Open for business: Well-established laws offer an investment-friendly market

I. GENERAL LEGAL ENVIRONMENT: undefined A. Sources of Law: Côte d’Ivoire has a civil law system where laws are compiled in codes and establish what is legal and what is illegal. The higher law is the version of the Constitution adopted by referendum on July 23, 2000. The Constitution includes laws that are adopted by the National Assembly, ordinances and decrees issued by the President, and, at the bottom, ministerial decrees and orders.

Due to its membership in regional organisations, mainly the West African Economic and Monetary Union (L’Union Economique et Monétaire Ouest Africaine, UEMOA), the Economic Community of West African States, the Organisation for the Harmonisation of Business Law in Africa (OHADA), the African Intellectual Property Organisation, and the Inter-African Conference on Insurance Markets, Côte d’Ivoire benefits from a modern and competitive set of laws that are directly applicable or are duplicated in the country’s legal system.

These laws regulate sectors which include:

• Competition;

• Banking;

• Companies;

• Securities;

• Insurance;

• Insolvency;

• Arbitration; and

• Foreign exchange. Côte d’Ivoire is also a member of a number of international organisations promoting international investments such as the World Trade Organisation, as well as the International Centre for Settlement of Investment Disputes. B. Judicial System: The judicial system is made up of the Constitutional Court, the civil courts and the commercial courts. The Constitutional Court has exclusive jurisdiction over constitutional issues, mainly the constitutionality of laws, the interpretation of the Constitution and even presidential elections disputes. The jurisdiction of civil courts includes but is not limited to criminal cases, labour and employment disputes, family law and land disputes. These courts are under the authority of the Supreme Court, which decides on their rulings as a last resort. For certain categories of cases, as in some administrative proceedings, the Supreme Court decides in first and last resort.

It should be noted that in all 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.

Commercial courts are the newest category of courts created in Côte d’Ivoire on January 11, 2012 to speed up the settlement of commercial and corporate disputes. They decide on first instance and shall render their decisions within three months. The first commercial court has now been created in Abidjan and more shall be created covering the entire country in the future. C. Arbitration System: Arbitration is a recognised way of dispute resolution in Côte d’Ivoire. The parties may refer their disputes to local or foreign arbitration centres. 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.

II. 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. Most Commonly Used Forms of Structures: i. The Private Limited Liability Company (Société à Responsabilité Limitée, SARL) The Private Limited Liability Company is the simplest and most common form of business structure in the country. Its mandatory share capital must amount to at least CFA1m (€1500), divided into member shares (parts sociales) of a nominal value of at least CFA5000 (€7.5) each. Moreover, the modalities for the transfer of shares are provided for by the articles of association.

The SARL is formed by one or more partners who are liable for the company's debts up to the limit of their capital contributions. One or more natural persons, who may or may not be partners, whether appointed in the articles of association or by a collective decision of the partners, assume responsibility for the management of the SARL.

The dismissal of the manager (gérant) is decided by the partners representing the majority of the share capital. The manager is vested with the widest powers to act with third parties on behalf of the SARL, even with respect to matters falling outside the scope of the corporate purpose.

Collective decisions are taken at a general meeting by an absolute or a simple majority of the votes. Extraordinary decisions are taken by a three-quarters majority of the votes. ii. The Public Limited Liability Company (Société Anonyme, SA) The minimum share capital for an SA is CFA10m (€15,000), divided into shares (actions) of a nominal value of at least CFA10,000 (€15). At least one-quarter of the nominal value of the shares subscribed in cash must be paid up during capital subscription. The partners are liable for the company's debts up to the limit of their capital contributions. The OHADA Uniform Act on Commercial Companies and the Economic Interest Group provides the possibility to form an SA with one partner, who may be a natural or a legal person.

Moreover, an SA may be formed with or without a Board of Directors consisting of at least three members and 12 members maximum.

In the first case, a chairman or managing director of the board of directors (président directeur général), or a managing director (directeur général), assumes responsibility for the general management of the company, while in the second case a general manager (administrateur général) takes on this responsibility.

Furthermore, the managers are vested with the widest powers to act in all circumstances with third parties on behalf of the SA. Other Available Forms of Structures: The OHADA Uniform Act on Commercial Companies and the Economic Interest Group provides as well the possibility to form other types of commercial companies, including: i. The General Partnership Company (Société en Nom Collectif, SNC), in which all the partners are traders and have unlimited liability for the company's debts. The management has the most extensive powers to manage the company; ii. The Limited Partnership (Société en Commandite Simple), in which there are one or more general partners having 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. Ongoing Reforms: i. The OHADA Uniform Act on Commercial Companies and the Economic Interest Group is currently being revised to offer investors a larger choice of structures. ii. Two amended Uniform Acts relating respectively to the General Commercial Law and to Secured Transactions and a new Uniform Act relating to Cooperatives were adopted on December 15, 2010 and entered in force on May 16, 2011.

