2019 Investment Climate Statements: Cameroon
In December 2018, the International Monetary Fund (IMF) completed the third review of Cameroon’s 2017 Extended Credit Facility (ECF), concluding that program performance had improved, though structural reforms remain delayed. From June 2018, the ECF prescribed a package of reforms aimed at restoring external and fiscal sustainability and sustaining growth in Cameroon and Central African Economic and Monetary Community (CEMAC). The IMF also commented that risks from heightened global uncertainty, insufficient adjustment at the regional level, and continued insecurity in the Anglophone regions are increasing. Cameroon had hoped hosting the 2019 African Cup of Nations (CAN) soccer tournament would boost consumer spending, but lost the event in November 2018 due to serious delays in promised infrastructure improvements. Delays are likely to increase the cost of the construction of the infrastructure earmarked for the tournament, now scheduled for 2021, and increase pressure on public finance and public debt. Firms have claimed CEMAC is attempting to hoard foreign exchange as reserve buffers have failed to grow as expected.
Infrastructure, energy, and extractives remain priority areas for Cameroon. The government offers incentives for investment in agriculture, technology, and manufacturing, especially when investments lead to the transformation of local commodities in Cameroon. The government, under the auspices of the ECF, has ramped up tax collection on the relatively small number of companies that actually pay taxes, including foreign firms. FDI inflows were lower than expected over the last year and the loss of CAN will lead to even lower foreign exchange inflows in 2019.
Cameroon’s ranking in the World Bank’s 2019 Doing Business Report – 166th out of 190 countries – and Transparency International’s 2018 Corruption Perceptions Index – 152nd out of 175 countries – accurately reflect a business climate growing more difficult. The most important factors that affect the business climate are dysfunctions within public administration, corruption, and poor infrastructure. These challenges contrast with the country’s huge potential in terms of untapped natural resources and its strategic position as the gateway to landlocked neighbors.
% of GDP
Services and consumer retail
Banking and Finance
Real Estate and Infrastructure Construction
Extractive industry (Oil, Gas, Mining)
Information & Communication Technology
Utilities (Electricity, Water)
Tourism, Media and Leisure
Source: Cameroon Ministry of Finance, IMF, World Bank
Sectors that have historically attracted significant investment are:
Agriculture has attracted significant investment over the past decade, mostly from the Cameroonian government. Cameroon is often described as the breadbasket of Central Africa because it supplies foodstuffs to Nigeria (180 million people) and to the countries of CEMAC (50 million people). Market opportunities exist in the transformation of raw crops into finished or semi-finished products. Access to credit, poor infrastructure, securing land rights, and ongoing fighting between separatists and government security forces in the cocoa and coffee-growing regions are significant obstacles.
The economy of Cameroon and those of neighboring countries suffer from Cameroon’s poor roads, limited capacity of the aging rails, and the unreliability of the national airline. The government has engaged in an ambitious program to upgrade and build new transport infrastructure, but Chinese companies dominate the sector. Incentives to invest exist, though administrative procedures cause long delays.
Information & Communication Technology
Information and communication technology is the fastest growing economic sector in Cameroon, though internet penetration is still one of the lowest in Sub-Saharan Africa. The mobile sector is still concentrated in the hands of four companies, including the state-owned Cameroon Telecommunication (CAMTEL), which also functions as the market regulator. Despite CAMTEL’s monopoly on the communication backbone, such as sub-marine fiber optic cables, faster internet broadband and 3G-4G offer lucrative investment opportunities.
Extractive industry (Oil, Gas, Mining)
Cameroon has been an oil exporter since 1977. Oil production has stagnated as prices fluctuated, but the country can count on untapped gas reserves estimated at 3.5 billion cubic meters. The government dominates the sector and generally operates a revenue-sharing business model with foreign investors.
Banking and Finance
The financial sector of Cameroon has 15 banks, 26 insurance companies, one state pension fund, and one state-owned mortgage bank. In addition, the country has over 400 microfinance institutions, a state-owned postal bank, and a nascent stock market based in Douala. According to the International Monetary Fund (IMF), the total financial assets represent 40 percent of the national GDP, two-thirds of which is held by banks. Less than 15 percent of Cameroonians have access to financial services. There are investment opportunities in subsectors of the financial industry, particularly in conventional banking, risk protection, or in the increasingly popular mobile money business.
Table 1: Key Metrics and Rankings
TI Corruption Perceptions Index
152 of 175
World Bank’s Doing Business Report
166 of 190
Global Innovation Index
111 of 126
U.S. FDI in partner country ($M USD, stock positions)
$9.0 m (2017)
World Bank GNI per capita
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
The Government of Cameroon considers attracting FDI an important pillar of its development strategy. Many Cameroonian institutions have bodies that work to attract FDI, with mixed results. At the same time, Parliament, the Executive Branch, and donors continue to work to improve framework laws and regulations in order to provide incentives to investors.
By law, the government does not prohibit or limit foreign investors, whether in their ability to establish an investment (market access) or to operate in the market. Investors interested in Cameroon can target any sector of the economy provided they comply with extant regulations. Though not official policy, foreign companies often face increased scrutiny.
