D E M O C R A T I C R E P U B L I C O F C O N G O

1 P O L I C Y , P L A N S A N D P R I O R I T I E S

The Poverty Reduction and Growth Strategy Paper (PRGSP) and the Government programme for the period 2007 – 2011 as detailed illustration of the PRGSP are the two documents guiding the economic and social development of the country. The PRGSP builds on five strategic pillars:

(i) promoting good governance and consolidating peace;(ii) consolidating macroeconomic stability and macroeconomic growth; (iii) improving access to social services and reducing vulnerability; (iv)combating HIV/AIDS; and (v) promoting community activities.

The Government Medium-Term Programme (2007-2011) has then developed a strategy with five priority areas, namely: infrastructure, employment, education and health, water and electricity. With these two documents, Government intends to restore the rule of law and to rebuild the country with access to basic social services for the majority of the population. In June 2007, Government furthermore agreed on a Priority Actions Programme (PAP) to promote growth in the country and reduce poverty.

The Investment Code defines 3 economic regions that have been classified according to their degree of economic development. Incentives for investors have been developed depending on the region they invest in:

Region A: City of KinshasaRegion B: Bas Congo, Town of Lubumbashi, Town of Likasi, Town of KolweziRegion C: Bandundu, Equator, Eastern Kasai, Western Kasai, Maniema, Kivu

North, Kivu South, Eastern Province, Katanga

ANAPI and the government have identified investment opportunities and encourage investments in the following sectors:

Mining and Hydrocarbons; Agriculture, Forestry, Farming and Fishing; Industry: Manufacturing & Basic metallurgic industries; Electricity and Potable Water; Banking; Infrastructure; Tourism; Transport & Harbours; Telecommunications; Building, Public Works and Habitat (civil engineering).

Even though ANAPI is not responsible for approving investment project in all sectors listed above, a completed file with all relevant project information has to be provided to ANAPI.

Based on the negative ranking in the World Bank Doing Business report 2009 placing DRC at the last position out of 182 countries, and diverse complaints from the private sector, the Government initiated an overall reform process reviewing national legislation and procedures in diverse sectors. Committees have been

PRGSPRegions of PriorityPriority SectorsNational Reform Process

created consisting of key ministries and the private sector and chaired by the Prime Minister. The described legislation is, hence, reformed in the upcoming years.

2 I N V E S T M E N T P R O M O T I O N

2 . 1 I n s t i t u t i o n s

The National Agency for Promotion of Investment (ANAPI) has been set up by the Investment Code, Law no. 004/2002 from February 21, 2002. ANAPI is a public technical institution with legal status that is placed under the provision of the Ministries of Planning and Portfolio. The official statutes, functions and organisational settings are defined in Decree no. 065/2002 from June, 5, 2002. ANAPI is set up as a One-Stop-Shop for public, private and semi-public investments in DRC.

The aims of ANAPI are: a) to receive investment projects for approval within the framework of the Investment Code and investment projects governed by laws according to the Investment Code, or to provide technical advice in regard to the other laws; and b) to ensure the promotion of investments in DRC within the country as well as abroad.

According to Decree no. 065/2002, Article 3, the functions of ANAPI include:

Popularise the laws and regulations which grant tax and special tax incentives as regards investments;

Make use of means which should eradicate barriers or red tape to operations of setting up, extending and modernising enterprises;

Receive, analyse, and evaluate, in due approval period, applications for eligible investment projects to the advantages of the Investment Code and submitting to the Ministers the Plan, Finances and Budget of these projects for approval or rejection, with advices/notices conform to the eligibility conditions and advantages of the Investment Code;

Receive and review the documentation files of Investment projects which should be realised in sectors governed by particular Laws and giving technical advice on the said investment projects on behalf of the Government;

Search and promote domestic or foreign Investments, public, private or semi-public ones in accordance with the Law no 004/2002 of February 21, 2002, the Investment Code, and particular laws applicable to some business sectors;

Carry out surveys and making useful suggestions either for a better application of the Investment Code, or for the incentives entitled to promote public, private or semi-public investments, or for improving the settlement/welcoming conditions for domestic, foreign, public, private or semi-public investments in various economic regions of the country;

Constitute a data bank on the potentials and investment opportunities existing in the different economic regions of the country;

Carry out all operations linked directly or indirectly to its mission.

ANAPI is responsible for promotional activities and approval of applications in all sectors of economic activity, except to some sectors in which ANAPI only intervenes through providing its opinion for respective projects as required. Accordingly, the Investment Code is not applicable to the following sectors as they are handled by separate laws: Mining and hydrocarbons (see Mining Code, Law no. 007/2002 from July 11,

2002); Banking; Insurances; Production of munitions and activities related to the military; Production of explosives;

ANAPI

Assembly of military equipment and paramilitary security services; Production of munitions, military and paramilitary activities or security services; Commercial activities.