The major innovations of the reform 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 allowing 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;

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

• Creation of non-possessory pledges on tangible assets. The major innovations of the reform resulting from the amended Uniform Act relating to the General Commercial Law may be summarised as follows:

• Introduction of the status of entreprenant for small businesses to encourage informal entrepreneurs to join the formal economy; and

• Creation of a three-tiered computerised Registry of Companies and Secured Transactions, where companies and secured transactions are recorded. iii. 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’Entreprises, GUFE).

The GUFE is comprised of all relevant administrative bodies, which include the tax administration, company registry, and Ministry of Commerce, as well as the National Social Security Fund, involved in the business creation process.

Lastly, it aims to allow carrying out all the formalities for starting a business within 48 hours.

III. FOREIGN EXCHANGE CONTROLS: Côte d’Ivoire is a member of the UEMOA, which has a common Central Bank of West African States and a uniform exchange regulation. In Côte d’Ivoire, foreign exchange control and related issues are governed by Regulation No. 09/2010/CM/UEMOA of October 2010 and its annexes.

Under Regulation No. 09/2010/CM/UEMOA, the transfer of funds between UEMOA member countries is free and not subjected to any restrictions under the free movement of funds within the monetary union. Similarly, transfer of funds between UEMOA member countries and other countries are free, without any restrictions as regards funds reception within the union.

However, transfer of funds between UEMOA member countries and other countries is regulated according to the function of the underlying transaction (whether it is a current transaction or an investment transaction), as regards funds sending funds outside the union.

Regarding current transactions, transfer of funds to other countries for common operations is free with a justification of the fund provenance. Concerning investment transactions, transfer of funds from the UEMOA to non-member countries in relation to investment transactions requires the prior approval of the Ministry of Finance.

The CFA agreement with France guarantees the availability of foreign exchange and the unlimited convertibility of the CFA franc with the euro at a fixed rate, thus providing substantial monetary stability and simplifying international transactions.

IV. 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.

V. FINANCIAL MARKET REGULATIONS: Abidjan has been appointed to accommodate the UEMOA Stock Exchange.

Financial regulations have been enacted by the UEMOA and the UEMOA authority for regulation of financial markets, 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.

VI. INVESTMENT CODE: Since June 7, 2012 Côte d’Ivoire has instigated a new investment code, which was adopted by the 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 available in the same terms for national or foreign investors in all sectors except non-industrial housing, commerce, finance and banking.

General rights afforded include the protection of the property be it movable, immovable or intellectual, the free access to raw materials, the 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:

• The 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 3 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, the benefits are granted upon presentation of the evidence of the investments realised.

• The 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 the 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 activities and transactions. VII. LEGISLATION AFFECTING SMALL AND MEDIUM-SIZED BUSINESSES (SMES): The new investment code contains a number of specific provisions intended to help SMEs, with incentives including:

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

• State’s granting of lands; and

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

VIII. UPSTREAM HYDROCARBONS: Ordinance No. 12-369 of April 18, 2012 modifying Law No. 96-669 of August 29, 1996 relative to a 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.

IX. MINING: The mining legislation in force results from Law No. 95-553 of July 18, 1995 relative to a mining Code. The Code sets two distinct mining schemes:

• The title scheme: relates to exploration and/or exploitation activities carried out on an industrial scale and requires the issuing of a permit; and

• The authorisation scheme: the mining Code has defined the prospecting and searching activities and distinguished them from exploration. The government is in the process of drafting a revised mining Code to replace the current version.

X. EMPLOYMENT LAW: The sources of employment law are the Labour Code adopted on January 12, 1995; its implementing decrees; and the professional collective agreements negotiated between employers and employees.

In addition, a new Labour Code is currently under discussion and shall be submitted to the Parliament in a few months. Different types of employment contracts may be offered to employees: unlimited term contract, fixed-term contracts, part-time contracts. Moreover, according to the law, fixed-term contracts have a maximum cumulative duration of no more than two years.

The length of a standard working day is eight hours. Overtime is legally allowed with an increase of the pay. There are prescribed premiums payable depending on whether the overtime takes place during the day, the night or on official holidays. Wages of employees 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 working being 26.4 working days (1 month) annually. The law 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. 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 that can be personal grounds to the employee or 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.

XI. LAND OWNERSHIP: Côte d’Ivoire laws for private and commercial property do not provide for any restrictions on nationality for the possession and ownership of a property in Côte d’Ivoire except for 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.

XII. PROCUREMENT CONTRACTS REGULATION: undefined 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, Côte d'Ivoire has created by a 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.