flag Central African Republic Central African Republic: Investing

FDI in Figures

According to UNCTAD’s World Investment Report 2021, FDI flows to the Central African Republic (CAR) have resumed since the 2013 civil war (which had caused almost all economic activity to stop and led investors to withdraw from the country), rising from USD 26 million to USD 35 million between 2019 and 2020, despite the economic and health crisis triggered by the Covid-19 pandemic. The FDI stock has also increased, reaching a total of USD 718 million in 2020. In 2021, global FDI flows rebounded strongly, but FDI flows to African countries (excluding South Africa) rose only moderately (UNCTAD’ Investment Trends Monitor). The wood and diamond sectors attract most of the FDI and France as well as China are the two main investors in the country.

In the latest available Doing Business ranking from the World Bank, CAR was ranked 184th worldwide, down one place from the previous ranking. The country has abundant natural resources (diamonds, gold, uranium and wood), which are largely untapped, as well as huge arable land. However, the unfavorable security climate and political instability are a source of concern for investors, in this country where the majority of underground wealth is controlled by armed gangs. Other factors limiting its attractiveness include insufficient infrastructure and a shortage of skilled labor. The country has, however, undertaken various reforms to attract investment, in addition to the ongoing efforts under the peace agreements. Among these reforms are the establishment of a public-private dialogue framework, tax incentives for businesses, the reduction of the minimum capital required to start a business and measures to protect minority investors. However, renewed violence and insecurity in 2021 could delay their implementation (Coface).

 

Country Comparison For the Protection of Investors

  Central African Republic Sub-Saharan Africa United States Germany
Index of Transaction Transparency* 7.0 5.5 7.0 5.0
Index of Manager’s Responsibility** 1.0 3.5 9.0 5.0
Index of Shareholders’ Power*** 5.0 5.5 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

 
Foreign Direct Investment 201920202021
FDI Inward Flow (million USD) 263530
FDI Stock (million USD) 683.7718.5748.6
Number of Greenfield Investments* 0.01.00.0
Value of Greenfield Investments (million USD) 080

Source: UNCTAD - Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

 

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Tax Rates

Vaue added tax (VAT) - Taux sur la valeur ajoutée (Local name)
19% (standard rate).
Reduced rate of 5% on wheat flour, milk, frozen fish and refined oils.
Exports and international transport services are zero-rated.
Essential goods, medical services, sales of gold and diamonds are exempt from VAT.
Company Tax
30%
Withholding Taxes
Dividends: 15%; Interests: 15%; Royalties: 15%.
Social Security Contributions Paid By Employers
19% (12% family allowances; 4% old-age contribution; 3% professional risks)
Other Domestic Resources
Ministry of Finance, in French
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 
 

Individual Taxes

Personal income tax Progressive rates from 0% to 40%
XAF 0 to 378.000 0%
XAF 378.001 to 1.680.000 8%
XAF 1.680.001 to 3.360.000 15%
XAF 3.360.001 to 5.040.000 28%
XAF 5.040.001 and above 40%
 
 

Country Comparison For Corporate Taxation

  Central African Republic Sub-Saharan Africa United States Germany
Number of Payments of Taxes per Year 56.0 36.6 10.6 9.0
Time Taken For Administrative Formalities (Hours) 483.0 284.8 175.0 218.0
Total Share of Taxes (% of Profit) 73.3 47.3 36.6 48.8

Source: Doing Business - Latest available data.

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Investment Opportunities

Tenders, Projects and Public Procurement
Tenders Info, Tenders Worldwide
DgMarket, Tenders Worldwide
Setting Up a Company
Consult Doing Business Website, to know about procedures to start a Business in Central African Republic.
Useful Resources
Embassy of the Central African Republic in France (in French)
Business Portal for Africa
 

Business Setup Procedures

Setting Up a Company Central African Republic Sub-Saharan Africa
Procedures (number) 10.00 7.51
Time (days) 22.00 21.30

Source: Doing Business.

 
 
 

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Latest Update: September 2022