Introduction to the Country
Solidarity always comes first.
Didier Drogba, professional footballer (1978 )
The Government of Ivory Coast is a republic with a multiparty presidential regime established in 1960. Cote dIvoires constitution of the Second Republic (2000) provides for a strong presidency within the framework of a separation of powers.
The executive power is held by the president elected for a 5 year-term. The president is the head of state and commander in chief of the army. He selects the prime minister, who is the head of government. The unicameral National Assembly is composed of 225 members elected by direct universal suffrage for a 5-year term concurrently with the president. The National Assembly holds the legislative power. The judicial system culminates in the Supreme Court. The High Court of Justice is competent to try government officials for major offences. There is also an independent Constitutional Council for the organisation of the election and other matters related to this.
The unicameral National Assembly is composed of 225 members elected by direct universal suffrage for a 5-year term concurrently with the president.
For administrative purposes, Ivory Coast is divided into 19 regions and 58 departments. Each region and department is headed by a prefect appointed by the central government. In 2002, the country held its first departmental elections to select departmental councils to oversee local infrastructure development and maintenance as well as economic and social development plans and projects. There are 196 communes, each headed by an elected mayor, plus the city of Abidjan with 10 mayors.
The legal system of Ivory Coast is based on French civil law system and customary law; judicial review in the Constitutional Chamber of the Supreme Court; has not accepted compulsory ICJ jurisdiction.
The Ivorian economy is largely market-based and depends heavily on the agricultural sector. Between 60% and 70% of the Ivoirian people are engaged in some form of agricultural activity. A majority of the population remains dependent on smallholder cash crop production. Principal exports are petroleum, cocoa, coffee, cotton, pineapples, tuna, and tropical woods.
Ivory Coast is among the worlds largest producers and exporters of coffee, cocoa beans, and palm oil. Consequently, the economy is highly sensitive to fluctuations in international prices for these products and to weather conditions.
Direct foreign investment plays a key role in the Ivoirian economy, accounting for between 40% and 45% of total capital in Ivorian firms. France is overwhelmingly the most important foreign investor.
By developing-country standards, Cote dIvoire has an outstanding infrastructure. There is a network of more than 8,000 miles of paved roads; good telecommunications services, including a public data communications network, cellular phones, and Internet access. There are two active ports. Abidjans port is the most modern in West Africa and the largest between Casablanca and Cape Town. A smaller port is located in San Pedro.
Finance and Tax matters
(a) Financial assistance
(i) Does the concept of financial assistance exist?
There are no prohibitions or restrictions on the ability of a company to guarantee or give security to support borrowing incurred to finance.
(b) Lending restrictions/banking monopolies
(i) Any restrictions applicable to the importation of capital by lenders?
There are no restrictions or requirements applicable to the importation of capital by lenders to the Project.
(ii) Requirement for the lenders/security agent to be registered in the jurisdiction?
Lenders or security agents are not required to be registered in Ivory Coast.
(iii) Can foreign lenders lend into the jurisdiction?
Foreign lenders can lend into the Ivory Coast.
(c) Restrictions relating to repatriation of dividends
(i) Are there any restrictions relating to repatriating dividends?
The Investment Code allows the repatriation of dividends.
(i) Are there any restrictions on the convertibility of the jurisdictions currency?
There are no restrictions on the convertibility of the CFA.
(e) Interest payments
(i) Are there any restrictions on the payment and compounding of interest? If so, does this also affect both local and foreign lenders?
There are no restrictions on the payment and compounding of interest.
(i) Are there any withholding tax issues in relation to interest payments and fees to foreign lenders or payments received under any agreements?
Dividends paid to residents and non-residents are taxed at a rate of 10% for distributions paid by listed companies and 18% on distributions that are exempt from the tax on industrial and commercial profits; otherwise, the rate is 12%.
Interest paid to residents and non-residents is taxed at 25% on bearer bonds, 6% on long-term government bonds and 15% on other bonds. The rate applicable to other interest and similar payments is normally 18%.
(ii) List of double taxation treaties.
Ivory Coast has ratified a bilateral double taxation treaties with France, Germany, Belgium, Norway, Canada, Great Britain, Italy, Switzerland, Tunisia.
Ivory Coast has also signed on multilateral double taxation treaties: Convention of the African and Mauritian Common Organization (OCAM) signed 29th January 1971 in NDjamena (Chad).
Convention of the Commonwealth states of West Africa (ECOWAS) signed on 29th October 1984.
(iii) Lender risks in respect of tax liabilities/tax domiciliation as a result of providing debt and/or taking/enforcing security interests
There are no significant risks that lenders should be aware of in respect of tax liabilities/tax domiciliation as a result of providing debt to the project or project company.
(iv) Can loan repayment / enforcement proceeds be treated negatively from a tax perspective for the lenders?
There is no specific legislation on this point.
(g) Stamping costs
(i) Details of stamp duty costs
Stamp duty is 1% of the secured amount (i.e. the value of the asset or the amount of the debt provided by the lenders) without cap. There is also a fixed CFA 500 stamp per page of the security documents.
