Rundown of relevant legislation updates and reforms in Cote d'Ivoire

Côte d’Ivoire is a civil law country, and as such the legal system does not rely on prior decisions, but is instead structured by several different specific codes. The supreme law of the country is the Constitution, which was adopted by referendum on October 30, 2016. The legal hierarchy puts the Constitution at the apex of the legislative pyramid. This document is followed, respectively, by international treaties legally ratified by the National Assembly and laws adopted by the National Assembly, ordinances and decrees issued by the president, and, at the lowest level, ministerial decrees and orders complete the legal framework.

Regional Order

Côte d’Ivoire is member of the West African Economic and Monetary Union (Union Économique et Monétaire Ouest-Africaine, UEMOA), and its economy represents about 40% of this regional organisation. UEMOA includes eight, mainly francophone, West African states and was established in 1994. Côte d’Ivoire is also a member of different regional institutions such as the Organisation for the Harmonisation of Business Law in Africa (OHADA), the African Regional Intellectual Property Organisation and the Inter-African Conference on Insurance Markets. The aforementioned bodies provide regulations in a variety of different sectors of laws, including the following:

• Banking;

• Companies;

• Securities;

• Insurance;

• Insolvency;

• Civil proceedings;

• Arbitration; and

• Foreign exchange. Côte d’Ivoire is also a member of a number of international organisations that promote international trade and investment such as the World Trade Organisation, which it joined in January 1995, and the International Centre for Settlement of Investment Disputes (ICSID), to which the country became a signatory in the 1965, with the ICSID convention going into force that same year.

Judicial System

The judicial system is organised under the authority of the Supreme Court. The Supreme Court is composed of:

• The Administrative Court of the Supreme Court;

• The Court of Cassation for Civil and Criminal Cases. The Administrative Court is responsible for all litigations to which the state or a public entity is a party. For certain categories of cases, as in some administrative proceedings, the Supreme Court decides in first and last resort. The Constitutional Court also has exclusive jurisdiction over constitutional issues, mainly the constitutionality of laws, the interpretation of the Constitution and even disputes over presidential elections.

The Court of Cassation is the higher court for matters related to and limited to criminal cases, labour and employment disputes, family law and land disputes. The aforementioned courts are all under the authority of the Supreme Court, which decides on their rulings as a last resort It should also be noted that any matters that imply the interpretation or application of any OHADA uniform act shall be referred, in last resort, to the OHADA Community Court of Justice and Arbitration, instead of the Supreme Court.

The constitutional court operates independently from the Supreme Court.

Finally, commercial courts are the newest category of courts, created in Côte d’Ivoire on January 11, 2012. They allow the judicial system to speed up the settlement of commercial and corporate disputes. They decide on first instance and shall render their decisions within three months. The Commercial Court of Appeals is expected to be created soon.

Arbitration System

The process by which the parties to a dispute may submit their differences to the judgment of an impartial person or group appointed by mutual consent or statutory provision is recognised in Côte d’Ivoire. Indeed, Côte d’Ivoire is a signatory of the New York Convention and arbitral awards shall become fully enforceable in the country through the exequatur procedure.

The parties may refer their disputes to local or foreign arbitration centres. In Côte d’Ivoire there two types of arbitration courts:

• The Court of Justice and Arbitration; and

• The Court of Justice and Arbitration of the Organisation for the Harmonisation of Business Law in Africa (CCJA), which is the key institution of OHADA. The CCJA was established in 1998 and rendered its first legal decision in 2001. As of April 10, 2015, the CCJA is composed of 13 judges elected by OHADA’s Council of Ministers for a seven-year, non-renewable term. The judges are required to elect a president and two vice-presidents for a three-and-a-half-year term of office. The court currently comprises three chambers: two chambers of five judges and one chamber of three judges. The Treaty on OHADA, which is supplemented by a rules of procedure before the CCJA, organises the functioning of the court and the status of its judges.

The court shall have its seat in Abidjan, but may be located at any other place in the territory of one of the 17 member states. It has already held mobile hearings in several other OHADA member states in recent years. Finally, it should be noted that the OHADA Uniform Act of Match 11, 1999 on arbitration is currently under revision and a new version of this act will be enacted during 2017.

Court Of Arbitration

The Court of Arbitration of Côte d’Ivoire (CACI) is a centre for the settlement of disputes, including national and international non-profit organisations. The CACI was created within the Chamber of Commerce and Industry of Côte d’Ivoire. The mission of the court is to provide economic operators with alternative means of resolving their disputes, in particular arbitration, arbitral proceedings, accelerated recovery of claims, mediation, mini-trial and expertise.