2 . 2 I n v e s t m e n t a n d E x p o r t I n c e n t i v e s

Investments accepted to qualify for the Investment Code shall benefit from advantages referred to below for a period of:

Three (3) years in economic Region A Four (4) years if in economic Region B Five (5) years if in economic Region C

The Government grants various customs and tax advantages when investment projects are approved to qualify according to the Investment Code.

Customs advantages are stated in Articles 10-12 of the Investment Code:

With the exception of the administrative tax (5 %), a full exemption from duties and taxes on import for machinery, new tools and equipment, new spare parts not exceeding 10 % of CIF value of the said equipment for public utility investments ;

Exoneration from duties and taxes on export for all or part of finished products, carved or semi-carved in good conditions for the balance of payment

Second hand heavy engines, ships and aircraft are allowed a total exemption.

Exemption from fees and taxes at importation can only be granted if one of the following conditions is fulfilled:

The concerned goods are not manufactured in the DRC. The price before tax of the local product is 10% higher than the price of the

same imported product.

Approved investments, which envisage the exportation of all or part of their finished products, processed or semi processed goods under conditions that are favourable for the balance of payment shall benefit from exemption from fees and tax at exportations. This exemption applies from the first exportation with exportation documents proving so. (Article 12)

Summary of Customs regime on importsCommon Law Investment Code

Equipment, machinery, plant, tools, heavy vehicles

8% Exemption (5% administrative charge not exempted)

Agricultural and breeding inputs 5% 5%Raw Materials 5% 5%Pharmaceutical inputs 5% 5%Spare parts 10% ExemptedOther inputs and intermediate products

10% 10%

According to Article 32 of the Investment Code, any material, equipment, goods and tools imported under the benefits of the Investment Code are not allowed to be transferred, leased or used for other purposes other than the initial purpose within a period of 5 years. However, an exception can be granted by the Ministry of Planning and after notification by ANAPI. A reason for granting such exception

General IncentivesCustoms IncentivesRestrictions

could be that lease, transfer or envisaged use could improve the development of a disadvantaged region.

2 . 3 E P Z s , F r e e p o r t s a n d o t h e r S p e c i a l E c o n o m i c Z o n e s

The previous Law no. 86-028 of April, 5 1986 on Investments and the Regulatory Law No 81-010 of 2 April 1981 instituting the system of the Free Industrial Zones has been abrogated by the new Investment Code. The new Investment Code does not state any details on Free Industrial Zones which means they do not apply anymore. Advantages and guarantees acquired by the previous laws remain however valid.

2 . 4 T a x I n c e n t i v e s

Tax incentives provided under the Investment Code are the following:

The benefits realised by new approved investments are completely exempted from professional contributions on revenue preempted in Title IV of regulatory law N0 69OO9 of 10 February 1969, as modified to date;

Investments in socioeconomic infrastructure such as schools, hospitals, sporting facilities and roads realised under approved projects are redeemable according to the regulations on degressive repayments (sliding scale of charges);

Full exemption from professional tax on income for profits made by approved investments ;

Exemption from land tax (on land concessions and developed properties) ; During their constitution or the increase of their share capital, approved limited

liability companies are exempted from proportional rights/fees preempted in article 13 of the decree of 27 February 1887 on commercial companies, as modified to date. Approved companies, other than those mentioned above, are exempted from fixed rights/fees preempted in article 13 of the Decree quoted during their constitution;

Exemption from ad valorem duty on the constitution or increase of the share capital of Limited Liability Companies (SARL);

Approved enterprises that buy equipment/material from local producers and industrial inputs manufactured in the DRC or solicit the services of workers on immoveable property, are exempted from paying tax on the turnover on these products and services. (Article 17);

Benefits for SMEs / SMIs are furthermore :

o Full exemption from duties and taxes on import of machinery and equipment, event second hand tools (besides the administrative tax);

o Possibility of calculating the depreciation according to a degressive mode ;

o Deduction of expenses made for the training or improvement of the staff, protection and conservation of the environment from the taxable income ;

o Exemption from duties on charters and registration fees in the new trade register.

Depending on the economic region where the investment will take place, the above stated advantages are granted for a period between 3 and 5 years which starts as soon as the goods and services produced by the approved company are on the market.

2 . 5 I n t e r n a t i o n a l T r a d e & E x p o r t P r o m o t i o n

DRC is eligible under the African Growth and Opportunity Act (AGOA) as well as the Everything But Arms (EBA) initiative as LDC country.

