depending on the legal form, other documents may be requested.
The transformation of an OPCVM or a change of legal form requires a new authorisation.
According to the legal form of the OPCVM, the amount of registered capital varies between XOF50 million and XOF250 million.
Côte d’Ivoire has a merger control regime, with legislation on both national and community levels.
National competition structures have a general task to investigate and assist the Commission, which has the power to take decisions and may oblige enterprises or associations of enterprises to put an end to antitrust agreements.
But the Commission may also find, of its own motion or upon request, that there are no grounds for it to intervene in respect of a concerted or anti-competitive agreement, decision or practice.
Exemptions and Notification Process
Agreements, decisions and concerted practices, through which enterprises or associations of enterprises wish to avail themselves of the benefit of “negative certification”, must be notified to the Commission.
Persons entitled to submit requests and notifications:
Filing and content of requests and notifications
These should be submitted to the Commission, using Form N, against receipt.
Following a notification, the decision-making procedure is as follows:
The individual exemption decision is granted for a fixed period and may be subject to conditions and obligations. It may relate to the act ab initio, even if this means that the exemption applies to a period prior to the date of notification. The decision may be renewed ex officio or on request, if the conditions for granting an individual exemption are still met. The Commission may also revoke or amend its decision or prohibit specific acts.
The Commission may adopt block exemptions by means of an implementing regulation. Specialisation agreements, research and development agreements, and technology transfer agreements may be covered by an implementing regulation for the purposes of the block exemption.
Ivorian competition law is applicable to mergers. However, it does not involve a substantive overlap or competitive assessment of the investment.
The Commission may, by decision, impose fines on (associations of) enterprises of between XOF500,000 and XOF100 million, or up to 10% of the turnover in the preceding business year of each of the enterprises participating in the infringement, or 10% of the assets of those enterprises.
The fine is without prejudice to remedies before the national courts relating to compensation for damage suffered.
The Commission may impose penalty payments on (associations of) enterprises of between XOF50,000 and XOF1 million per day of delay from the date it reaches its decision.
The Commission may also adopt interim measures (eg, an injunction to return to the previous state, suspension of the practice, the imposition of conditions necessary to prevent anti-competitive effects).
Ability to End the FDI
If the Commission observes, on request from a member state or a natural/legal person, or on its own, an infringement to competition rules, it has the power to compel the (association of) enterprises concerned to put an end to it. This is the case for the following practices prohibited by Article 88 (a) and (b) of the WAEMU Treaty:
In the case of a practice amounting to an abuse of a dominant position, the Commission may require the enterprises:
Complaint Procedure Against an Agreement, Decision or Practice
A complaint may be brought before the Commission by any natural or legal person. It may be verbal or written, and in the latter case, it must contain the name and address of the complainant, the subject of the complaint, a copy of any useful document, a product description, a description of the nature and structure of the relevant market, and the decision requested by the complainant.
When corporate agreements constituting investments are made without any negative clearance, they may give rise to complaints, and suspension or even termination, if the infringement is found and proved.
This will be initiated by the Commission to follow up on a complaint. The Commission must give its opinion within 12 months of opening the adversarial procedure, failing which, its silence will be deemed to constitute a “negative clearance” or “individual exemption” decision.
Refer to 6.3 Remedies and Commitments.
The Commission publishes decisions, taking into account business confidentiality. A judicial appeal is possible before the WAEMU Court of Justice which evaluates the legality of decisions. Action for the evaluation of the legality of a decision is open to member states and the Council. It is also open to any natural or legal person against any act adversely affecting them.
Ivorian legislation does not provide for a specific national security review regime applicable to FDI.
WAEMU Declaration Regime
However, such regime is provided by the WAEMU regulations, and especially Regulation No 09/2010/CM relating to the external financial relations of the WAEMU member states, through a declaration for statistical purposes, addressed to the Directorate of Finance (Ministry of Economy and Finance), and to the Central Bank, notably in the context of the constitution of foreign investments in a WAEMU state.
This obligation applies to direct investments, defined in this regulation as the sole participation, when it exceeds 10% of the capital of a company.
Form of the Declaration
This declaration consists of a simple letter, sent to the Directorate of Finance and to the Central Bank, against receipt, supplying the following information:
In practice, this declaration may be filed after the financing documents have been signed, or after the transaction has been completed, or after the funds have been disbursed.
The Directorate of Finance and the Central Bank are free to request additional information from applicants.
Foreign direct investments are defined under the WAEMU regulation as:
It must be specified that if the sole participation in the capital of a company does not exceed 10%, it is not considered a direct investment. In other words, a participation of less than 10% would not be subject to the reporting requirement for statistical purposes as described in 7.1 Applicable Regulator and Process Overview.
As mentioned in 7.1 Applicable Regulator and Process Overview, the constitution of FDI in Côte d’Ivoire is subject to mandatory reporting for statistical purposes to the Directorate of Finance (Ministry of Economy and Finance) and to the Central Bank (BCEAO). These authorities may request additional documents or information from the applicants.
In the case of infringement of the regulation of external financial relations and non-compliance with this mandatory formality, Decision No CM/UMOA/020/12/2012 of 14 December 2012 adopting the draft uniform law on litigation of infringements of the regulation of external financial relations of the member states of the WAEMU provides sanctions.
Natural persons are punished by a prison sentence of one to five years and a fine of a minimum amount corresponding to the sum or value of the offence and a maximum of five times the said sum or value.
