Madeleine Berre, Partner and GM, Deloitte Legal and Tax, and Nicolas Balesme, Partner and GM, Deloitte Touche Tohmatsu, on incentives

The business climate has improved with the 2012 law, which complements the attractive framework for investment. The government has maintained its objective of attracting investment and encouraging industry.

On a fiscal level, this effort to improve the business environment can be seen in an incentivising framework for investments of at least CFA800m (€1.2m) for companies in the hotels and tourism sector. Small and medium-sized enterprises (SMEs) and small and medium-sized industries (SMIs) are granted a tax holiday for their first five years of operation under the conditions set out in Law No. 16/2005 of September 2006, as long as the following conditions are met: they have their headquarters on the national territory; their purpose is the production of goods, processing, distribution or provision of services; at least 51% of the capital is held by nationals, who must ensure the effective management of the company; investment does not surpass CFA1bn (€1.5m); generating revenue is below or equal to CFA2bn (€3m); and at least 50% of permanent staff are nationals. The effectiveness of these criteria, given the operating environment, is under consideration.

Incentives for investments in the wood and cement industries are also planned. Companies operating in the wood industrialisation sector from now on will benefit from a fiscal and Customs regime with exemptions from common law, as long as they have the approval of the industrialisation commission of the forestry sector, based on their industrialisation plan. In the cement industry, incentives include those for the investment phase. For information technology equipment, the measures help reduce Customs duties by 5% for imports, in line with the vast modernisation programme for technological, digital and telecoms infrastructure.

At the social level there have not been fundamental reforms of the existing work and social security codes. It is an area that ought to be boosted, both to correlate with the fiscal and Customs incentives for investors, and to modernise the employment environment to face the realities of shifts in the economic sphere.

Carrying out big investment projects and building infrastructure should benefit employment for nationals. However, while maintaining this as a priority, a framework dedicated to the employment of foreign labour ought to be considered, given the deadlines assigned for the completion of these projects and government imperatives. The authorities should be able to carry out employment regulation of the foreign workforce backing big projects, even those outside economic zones with privileged regimes. This framework should also apply to immigration rules.

Access to property is central to the government’s actions, and the will to smooth bureaucratic procedures drove the enactment of new regulations defining the framework for real estate property, which has been in effect since March 2012.

It should also be noted that the contractual framework of public-private partnerships, concessions, contracts in the mining, hydrocarbons and forestry sectors, or all contracts involving the government, requires a conformity visa. This reflects the government’s will to rebalance and manage the content of contracts.

Finally, significant progress has been made since the end of 2010 on management of public finances and accounting, with the enactment of Organic Law No. 31/2010 relating to finance laws and budget execution, the creation of the Superior Accounting Council that will rule on the applicable accounting rules for both the public and private sectors, and the publication in December 2011 of Decree No. 01403/MBCPFPRE, which defines the budgetary and accounting framework of national public establishments, constitutional institutions and autonomous government entities. Given the significant changes implied by these texts, which have the ultimate objective of allowing the government to align itself with international best practices and standards (for example the IPSAS standard for government accounting), it seems necessary to set up structures to manage projects to accompany the central and regional administrations in this transitional process.