Laws and regulations covering trade are Law No. 73/009 of 5 th January 1973 and its three departmental Acts (No. 015/CAB/004/73 of 7 th September 1973, No.015/CAB/006/73 of 39th November 1973, No. 015/CAB/008/73 of 10th

December 1973) and Law No. 74-014 of 10 th July 1974 which is amending and completing the special law on trade. Accordingly, import, local manufacture of fabric, household products and certain food items, electrical appliances and household appliances are reserved to Zairians (Congolese) natural persons or legal entities (with Congolese controlling the major capital share). If products are acquired for investment purposes, or as raw materials and/or for production, they are not affected by this restriction. However, the legal situation is not clear; please see Mutombo (2005) for more information.

Within the overall review of national legislation and administrative processes, a review of trade laws and regulations has been initiated replacing the outdated laws. Reform of existing cumbersome areas are, for example, the period for trade registry which is aimed to be shortened from 15 days to a maximum of 5 days, the abandonment of compulsory trade licenses and a review of existing export/ import procedures.

2 . 6 O t h e r I s s u e s

The Investment Code (Law no. 004/2002) has provisions for the promotion of Small & Medium Scale Enterprises (PME) and Small & Medium Scale Industries (PMI).

They are economic entities constituted either in the form of an individual enterprise or in form of a shareholding company. In an individual company, priority is given to a natural person as head of the enterprise which ensures financial and administrative managerial functions. A shareholding company is a company that employs at least five workers. The condition of acceptance onto the PME and PMI in the general system is fixed at a minimum of the equivalent of US$10.000 and at a maximum of an equivalent of US$200.000.

Special advantages and exemptions granted to SMEs and SMIs are specified in the Investment Code (Article 19 – 22) and are:

“Article 2O: With the exception of administrative tax, PME and PMI which realise a programme of investment under the conditions stated in article 2, paragraph “h” above, benefit from total exemption from fees/rights and taxes at importation, for machinery and material, even second hand tools, spare parts not exceeding 1O% of the CIF value of the said equipment, as well as for industrial inputs necessary for the realisation of the approved investment.

Article 21: The PME and PMI admitted into the general system of the code are authorised on the one hand to deduct from their profit amounts spent on the training and upgrading of the enterprise manager and his personnel, on protection and conservation of nature and on the other hand to calculate their repayments on a sliding scale of charges.

Promotion of Local and Regional Entrepreneurs

Article 22: PME and PMI also benefit from exemptions on fees on constitution act for companies or cooperatives and on registration fees into the New Commerce register.”

3 A C C E S S A N D A D M I S S I O N O F F O R E I G N I N V E S T O R S

3 . 1 F o r e i g n I n v e s t m e n t & C a p i t a l M o b i l i t y

The Government modified its political and economic approach since 2001 and therefore also decided to adapt its legislation to comply with the new vision and strategies for the economic development of the country. The old investment law from 1986 was replaced in 2002 by the new Investment Code, Law no.004/2002 from February 21, 2002.The following main objectives are pursued with the new legislation:

a) To advance the establishment of civil engineering companies that will construct and maintain highways and streets, but also target the public transport of people and goods in terms of transport on soil, water and in the air;

b) To advance investments that will develop the agricultural sector and agro-industry through mechanisation in order to assure food self-sufficiency which will reduce import of basic goods at the same time as increasing income of rural communities, improve the supply of primary materials to the agro-processing industry, and enlarge the national market of consumer goods in circulation;

c) To advance/ attract investments in the heavy industry to secure a stable industrial basis on which economic growth can be based sustainably;

d) To advance investments which add value to national primary resources in order to increase value-added within the country and export volumes.

The Investment Code (Law no.004/2002) defines the different terms relevant to investment operations in Article 2.

Direct Investment: All Investment coming from the field of application of this law envisaged through a new enterprise or existing enterprise whose objective is to put in place a new capacity or to increase production capacity; expand the range of products or to improve the quality of products and services.

Direct Foreign Investment:All Investment whose foreign participation in the share capital of an enterprise in which the investment realised is at least equal to 10%.

Direct Investor: All natural persons, public or private doing direct investment in the DRC.

Direct Foreign Investor:All natural persons who are not of Congolese nationality or of Congolese nationality and resident in a foreign country and all natural persons public or private whose cooperate headquarters is not within the Congolese territory and is carrying out a direct investment in the Congo.

Investment Legislation and its Reasoning

Investor Definitions, Requirements and Obligations

Every investor/ investment that wants to qualify for benefits under Law no. 004/2002, the Investment Code, has to fulfil the following requirements:

Being an economic entity of Congolese rights; Should have a minimum amount equivalent to 200.000 American Dollars; Do respect the laws as far the protection of the environment and nature is

concerned; Engage in training local personnel for specialised technical posts, and

management posts; Guarantees a value added rate equal to or more than 35%.