Legal entities other than credit institutions, on behalf or for the benefit of which an infringement of the regulations on external financial relations has been committed by one of their bodies or representatives, will be punished by a fine of a minimum amount corresponding to the sum or value to which the infringement relates and a maximum of five times the said sum or value.
See 7.3 Remedies and Commitments.
The relevant authorities may have the ability to challenge the FDI, most probably after the investment is made, as the reporting obligation must be fulfilled at this time.
According to the Ivorian Investment Code, and especially Article 25 of Ordinance No 2019-1088 amending Ordinance No 2018-646, natural and legal persons of foreign nationality will receive treatment identical to that granted to national or legal persons of Ivorian nationality, without prejudice to the national policy of promoting national entrepreneurship.
Furthermore, access to foreign currency is not restricted, and there are no restrictions on investors obtaining foreign currency for their activities.
This law also guarantees any investor free access to raw or semi-finished raw materials produced in the national territory.
However, some specific rules do apply to foreign investors.
Foreign Exchange Regulations
Regulation No 09/2010/CM/UEMOA of 1 October 2010, on the external financial relations of the member states of the WAEMU, lists the following obligations.
Real Estate Transactions
General principles of the Investment Code
According to the Investment Code (Article 33), the private property of all goods, movable or immovable, tangible or intangible, is protected in all its aspects, its elements and its dismemberments, its transmission and the contracts of which it is the object. The transfer of land under the rural land tenure system can only be carried out in accordance with the provisions of the laws and regulations of the rural land tenure system. Finally, no investor may be deprived of ownership of their investments except for reasons of public utility and under the condition of fair and prior compensation.
Certain professional activities in the real estate sector in Côte d'Ivoire are reserved for persons of Ivorian nationality. This is the case for real estate brokers, real estate agents and administrators of goods, under the Ivorian Code of Construction and Housing (Law No 2019-576 of 26 June 2019).
Specific national requirements
Ivorian Law No 2019-576 of 26 June 2019, establishing the Construction and Housing Code, provides for the following.
Specific Industry/Sector Restrictions
An individual licence can only be obtained by a legal entity under Ivorian law, under the Ordinance 2012-293 of 21 March 2012 on Telecommunications and Information and Communication Technologies.
To obtain authorisation, a private commercial television or radio broadcasting company must be a limited company under Ivorian law.
According to Law No 2014-138 of 24 March 2014 on the mining code, any natural or legal person, of Ivorian or foreign nationality, may undertake or conduct an activity governed by this law on Ivorian territory, provided that they first obtain a mining title or authorisation.
The granting of a mining permit obliges its holder to create a company under Ivorian law with the exclusive purpose of exploitation of the deposit for which the permit was issued.
Similarly, the research permit is granted by decree, subject to prior rights, to any individual or legal entity under Ivorian law.
Oil and gas
In the oil and gas sector, the government adopted Law No 2022-408 of 13 June 2022 on local content in oil and gas activities providing that all oil companies, oil subcontractors, service providers and suppliers involved in oil and gas activities are subject to the following local content requirements:
Non-compliance with local content obligations exposes the perpetrator to administrative sanctions, including suspension or withdrawal of approval, prohibition from contracting, termination of production sharing contracts, and also administrative fines ranging from XOF500,000 to XOF200 million which may be doubled.
Only legal entities governed by the law of the WAEMU member state in which they intend to set up operations may become licensed customs brokers. In addition, the level of participation of WAEMU nationals in the capital of approved legal persons must be at least 25%.
The taxation of companies doing business in Côte d'Ivoire depends on the nature of the structure (capital company or a company of persons), and on whether the person is established in Côte d'Ivoire as a resident or a non-resident (branch). Taxes are also applicable, in the form of withholding, in the absence of a physical presence in the country, when business is conducted there (see 9.2 Withholding Taxes on Dividends, Interest, Etc).
Taxation of Limited Liability Companies
An SA or SARL resident in Côte d'Ivoire is in principle subject to the following tax regime.
Tax on industrial and commercial profits
In principle, natural and legal persons operating in the country are subject to different tax regimes depending on the size of their turnover.
The normal real profit regime RNI (Article 34 of the CGI)
This concerns individuals or legal entities whose annual turnover, including all taxes, exceeds XOF500 million. It should be noted in this respect that, subject to the deduction of income from movable property, the taxable profit is the net profit determined on the basis of the overall results of operations of any kind carried out by the companies, including in particular the sale of any assets, either during or at the end of the operation.
The simplified real profit regime RSI (Article 45 of the CGI)
This regime applies to individuals or legal entities whose annual turnover, including all taxes, is between XOF200,000,001 and XOF500 million. Subject to some adjustments relating to depreciation, the results are determined in the same way as for RNI.
For both RNI and RSI, the principle rate is 25%. On the other hand, companies in the telecommunications, information technology and communication sector are subject to the 30% rate.
The microenterprise regime (RME) (Article 71 bis of the CGI)
Natural or legal persons whose annual turnover, including all taxes, is between XOF50,000,001 and XOF200 million. For these companies, the tax rate is 6% of the turnover including all taxes and a reduced rate of 4% is provided for members of the Centre de Gestion Agrée (CGA) and taxpayers whose accounting is monitored by the Order of Chartered Accountants of Côte d'Ivoire with whom the Directorate General of Taxes has signed an agreement.
The entrepreneur's regime
The system makes a distinction between the entrepreneur's communal tax and the entrepreneur's state tax.