In collaboration with public and private institutions, the Cameroon Investment Promotion Agency (CIPA) implements government policies to promote and facilitate all forms of direct investment in Cameroon. To achieve this end, CIPA receives and studies investment proposals, assists with visa applications for foreign investors, and helps in the accreditation of companies. CIPA can enable access to related public facilities, simple administrative procedures, and guide investors through the legal compliance processes. CIPA also offers incentives and can reward investors with additional support if they maintain certain employment and export requirements.
CIPA Process Flow Chart
IPA (Investment Promotion Agency) MINFI (Ministry of Finance)
The government of Cameroon has stated that attracting and retaining investors is important. General laws and specific sector investment codes offer incentives for the retention of investors. Incentives scale up from the establishment phase to companies carrying out new investments. Business lobby groups, such as the Groupement Inter-Patronal du Cameroun and Enterprise Cameroon, maintain a dialogue through the Cameroon Business Forum, a platform supported by the government and donors to foster discussions on improving the business climate in Cameroon.
Limits on Foreign Control and Right to Private Ownership and Establishment
Despite an active government presence in most sectors of the economy, private entities – both domestic and foreign – can create and own businesses that engage in all forms of legal remunerative activities. They can also enter into joint ventures and public-private partnerships with the government.
There are no general economy-wide statutory limits on foreign ownership or control. Foreign companies have complained that, without a well-connected local partner, business can be challenging.
Cameroon has no laws or regulations that prescribe outright prohibition on investment, equity caps, mandatory domestic joint venture partners, licensing restrictions, or mandatory Intellectual Property (IP)/technology transfer requirements.
Cameroon has a screening process, which is applicable to all domestic and foreign investments. This screening process ensures that investors meet the criteria, such as employment and export quantities, to qualify for private investment incentives.
Other Investment Policy Reviews
In June 2017, Cameroon signed a three-year Extended Credit Facility (ECF) agreement the International Monetary Fund (IMF). The program included structural reforms to accelerate and consolidate growth and control spending. Under the terms of the agreement, the IMF has conducted three policy reviews.
- First Review: https://www.imf.org/~/media/Files/Publications/CR/2018/cr1809.ashx
- Second Review: https://www.imf.org/~/media/Files/Publications/CR/2018/cr18235.ashx
- Third Review: https://www.imf.org/~/media/Files/Publications/CR/2018/cr18378.ashx
The IMF expressed satisfaction on the progress of the implementation of reforms while urging the country to implement stronger measures on budget transparency and the improvement of the business climate. In the area of public expenditure, the World Bank published a review in late 2018. The review examines public expenditure data over a period of 10 years with the objective of assisting Cameroon in the restoration of fiscal stability. http://documents.worldbank.org/curated/en/412641543396425023/Aligning-Public-Expenditures-with-the-Goals-of-Vision-2035
According to the World Bank’s Investing Across Borders (IAB) Report, it takes 14 procedures and 82 days to establish a foreign-owned limited liability company (LLC) in Douala, Cameroon. This process is lengthier and more complex than the IAB regional and global averages. While only two additional steps are required of foreign companies compared to domestic ones, these steps add an additional 48 days to the overall establishment process. A declaration of foreign investment to the Ministry of Finance is mandatory 30 days prior to the beginning of the establishment process. In addition, if the company wants to engage in international trade, registration in the importers’ file is required to obtain a “sydonia” number (a custom computer identification). This number facilitates the entry and exit of goods produced by the company. The authentication of the parent company’s documentation abroad is required only to establish a subsidiary. Foreign-owned resident companies that wish to maintain foreign currency bank accounts in Douala must obtain prior approval. The Minister of Finance issues such authorization, which is subject to approval from the Bank of Central African States as per Section 24 of the exchange control regulations. This approval takes on average 38 days to obtain. There is a minimum paid-in capital requirement of CFA 1,000,000 (~USD 2,060) for setting up foreign as well as local LLCs.
In April 2016 with the support of the United Nations Conference on Trade and Development and the European Union, Cameroon launched an online business registration website called mybusiness.cm. The government hopes that this platform will simplify the business creation process and amplify entrepreneurship promotion policies. The site should present real time data on business creation, which the Ministry of Small and Medium Enterprises and the National Agency for Small and Medium Enterprises can use to improve interactions between different market actors. The government indicates that after a year, the website collected market data on 11,000 registered enterprises.
Although its policies overwhelmingly target inward investment, the Cameroonian government promotes external partnerships and joint ventures as well.
The government does not restrict domestic investors from investing abroad, though recent restrictions on moving foreign exchange outside of CEMAC function as a de facto limit on Cameroonians investing abroad.