Security, Enforcement and Insolvency
(a) Overview of security regime
(i) Can a security interest be obtained over a companys assets, e.g.:
(A) Accounts receivable (book debts) yes, by way of pledge
(B) Inventory (stock in trade) yes, by way of pledge
(C) Shares of a company (issued and authorised) yes, by way of pledge
(D) Equipment yes, by way of pledge
(E) Real property yes, by way of mortgage
(F) Insurances yes, by way of pledge
(G) Project contracts yes, by way of pledge
(ii) Can shares of a project company validly be pledged and enforced under an English law share charge?
Shares of commercial company are validly pledged and enforced under the Security Code.
(iii) Can a company grant a security interest in order to secure its obligations (i) as a borrower under a credit facility, and (ii) as a guarantor of the obligations of other borrowers and/or guarantors of obligations under a credit facility?
The Project Company can grant security interests over its assets to secure borrowings.
(iv) If the borrowings to be secured are under a revolving credit facility, are there any special priority or other concerns?
There are no special laws or regulation relating to a revolving credit facility in Ivory Coast.
(v) Can the relevant security interests be granted to a security agent or trustee on behalf of the lenders from time to time?
The concept of security trustee is not provided for under the Uniform Act of OHADA on security.
(vi) Claims that would have priority over the relevant security interests.
(A) The priority following insolvency in respect of claims against immovable property is as follows
(I) Costs of the court and the legal process
(II) Unpaid salary
(IV) General privileges subject to publicity
(V) General privileges not subject to publicity
(VI) Unsecured creditors with an enforceable title
(B) The priority following insolvency in respect of claims against movable property is as follows
(I) Costs of the court and the legal process
(II) Expenses incurred to hold the assets of the debtor
(III) Unpaid salary
(V) Other privileges subject to publicity
(VI) Special privileges
(VII) General privileges not subject to publicity
(VIII) Unsecured creditors with an enforceable title
(vii) Is there a public security registry?
The register of trade and credit can be consulted to confirm whether a company has any security registered by or against it.
(viii) Formalities in respect of security creation:
(A) Statutory perfection requirements;
A security interest must be made by deed or by private act duly recorded. This act is effective only if it is registered at the register of trade and credit.
A pledge must, to avoid being void, contain the particulars set out by article 70 of the Security Code.
(B) Any other formalities
Pledging of shares is not possible without the approval of the majority of shareholders, representing 75% + 1 of the issued share capital.
(C) Steps for perfection and length of time taken
(I) See above at (A)
(II) Provisional registration and enrolment must be taken respectively, following the decision authorizing the pledge.
(III) Registration retains the right of creditor for 5 years. After which a renewal must be done.
(IV) Pledge must be delivered to the company.
(D) Any significant financial costs or significant time delays required to create and perfect the relevant security interest?
The notary fee is significant but can be subject to negotiation.
(b) Insolvency and enforcement regime
(i) Is there a court or similar register that can be searched in respect of proceedings and insolvency actions?
Yes, the register of trade and credit can be searched in respect of proceedings and insolvency actions.
(ii) Summary of the different options for an insolvency related process.
Insolvency processes are set out in the Uniform Act of OHADA on the organization of simplified procedures for debt recovery.
In brief, 8 days after an unsuccessful payment order, the creditor may proceed with the seizure of the secured assets. Seizure must be notified to the debtor within 8 days. A minute is then drafted. One month from the service of the minute on the debtor, a forced sale may be initiated if the goods have not been sold privately before that point.
(iii) Are summary or expedited proceedings available?
There is no special article in Ivory Coasts regulations providing the expedited proceedings.
(iv) Are any governmental or other consents required in connection with:
(A) the enforcement of a security interest in shares;
The mechanism is prescribed by the Uniform Act of OHADA related to the procedures of debt recovery.
(B) the enforcement of a security interest in other assets; or
The mechanism is prescribed the Uniform Act of OHADA related to the procedures of debt recovery.
(C) the enforcement of a guarantee (sovereign or otherwise)?
The mechanism is prescribed by the Uniform Act of OHADA related to the procedures of debt recovery.
(v) Do lenders inherit all environmental liabilities when they become owner of the shares upon enforcement (or at any other time)?
Yes, lenders (or any other owner) would inherit all environmental liabilities when they become owner of the shares.
(vi) Can security interests be enforced by both private sale and public auction, and is it necessary to appoint a court or other official to carry out the enforcement?
Yes. The uniform act on organization of simplified procedures for debt recovery lists the steps to follow when enforcing security.
Corporate, Insurance and Employment matters
(A) Project company incorporation:
(I) Type of vehicle: what is the most appropriate type of corporate vehicle for a project and can you describe its key features (e.g. limited liability, shareholding requirements, and share capital requirements)?
The legal form of the company for the project company is a Societe Anonyme (SA).
Its key features are:
- Can be managed by one person or associated entity.
- An SA may be administered by a Board of Directors from 3 to 12 members with a Managing Director.