I. The Entrepreneur's Communal Tax (TCE) (Article 33, Law No 2020-972 of 23 December 2020, Tax Schedule)
This tax replaces the flat-rate tax on small traders and artisans and applies to taxpayers with an annual turnover of less than XOF5 million, inclusive of tax.
The rate applied to the annual turnover or forecast turnover is:
This contribution is calculated annually and paid monthly in a fraction equal to one twelfth of the annual tax.
II. State tax on entrepreneurs (TEE) (Article 72 of the CGI)
This tax concerns natural or legal persons whose annual turnover, including all taxes, is between XOF5,000,001 and XOF50 million. The rate of the tax is 4% on the turnover including all taxes for trade and commerce activities and 5% for other activities (industry, crafts and services). The rate is reduced by half for members of the CGA, ie, 2% or 2.5%. Reductions of this rate are also foreseen. This tax, which is calculated annually, is paid monthly by payment by the tenth of each month of a fraction equal to one twelfth of the annual tax.
The CGI also provides for a flat-rate minimum tax in situations of low profits or losses. The basic rate is 0.5% of turnover including VAT. Derogatory rates exist for certain types of companies.
Value-added tax (VAT)
VAT is a consumption tax based on turnover, the basic rate of which is 18%. Services are taxable in Côte d'Ivoire when they are performed in the country. However, when a service is performed in another country but is used in Côte d'Ivoire, taxation takes place in Côte d'Ivoire. With regard to the supply of goods, the location of the supplying of goods is deemed to be in Côte d'Ivoire if the goods are there at the time of delivery or, in the case of transport of goods, at the time of departure of the shipment or transport to the purchaser. Exports are in principle exempt from VAT.
This VAT borne by the taxable person receiving the goods or services is in principle deductible if the conditions are met. There are also legal or conventional exemptions in Ivorian regulations and the possibility of being reimbursed for VAT that cannot be deducted, under certain conditions.
It is also important to note that with the 2022 tax schedule, clarifications have been made on the VAT territoriality rules applicable to online sales, digital services and commissions received by digital intermediation platforms for their submission to Ivorian VAT. Thus, operators of online platforms selling goods or services who do not have a business establishment or a legal representative in Côte d'Ivoire, but who carry out taxable operations in the country, are required to file a tax declaration of existence before the start of their activities, using the simplified online procedure set up by the tax administration. This tax declaration results in the allocation of a taxpayer account number to the platform, through which it can pay the taxes that fall due. The operators of online platforms that do not have a business establishment in Côte d'Ivoire are required to calculate and pay into the coffers of the Ivorian Treasury the VAT due on the commissions and other remunerations they receive on taxable transactions in Côte d'Ivoire carried out via their platform.
Contribution is due by a natural or legal person, Ivorian or foreign, who practises a trade, an industry or a profession in Côte d'Ivoire that is not included in the exemptions determined by the General Tax Code. It consists of a duty on turnover and a duty on value added. The duty on turnover is equal to 0.5% of the turnover or gross receipts and taxes of the previous year. This may vary in some sectors. The rate of duty on the rental value is set at 18.5% of the rental value of the business premises. This rate is reduced to 16% for establishments that do not fall within a municipal perimeter. There are also some exemptions (eg, small and medium-sized enterprises are exempted for a period of five years from the year of their creation).
Tax on property income (IRF)
In principle, property income is included in the company's profits and taxed as BIC. Otherwise, said income is subject to the tax on land income. This is a schedular tax levied on income from the letting of built or unbuilt property (house, factory, bare land, etc) at a rate of 3% of the rental value of income-producing buildings belonging to companies or legal persons. It is payable by the owner or possessor on 1 January of the tax year. This rate is increased to 4% for buildings belonging to companies or legal entities, with the exception of real estate co-ownership companies.
Tax on the real estate assets of built-up properties
This is an annual tax levied on the rental value of income-producing built and unbuilt properties. It is applied at a rate of 9% of the rental value of built properties producing income. This rate is increased to 11% for companies or legal entities except for co-ownership real estate companies. Other rates and exemptions are also provided for.
In addition, according to Article 158 of the General Tax Code, the rate of tax on real estate assets is raised to 15% of the rental value of buildings belonging to legal persons and companies, and assigned to their activities, with the exception of co-ownership real estate companies.
Article 16 of the 2022 Tax Schedule further provides for the reduction of the rate of property tax on unfinished buildings on the balance sheet from 15% to 10% in order to reduce the tax burden on companies and legal persons.
Property tax on undeveloped properties
This tax concerns undeveloped properties and is applicable at a rate of 1.5% of the market value. This rate is reduced to 0.75% for non-built and non-income producing properties belonging to the Autonomous Port of San Pedro.
Registration and stamp duties
Registration fees are fees levied when a deed is submitted to the registration formality, which consists of having a legal document transcribed at the registration office. Some deeds are required to be registered; others are not. The formality may cost a fixed fee of at least XOF18,000 or a proportional or progressive fee.
Taxes and taxes on wages
Payroll tax (IS)
This is a tax deducted at source from salaries, wages, pensions and life annuities. Its rate is 1.5%, applicable on 80% of net income (net income = RB X 80%) (Article 120 and following of the CGI)
Contributions payable by the employer include the following:
These contributions are the responsibility of employers who pay wages and salaries, whether or not they are based in Côte d'Ivoire. The rate of use of this overall contribution is 2.8% for local staff and 12% for expatriate staff (Article 146 of the CGI).