Once approved, investors have to follow certain obligations stated in Article 31, Investment Code:

To implement the agreed programme as approved by the system of the code according to the description and within the periods agreed by the Decree;

Maintain regular accounting, which is conform to the General Congolese Accounting Plan;

Accept all inspections conducted by the relevant department; Ensure the training and promotion of personnel according to the agreed

programme; Respect the regulations on foreign exchange and the protection of the

environment as well as nature conservation; Submit half-yearly relevant data to ANAPI that indicates the degree of

realization of investment and exploitation while the company is under the system of the code;

Respect the regulation in force for employment, i.e. to give first preference to nationals;

To be compliant to local and international standards on quality of goods and services produced.

Empowerment of nationals, training and skill transfer is an important aspect of the new policies. The Investment Code states explicitly in Article 31 the obligation for investors to employ preferably nationals over expatriate workers, train and upgrade the skill levels of nationals to specialised positions and management level.

If the investor has not started the investment project within a year after the official start as stipulated in the Decree and cannot provide valid reasons causing the delay, the withdrawal of the license will be pronounced by an Interministerial Decree from the Ministries of Planning and Finance (Investment Code Articles 35, 34).

3 . 2 F o r e i g n I n v e s t m e n t E s t a b l i s h m e n t , R e g i s t e r i n g a n d L i c e n s i n g P r o c e s s e s

The Investment Code (Article 5) specifies that all investors that want to take advantage of benefits granted under the Code need to provide a complete file including all relevant project information and proofs according to the prescribed format (see “Fiche d'évaluation du niveau de réalisation d'un projet agréé “ on the ANAPI website) to ANAPI. ANAPI will examine the project proposal and transfer it to the Ministries of Planning and Finance for the issue of the approval in form of a Ministerial Decree.

The decision related to the decree shall not take longer than 30 days from the date of submission of the file to ANAPI. If the investor has not received response until

Requirements & ObligationsImplementation DelayInvestment Application

the end of this period, the decree can be considered as granted (Article 6). In that case, the authorities are obliged to grant the decree within 7 days. In case of disapproval, the decision has to be communicated in written form and shall express the reasons why the application is not eligible (Article 6).

According to Article 7 of the Investment Code (Law no. 004/2002), the Interministerial Decree should specify:

The object, the place of investment and the date for the commencement of activities;

The identification of the investor and his mandate/capacity; The investment programme, the duration, and the realization plan; The production objectives which should normally be achieved at the end of the

investment programme; The nature and duration of advantages granted.

Respective to which kind of investment is intended, the website of ANAPI describes both in English and French the processes for setting up a company, a bank, as well as how are the processes for investing in Mining and Forestry. The website is: http://www.anapi.org/.

Please note that even though ANAPI is not responsible for approving investment project in all sectors of investment, a completed file with all relevant project information has to be provided to ANAPI.

The process for registering a company/ business in DR Congo is considered complex and time-consuming. Accoridng to the World Bank Doing Business Report 2010, it takes on average 149 days to start a business and involves high costs. Hence, DRC is on rank 154 out of 183 countries. The US Commercial Service (2009) recommends to engage a local competent lawyer for the process. Furthermore, numerous information on commercial rules and practices shall be collected as regulations can change quickly and without official publication.

The steps to undertakt to establish a business are the followings:

(1) The foreign investor has to acquire a rade license from the General Secretary of the Ministry of Commerce & Industry. The related fees are US$1,000 for a Societé, and US$500 for an Établissement. This requirement only applies to foreign investors.

(2) Certification of Business to be received from the Municipality where the business is located at the cost of US$35.

(3) An authentification of the Statutes (the Memorandum and Articles of Association) has to be obtained from the Nothary office for a cost of US$50.

(4) The investor may register with the New Trade Register at the clerks office of the Municipal Court (Greffe fu Tribunal de Commerce). This registration costs US$800 for businesses with majority of foreign ownership, and US$200 if Congolese nationals own the majority share.

(5) Publication of the company statutes in the Official Journal, the Governmen Gazette through the office of the Official Journal. Costs involved in this step are US$0.25 per line.

Registering a company

(6) A national identification number is to be obtained from the Office of the Secretary General of the Ministry of Economy which costs US$200 for companies (societes) and US$100 for Établissements.

(7) Acqiusition of an import-export number from the Secretary General of the Ministry of Commerce. The fees for this number is US$250 for companies and US$125 for Establishments.

(8) The final step then covers the registration with the Office of the Tax Authority (DGI) to acquire the tax number (free of charge).