2. Bilateral Investment Agreements and Taxation Treaties
- Belgium-Luxembourg: Convention between the Belgium-Luxembourg Union for the reciprocal promotion and protection of investments (1980)
- Canada: Investment Promotion and Protection Agreement (FIPA) (2014)
- China: Bilateral Investment Treaty Agreement (1997)
- Egypt: Memorandum of Understanding with the General Authority for Investment
- Germany: Treaty between the Federal Republic of Germany and the Federal Republic of Cameroon concerning the encouragement of investments (1962)
- Guinea: Mutual Discussions and Framework Agreement
- Italy: Economic, Technical, and Financial Development Cooperation Agreement between the Government of the Republic of Italy and the Government of the Republic of Cameroon (1989)
- Mali: Cultural Agreement and Commercial Agreement (1964)
- Mauritania: Framework Agreement for General Bilateral Cooperation following recognition after independence
- Mauritius: Framework Agreement for General Bilateral Cooperation following recognition after independence
- Morocco: Economic and Technical Cooperation Agreement (1974)
- Netherlands: Agreement (1967)
- Romania: Agreement between the Government of the Socialist Republic of Romania and the Government of the Republic of Cameroon on the mutual promotion and protection of investments (1980)
- Switzerland: Cameroon-Switzerland Bilateral Investment Treaty (1964)
- Turkey: Cultural and Scientific Cooperation Agreement (2002), Trade, Economic and Technical Cooperation Agreement (2002), Joint Economic Commission Protocol (2003)
- United Kingdom: Agreement between Great Britain and the Government of the United Republic of Cameroon for the Promotion and Protection of Investments (1982)
- United States of America: Bilateral Investment Treaty (1986)
Cameroon and the United States have not signed an FTA, nor is there any intention to do so, at present.
Cameroon has tax treaties with Canada, France, Morocco, South Africa, Tunisia, United Arab Emirates, Gabon, Equatorial Guinea, Congo, Chad, and Central African Republic. Cameroon does not have a bilateral tax treaty with the United States.
Domestically, some U.S. companies face tax challenges in Cameroon. A major U.S. international bank is facing a USD 5 million tax penalty as the result of contradictory and conflicting claims from different government authorities. After months of claims and counter claims between the Ministry of Finance and the Ministry of Trade, the Taxation Directorate (under the Ministry of Finance) accused the U.S. bank of complicity in tax evasion. A second case involves a U.S. wood processing company that has seen a tenfold increase in its tax bill and retroactive charges related to its transfer pricing practices.
3. Legal Regime
Transparency of the Regulatory System
In general, Cameroon has adequate laws, most of which are consistent with international business and legal norms. Weak investigating capacity, a lack of understanding of international business practices, and corruption in the judiciary adversely affect the implementation of the laws. In many circumstances, judicial loopholes lead to arbitrary interpretations of the texts.
Some ministries, though not all, consult with the general public and private sector organizations through targeted outreach to stakeholders, such as business associations or other groups. There is no formal process for such consultations. Ministries do not report the results of consultations. Such processes are not believed to disadvantage U.S. or other foreign investors.
Legal procedures of Cameroon are based on national, regional, and supra-national laws and treaties. Parliament is the nominal source of all regulatory power, though the Parliament is subsidiary to the President, and the Executive Branch originates 98 percent of all laws passed. Public involvement is limited and oversight or enforcement mechanisms are weak and do not ensure that governments follow administrative processes. National regulations, controlled by ministries, control most economic activity and are the most relevant for foreign businesses.
Cameroon does not meet the minimum standards of fiscal transparency. Many of the state-owned enterprises do not have public accounts. There are only three publicly listed companies on the Douala Stock Exchange. All three use the OHADA (Organization for the Harmonization of Corporate Law in Africa) accounting system, which does not conform to IFRS (International Financial Reporting Standards) or GAAP (Generally Accepted Accounting Principles) standards.
Draft bills and regulations are not made available for public comment.
The government is currently working on an online and digitalized database for all legal texts. Until that project is completed, the Official Journal or “Journal Officiel” (in French), is the main repository for all legal texts. Currently, the website for the Office of the Prime Minister (www.spm.gov.cm ) contains PDF versions of all new regulatory actions published in the Cameroon Tribune, the country’s newspaper of record.
Cameroon has administrative courts that specialize in the application and enforcement of public laws. From a strictly legal perspective, the Supreme Court has oversight on enforcement mechanisms, but a lack of separation of powers prevents the judiciary from carrying out its responsibilities.
Cameroon has made tangible progress in the area of fiscal modernization largely with the support of the International Monetary Fund (IMF) and initiatives such as the Extractive Industry Transparency Initiative. Cameroon’s budget was widely and easily accessible to the general public, including online on various government websites. The government published its fiscal year 2019 executive budget proposal in June 2018 and enacted the budget in December 2018. The end-of-year report for the previous year was published in October 2018.
It is too early to tell the impacts of the reforms. The IMF continues to stress that the government must strengthen fiscal governance, improve its fiscal consolidation, implement debt sustainability, enhance private sector-led growth, and expand financial access. Full implementation of these recommendations would have a tremendous impact on the country and economy.
Ministries and regulatory agencies do not develop forward regulatory plans – i.e., a public list of anticipated regulatory changes or proposals intended to be adopted/implemented within a specified period. Ministries do not have a legal obligation to publish the text of proposed regulations before their enactment. There is no period of time set by law for the text of proposed regulations to be made publicly available.
There is no specialized government body tasked with reviewing and monitoring regulatory impact assessments conducted by other individual agencies or government bodies.
There are no scientific or data-driven assessments of new regulation. There are no publicly available scientific studies or quantitative analyses conducted on the impact of regulations. Affected parties do not have the right to request reconsideration or appeal adopted regulations to the relevant administrative agency. There is no existing requirement that regulations be periodically reviewed to see whether they are still needed or should be revised.
Information on debt obligations was publicly available and updated quarterly in the form of brochures, and increasingly via the website of the Cameroon Debt Management Office. For example, the electronic version of the debt data covering the second and third quarters of 2018 was released and can be obtained upon request, although it was not posted on the website as in previous years. However, allocations to and earnings from state-owned enterprises were not identified in budget documents and few state-owned enterprises produced financial statements.