General Income Tax (IGR)
This is tax deducted at source, in general, on wages, salaries and allowances paid by employers to workers. This tax is levied on the total annual income of natural persons. For its calculation, a progressive scale is applied, at a rate of between 0% and 40%. A 20% deduction is allowed as a flat-rate charge or a deduction of actual expenses as the taxpayer's choice.
It is important to note that the microenterprise regime (RME) and the Entrepreneur's State Tax regime are exempt from taxes such as VAT, BIC and patente.
Other taxes may be paid in the form of withholding taxes, including withholding tax on distributions, withholding tax on income from receivables, and withholding taxes. See 9.2 Withholding Taxes on Dividends, Interest, Etc.
Taxation of partnerships
Partnerships are not personally liable to tax because of the tax transparency that characterises them. Each of the members or partners is taxable as if they personally carried out the activity. Thus, for general partnerships and limited partnerships (in the case of general partners), corporate tax is payable by the individual partners for their share of the profits. The taxes thus included in the rolls in the name of the partners are nonetheless corporate debts (Article 63 of the CGI).
Concerning the patente, this same transparency means that partnerships are not personally subject to it but their partners are personally subject to it.
Some companies carry out activities in Côte d'Ivoire in the form of a permanent establishment, in particular a branch, while others do business there without any physical presence.
Taxation of Partnerships
Partnerships are characterised by tax transparency and are not subject to tax. Each of the members or partners is taxable as if they were personally carrying out the activity. Thus, for general partnerships and limited partnerships (in the case of general partners), corporation tax is borne by the partners individually, for their share of the profits. The taxes thus included in the rolls on behalf of the partners are nevertheless social debts.
With regard to the licence, this same transparency means that partnerships are not personally subject to it but their partners are.
Existence of a permanent establishment
A foreign company doing business in Côte d'Ivoire is taxable for industrial and commercial profits tax only when it has a permanent establishment in Côte d'Ivoire. This concept can be defined by a tax treaty, if there is one, between Côte d'Ivoire and the state of residence of the company. In the absence of an agreement, the General Tax Code includes similar criteria.
In general, a permanent establishment is defined through a fixed place of business held in Côte d'Ivoire or a dependent agent with certain powers.
In principle, the permanent establishment is subject to the same taxes and duties as a branch, except for the withholding on dividend distributions.
In the absence of a tax treaty, domestic law provides similar criteria, namely:
Certain income is applicable to foreign persons in the form of deductions, when they are beneficiaries of income such as dividends, interest and royalties.
Withholding Tax on Dividends
In Côte d'Ivoire, securities income tax (taxe sur le revenu des valeurs mobilières or IRVM) is withheld at source on:
There are common law rates and special rates for this tax.
Ordinary duty rate is 15% for:
Special rate of 10% for:
Another special rate of 2% for:
Tax treaties may provide for a lower rate and an obligation for the state where the beneficiary is located to avoid double taxation.
Some exemptions exist as provided for by the Investment Code.
Withholding Tax on Debt Interest
In principle, the payment by a debtor established in Côte d'Ivoire of interest, arrears and all other proceeds of receivables, deposits, guarantees, current accounts and non-bond loans must be subject to withholding tax. The rate of this withholding is 18%, in principle, for interest on receivables. In other cases, lower rates are applied.
Tax treaties also provide for limitations on these rates.
Royalty Deduction or Non-commercial Benefit Deduction
Persons established in Côte d'Ivoire and recipients of benefits for persons residing abroad and without permanent establishment in Côte d'Ivoire must, in principle, make a deduction at source on their payment.
The rate of this deduction is 25%, with a reduction of 20% on the gross amounts collected by the beneficiary.
Tax treaties may exclude this withholding with a restrictive definition of the concept of royalty, or they may limit the rate provided by domestic law.
These deductions are, in principle, discharged from income tax.
Companies doing business in Côte d'Ivoire often use strategies to pay the minimum amount of tax in the country. These strategies include the following.
An Unbalanced Breakdown of Public Procurement Prices
It is common for multinational companies that do not hold most of their public contracts in Côte d'Ivoire to use public market price distribution keys, which ultimately leave the Ivorian State with the right to tax only a very small part of the price. Indeed, to do so, they use strategies that pay a high price for the import of supplies and services from their related entities abroad and reserve a supervisory role for their low-paid local branch. With the restrictive definition of the concept of royalty provided in tax treaties, significant tax mitigation emerges.
The Use of Intangible Assets for Tax Mitigation Purposes
Intangible assets (trade marks, patents, designs, copyrights, etc) are difficult to value. The appreciation of their value can vary greatly depending on the factors considered. Companies, especially foreign ones, take the opportunity to make these assets available to their local subsidiaries or branches at prices exceeding their real value. The payment of these remunerations entails a transfer of profits from Côte d'Ivoire to the country of the beneficiary of the payments, generally a state with a lower tax burden.
Avoidance of Permanent Establishment Status
The permanent establishment is the threshold of activity above which a foreign person has a taxable presence in Côte d'Ivoire, for corporate tax purposes. Where there is an applicable tax convention, the scope of its definition may be considerably narrowed or widened. For example, some tax treaties give the source country (Côte d'Ivoire) the power to tax a construction site if the duration of this project exceeds six months, while for others it is less than six months, and more for some others. Foreign companies, through the game of “treaty shopping”, create a residence in a country under agreement with Côte d'Ivoire that meets these criteria sought for tax mitigation purposes.
Other exploitable advantages are the parent-subsidiary regime with an exemption of 95%, as well as the deferral of the taxation of the capital gains realised on fixed assets during operation, etc.