Documents that will be required in the process are, among others:

A copy of the identity cards; Extract of the criminal record from the Criminal Investigation Body; A non-civil servant certificate from the commune.

For the establishment of a bank, one can state the process as following:

On the legal level:1. Formation of a limited liability company (SARL) ; 2. Company’s shareholders and managers should be in harmony ; 3. Get approval from the Central Bank of Congo.

On the economic level:Approval is granted on the conditions hereafter:

1. Provide evidence for payment of the capital of: US$1,500,000 ; 2. Present a coherent and reliable feasibility study.

On the practical level1. Submission of completed file by the investors without the Presidential

Order granting the legal status ; 2. Setting up the bank into a Limited Company (SARL) ; 3. Registration of the bank on the list of banks.

Official fees for the process are.1. Project Study fee of US$300;2. Agreement fee (Governor of the Central Bank acceptance of the project)

US$2,000;3. Final agreement fee (Presidential decree) 1% of the share capital.

Relevant laws for the banking sector are Law no. 002/2002 on the applicable dispositions to Thrift Institutions and Credit Cooperatives, Law no.003/2002 relating to the activity and control of Credit Institutions, and Law no.005/2002 relating to the constitution, organization and functioning of the Central Bank of Congo. The Central Bank of Congo is responsible for oversight of the banking sector and the regulation of banks, credit unions, and other financial services.The basic law in the Mining Sector is Law no. 007/2002 from 11 July 2002 stating the Mining Code. In addition to this law, different Ministerial Decrees and Orders were issued for specifications. Please see the website of the Ministry of Environment, Nature Conservation and Tourism which is the authority in charge of this sector, for more details and all laws and amendments relevant: http://www.mecnt.cd/index.php?option=com_content&task=view&id=64&Itemid=27.

The company must be registered under Congolese law. A prospecting permit shall be acquired from the Mining Land Registry (CAMI) for a fee of US$2.55 to

Establishing a BankInvesting in the Mining SectorMining Prospecting

US$124.03 per square metre. Conditions for this license are that the company is eligible according to the mining laws, can prove his/her financial capacity equal at least ten times the total amount of annual superficiary duties per square to be paid for the last year of the 1st validity period of that duty; and that is has prepared and got approval for the buffering/ lightening and rehabilitation plan within the six months of delivery of the prospecting permit.

The company must be registered under Congolese law and obtain a prospecting permit from the Mining of Land Registry (CAMI). Conditions for this license are that the company can show evidence of the existence of an economically exploitable deposit (providing a feasibility study); the company can proof the necessary financial resources, and that it has obtained a prior approval of the environmental impact study and of the plan of project environmental management. The cost for this license will be US$195.4 to US$679.64 per square meter.

A company registered under Congolese law needs to receive an Approval Order from the Direction of Mines in the Ministry of Mines. For that, the investor has to show evidence of a bank account held in an approved bank, the registration letter from the Central Bank of Congo, and pay the annual tax :of US$50,000.

Being a company registered under Congolese law, an Approval Order from the Direction of Mines in the Ministry of Mines is required. It can be obtained by providing an evidence of a bank account held in an approved bank, a registration letter from the Central Bank of Congo, payment of the guarantee :at US$25,000, and payment of the annual tax of US$200,000.

The basic law for the forestry sector is the Law from 29 August 2002 stating the Forestry Code. In addition to this basic legal document, diverse decrees, amendments and ministerial orders were issued on specified topics. Please see the website of the Ministry of Environment, Nature Conservation and Tourism for these laws and related amendments: http://www.mecnt.cd/index.php?option=com_content&task=view&id=59&Itemid=27.

For forest exploitation, an investor has to register an enterprise under Congolese law, obtain a forest operating permit from the Forest Management Department, in the Ministry of Environment, Nature Conservation and Tourism, and pay the forest concession tax of US$0.10 to US$0.50 per hectare.

Companies engaging in Timber Export require a timber purchase contract and have to pay a tax which varies between 1-2% of the FOB value. Please see the Forest Management Department of the Ministry of Environment, Nature Conservation and Tourism for more details.

Investors pursuing reforestation need to hold a concession contract, pay the timber felling tax of US$2/ hectare and the reforestation tax of:

4 % of ex-works value per m3/rough timber 2 % of ex-works value per m3/exported rough timber (tola and other species to

be promoted).

Please see the Forest Management Department at the Ministry of Environment, Nature Conservation and Tourism for more details and the acquisition of the concession contract.

Mining ExplorationGold DeskDiamond Trading postInvesting in the Forestry Sector

3 . 3 F o r e i g n E m p l o y m e n t & R e s i d e n c e

The Ministry of Labour is in charge of expatriate/ foreign labour permits.