The CACI organises and offers economic operators, as well as any person(s) who so wishes, different procedures that allow them to find a solution to their disputes outside of judicial institutions. The decisions rendered under its aegis have the same legal force as those of the state courts.

Commercial Companies Law

In Côte d’Ivoire, commercial companies are governed by the OHADA Uniform Act on Commercial Companies and the Economic Interest Group, which has been applicable since January 1, 1998. The most commonly used forms of commercial companies are as follows:

• Société à responsabilité limitée (private limited liability company);

• Société anonyme (public limited company); and

• Société par actions simplifiée (simplified joint stock company). The private limited liability company model is the simplest and most common form of enterprise structure in the country. Indeed, this option is flexible and easy to use. Such companies can even have just one shareholder, and this shareholder can be an individual or a corporation.

In addition, there are no mandatory minimum capital shares. Nevertheless, the nominal value of the shares is at least CFA5000 (€7.50) each. The corporate law limits the liabilities of shareholders to their contributions.

The responsibility for management lies with the manager, who is vested with the widest powers to act with third parties on behalf of a private limited liability company, even with respect to matters falling outside the scope of the corporation’s purpose. Collective decisions are taken at general meetings by an absolute or a simple majority of votes. Extraordinary decisions may be made by a three-quarters majority of votes.

The Public Model

The public limited liability company model is a commercial form of enterprise that is often used for more important commercial activities since the procedures applicable to this corporate form are more complex. Nevertheless, this company can also have only one stakeholder, and the corporate law limits the liabilities of the stakeholders to their contributions.

The minimum share capital for a public limited liability company is CFA10m (€15,000), which is divided into shares (actions) of a nominal value of at least CFA10,000 (€15). Since May 5, 2014, the restriction on the sale of the shares is expressly recognised, provided that this justified by a serious and legitimate cause. Thus, any transfer of shares made in violation of this clause would be void if the stipulation was in the company’s articles of association or if it is clear that the buyer knew or should have known of the existence of this clause. Therefore, under the 2014 legal reform, the regime of opposability of this clause has been clarified.

At least one-quarter of the nominal value of the shares subscribed in cash must be paid up during capital subscription. The shareholders are liable for the company’s debts up to the limit of their capital contributions. Moreover, a public limited liability company may be formed with or without a board of directors consisting of at least three members and a maximum of 12 members. In the first case, a chairman or managing director of the board of directors (président directeur général), or a managing director (directeur général), must assume responsibility for the general management of the company, while in the second case a general manager (administrateur général) takes on this responsibility. Furthermore, the manager(s) are vested with the widest powers to act in all circumstances with third parties on behalf of the public limited liability company.

Since May 5, 2014 the shareholders of such a business can delegate to the board of directors the power to raise the capital of the company. Finally, the law allows for board meetings to be organised via videoconferencing technologies.

Simplified Model

The introduction of the simplified joint stock company under OHADA law dates back to the reform of OHADA legislation on May 5, 2014. This corporate form is the more flexible option available, and is thus attractive to investors since the stakeholders can adapt the articles of association to their precise needs. Indeed, there are no mandatory rules relating to the governance and/or organisation of this type of company, and the only requirement is that a simplified joint stock company must be represented by a president.

Furthermore, the Uniform Act provides that any action that violates an essential stipulation of the articles of association would be non-effective and a forced execution is possible.

Other Company Structures

The OHADA Uniform Act on Commercial Companies and the Economic Interest Group provides other possibilities and options for the form or type of commercial companies, including the following:

• Société en nom collectif (general partnership company), under which all partners are traders and have unlimited liability for the company’s debts (This form offers management the most extensive powers); and

• Société en commandite simple (limited partnership), under which there are one or more general partners that have unlimited liability for the debts of the partnership, and one or more limited partners whose exposure to the debts of the partnership is limited to the contribution each has made to the partnership.

Security Law & Commercial Law

The New Uniform Act relating to Secured Transactions entered in force on May 16, 2011. The major innovations and reforms resulting from the amended Uniform Act relating to Secured Transactions may be summarised as follows:

• Security may be granted over any asset, whether present or future, and may secure any present, future or conditional obligation;

• New security mechanisms allow for the transfer of cash by way of security and simplified assignment of receivables by way of security in favour of banks;

• Creation, perfection and enforcement of security interests have been simplified;

• Creation of non-possessory pledges on tangible assets is now allowed; and

• It is now possible to appoint a security agent for the creation, perfection, management and enforcement of any security interests.