Capital gains are generally taxed in Côte d'Ivoire. However, there are adjustments to this rule.
Principle: Taxation of Capital Gains
In principle, taxable profit is the net profit, determined based on the overall results of operations of all kinds carried out by companies, including the disposal of any element of the asset, either in progress or at the end of the operation. Therefore, capital gains are taxable in Côte d'Ivoire.
Exceptions and Internal or Conventional Arrangements
The CGI provides derogations from this principle, as do tax treaties.
Exceptions and adjustments provided by the General Tax Code
Capital gains arising from the sale, during operation, of fixed assets are not included in the taxable profit of the financial year in which they were realised, if – in the declaration of the results of that financial year – the taxpayer undertakes to reinvest in fixed assets in their companies in Côte d'Ivoire a sum equal to the amount of these capital gains added to the cost price of the items transferred. This reinvestment must take place before the expiry of a period of three years from the end of the financial year in which the results were declared.
Capital gains from the sale of equity securities by holding companies are taxable at industrial and commercial profits tax at a rate of 12%, subject to compliance with certain conditions. Transfers of equity securities held for less than two years are taxed under the conditions of ordinary law, unless the securities were acquired following a merger or contribution and were included in the portfolio of a company meeting the conditions required by the CGI.
As for the disposal at the end of the business, it should be noted that the capital gains resulting from the sale of fixed assets at the end of the operation or in the event of a partial transfer of an enterprise, and the compensation received in return for cessation of the exercise of the profession or the transfer of clientele, are counted in the commercial profits and the profits of taxable non-commercial professions, as half of their amount.
However, where the sale, transfer or cessation occurs more than five years after the creation or purchase of the fund, the office or the clientele, the capital gain is retained in taxable profits for only ⅓ of its amount.
Moreover, it is important to clarify that these provisions do not seem to cover the gains made by a foreign person through an assignment of social rights. It should be noted that the registration duties of 1% are applicable on the transfer of all or part of the social rights of a company when this does not entail the disappearance of said company or the creation of a new company. There is an exemption if the transfer benefits an Ivorian resident. The transfer of immovable property by a foreign company not liable to corporation tax is in principle subject to a levy on the capital gain on the sale. The capital gain on disposal is fixed at a flat rate of 20% of the sale price. The levy rate is 15% based on the said flat-rate capital gain.
The taxation of capital gains may also be impacted by tax treaties. Indeed, in cases where taxation is provided for by the CGI, the tax treaty could grant tax jurisdiction to the state of residence of the foreign transferor. If so, there will be no taxation in Côte d'Ivoire. Also, there will be no taxation if despite the tax jurisdiction granted by the tax treaty, Ivorian law does not provide for effective taxation.
Ivorian law provides several rules to combat tax evasion, and the tax system for international taxation has been strengthened and modernised in recent years.
Payment to People in Low-Tax Countries
According to Ivorian law, interest, arrears and other proceeds from bonds, receivables, deposits and guarantees, royalties for the assignment or granting of operating licences, patents, trade marks, manufacturing processes or formulas, and other similar rights or remuneration for services paid or due by a natural or legal person domiciled or established in Côte d'Ivoire to natural or legal persons who are domiciled or established outside Côte d'Ivoire, are admitted as deductible expenses for the assessment of tax only if the debtor provides proof that these expenses correspond to real transactions and that they are not abnormal or exaggerated.
In this case, the sums paid are only allowed as deductible expenses for the preparation of the tax within the double limit of 5% of the turnover excluding taxes and 20% of the general expenses of the debtor company. Where the beneficiary of the sums paid is located in such a country or territory, the deduction of the sums will be capped at 50% of their gross amount, without prejudice to the double limit provided for above.
In addition, there is a 25% increase in income tax on receivables or income tax on securities on taxable amounts paid in these territories.
Anti-transfer Pricing Arrangements
The CGI also contains an anti-transfer pricing system. According to this system, for the establishment of the tax on industrial and commercial profits due by companies that are dependent on or have control of companies located outside Côte d'Ivoire, the profits indirectly transferred to the latter, by increasing or reducing the purchase or sale prices or by any other means, will be incorporated into the results. The same is true of enterprises that are dependent on an enterprise or group that also controls enterprises located outside Côte d'Ivoire.
In the absence of precise elements to make the adjustments provided for in the preceding paragraph, the taxable income is determined by comparison with those of similar companies normally operated (Article 38 of the CGI).
Similarly, in accordance with Côte d'Ivoire's commitments under the BEPS project, an obligation to report certain information on the accounting of companies called “country-by-country reporting” has been introduced in the tax system, to be borne by the ultimate parent companies of groups of companies established in Côte d'Ivoire. Failure to file this declaration is punishable by the payment of a fine of XOF5 million for cases of non-filing of these declarations within the required deadlines, and XOF2 million for cases of insufficient declaration, ie, for declarations deemed incomplete due to omissions or for errors found by the Tax Administration on these declarations.
Anti-tax Abuse Scheme
The administration also has another legal weapon against tax abuse. Taxpayers cannot be opposed to the Tax Administration acts that conceal the true scope of a contract or convention with the help of clauses that:
The law recognises the power of the administration to restore its true character to the disputed operation, subject to the assessment of the dedicated commission and the judge in the case of disagreement.
The penalty in a case of tax adjustment for the repression or abuse of rights is an increase of 150% of taxes regularly applicable.