It is allowed to employ a maximum of 5% foreign workers (expatriates) of the total staff. For any additional expatriate employed an extra tax is charged and it is required to provide a justification for the higher percentage of foreign workers. With this regulation, the hiring of local employment is encouraged.

3 . 4 F o r e i g n I n v e s t o r A c c e s s t o L a n d a n d P r o p e r t y R i g h t s

Land issues and processes are regulated by the Law No. 73-021 of 20 July 1973 stating the Ownership of Land, Property, Constructions and Securities which is completed by Law No. 80-008 of 18 July 1980.

4 F O R E I G N I N V E S T M E N T O P E R A T I O N S

4 . 1 E m p l o y m e n t

The new Constitution as amended in 2006 covers matters on labour such as the right to employment, the right to free association, establishment of labour unions and the right to collective bargaining and strikes.

The Labour law, Law No. 015/2002 from 16 October 2002 stating the Labour Code covers is the basic law covering labour issues in DRC. It contains regulations on contracts, professional training and education, rights and obligations of employers and employees, remuneration and forms of salary payment, the general work conditions, administration, the regulations on employment of minors, women and handicapped workers, leaves, and additional allowances such as the provision of meals and transport allowance. Chapter VII covers relevant regulations on health and safety standards at the workplace, and chapter XII the rights and regulations of collective bargaining and other professional relations.

The US Commercial Service (2009) states the following on the labour provisions:“The code provides for tight control of labor practices and regulates recruitment, contracts, the employment of women and children, and general working conditions. Strict labor laws can make termination of employees difficult. The code also provides for equal pay for equal work without regard to origin, sex, or age. The new code formally permits a woman to gain employment outside of her home without her husband’s permission.

Employers must cover medical and accident expenses. Larger firms are required to have medical staff and facilities on site, with the obligations increasing with the number of employees. Mandated medical benefits are a major cost for most firms. Employers must provide family allowances based on the number of children, and paid holidays and annual vacations, based on the years of service. Employers must also provide daily transportation for their workers or pay an allowance in areas served by public transportation.”

Constitution of DRCLabour Law 2006

4 . 2 B u s i n e s s T a x a t i o n

The Value Added Tax (VAT) is known as CCA and currently rates at 13% with the exemption being granted to petroleum-related activities of companies approved by the Hydrocarbons Code. Staple foods are also mainly exempted.

The highest marginal corporate income tax for corporations is 40% and for individuals 50%. The tax rate on income, profits and capital gains is 32%.

4 . 3 E n v i r o n m e n t , P h y s i c a l P l a n n i n g , H e a l t h & S a f e t y , C o n s u m e r P r o t e c t i o n

Article 31 of the Investment Code obliges any investor to fulfil the national regulations covering environmental protection, conservation of the nature and employment. The legislative framework on environmental matters consists, among others, of the Forestry Code law No. 011/2002 from 29 August 2002, and Ordonnance Law No. 69-041 from 22 August 1969 in respect to the Conservation of the Nature.

The Labour Law No. 015/2002 from 16 October 2002 prescribes in chapter VII regulations and obligations relevant to the health and safety at the workplace.

4 . 4 C o m p e t i t i o n P o l i c y & L a w

There is no comprehensive competition policy in place. Some aspects are covered by the current regulatory framework that dates from 1994. Its covers: pricing regimes for products, goods and services of all kinds; market transparency; trading standards; anti-competitive practices (although these provisions have not yet been implemented); stockholding, and the investigation and repression of fraud.

Prices are generally determined by the free play of competition. Some exceptions exist for staple foods. Authorization for maximum selling prices can be obtained by the Ministry responsible for trade.

Consumer protection is also part of the existing laws and regulations and focuses on market transparency and product quality.

4 . 5 M o n e t a r y P o l i c y , F o r e i g n E x c h a n g e a n d F o r e i g n I n v e s t o r s

International transfers that are linked to investment operations are regulated by the Investment Code, Law no. 004/2002, in Articles 27. They are guaranteed by the state as long as they are conform to exchange regulations. If the government applies restrictions to this liberty, foreign investors are, however, granted the following benefits (Articles 28-30) of the Investment Code:

Dividends and revenues generated by reinvestments in the company are guaranteed;

Transfer of royalties, loan payments, interests and other charges that a Congolese company admitted to this Law has to pay in order to service a loan or obligations abroad for financing this investment are guaranteed;

Without prejudice to the dispositions of the regulation on foreign exchange, all payments due to foreigners are transferable as indicated in Article 27.

EnvironmentHealth & Safety StandardsTransfers

The central bank is responsible for foreign exchange and trade regulations. Exporters and importers have to be licenses by the Central Bank and declare their foreign exchange transactions. Importers also have to declare their currency at commercial banks. The Central Bank maintains a relatively liberal system of payments for trade which is finances through commercial banks.

