The Republic of Cameroon is a developing country in the region of Central Africa. The state has a huge potential for growth and is rich in various natural resources. Therefore, many foreign businessmen choose exactly this jurisdiction to invest funds in projects that are associated with manufacturing processes and need low employment-related expenses. Founding a company in Yaoundé or any other city in Cameroon may introduce, among others, this potential for doing business.
Why Incorporate a Company in Cameroon?
A business decision of buying a ready-made company in Cameroon or registering a new one can open these benefits to a foreign investor:
- use of strategic location;
- economical and political stability;
- natural resources in abundance (oil, iron, gold, diamonds, etc.);
- advantageous business environment suitable for foreign investments;
- bilingual educated manpower;
- availability of free zones.
Types of Business Available in Cameroon
If you wish to create a company in Cameroon or formalize your official presence in this state in an alternative way, these forms may be used for that purpose:
- Private limited company – a commercial and corporate model according to which all types of obligations of its shareholders are narrowed to their contributions solely. Even one person, whether natural or legal, can incorporate this entity. One director, of any residency, is also needed for this company. Shares of this type of enterprise are allocated among its shareholders. At the same time, certain restrictions on share transfers are applied as well. These restrictions have to be fixed in the company’s statutory documents. A starting share capital of CFA 1,000,000 is expected for this entity model. At the pre-registration stage, there is no need to pay this capital fully or partially.
- Public limited company – a commercial entity designated to initiate public offerings and trade its shares. A starting capital of CFA 10,000,000 is required for this entity type. At the pre-registration stage, it is possible not to repay a share capital fully or partially. The obligations of shareholders are the same as in the case of a private limited company — limited to the extent of the funds invested solely.
- Branch – an option chosen by foreign companies to test the local business opportunities before entering the market with a higher amount of investment. A branch can facilitate commercial relations with local contractors and customers. Passing a simplified registration procedure is needed to establish a branch. 100% liability over the debts and obligations of a branch under any circumstances bears its mother company.
How to Register a Business in Cameroon?
The process of company formation in Cameroon takes these stages:
- Decide about the entity type that suits your business background and future objectives.
- Carry out a company name search and verify the suggested commercial name for a future company. Reservation is possible (optional).
- Define a clear list of business activities that an entity is going to handle.
- Formalize an official legal address for the future company.
- Gather and formalize all necessary particulars about the company’s shareholders, including its mother company (if any), beneficiaries, and managers.
- Prepare and execute all must-have registration documents, including the Articles and Memorandum of Association, application forms, documents on the appointment of a director and secretary, documents on the share issuance and allocation, etc.
- Paying an incorporation fee and forming the submission package. Forwarding it to the registrar. Creating a new entry about a newly-formed company in the Register of Companies. Issuance of the Certificate of Incorporation.
- Formalizing a new entity for the purposes of paying taxes (through a taxpayer’s card) and compulsory social security payments.
- Opening corporate bank accounts.
- Applying for and getting an appropriate business license (may be needed for specific types of regulated activities).
Legal and Regulatory Framework
From the point of legislation, opening a company in Cameroon is a bit difficult because of numerous bureaucratic formalities. This process in general can be assessed as strict and time-consuming. At the same time, Cameroon facilitates the efforts of foreign investors, including through the assistance of an especially designed authority – the Cameroon Investment Promotion Agency (CIPA).
Starting and doing special types of regulated activities will also require obtaining a license or permit. Contact Prifinance attorneys to have a service option that will help to tackle all possible difficulties and secure expected results.
Taxation in Cameroon
Any initial decision to incorporate a company in Cameroon should be evaluated along with the next peculiarities of taxation in Cameroon:
- Profit tax (for business) – 33 %
- Income tax (for individuals) – 38.5%
- VAT – 19.25%
- Withholding taxes (non-residents) – (1) dividends – 16.5% (2) interests – 16.5% (3) royalties – 15%
- Capital gains tax – (1) for business – see profit tax (2) for individuals – (i) stocks and shares – 16.5% (ii) real estate – 30%.
How Prifinance Attorneys Can Support You
Forming a company in Cameroon is a bit complicated thing if you are new in this region and have a lack of experience. Prifinance attorneys can foster the process thanks to the vast registration expertise gained through 11 000 cases worldwide, including in Africa. Provide the details and get personalized assistance for your case as well.