The government maintained items in the budget that may qualify as off-budget accounts and contingent liabilities in debt covenants that are not subject to adequate audit or oversight. There are similar concerns regarding the budget for security operations and what qualifies as “sovereign expenses.” Moreover, the information in the budget is generally reliable, though the execution of the investment budget deviated often significantly from projections because of the low execution rate.
International Regulatory Considerations
Cameroon is a founding member of the Central African Economic and Monetary Community (CEMAC). CEMAC treaties supersede national laws. The economic union has one central bank, one banking ombudsman, and a single regional tariff.
Cameroon is signatory to the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI). In 2009, the EU and Cameroon signed an interim Economic Partnership Agreement (EPA). They are working to bring several Cameroonian products up to EU standards. Cameroon references many international conventions and multilateral treaties such as the UN treaties in its domestic laws.
Cameroon joined the World Trade Organization (WTO) on December 13, 1995 and was previously a member of the General Agreement on Taxes and Tariffs. On March 11, 2019, Cameroon was suspended from the WTO for failure to meet its designated contribution to the organization. The government of Cameroon is expected to notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).
Legal System and Judicial Independence
The Cameroonian legal system is a legacy of French, German (Codified Laws), and English (Common law) colonization. There is also a patchwork of traditional ethnological legal systems, which varies for each ethnic group. The government wants to harmonize these different legal traditions to equip Cameroon with laws that are applicable across the country and reduce the need to navigate different legal systems. This project, however, is meeting with stiff resistance from English-speaking lawyers concentrated in the Northwest and Southwest Regions, who claim that the initiative will dilute their heritage.
In terms of standards, Cameroon’s commercial legal system follows the OHADA rules, which are supposed to be aligned with International Financial Reporting Standards (IFRS). Enforcement is weak partly because of lack of capacity. Cameroon does not train enough specialized judges in the commercial and economic fields. Consequently, poor enforcement of laws and accounting standards tends to create confusion for foreign investors. Despite efforts to align OHADA standards to international norms, government accounting regulations remain obsolete in the context of rapid developments in international finance and capital markets.
To circumvent the problem, U.S. enterprises and investors often maintain two sets of accounting records, one in accordance with U.S. GAAP or suitable international standards, and another to comply with OHADA standards and government reporting requirements.
The judicial system is subsidiary to the executive branch. The executive regularly interferes in judiciary matters. The current judicial process is not procedurally competent, fair, or reliable. Endemic corruption, lack of funding, and political considerations make the courts unable to function as independent arbiters of disputes.
Arbitration is becoming the solution of choice to solve business disputes in Cameroon. Arbitration exists in OHADA corporate law. Since OHADA is supra-national, Cameroon is bound by its decisions which follow international norms.
Regulations and enforcement actions are appealable and they are adjudicated in the national court system. Due to the court system’s revealed lack of objectivity, few businesses attempt to appeal against unfavorable rulings.
Laws and Regulations on Foreign Direct Investment
The Law No. 2013/004 of April 18, 2013 defines incentives for private investment in
Cameroon and proposes generic and special incentives while affirming the government’s responsibilities to private investors. The law remains valid for domestic and foreign investors. Additional laws and regulations are available on the website of the Ministry of Finance.
The Cameroon Investment Promotion Agency is the primary or “one-stop-shop” website for investment that provides relevant laws, rules, procedures, and reporting requirements for investors (https://investincameroon.net/en/).
Competition and Anti-Trust Laws
The National Competition Commission handles anti-competition and anti-trust disputes. In some cases, the regulator of a specific economic sector can play the anti-trust role. For example, in July 2018, the courts accused a multinational mobile operator of anti-competitive practices against a domestic money transfer provider when the multinational unilaterally suspended the domestic company’s Unstructured Supplementary Service Data code. The local company complained to the Telecom Regulatory Agency and to the National Competition Commission, which ordered the mobile operator to reinstate the code. The mobile operator ignored the initial injunction, forcing the Cameroonian company to take legal action. The courts ruled against the multinational.
Expropriation and Compensation
Decree N°.85-9 of July 4, 1985 and the subsequent implementation of Decree N°.87-1872 of December 16, 1987 lay down the procedure governing expropriation for public purposes and conditions for compensation. Some of the provisions of these legal texts were repealed by Instruction n°005/I/Y.25/MINDAF/D220 of December 29, 2005. Essentially, for the general public’s interest, the State may expropriate privately-owned land. The laws also lay down the formalities to be observed within the context of the procedure, both at the central and local levels.
In recent years, the government has expropriated property in the context of the construction of large infrastructure projects such as roads and hydroelectric dams. The government has a compensation process in place to try to meet the losses of those adversely affected by such decisions.
Serious allegations of corruption have plagued compensation procedures over the last decade. These incidents, often carried out by civil servants, have diluted trust in the process.
ICSID Convention and New York Convention
Cameroon ratified the ICSID Convention on January 3, 1967 and the New York Convention on February 19, 1988.
There is no specific domestic legislation providing for enforcement under the 1958 New York Convention and for the enforcement of awards under the ICSID Convention.