4 . 6 P u b l i c P r o c u r e m e n t

Public administrative reforms as implemented in 2002 allow foreign investors to bid on government contracts just as domestic investors. No discriminatory terms apply. It can even occur that foreign firms are favoured as they can access international insurance funding easier than local firms. A tender Board has been established that works under the Ministry of Budget. According to the regulation, public companies and/or parastatals normally do not participate in the bidding process.

4 . 7 I n t e l l e c t u a l P r o p e r t y

In terms of intellectual property rights, the Copyright law No. 24 from 07 July 1982 regulates all copyright processes, and related rights and obligations. The Arrêté Ministériel 002/CAB/MJCA/94 from 31 January 1994 providing the measures of execution of the Ordonnance-Law 86-033 from 5 April 1986 covering musical, literary and theatre, as well as photographic, plastic and arts and folklore.The Law No. 82-001 from 7 January 1982 sets the regulations on Industrial Property rights, and patents.

Intellectual property therefore enjoys full legal protection, but enforcing the IPR regulations is considered virtually non-existent. The Ministry of Industry is responsible for overseeing industrial property rights and the Ministry of Culture and Arts for editors, composers and authors’ rights.

DR Congo is furthermore member of the World Intellectual Property Organisation (WIPO) and the Paris Convention for Protection of Intellectual Properties.

4 . 8 I n v e s t m e n t P r o t e c t i o n a n d D i s p u t e S e t t l e m e n t

The Investment Code, Law no.004/2002 from February, 21, 2002 guarantees the following investment protection rights for investors that apply to ANAPI:

Article 23: Foreign individuals or companies receive treatment that is similar to that of individuals or companies of Congolese nationality, on condition of application of the same principle of equal treatment by the State in which the foreign individual or company is a citizen.

Article 24: Companies or individuals shall receive the same treatment except for Treaties and Agreements signed by the DRC government with other States. However this treatment does not extend to privileges that the DRC grants to nationals or companies from other States, in virtue of their participation or of their association in a zone of free exchange, customs union, common market or any other form of regional economic organisation. The dispositions of this article do not apply to fiscal questions.

Article 25: The Democratic Republic of Congo undertakes to assure a fair and equitable treatment, in conformity with the principles of the international law, to

WIPOInvestment Protection

investors and investments carried out in its territory and to make sure that the exercise of this law in not hindered.Article 26: The rights to individual or collective property acquired by an investor are guaranteed by the constitution of the DRC. An investor cannot be directly or in part, nationalised or expropriated by a new law, and/or a decision by a local authority, which has the same effect, except for motives of public use and subject to the payment of a fair and equitable compensatory indemnity. The indemnity is considered fair if it is based on the market value of the assets which were nationalised or expropriated; this value should be determined in a contradictory manner before the expropriation or nationalisation, or before the decision to expropriate or nationalize becomes public.

The new Constitution of the Democratic Republic of Congo as amended on 18 February 2006 confirms in Article 32 that every foreigner that is legally on national territory enjoys personal and property protection according to the conditions that are set through treaties and laws. Article 34 guarantees the right to private property. No expropriation should take place except in case of a public interest and through juridical order by the competent authority in accordance with the law.

Even though the legal framework covers property issues, protecting investors is weak in enforcement and places DR Congo on rank 154 according to the World Bank Doing Business Report 2010.

The Investment Code Articles 37 and 38 state the following:

“1. In case of disputes in the interpretation of application of the dispositions of the Investment Code or the amended Decree, courts and tribunals can be used according to Articles 159 and 074 of the Code on Congolese Civil Procedures.

2. In case of differences between the Investor and the DRC related to (a) the contract or Investment agreement; (b) an investment authorisation granted, any violation of the investor’s rights and/or investment, an amicable settlement of the differences is firstly aimed for. If that does not occur within a period of 3 months counted from the first written notice demanding entry in such negotiations, the difference shall be settled by following one of the arbitration procedures:

(i) Adhere to the Convention of March 18, 1965 for the settling of differences relative to investments between States and Nationals according to the Convention of the International Centre for the Settling of Investment Disputes (ICSID), that was ratified by DRC on April 29, 1970; or

(ii) The disposition of the Regulation on Supplementary Mechanism, if the investor does not fulfil the conditions of nationality stipulated in Article 25 of the ICSID Convention;

(iii) Settling of differences by the International Chamber of Commerce of Paris.”

DRC is a member of MIGA as well as ICSID and has ratified the Convention of ICSID on April 29, 1970 to adhere to its procedures on settling investment disputes. However, the reality is different. Several claims have been undertaken for settlement under ICSID which have been won by the investors but never were implemented on the site of the Government.

