Attitude toward Foreign Direct Investment
The Government of Benin (GOB) encourages foreign investment. The creation of APIEX in 2015 resulted in a dialogue between the Government and investors to implement reforms and improve Benin's business environment. The APIEX works to reduce, and where possible, eliminate administrative barriers to doing business and attract additional foreign direct investment. The agency has successfully reduced processing times for construction permits and registration of new companies from 90 to 30 and from 15 to 1 day, respectively. The GOB has also created a newly organized commercial section at the Court of First Instance in Cotonou responsible for expedited settlement of business related disputes. The GOB plans to expand the commercial section into a separate commercial court in Cotonou. The full-service office that expedites customs clearances, reduces the cost of clearances, and minimizes processing barriers to clearing cargo at the Port of Cotonou makes it possible to obtain cargo clearance within 48 hours of the date of its off-loading at the Port of Cotonou.
Beninese law guarantees the right to own and transfer private property. The court system enforces contracts, but the judicial process is routinely slow and enforcement of rulings is problematic. Most firms entering the market work with an established local partner and retain a competent Beninese attorney. A list of English-speaking lawyers and legal counselors is available from the Embassy's commercial section and on the Embassy's website http://www.cotonou.usembassy.gov.
Other Investment Policy Reviews
In 2015 the GOB conducted an investment policy review through the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), the United Nations Conference on Trade and Development (UNCTAD). The GOB cooperates with World Bank Group for the annual World Bank Group Doing Business Review (http://www.doingbusiness.org/data/exploreeconomies/benin). The 2016 Benin rank is 185th, http://www.doingbusiness.org/data/exploreeconomies/benin .
Laws/Regulations on Foreign Direct Investment
In April 2016, the Government of Benin announced plans to promote judicial sector reforms which would limit executive influence. Benin's 2008 Investment Code creates Free Trade Zones and establishes incentives such as tax reductions for investors. Depending on the size of the investment, investors may benefit from reduced tax liability on profits, exported finished products, or imported industrial equipment for up to one year from the date of business registration. Investors must meet several criteria including employing a minimum number of Beninese nationals, safeguarding the environment, and meeting nationally accepted accounting standards. The Investment Control Commission monitors companies that receive these incentives to ensure compliance. The GOB has also enacted a framework law to promote Public Private Partnership.
Reference:
- http://www.spcpibenin.com/ (FDI investment reforms)
- http://benin.eregulations.org/procedure/3/51?l=fr (E-registration)
- http://www.gouv.bj/investir-au-benin (GoB website)
- http://www.finances.bj/ (Ministry of Economy and Finance Website)
Business Registration
The Benin eRegulation website addresses business registration procedures and contains required documents for the creation of business. It normally takes 24 hours to register a business and does not require a notary’s assistance. APIEX serves as the single investment promotion center between the foreign investor and the administration.
Benin defines:
- Micro-enterprises as having less than 5 employees;
- Small and medium size enterprise (SMEs) as having between 5and 99 employees. SMEs may be a subsidiary of an international firm;
- http://benin.eregulations.org/procedure/3/51?l=fr
- http://www.gouv.bj/sites/default/files/Charte_nationale_PME_et_PMI.pdf
Industrial Promotion
The GOB aims to attract investment in the following sectors:
Agribusiness: Benin produces over 400,000 metric tons of pineapples that meet international standards. Pineapple processing offers a variety of products such as juice, jam, and dried pineapples that are exportable to sub-regional countries and other markets. Other tropical fruits are also available for processing. Creation of fruit processing units offers new business opportunities in the country. Benin is ranked 5th in cashew production and exports only 3% of this product to the international market.
Energy and Mining: Resources such as iron, phosphate, diamond, kaolin, marble, and gravels offer mining and export opportunities. Recent GOB-funded studies promote exploration opportunities in untapped oil fields, which are additional opportunities for business investment. Benin is also in need of stable electricity supplies to sustain growth. The GOB encourages private investment in this sector.
Other sectors for investments include agricultural, construction, building, automotive and ground transportation, food processing and packaging, information and communications, finance, and travel.
Additional information can be found at http://www.gouv.bj/investir-au-benin
Limits on Foreign Control and Right to Private Ownership and Establishment
Benin does not limit foreign ownership or control. The GOB encourages and seeks to incentive joint venture partnerships.
Beninese law and authorities respect the right to private ownership and investment. Beninese law guarantees freedom of commerce; choice of customers and suppliers; free movement throughout the country; the right of foreign employees and their family members to leave the country; and freedom from government interference in the management of private enterprises.
Privatization Program
The GOB has elected to support targeted divestiture programs over total privatization of State-Owned Enterprises. GOB divestitures of the cotton and wood sectors faced management challenges. State-owned Telecommunications Company, Benin Telecom SA and its affiliate cell phone provider – Libercom – are targeted for divestiture.
Foreign investors may participate in privatization programs. In March 2015, the governments of Benin and Niger jointly signed a document that would repeal the legal existence of the Benin-Niger Railway Organization (OCBN) parastatal and assign its concession to foreign private investors.
The government procurement process is specified in accordance with the Beninese procurement code (Code des Marchés Publiques: http://www.finances.bj/spip.php?article804). Tenders from the central government are announced in major publications, newspapers, and posted on the website of the Ministry of Finance and Economy at www.finances.bj. Published tenders often include local investor participation requirements.
Beninese procurement law allows for open and closed bid processes. Contracts are often awarded based on government solicitations to short-listed companies with industry-specific expertise often identified during commercial activities conducted in overseas markets. The public procurement process is not always deemed non-discriminatory. Foreign companies have expressed concerns about unfair treatment, biased consideration, and improper practices specific to the process of selecting companies.
Screening of FDI
The GOB does not screen FDI.
Competition Law
The Public Procurement Monitoring Authority (Autorité de Régulation des Marchés Publics) reviews transactions for competition-related concerns. The website is http://www.armp.bj/.