In accordance with technical procedures, such as the preparation of a business plan and requested documents, the Government of Cameroon has established a body to promote the establishment of enterprises, known as the “Center for Formal Education (CFCE)”, which offers the opportunity to establish an enterprise in 3 days, including with a capital of less than 1,000,000 CFA. If the amount exceeds 1,000,000 CFA, it is necessary to contact a notary.
The Investment Charter 2020 regulates foreign investment in Cameroon.
The Center for Business Formalities (Centre de Formalités de Creation d’entreprise – “CFCE”), created under the Agency for Investment Promotion (Agence de Promotion des Investissements “CIPA”), acts as a one—stop shop for business creation services.
All businesses must register with CFCE, regardless of the size of the company and the nationality of its sponsors.
After the company is registered with CFCE, it will be registered with the Register of Trade and Credit Mobility, as well as with the Tax Administration (Direction Generale des Impots — DGI).
Finances can be obtained through personal savings, loans or bank loans. The most popular source of financing is bank loans due to the availability of these banks, their cooperation and the competition that exists in this sector.
There are several ways of doing business in Cameroon. The most common of these is the creation of a limited liability company (SARL). Investors can also create a public limited liability company (SA). Alternatively, foreign companies can open a branch or representative office.
The forms of doing business available in Cameroon are mainly the following, provided for by the OHADA Uniform Law on Commercial Companies and Economic Interest Groups:
Cameroon Limited Liability Company (SARL):
SARL is the most common legal entity used by entrepreneurs to set up small and medium—sized enterprises in Cameroon. The SARL must appoint at least 1 resident director and one shareholder of any nationality. The shareholder may be a natural or legal person. The minimum share of 100,000 CFA francs will be divided into equal shares, the nominal value of which cannot be less than 5,000 CFA francs.
Cameroon Public Limited Liability Company (SA):
A minimum paid share of 10 million CFA francs is required to complete the establishment of a company in Cameroon. However, subsequently a higher authorized capital of 10 million CFA francs will be required if the company intends to be public.
Simplified Limited Liability Company (Societe par Action Simplifiée SAS):
There is no minimum required share, but in practice it is 10 million CFA francs.
Cameroon Branch (Succursale):
There is no minimum required share, but in practice it is 10 million CFA francs.
Representative Office of Cameroon (Bureau de liaison):
Although 100% foreign ownership of a representative office is allowed, it is not considered a legal entity and does not have the right to carry out direct sales in Cameroon.
What advice can you give me regarding salary and taxation requirements? The tax system in accordance with the usual legislation for companies established in the Republic of Cameroon is codified in the General Tax Code and applies to both resident and non-resident companies. This tax is levied on income categories as follows:
• Profit or income of companies and other legal entities.
• Wages, pensions and annuities for life.
• Income from stocks and shares.
• Income from real estate.
• Profit from artisanal, industrial and commercial activities.
• Profit from farming business.
• And profit from non-profit and related professions.
The standard corporate income tax rate is 30%. An additional municipal tax of 10% is applied, resulting in a total tax amount of 33%.
The minimum monthly tax applied to turnover is usually 2.2%, 3.3% or 5.5% of turnover, depending on the tax regime to which the company belongs
The minimum tax is credited to the corporate tax payable for the current fiscal year. In case of a loss, the monthly amounts paid during the year are considered the minimum corporate tax.
Value added tax (VAT) in Cameroon is charged at the standard rate of 19.25%. Companies with taxable annual turnover must submit VAT returns by the 15th of each month.
Income tax of 16.5% is applied to dividends paid to resident and non-resident companies. It can be reduced if a double taxation avoidance agreement is applicable.
Income tax of 15% is applied to royalties paid to non-resident companies. However, the rate may be reduced if a double taxation avoidance agreement is applied.
The capital fee is charged depending on the registered capital of the company at a regressive rate of 2% and 0.25%.
Taxable income:
• Income from salaries, allowances, allowances, pensions and lifetime annuities; where the remunerated activity is carried out in Cameroon.
The basis of the assessment:
• The basis of the assessment is the total amount of wages, allowances, remuneration, wages, pensions and lifetime annuities, as well as in-kind or cash benefits provided to interested persons.
Ad valorem and specific excise tax on products have been introduced. As As a rule, the excise duty is applied to the following goods: wines from fresh grapes, cigars and cigarettes, cosmetics, beer, telephone and Internet transactions.
The rules applicable to VAT in respect of persons responsible, taxable transactions, exemption from liability and territoriality are also applicable to excise tax.
Louis Gouend is the President of the Cameroonian Diaspora in Russia and the ideological inspirer of the Russian—Cameroonian Business Initiative, who represents the interests of Cameroonian companies in Russia and supports Russian companies in their relations and cooperation with Cameroonian companies – both in Russia and in Cameroon.
We offer consulting services for small, medium and global companies that want to invest in the African continent.
Louis Gouend has been living and working in Moscow, the capital of Russia, for more than 29 years. However, it maintains constant communication with the States of the African continent. He is a “messenger of friendship” for representatives of many governments and international cooperation organizations.
If you are interested in starting a business in Africa, our diaspora is ready to become your guide. Write to us here: info@diaspocam.ru