BURUNDI

  • September 6, 2016

The attractiveness of Burundi as a place to invest lies on the improvement of the business climate by the Government. The efforts in improving the latter are focused on increasing the competitiveness of the economy in order to enable the Burundian Economy in order to take advantage of the opportunities offered by open markets.

Burundi is member of economic communities CEPGL, COMESA, EAC totaling more than 20 countries and 450 million consumers. Since 2008, the process is started for the integration of these communities into a single regional community, (AEC) African Economic Community.

 

Indeed, if the infrastructures of transportation are developed further, countries such as Rwanda and Uganda will make the choice of transiting their goods through the port of Bujumbura for their commercial exchanges with Southern Africa via Tanganyika Lake.

The same applies to the exchanges between the east of the Democratic Republic of Congo and Congo and Eastern Africa, Burundi could represent a strategic position for foreign investors wishing to invest in the region and to enter neighboring markets.

Burundi’s integration to several economic communities such as EAC and COMESA. This gives Companies established in Burundi access to a wider market larger than 450 million consumers.

Promising business sector;

A country in full reconstruction;

The new investment coed incentives;

Freedom of settlement and investment;

Granting of visas, fixing and moving residence to expatriates required by investment freedom, title to any person or

entity, without any discrimination

Capital Transfer:

Capital transfer advantages include:

Free transfer of foreign capital and income after payment of taxes.

Transfer of unused professional income by foreign employees.

The transfer of capital remuneration in the form of dividends, in full for enterprises with foreign capital:

Protection of private property:

Non- nationalization and non-expropriation of investments implemented in its territory as well as any measures of equivalent scope.

Tax Advantages

All new investments are automatically entitled to:

Waiving of mutation on the acquisition of property rights and land:

Deduction of 37% as tax credit on the amount depreciable invested good:

No refund to the fiscal administration with disposed assets that raised tax credit for a period of five years:

Tax credit during the implementation of investments for new businesses or for the extension of existing businesses:

Reduction of 2 and 5% in the rate of tax credit on the profits of companies that respectively employ between 50-200

employees and over 200 employees.

An Investment Promotion Agency (API) entirely at your service

The IPA:

Has several high-qualified bilingual French- English staff;
Assists investors in all steps: drafting of statues, registration of companies in Burundi, obtaining tax identification, compiling the file required to access the investment code incentives, obtaining work and residence permits, etc.

Performance Requirements and Incentives

Incentives include:

Exoneration of charges incurred for acquisition of buildings and land;
Cooperate tax credit equivalent to 37% of the value of depreciable goods invested for any investment of at least BIF 100 million (app. 77,000 USD) creating at least 10 permanent jobs for Burundians in Bujumbura, or any investment of BIF 50 million(app. 38,500 USD) creating 5 permanent jobs for Burundians outside Bujumbura;
Raw materials and capital goods rated at 0% during customs clearance;
No payment of VAT (18%) on imported investment goods for any investment at least 500 million BIF;
Corporate tax reduction of 2% and 5% for companies employing respectively between 50-200 employees, and more than 200 employees.

Performance requirements or incentives are applied fairly and uniformly to both international and domestic investors. To encourage investment Burundi applies investment incentives to both international and domestic companies in the form of income tax deferrals, and exemption from from import and export duties.

Burundi does not impose conditions on permission to invest, except for companies that apply for special incentives, such as specialized tax advantages embedded in the investment code. The government of Burundi does not enforcement procedures on companies, and investors are not required to disclose propriety information to the government as part of the regular process. Burundi does not impose any discriminatory or excessively onerous visa residence, or work permit requirements that would hinder a foreign investor’s mobility, or discriminatory export or import policies.

Free Zones

The regime gives legal status to companies who automatically qualify for a set of tax and customs exemptions. The regime has the distinction of being organized as a legal unlimited geographical area. Free zone companies are divided by sector and are referred to as free companies in the industrial, commercial, services or agricultural sectors. The main criteria for eligibility are:

The export of all production;

Creation of substantial added value;

Compliance with environmental, health and safety regulations;

The importation or re-export after further processing or packaging of imported products can be based on a list

established by the minister responsible for the free zones.

The main benefits of the free zones are:

Full exemption from corporate tax for the first ten years of operation and payment of a reduced rate of 15 % thereafter;

Tax exemption on dividends for an unlimited period

Right to repatriate capital and income

Permission to have foreign currency bank deposits;

More flexible labor regulations than that provided in the Labor Code;

Imports of business located in these zones are exempt from all duties and taxes, direct or indirect, without an import

license;

The regime also applies to duties on exports.

Burundi is a member of many Regional Economic Communities and accordingly has preferential access to many international markets. Below is a list of the main organizations of which Burundi is a member.

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