Investor-State Dispute Settlement
The OHADA-signatory nations adopted a uniform act on arbitration (the Uniform Act) on March 11, 1999. The Uniform Act sets out the basic rules applicable to any arbitration, where the seat of arbitration is located in an OHADA member state. The Uniform Act is based on the United Nations Commission on International Trade Law (UNCITRAL) model law. It supersedes the national laws on arbitration of the OHADA states. Cameroon’s arbitration law is contained in its code of civil and commercial procedure in the third volume, Articles 576 to 601.
Cameroon has a Bilateral Investment Treaty (BIT) with the United States. There have been no claims against the BIT since it came into force in 1989.
There have been cases of disputes between Cameroonian partners and U.S. companies, but they tend to be solved through arbitration. General misunderstandings between partners about contractual commitments tend to cause conflicts, but such cases have been infrequent over the past 10 years.
Local courts may recognize foreign arbitral awards issued against the government, but they are not well equipped to enforce such decisions.
In general, foreign investors complain more about administrative harassment or bottlenecks, and less about extrajudicial actions.
International Commercial Arbitration and Foreign Courts
Additional alternative dispute resolution may involve mediation and negotiations, also possibly through third-party binding arbitration. The OHADA system serves both as domestic and primary reference legislation.
The Groupement Interpatronal du Cameroon, the country’s most powerful business lobbying group, has an arbitration center in Douala. Douala is Cameroon’s largest city and trade hub, and the arbitration center is modern and well equipped. In principle, local courts have the power to recognize and enforce foreign arbitral awards issued against the government if found at fault.
As a treaty, the OHADA prevails over domestic laws. An international arbitration award can prevail especially if operating through the OHADA framework. The Common Court of Justice and Arbitration enforced under OHADA is both an arbitration institution and a judicial court, with a remit covering all the OHADA states.
Judicial processes are bureaucratic, expensive, time-intensive, and lengthy to pursue. This is true even for domestic and state-owned companies, which like their foreign competitors, also suffer from the weaknesses of the legal system and are not guaranteed any better treatment in case of dispute.
Cameroon has bankruptcy laws, which recognize the right of creditors, the equity of shareholders, and other types of liabilities. Bankruptcy is not criminalized, if it is not a deliberate collusion to avoid tax or mislead investors. Globally, Cameroon stands at 127 in the ranking of 190 economies on the ease of resolving insolvency. According to data collected by Doing Business 2019, resolving insolvency takes 2.8 years on average and costs 33.5 percent of the debtor’s estate, with the most likely outcome being that the company will be sold in a piecemeal sale. The average recovery rate is 15.8 cents on the dollar.
4. Industrial Policies
Cameroon’s 2013 investment law lists several types of investment incentives for investors and specifies the conditions that they have to meet in order to benefit from those incentives. This law lays down incentives applicable to Cameroonian or foreign legal entities, whether or not established in Cameroon, conducting business therein, or holding shares in Cameroonian companies, with a view to encouraging private investment and boosting national production. For example, during the establishment phase (which cannot exceed five years), the new code provides for exemptions from VAT and duties on key services/assets (including an exemption from stamp duty on the lease of immovable property). During the operation phase (which cannot exceed 10 years), further exemptions from, or reductions of, other taxes (including corporate tax), duties (such as stamp duty on loans), and other fees are granted. Overall, the law seeks to facilitate, promote, and attract productive investment in order to develop activities geared towards strong, sustainable, and shared economic growth as well as job creation. In a context where businesses have to navigate between national and regional incentives, U.S. companies and investors must seek local and regional expertise if they plan to operate in CEMAC.
Common incentives are granted to investors during the establishment and operation phases. The investor may, during the operation phase, which may not exceed 10 years, according to the scale of investment and expected economic returns, as applicable, enjoy exemptions from or reductions of payment of several taxes, duties, and other fees including corporate tax, tax on profit, and stamp duty on loans. In addition, any investor may benefit from a tax credit provided he or she meets one of the following criteria: (1) employs at least five graduates each year, (2) combats pollution, and (3) develops public interest activities in rural areas.
The investor shall enjoy the following benefits during establishment phase, which may not exceed five years, with effect from the date of issuance of the approval:
- Exemption from stamp duty on establishment or capital increase;
- Exemption from stamp duty if immovable property used exclusively for professional purposes and that is part of an integral part of the investment program;
- Exemption from transfer taxes on the acquisition of immovable property, land and buildings essential for the implementation of the investment program;
- Exemption from stamp duty on contracts for the supply of equipment and construction of buildings and installations, that is essential for the implementation of their investment program;
- Full deduction of technical assistance fees in proportion to the amount of the investment made, calculated on the basis of the total amount of the investment;
- Exemption from VAT on the provision of services related to the execution of the project and obtained from abroad,
- Exemption from stamp duty on concession contracts;
- Exemption from business license tax;
- Exemption from taxes and duties on all equipment and materials related to the investment program;
- Exemption from VAT on the importation of equipment and materials;
- Immediate removal of equipment and material related investment program during clearance operations;
- The right to open in Cameroon and abroad local and foreign currency accounts and to carry out transactions on such accounts;
- The right to freely use and or keep abroad funds acquired or borrowed abroad, and to freely use such;
- The right to freely keep abroad dividends and proceeds of any kind from capital invested, as well as proceeds from the liquidation or sale of their assets;
- The right to directly pay abroad non-resident suppliers of goods and services essential for conduct of business;
- Free transfer of dividends and proceeds from the sale of shares in case of disinvestment.