Limitation of Interest Deduction
To prevent loans from partners or shareholders for the benefit of Ivorian companies from being a gateway to tax evasion, the Ivorian legislature has placed the following limitations on the deduction of interest paid to persons directly related to the company:
Côte d'Ivoire has ratified the eight fundamental conventions of the International Labour Organisation. The Ivorian Labour Code provides for the rights and duties of employees and employers.
Article 15 of the 2016 Constitution, which states that every citizen has the right to decent working conditions and fair remuneration, is supplemented by the Labour Code, which applies to all contracts intended to be executed in the territory of Côte d'Ivoire, as well as missions of less than three months abroad, with the exception of employees of public administrations and state-owned enterprises.
The provisions of the Labour Code are of public order, but do not prevent the adoption of more favourable measures, in particular, through the collective agreements that it governs.
The Labour Code governs open-ended contracts (CDI) and fixed-term contracts (CDD) limited to two years, including renewals. The number of workers on fixed-term contracts may not exceed ⅓ of the company's workforce. It also deals with the conditions of work, suspension and termination of the employment contract, the sale, succession, merger, transformation or incorporation of the company, and the methods of settling labour disputes.
It includes non-discrimination and equality between men and women, and protection of women and children against certain forms of labour.
The guaranteed interprofessional minimum wage (SMIG) is set at XOF60,000 per month. Freedom of association and the right to strike are protected.
The recruitment of foreigners is subject to a procedure prior to hiring and is in principle requires the absence of national skills.
Collective Bargaining and Unions
A works council is set up in all companies that usually employ at least 300 permanent employees.
A trade union delegate may be appointed within a company or establishment by a regularly constituted trade union organisation that is representative of the workers.
To be representative within a company, a trade union organisation must have a sufficient audience in its sector of activity and geographical area. The said audience is determined by the results of the professional elections.
Other Employment Regulations for Foreign Investors
The Investment Code introduces a quota for certain categories of employees. The number of foreign managers and supervisors must not exceed 20% of the total workforce of the company in order to benefit from certain provisions of the Investment Code.
The payment of wages obeys the following rules:
Monthly payments must be made no later than eight days after the end of the working month that gives right to the salary.
In the case of change of employer as a result of a sale, merger, transformation of the business, or incorporation, all employment contracts in effect on the day of the change (ie, change of employer) survive between the new employer and the company's personnel. The new employer is also obliged to pay the salaries of the workers whose contracts are in progress.
See 10.2 Employee Compensation on the consequences of a change of employer.
It should be noted, however, that the new employer retains the right to terminate employment contracts in accordance with the legal procedures for dismissal.
Finally, there are no works council or other collective bargaining requirements to complete an acquisition or investment transaction.
Intellectual property is not an important aspect in screening FDI in Côte d’Ivoire, and no industries are subject to particular rules or increased scrutiny. Nevertheless, foreign investors need to be aware that counterfeiting is strongly present throughout West Africa and affects many areas of activity, mainly agrifood, pharmaceuticals, electrical equipment, and automobile spare parts.
At Regional Level
Côte d’Ivoire is a member of the African Intellectual Property Organisation (OAPI) established by the Bangui Agreement, as well as a member of the WIPO and a signatory to the main treaties on IP law.
The OAPI established a uniform system for a single deposit and the protection of trade marks in all member countries, with protection for ten years from the date of filing of the application.
At Local Level
The Ivorian office for copyrights (BURIDA) ensures protection of copyright that enjoys, by the sole fact of its creation, an intangible property right, exclusive and enforceable against all, including moral and economic rights. Any infringement is subject to sanctions. Additionally, domain names are managed by the telecommunications authority (ARTCI) in accordance with the WIPO rules.
There are no particular sectors in which it is difficult to obtain intellectual property protection or that are subject to significant limitations on protection or enforcement. Nevertheless, despite the reassuring level of legislation, counterfeiting is strongly present in Côte d’Ivoire, causing numerous cases of personal injury and accidents.
The relevant legislation includes:
Law No 2013-450 also provides for the territorial application of its provisions to data controllers and processors. Indeed, it applies to any data processing operations carried out in the national territory (Article 3). In other words, if a data controller collects, processes and/or deletes data in Côte d’Ivoire, the controller is automatically subject to Ivorian law. The conditions of application are the same for subcontractors. In addition, only natural persons residing in Côte d’Ivoire or legal entities under Ivorian law may file a declaration or submit an application for authorisation to process data.
Therefore, the Ivorian law on data protection bases its application on the criterion of establishment.
These laws are subject to strong enforcement in Côte d’Ivoire. Indeed, the regulatory authority (ARTCI) is very active in issuing opinions on questions raised by public or private entities in relation to the regulations in force, especially with regard to data protection. The ARTCI is also active in punishing these same entities in the event of violation of the applicable regulations.
There is no further information in relation to investments in Côte d'Ivoire.
Local Content Rising in the Oil and Gas Industry in Côte d'Ivoire
Known as one of West Africa’s most dynamic economies, Côte d'Ivoire’s government has recently integrated local content requirements to many regulatory frameworks, particularly to the Petroleum Code, whereas local content regulations are expected to become essential, as major offshore oil and gas discoveries have been made in 2021 and 2022, rejuvenating interest in the country.
As such, on 13 June 2022, the government adopted Law No 2022-408 on local content in oil and gas activities, in order to reinforce local content provisions in the oil and gas sector. The main purpose of the law is to encourage the companies working in the industry to use more local people, local businesses and local services.