Constitution of the DRCDoing Business EvaluationDispute SettlementMIGA & ICSID

4 . 9 I n t e r n a t i o n a l A g r e e m e n t s a n d O b l i g a t i o n s – T r a d e a n d o t h e r A g r e e m e n t s , B I T s , D T T s

DRC is member of the WTO, is eligible to AGOA and EBA. It negotiates the European Partnership Agreements (EPAs) under the CEMAC group, the Central African Economic and Monetary Community.In terms of regional organisations, it has triple membership under SADC, COMESA and ECCAS (Economic Community of Central African States), and it belongs to the Nile Basin Initiative (NBI).

Furthermore, DRC has recently joined OHARA which is the Organisation for the Harmonisation of Business Law in Africa which will help the country to modernise its legal standards.

As already stated, DRC is signatory to MIGA, ICSID, and the WIPO regulations.

Please see the tables for BITs and DTTs below.

5 S A D C R E L A T E D I S S U E S

In a joint initiative, COMESA, EAC and SADC are implementing the North-South Corridor Aid for Trade Programme which aims to reduce transport costs along two priority corridors. The two corridors cover the Dar-es-Salaam Corridor linking Dar-es-Salaam to the Copperbelt, and the North-South Corridor linking the Copperbelt to the southern ports of South Africa. The later passes through 8 countries which includes the DRC as well as Tanzania, Zambia, Botswana, Malawi, Mozambique, Zimbabwe and South Africa. This pilot programme does not only involve improvement of the physical infrastructure for transport, but also covers the regulatory environment for trade and transport along the Corridor.

Bilateral Investment Treaties with DRC as of 1 June 2009Partner Country Date of signature Date of Entry

into force1 Belgium and

Luxembourg17-Feb-05 -

2 China 18-Dec-97 -3 Egypt 18-Dec-98 -4 France 5-Oct-72 1-Mar-755 Germany 18-Mar-69 22-Jul-716 Greece 26-Apr-91 -7 Israel 14-May-85 -8 Italy 13-Sep-06 -9 Jordan 23-Jun-04 -10 Korea, Republic of 17-Mar-05 -11 South Africa 31-Aug-04 -12 Switzerland 10-Mar-72 10-May-7313 United States 3-Aug-84 28-Jul-89

Double Taxation Agreements with DRC as of 1 June 2009Partner Country Type of Agreement Date of Signature

1 Belgium Income and Capital 23 May 20072 South Africa Income 29 April 2005

Trade agreementsRegional GroupsOHADAMIGA, ICSID, WIPORegional Transport CorridorBilateral Investment TreatiesDouble Taxation Agreements

3 Spain Air Transport 14 June 1969

Sources included

African Development Bank Group (2008) Democratic Republic of Congo. Result-based Country Strategy Paper 2008-2012

African Economic Outlook (2010) Website with analysis on the Democratic Republic of Congo, http://www.africaneconomicoutlook.org/en/countries/central-africa/congo-democratic-republic.html

ANIPI (2010) Website of ANAPI including related information, http://www.anapi.org

Central Bank of Congo (2010) Information provided o the website, http://www.bcc.cd

Egypt Import-Export (2010) Investing in the Democratic Republic of Congo, http://www.egypt-import-export.com/en/country-profiles/democratic-republic-of-congo/investing-3

Government of the Democratic Republic of Congo: different national legislation

IMF (2010) Democratic Republic of Congo: Staff Report for the 20099 Article IV Consultation Requests for a Three Year Arrangement under the Poverty Reduction and Growth Facility, and Request for Additional Interim Assistance under the Enhanced Initiative for Heavily Indebted Poor Countries, March 2010

Mutombo, Thierry (2005) Report on the Study of Coherence between the Democratic Republic of Congo legal and regulatory Framework and the COMESA Common Area Investment Draft Framework Agreement, March 2005

NationMaster.com Tax statistics DRC, http://www.nationmaster.com/country/cg-congo-democratic-republic-of-the/tax-taxationUNCTAD (2010) Bilateral Investment Treaties and Double Taxation Treaties, http://www.unctad.org/Templates/Page.asp?intItemID=4505&lang=1

US Commercial Service (2009) Doing Business in the Democratic Republic of the Congo: 2009 Country Commercial Guide for U.S. Companies

US Department of State (2009) 2009 Investment Climate Statement – Democratic Republic of the Congo, http://www.state.gov/e/eeb/rls/othr/ics/2009/117424.htm

World Bank (2010, 2009) Doing Business Report 2010 and 2009, www.doingbusiness.org/

WTO (2006) Trade Policy Review. Republic of Congo, Report by the Secretariat