Also, with respect to foreign staff employed by the investor and resident in Cameroon, they shall enjoy free conversion and free transfer to their country of origin of all or part of amounts due them, subject to prior payment of various taxes and social security contributions to which they are liable in compliance with the regulations in force. Finally, the Government shall institute facilities necessary for the establishment of a specific visa and reception counter at all airports throughout the national territory for investors, subject to their presentation of a formal invitation from the body in charge of investment promotion of small and medium-sized enterprises.
There are additional incentives in priority economic sectors. In addition to the above-mentioned incentives, specific incentives may be provided to enterprises, which carry out investments that contribute to the attainment of the following priority objectives:
I. Development of agriculture, fisheries, livestock, and plant, animal, or fishery product packaging activities;
II. Development of tourism and leisure facilities, social economy, and handicraft;
III. Development of housing, including social housing;
IV. Promotion of agro-industry, manufacturing industries, industry, construction materials, iron and steel industry, construction, maritime, and navigation activities;
V. Development of energy and water supply; encouragement of regional development and decentralization;
VI. The fight against pollution and environmental protection;
VII. Promotion and transfer of innovative technologies and research and development;
VIII. Promotion of exports;
IX. Promotion of employment and vocational training.
Foreign Trade Zones/Free Ports/Trade Facilitation
In Cameroon, Foreign Trade Zones (FTZs) are demarcated and fenced geographic areas, with controlled access, where some standard trade barriers, tariffs, quotas, or other bureaucratic requirements are lifted or lowered to attract investments. Cameroon passed a special law instituting FTZs in 1990. Applications for an authorization to establish an industrial free zone are submitted to the National Office for Industrial Free Zones. The authorization to establish an Industrial Free Zone is granted by the Minister in Charge of Industrial Development. Some of the benefits of the FTZs are built into commercial, fiscal, custom, and labor codes. The status of FTZs has not changed since the last reporting period.
Performance and Data Localization Requirements
The government of Cameroon does not mandate local employment except as an incentive to entice foreign investment. The government encourages investors to create jobs and employ local labor.
There are no compulsory or legal requirements on senior management and boards of directors either, although local managers can facilitate the understanding of the domestic business environment.
Prospective investors and their employees can travel to Cameroon on standard intentional visas. The fees may vary per country of application. Once they settle in Cameroon, they can apply for long-term residence permits.
The government applies visa reciprocity rules to a limited extent, but companies have in the past complained about the difficulty of obtaining work permits or the fact that work visas expire after six months and frequently are single entry. Longer-term work permits are now said to be available, the Embassy is only aware of work permits issued in conjunction with residency work permits, a different category with more complicated application procedures. The government does not impose rules on the recruitment of senior management nor excessively onerous visa, residence, work permit, or similar requirements inhibiting mobility of foreign investors and their employees
The Embassy is not aware of any government-imposed conditions on permission to invest.
The Embassy has not received any reports of forced localization.
Enforcement procedures for performance requirements are not yet standardized, but the government generally develops terms of reference on a case by case basis for contract performance. The government has not stated intentions to maintain, increase, or decrease performance requirements.
Investment incentives described above are available to both domestic and foreign investors.
Foreign information technology providers are not required to turn over source code and/or provide access to encryption, but they can be required to provide them in cases of cybercrime under the national cybercrime law.
The Embassy is unaware of any measures designed to prevent or impede companies from freely transmitting customer or other business-related data outside of Cameroon.
The Embassy is unaware of any mechanisms used to enforce rules about local data storage in Cameroon.
5. Protection of Property Rights
Property rights are recognized by law, but Cameroon’s weak judiciary makes enforcement sporadic. For mortgage transactions between two private parties, a proper contract is required for the agreement to be binding and enforceable in the courts. Liens have to be recorded in the contract. A registry of land title exists in Cameroon. The land rights of indigenous peoples, tribes, and farmers are recognized in the constitution. Property rights are enforced or not according to the relative economic and/or political power of those involved.
Existing legislation does not discriminate against foreign landowners.
Records from the Ministry of State Property and Land Tenure (French acronym “MINDAF”) indicate that land registration rates have not significantly increased since colonial times. Between 1884 and 2005, only 125,000 title deeds were issued. On average, this represents approximately 1,000 titles per year, covering less than 2 percent of the land in Cameroon. In 2009, a study by the African Development Bank (AfDB) identified other distinctive patterns in land ownership. For example, formal land registration is more common in urban (60 percent) than in rural areas. There have been token efforts to identify property owners, but unregistered land remains common.
Land disputes are common between Cameroonian citizens. The disputes are generally caused by non-respect of commercial sales contracts or by informal sales of land. Illegal occupations of lands are also common. Globally, Cameroon stands at 177 in the ranking of 190 economies on the ease of registering property.
Intellectual Property Rights (IPR)
The legal structure for intellectual property rights (IPR) and corresponding enforcement mechanisms are weak. Infringement on IPR is especially common in the media, pharmaceutical, software, and print industries. Theft is common.
There were no new IPR related laws or regulations enacted during the previous year. The Embassy is not aware of any pending reform bills.