With this in mind, and as Côte d'Ivoire offers enormous business and investment opportunities for companies in the energy sector, investors should be aware of the main regulations governing the industry, as highlighted in this article.
Discretionary power of the State in granting oil and gas authorisations and contracts
First of all, the State exclusively owns all the deposits and natural accumulations of hydrocarbons in the soil and subsoil of Côte d'Ivoire, its territorial sea, its exclusive economic zone and its continental shelf, whether discovered or not discovered (Article 2 of the Petroleum Code). No person, including the owner of the surface, may undertake any operation unless such person has been previously authorised in accordance with the provisions of the Petroleum Code (Article 4 of the Petroleum Code).
Oil and gas operations are therefore undertaken directly by the State itself, or by companies or joint ventures that have entered into a contract with the State for this purpose, while keeping in mind that the government has a discretionary power to grant oil and gas authorisations and contracts.
Accordingly, the main licences/authorisations relevant to oil and gas exploration and exploitation are summarised under the following subheadings.
Hydrocarbons prospecting authorization (autorisation de reconnaissance d’hydrocarbures)
Such authorisation gives its holder the right to conduct preliminary surface prospecting works on a non-exclusive basis. The prospecting period is fixed at a maximum of one year, renewable once, for a period not exceeding one year. It is to be noted that no preferential right to a Petroleum Contract is granted by such authorisation.
Exploration authorisation (exploration permits under concession contracts ‒ permis de recherche d’hydrocarbures) and exclusive exploration authorisations under production sharing contracts (autorisation exclusive d’exploration)
Both are initially granted for a maximum period of three years, renewable twice, as determined in the respective concession or production sharing contract, while noting that it may not exceed seven years (or nine years in deepwater zones).
Exclusive appraisal authorisation (autorisation exclusive d’évaluation)
Such authorisation is granted to a contractor in the event a discovery is made. The duration of the exclusive appraisal authorisation is determined in the production sharing contract.
Production authorisations (Production concessions under concession contracts ‒ concession d’exploitation) and exclusive production authorisations under production sharing contracts (autorisation exclusive d’exploitation)
Both are granted for a maximum period of 25 years with one renewal period of up to ten years, as set out in the relevant contract.
Furthermore, there are three types of petroleum contracts for upstream activities provided for under the Petroleum Code (Articles 13 and subsequent of the Petroleum Code).
Concession contract (contrat de concession attachés à l’octroi de titres miniers d’hydrocarbures constitués par des permis de recherche et les concessions d’exploitation)
This contract is entered into prior to the grant of an exploration permit and confers rights and obligations during exploration and, in case of a discovery, during production. The concession contract holder assumes financial and operating risks and may dispose of the production in accordance with the contract.
Production sharing contract (contrat de partage de production)
These are generally the most common tool used by investors in Côte d'Ivoire and under them the State grants an exclusive exploration right and, in case of a discovery, an exclusive right of production. The contractor assumes financial and operating risks. Production is shared with the State in accordance with the contract.
Production is shared between the State and the contractor to compensate the latter for the services and costs it has incurred. The contract defines the portion of the “Cost Oil”, ie, the portion of the total production that can be allocated to reimburse the costs incurred, as well as the portion of the “Profit Oil”, ie, the balance of the total production after deduction of the Cost Oil, respectively allocated to the State and the holder. This sharing may vary depending on whether the production is crude oil or natural gas, or on the impact of the water depth of the deepwater fields.
Service contract (contrat de services à risques)
Under these contracts, the contractor has no entitlement to any portion of the production but is remunerated in cash for its services and reimbursed its petroleum costs.
In addition, petroleum contracts must, among other things, address the following points: the research perimeter, the duration of the contract and the Petroleum Titles concerned as well as the terms and conditions of their renewal, the participation of the State, stability, force majeure and dispute resolution, obligations relating to the environment, health, safety and rehabilitation of the sites, the terms and conditions of assignment, local employment, as well as work and investment commitments, the tax and customs regime. They also define the terms and conditions relating to the portion of production to be sold on the local market.
Petroleum contracts contain all dispositions applicable to the relevant exploration and/or production phase, including, inter alia, exploration area, duration of the contract and the relevant authorisations or permits including renewal periods and relinquished areas, work and investment commitments and relevant securities, transportation rights, production ownership and sharing, state participation, tax and customs regime, transfer and assignment, environment, health and safety and rehabilitation of sites, local preference and local training commitments, abandonment obligations including abandonment deposit, and stability, force majeure, applicable law and dispute resolution clause. A model contract may be provided by the Ministry of Mines, Petroleum and Energy to serve as a basis for negotiations.
Law No 2022-408 of 13 June 2022 reinforcing local content provisions
This being said, and in order to reinforce local content provisions in the oil and gas sector the government has adopted the Law No 2022-408 of 13 June 2022 on local content in oil and gas activities providing that all oil companies, oil subcontractors, service providers and suppliers involved in oil and gas activities are subject to local content requirements. Indeed, all companies must recruit and employ as a priority personnel of Ivorian nationality with the required qualifications. Derogations may be granted for the recruitment of non-Ivorian personnel, but under conditions defined by decree.
In addition, all companies involved in oil and gas activities must set up training and/or mentoring programmes for Ivorian workers to enable them to reach all levels of responsibility in the company.
Similarly, the list of jobs in oil and gas activities that must be filled entirely by Ivorian nationals, as well as the proportion of Ivorian workers in companies involved in oil and gas activities, is established by decree.