Law On Cooperatives

The New Uniform Act Related to General Commercial Law and the Uniform Act Relating to Cooperatives were also adopted on December 15, 2010. The major innovations of the reform resulting from amendments to the former is related to the introduction of the status of entrepreneur for small businesses, which is intended to encourage informal entrepreneurs to join the formal economy. In addition, the act provided for the creation of a three-tiered, computerised Registry of Companies and Secured Transactions, where companies and secured transactions are recorded.

Furthermore, it should be noted that the business creation process in Côte d’Ivoire was streamlined recently through the implementation of a single window bureau (guichet unique des formalités d’

Following UEMOA Regulation CM/09/2010/ UEMOA related to the Foreign Exchange Relations of the UEMOA, a distinction must be made between residents and non-residents when it comes to foreign currency accounts. Concerning residents, and following Article 7 of Instruction No. 08/07/2011, the opening of foreign currency accounts by residents is subject to authorisation by the minister of finance, following assent from the BCEAO. Furthermore, this authorisation cannot exceed one year and must be renewed each year.

Rules For Non-Residents

Concerning non-residents, under Article 34 of Appendices II of Regulation No. 09/2010, foreign currency accounts can be freely held by non-residents in the UEMOA region, provided they are held in euro. Otherwise, an authorisation from the BCEAO is also required Finally, non-residents can freely open regular accounts in CFA (Instruction No. 08/07/2011).

When it comes to investment transactions, it should be stressed that the transfer of funds from within UEMOA to non-member countries requires the prior approval of the Ministry of and Economy and Finance (Ministère de l’Economie et des Finances, MEF). Typically, in cases where a non-resident grants a loan to a resident of UEMOA, this transaction must first be declared to the MEF so the status of loan repayment can be more easily tracked.

Controlled Banking Systems

Banking regulations derive from UEMOA regulations, which are updated from time to time to reflect new banking authorisation and constraints.

No banking activity is allowed if it is not supplied by a commercial bank approved and controlled by the UEMOA Banking Commission.

Financial Market Regulations

Abidjan has been appointed to accommodate the UEMOA Stock Exchange (Bourse Régionale des Valeurs Immobilières). Financial regulations have been enacted by UEMOA, the UEMOA Authority for Regulation of Financial Markets and the Regional Council for Public Saving and Financial Markets in order to authorise, in particular, listings of companies and bonds, including both state-owned and private companies.

Investment Code

Since June 7, 2012, Côte d’ Ivoire has introduced a new investment code, which was adopted by Presidential Ordinance 2012-487 of the same date. This code in effect replaces the Investment Code of 1995 and is intended to encourage and stimulate productive, “green” and socially responsible investments in the country. The code provides a number of rights that are available, under the same conditions, to both national and foreign investors in all sectors, except for non-industrial housing, commerce, finance and banking.

General rights afforded under the investment code include the protection of the property, be it moveable, immoveable or intellectual; free access to raw materials; free transfer of profits; and the right to a prior and just compensation in case of expropriation. Two investment regimes are available to investors with specific rights attached to them and are listed below:

• A declaration regime whereby an investor benefits from tax exemptions for investments made in relation to the creation of a new activity. The country has been divided in three investment zones (A, B and C) and the exemptions rates, as well as their duration, depend on the zone of the country where the investments are realised.

Finally, benefits are granted upon presentation of the evidence of the investments realised.

• An approval regime whereby an investor receives, for a certain period of time, tax exemptions for investments to be made in connection with the creation or the development of an activity in any zone of the country. The benefits are granted upon presentation of an investment programme to the national agency in charge of investment promotion. Apart from this general legal framework for investments, additional legal incentives also exist in the context of specific laws, particularly with regard to certain types of economic activities and transactions.

Legislation For Smes

With small and medium-sized enterprises (SMEs) representing as much as 80% of Ivorian companies, the government has partnered with international bodies, such as the World Bank, to improve the business climate for smaller firms. The new investment code also contains a number of specific provisions intended to help SMEs, with incentives including:

• Exemption from corporate income tax from seven to 15 years;

• Government granting of lands; and

• Preferential tariffs on electricity, water and new technologies services.

Upstream Hydrocarbons

Ordinance No. 12-369 of April 18, 2012, modifying Law No. 96-669 of August 29, 1996 relative to the Petroleum Code, regulates the industry. The ordinance provides that the state of Côte d’Ivoire remains the owner of its natural resources, but that an exploration and production-sharing contract may be negotiated between oil operators and the state.