The government seizes and publicly burns counterfeit goods, but these actions are not documented systematically and no cumulative data exists on the seizures. The Embassy is unaware of any prosecutions related to IPR violations.
Cameroon is not listed in the United States Trade Representative (USTR) Special 301 Report or the Notorious Markets List.
For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/.
6. Financial Sector
Capital Markets and Portfolio Investment
The Cameroonian government is open to portfolio investment, though no efforts have been made to increase the capacity of the Douala Stock Exchange to encourage foreign participation.
The Douala Stock Exchange (DSX) is meant to be the stock market for all Economic and Monetary Community of Central Africa (CEMAC) member states. It was created in 2001 and currently has only three companies listed and five sovereign bonds. The regulatory system of the DSX permits portfolio investment, but the market is still in its infancy, suffering from low liquidity and bureaucratic inertia.
Cameroon has a limited capital market. The Embassy is not aware of any policies that facilitate or restrict the free flow of financial resources to the product and factor markets.
CEMAC’s central bank, known by its French acronym BEAC, respects IMF Article VIII by refraining from restrictions on payments and transfers for current international transactions. In early 2019, international firms began to complain that receiving permission to draw on their foreign exchange accounts was becoming more difficult.
Foreign investors can get credit on the local market and the private sector has access to a variety of credit instruments. Cameroon is connected to the international banking payment system.
Money and Banking System
Under ten percent of Cameroonians have access to formal banking services. The Cameroonian government has often spoken of increasing access, but no coherent policy or action has been taken to alleviate the problem. Mobile money, introduced by local and international telecom providers, is the closest thing to banking services that most Cameroonians access.
The banking sector is generally healthy, but financial institutions suffer from under-performance on local debt and un-serviced loans from both commercial and individual debtors.
According to the World Bank, non-performing loans were 10.31 percent of total bank loans in 2016.
Cameroon has several international banks operating within the country, including:
- Afriland First Bank Group (approximately USD 6 billion in global assets in 2016)
- CitiBank (USD 1.917 trillion in global assets in 2018)
- Societee Generale (USD 1.47 trillion in global assets in 2018)
- Standard Chartered Bank Cameroon (USD 688 billion in global assets in 2018)
- Ecobank (USD 23.6 billion in global assets in 2015)
Cameroon is part of the six-member Economic and Monetary Community of Central Africa (CEMAC), which maintains a central bank, known by its French acronym, BEAC.
Foreign banks are allowed to establish operations in Cameroon. They are subject to the same regulations as locally developed banks. The Embassy is unaware of any lost correspondent banking relationships within the past three years.
There are no restrictions on foreigners establishing bank accounts, credit instruments, business financing or other such transactions. Rules on all forms of mergers and acquisitions, including hostile, are governed by OHADA and are detailed in a lengthy body of commercial, legal, and accounting codes. The OHADA sections on mergers and acquisitions are the Napoleonic version of our SEC regulations.
Foreign Exchange and Remittances
While there are no legal restrictions, each request for a foreign exchange transaction requires a “dossier” that would include various documents. The documents required vary based on the type of transaction to demonstrate the legitimacy of the planned purchase in foreign exchange that BEAC would approve. The not yet formalized list of required documents from BEAC includes a significant number of required supporting documents for various purposes. The IMF has stated that forex transactions of less than USD one million only require approval by local BEAC representatives in each country and should take place in a matter of days. Forex transactions exceeding USD one million would require approval from BEAC headquarters in Yaounde and should occur in no more than 48 hours.
The Embassy is unaware of any restrictions on investment type and conversion of funds into world currencies.
The Central African CFA Franc is the currency of six independent states in Central Africa: Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea, and Gabon. It is administered by BEAC and is currently pegged at roughly 656 CFA to one Euro.
The Embassy is unaware of any recent changes or plans to change investment remittance policies that either tighten or relax access to foreign exchange for investment remittances.
There are no time limitations on transactions beyond the classic banking transactions timeline. BEAC regulates remittances and banking transactions. Foreign investors can remit convertible and negotiable instruments through legal channels recognized by BEAC.
Domestically, the remittance market is expanding. Cameroon currently counts more than six million registered mobile money subscribers. In addition, 1.5 million people are using four digital solutions currently offered by banks and mobile phone companies, namely ATM, mobile wallet, mobile debit card, and website. These systems are supporting various forms of remittances and financial services.
Sovereign Wealth Funds
Cameroon does not have a sovereign wealth fund.
7. State-Owned Enterprises
Roughly 70 percent of Cameroon’s 130 SOEs are profit-oriented, though most are a net negative to government finances. Some provide public services. Many SOEs are so dominant in their markets that they act as de facto regulators, specifically in telecommunications and media. The Government of Cameroon has over 130 state-owned companies in which it has majority ownership, and which operate in key sectors of the economy including agribusiness, energy, and mining. SOEs are also present in real estate, transportation, services, information & communication, finance and travel.
In 2017, the Parliament voted into law a new regulation to govern SOEs. The government says that the objective of this reform is to improve the services offered and the competitiveness of public companies, in line with the development objectives of the country. Some of the innovations of this law include the diversification of the investment universe of SOEs, modern control through reporting requirements, and compliance with modern governance principles. As of 2019, it does not appear that any of these objectives have been completed.
The Embassy is not aware of any published list of SOEs.