- An SA may also be administered by a single administrator, with combined power of Managing Director and Board Chairman.
- Shares can be transferred, sold, or assigned by private treaty
(a) Corporate vehicle
(i) Project company incorporation:
(A) Type of corporate vehicle
Different types of corporate vehicle are possible in Ivory Coast Societe Anonyme and Societe a Responsabilite Limitee. Please contact us directly for further information on this point.
(B) Issues relating to thin capitalisation
Interest expense may be disallowed where it arises on shareholder loans in excess of fixed capital.
(C) Requirement to have indigenous shareholdings
There is no requirement for a certain amount of equity to be held by indigenous entities:
Foreign investor may own 100% of the shares of its company.
(I) Thin capitalisation requirements
The minimum capital for S.A is CFA10,000,000 (approx of USD 22,000).
(II) Can a limited liability company be established?
A limited liability company can be established as a Societe Anonyme known as SA or as a Societe a Responsabilite Limitee, known as SARL.
(III) Is it possible to use a foreign company or a branch of a foreign company to act as project company?
It is possible to use a foreign company or a branch of a foreign company to act as a Project Company in Ivory Coast.
(D) Estimated timescale for incorporation in the country. Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?
The estimated timescale for incorporation in the country is 40 days. The fees or other costs payable to governmental authorities are:
Stamp duties of CFA 500 (US$1.10) per page for the registration of the minutes.
A Registration fee which varies according to the amount of the equity capital is payable: If it is up to CFA 5 billion (US$11m), the registration fee will be 0.6% of the amount of the capital; and if it is over CFA 5 billion, the registration fee will be 0.2% of the amount of the capital.
Tax return on incorporation: CFA 5,000 (US$11).
(b) General corporate issues
(i) Is a private company free to lend and/or issue guarantees?
A private company is free to lend and/or issue guarantees.
(ii) Are there any restrictions on dividend distribution?
The procedure of payment of dividends is fixed by the shareholders at a general meeting.
Distribution of the dividend must be made within a maximum period of nine months after the close of the financial year.
Except, in the case of a reduction in capital, no distribution can be made to shareholders, if the equity, following a distribution, would be less than the amount of the capital.
(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?
The only mandatory insurance is for motor vehicles and imported goods (CIF shipping).
(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?
There is no mandatory requirement to place insurance with domsestic insurers.
(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?
No restriction is set out by the insurance code for local insurer or reinsurer in granting security.
(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.
A foreign employee is only permitted if the position in question has not been filled by Ivorian employee following a public advert for the position for at least a period of 2 months. The employer has a period of 6 months to put in place the appropriate work permit and residence card.
(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?
It is possible to dismiss any foreign employee working in Ivory Cost, in order to replace that employee with an Ivorian. Although the law does not set out expressly that it is authorised to dismiss a foreign employee for the sole reason to replace it by an Ivorian, existing precedent suggests it is lawful.
(a) Land registry: is there a land registry (or similar) in the country that can be searched to confirm whether a project company has granted of any mortgage, charge, option assignment, lien or other encumbrance over the whole or part of the properties or assets of a company?
The Land Registry contains all available information relating to land.
(b) Landlordâs rights: please indicate whether there are any rights which accrue to the landlord (or the government or any other bodies) that may override the terms of a land lease or threaten the rights of a project company particularly any right of repossession or acquisition.
The administrative authority has power to facilitate the implementation of development programmes and may prohibit activities constituting nuisance to the said development programmes and to the environment on the basis of public interest.
(c) Direct agreement: are you aware as to whether a direct agreement in respect of a lease has been previously been provided to lenders on other transactions?
We are not aware of any example.
(d) Forfeiture rights: do relief from forfeiture rights exist and would the lenders be entitled to rely on such rights?
There are no specific laws on this point.
(e) Is there any additional legislation governing property rights?
Article 15 of the Ivorian Constitution guarantees property rights.
(f) Are there any formalities with which lenders need to comply when enforcing security over land?
To enforce security over land, lenders have to follow formalities prescribed on registration of their rights as recorded at the land registry.
International law and arbitration
(a) Supra-national treaties
(i) List all Bilateral Investment Treaties to which the country is party.
Ivory Cost has Bilateral Investment Treaties with Belgium and Luxembourg, China, Germany, Ghana, Italy, Netherlands, Sweden, Switzerland, Tunisia and the United Kingdom.
(ii) Is the country a signatory to the Energy Charter Treaty?
Ivory Cost is not a signatory to the Energy Charter Treaty.
(i) Requirements and restrictions applicable to the choice of arbitration roles and place of arbitration
Parties are free to submit their dispute to arbitration. The procedure of OHADA is applicable only when the seat of arbitral tribunal is in a member state.
(ii) Are foreign arbitral awards / decisions are enforceable in the country (i.e. is the country a party to the New York Convention on the Recognition of Foreign Arbitral Awards (the âConventionâ)?
Ivory Cost is a party to the New York Convention on the Recognition of Foreign Arbitral Awards.