Mining Sector

The mining industry saw the introduction of a new code in 2014. There are three relevant statutes that govern the country’s mining laws:

• Law No. 2014-138, dated March 24, 2014, supported by Decree No. 2014-397, dated June 25, 2014, which implements the Mining Code;

• Ordinance No. 2014-148, which is dated March 26, 2014 and relates to fees, royalties and mining taxes; and

• Ministerial Decree No. 002/MIM/CAB of January 11, 2016 which relates to the granting of and renewal procedures for mining titles. Policy direction is overseen by the Ministry of Industry and Mines (Ministère de l’Industrie et des Mines, MIM), with operational and administrative affairs handled by the state-owned Société pour le Développement Minier de la Côte d’Ivoire. A permit is required to conduct exploration. Exploration permits can be granted for four years for a surface area of up to 40,000 ha by presidential decree, which must be issued during the Council of Ministers upon the proposal of the minister of industry and mines to any person or entity that has submitted an application that is in line with the relevant legal requirements. The permit may be renewed twice for a period of up to three years.

An exploitation permit is required to conduct mining operations. Pursuant to Article 67 of Decree No. 2014-397, dated June 25, 2014, an artisanal mining permit may be granted by the minister of industry and mines. Under Article 58 of Decree No. 2014-397, dated June 25, 2014, a semi-industrial permit to conduct mining may be issued by the minister of industry and mines for up to four years.

Finally, an industrial mining permit may be granted by a presidential decree during the Council of Ministers upon proposal by the minister of industry and mines, provided that suitable evidence of the existence of relevant mineral deposits, as previously indicated in the exploration licence, is presented. An investigation as to the convenience or otherwise of the exploitation of the resources – whether it is in “commodo” or “incommodo” – under Ivorian law, is required prior to the granting of authorisation.

A person does not need to own or acquire an interest in the land in order to apply for or hold a mining permit on the land. Once this investigation is completed, the entity or the individual is entitled to an exploration permit. Finally, it should be noted that the permit holder is entitled, among other things, to the following tax advantages and incentives:

• Exemption from payment of up to 50% of registration fees for capital increase in a mining company;

• Exemption from import duties, including value-added tax on import of materials, machinery and equipment for mining activities; and

• Exemption from export duties on mining products. The closure of mining operations should first be declared to the MIM. Other obligations include: cleaning and rehabilitation of the site; removal of any mining infrastructure; and monitoring of the post-rehabilitation programme.

To this end, a company holding a mining title must open an escrow account before starting mining activities. These obligations are set out in the closure plan, which is drafted on a case-by-case basis depending on the site and the type of exploitation.

Employment Law

Under Ivorian law, the sources for employment regulations include the following:

• The Labour Code adopted on July 20, 2015;

• Different implementing decrees; and

• The professional collective agreements negotiated between employers and employees, dated July 19, 1977. Different types of employment contracts may be offered to employees, including:

• Unlimited term contracts;

• Fixed-term contracts (according to Ivorian law, these contracts can have a maximum cumulative duration of no more than two years); or

• Part-time contracts. The length of a standard working day is eight hours. Overtime is legally allowed, provided there is an increase in pay, and there are prescribed premiums payable depending on whether the overtime takes place during the day, night or on official holidays. Employees’ wages must not be lower than the local minimum salary (on a monthly basis). An employee is entitled to paid annual leave after one year of working for an employer. Each employee is entitled to 2.2 working days per month of leave, equivalent to 26.4 working days (one month) annually.

With regard to fixed-term employment contracts, these are terminated without any notice or compensation at the term. The termination of unlimited-term contracts should be motivated by real and serious grounds, which includes both personal grounds to the employee and economic motives. The employment contract can be terminated by alternative amicable means such as resignation of the employee or amicable termination agreements signed by both parties.

Foreign Employees

The law also grants additional paid leave for foreign employees or employees who have reached a specific length of service. A foreign national must hold a work permit before being able to render services locally. A foreign employee may only be recruited by a company if there is a genuine need for the employee and there is no suitable domestic candidate. A fine equivalent to three months’ salary of the employee recruited may be imposed on any employer that has unlawfully employed foreign nationals without complying with the relevant statutory requirements.

Land Ownership

In Côte d’Ivoire regulations covering private and commercial property do not provide for any restrictions on nationality in regards to possession and ownership of a property in the country, with the exception of traditional village lands. Furthermore, any foreigner desiring to lease or acquire property for private or commercial needs may freely do so according to the law.

Procurement Contract Regulations

Procurement contracts are regulated in Côte d’Ivoire by a decree adopted on August 6, 2009 in line with UEMOA Directives 4/2005 and 5/2005 on procurement contracts. Pursuant to this decree, the government has created, via Decree 2009-260 of August 6, 2009, a national authority regulating procurement contracts, which has the power to settle disputes in relation to the granting or execution of a procurement contract. Furthermore, the decree also has the power to impose sanctions on applicants or contractors of a procurement contract for fraud.