In addition, the awarding of oil subcontracts, service provision or the supply of goods and services is done by invitation to tender, unless an exception is made under conditions specified by decree, and preference is given to Ivorian companies.
This law also includes provisions for the implementation and monitoring of local content, requiring oil companies, any oil subcontractor, service provider and supplier involved in oil and gas activities to submit a local content plan to the administration in charge of hydrocarbons.
Non-compliance with local content obligations exposes the perpetrator to administrative sanctions, including suspension or withdrawal of approval, prohibition of contracting, termination of production sharing contracts, and also administrative fines ranging from XOF500,000 to XOF200 million, which may be doubled.
Finally, contractors may have obligations to supply the domestic market a defined portion of their production, the level of which will be defined in the Petroleum Contract (usually 10% of the oil and gas production).
On another hand, it is important for investors to understand how the government derive value from oil and gas resources, whether from the production sharing contracts or the taxation regime applicable.
Shared production with the State
For the production sharing contracts, hydrocarbon production is shared between the State and the contractor in accordance with the provisions of such contract. It is to be noted that such production, commonly referred to as “cost oil”, cannot be higher than the percentage of the production fixed in the contract, which defines the recoverable oil costs and the terms and conditions for their recovery from production and specifies whether the sharing is carried out before or after tax on industrial and commercial profits.
Contractors are subject to taxes and other contributions under the General Tax Code, the Petroleum Code as well as the relevant Petroleum Contract.
Indeed, taxation in the oil sector is both upstream and downstream. However, while downstream taxation is governed by common law, upstream taxation is governed by the Petroleum Code and production sharing contracts.
In the upstream oil sector, the main taxes and duties applicable to companies are the following.
I. Tax on industrial and commercial profits (BIC)
It is the corporate income tax at the rate of 25% provided for in the General Tax Code (Impôt sur les Bénéfices Industriels et Commerciaux (BIC)).
In accordance with the Petroleum Code and the production sharing contract, the state's share of production includes the BIC tax payable by the oil and gas company.
II. Oil and gas exploitation taxes
Applications for the award, renewal, assignment, transfer or waiver of petroleum contracts and the authorisations deriving therefrom are subject to the payment of fixed entry fees and are payable at the conclusion of each award or transaction
Annual surface royalty, the amount and payment terms of which are set forth in the relevant oil contract and payable no later than the tenth day of the year.
In addition, concession holders must pay a monthly production royalty in cash or in kind, the amount of which is also established in the underlying Concession and is based on the total extracted production, it being specified that, in order to promote oil operations in Côte d'Ivoire, exemptions from payment of the production royalty may be granted in exceptional cases.
Similarly, concession holders may be subject to an additional levy on profits from their oil operations in the relevant concession.
III. Bonuses (signature and production bonuses)
The Petroleum Code also provides that petroleum contracts may provide for signature and production bonuses.
With regard to the upstream oil sector, oil and gas contract holders are mainly exempt from the payment of:
Finally, the environmental regime applicable to the sector must be taken into consideration by potential investors.
Indeed, in accordance with Article 39 of the Environmental Code and Annex I of the Decree N°96(1), oil and gas projects are subject to an environmental impact assessment (EIA) prior to their implementation, the content of which is set out in Article 40 of the Environmental Code and Article 12 of the Decree N°96-894.
The EIA is the responsibility of the operator. The EIA must be carried out by environmental study offices approved by order of the Minister in charge of the environment (Article 10 of Ordinance N°00972-2007(2)).
Falsification, failure to carry out an EIA, failure to comply with the specifications for the EIA or failure to use an approved environmental study office are punishable by criminal penalties (Article 92 of the Environmental Code and Articles 31 of Ordinance N°00972-2007).
The National Environmental Agency (ANDE) is the environmental authority responsible for supervising, validating and controlling all activities relating to EIA of development projects. The operator pays ANDE a fee of XOF20 million (Article 27 N°00972-2007).
The environmental impact assessment must be approved by the Minister of the Environment before the project is implemented. The project is then subject to control and monitoring to verify the relevance of the forecasts and adopt the necessary corrective measures. Six months after the implementation and operation of the activities of a development project, the environmental monitoring following the EIA is completed by an environmental audit, without interrupting the course of this environmental monitoring (Article 18 of N°00972-2007).
Criminal sanctions are provided for in the Environmental Code.
Moreover, in accordance with Article 35 of the Environmental Code, the oil contract holder must, in the context of its activities, comply with the following principles:
Furthermore, the holder of the petroleum contract must:
On a final note, the Decree N° 2013-851 of 19 December 2013 establishes an exclusion and safety zone around oil and gas drilling, exploration and production equipment, and seismic survey vessels. Thus, in accordance with Article 65 of the Petroleum Code, a perimeter of one nautical mile (1.845 km) is declared an exclusion and safety zone for navigation and fishing around drilling, research and oil and gas production equipment and related facilities, as well as around seismic survey vessels. This measure is intended to prevent accidents related to fishing activities around offshore oil facilities.
Last but not least, the holder of a petroleum contract must ensure that health and safety standards are applied in accordance with the applicable standards in the international oil industry, both on their own behalf and on behalf of their subcontractors, and any serious accident must be reported immediately to the competent authorities (Article 54 of the Petroleum Code). The holder must also take all measures to preserve and protect the safety of persons and people and property (Article 49 of the Petroleum Code).
As a conclusion, further to significant discoveries of Ivorian offshore oil reserves, the Ivorian government is open to partnerships with foreign companies and investors wishing to participate to the development and growth of the country.