SOEs competing in the domestic market receive non-market based advantages from the host government. They receive taxpayer subsidies and in many markets serve as de facto regulators. They also have a history of accumulating unpaid tax arrears while at the same time benefitting from preferential access to land and to public funds through State subventions.
The Chambers of the Supreme Auditor of Cameroon indicates in its yearly reports that SOEs are not financially transparent. Only about 22 percent of these structures publish financial accounts. Media reports have highlighted corruption cases involving managers of SOEs and unveiled inefficiencies, severe dysfunctions, and opacity of the management of SOEs. These problems are exacerbated by the fact that over the past years, the government has not imposed any performance targets, productivity requirements, quality of service standards, or any significant budget constraints on SOEs. The governing boards and senior executive teams are political appointees and connected individuals, and thus have the means to avoid tax burdens levied on private enterprises, receive specialized consideration for subsidies and enhanced operating budgets, and obtain generally preferential treatment from the government (including courts).
Cameroon enacted major privatization policies in the 1990s and early 2000 under the purview of international donors such as the International Monetary Fund and the World Bank. The process has been stalled for over a decade, but market pressures continue to mount for additional privatization efforts. We estimate that 30 companies have undergone some form of privatization since 2004, though the government has stakes in at least 100 more companies. The government has openly discussed privatization of the national airline, the telecommunications company, the oil sector, and agribusinesses, but little has occurred.
In general, privatization appears to be on hold. The government favors Public Private Partnership (PPP) or some variations of outsourcing and contractual management, with the State retaining some ownership of assets or of the business rather than outright privatization. In some cases, the State prefers to participate in joint ventures, such as with mining companies, rather than creating a state-owned company.
Foreign investors can participate in privatization programs. According to some analysts, of the 30 State-owned companies privatized before 2004, foreign bidders won the majority (22).
The public bidding on tender offers is transparent. They are advertised in the media, but the actual process of awarding contracts may still be tainted by corruption, particularly for large projects. The listing of public tenders in the Cameroon Tribune newspaper and publication of which firms received the contract do not guarantee a fully transparent process of awards.
8. Responsible Business Conduct
Cameroon does not have laws that regulate responsible business conduct. However, the government has enacted laws that cover issues related to what is locally considered corporate social responsibility. There are additional initiatives in the private sector to foster corporate social responsibility.
All major infrastructure projects in Cameroon are compelled to conduct an Environmental and Social Impact Assessment (ESIA) to establish the impact of the projects on people and nature. Cameroon’s ESIA law strives to follow World Bank standards. The Ministry of Environment and Forestry was created in April 1992 with a mandate to elaborate, implement, and follow up on the national policy of environment. An August 1996 law related to environmental management prescribes environmental impact assessment for all projects that can cause environmental degradation. The ESIA is fast becoming an important and unavoidable compliance step for foreign and domestic companies.
The Embassy is unaware of a formal definition of responsible business conduct (RBC) within the Cameroonian government. It does not have a national ombudsman for stakeholders to get information or raise concerns about RBC. The government has not conducted a national action plan on RBC. The government does not factor RBC into its procurement decisions.
The Embassy is not aware of any recent high-profile instances of private sector impact on human rights.
The government has limited will or capacity to enforce most government regulations, including those related to RBC.
The Embassy is unaware of any government policies relating to corporate governance, accounting, or executive compensation in order to protect shareholders.
The Business Council for Good Governance, the American Chamber of Commerce, Rotary International, and Transparency International promote RBC in Cameroon, though their ability to monitor RBC is limited. A number of civil society actors also promote good governance and fair business practices but their capacity to impact change remains limited.
The Embassy is unaware of any government efforts to adhere to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas.
Cameroon participates in the Extractive Industries Transparency Initiative. Domestic transparency measures requiring the disclosure of payments made to governments are lacking.
Corruption is punishable under sections 134 and 134 (a) of the Pena1 Code. Despite these rules, corruption remains endemic in the country. In 2018, Cameroon ranked 152 (of 180 countries) in Transparency International’s Corruption Perception Index. Arrests of high-ranking officials for corruption are widely viewed as political.
In a recent case, a former minister of defense, and leading member of the ruling party, was arrested with his wife and two adult children, an indication that the law can extend to family members of officials and to political parties.
If Cameroon has laws or regulations to counter conflict-of-interest in awarding contracts or government procurement, the Embassy is unaware of them. U.S. firms indicate that corruption is pervasive in government procurement, the award of licenses or concessions, transfers, performance requirements, dispute settlement, regulatory system, customs, and taxation.
The National Anti-Corruption Commission (CONAC) recently began encouraging private companies to establish internal codes of conduct and ethics committees to review practices. The Embassy is unaware of how many companies have instituted either program.
Bribing of government officials remains common throughout the private sector. While some companies use internal controls to detect and prevent such bribery, it is difficult to determine how widespread the practice is, in practice.
Cameroon is signatory to the United Nations’ and the African Union’s anti-corruption initiatives, but the international initiatives have limited effects on the enforcement of laws in the country.
Post is unaware of any NGO’s involved in investigating corruption. The government prefers the state-controlled anti-corruption commission, CONAC, to investigate potential cases.
U.S. firms indicate that corruption is most pervasive in government procurement, the award of licenses or concessions, transfers, performance requirements, dispute settlement, regulatory system, customs, and taxation. Multiple American companies have told the Embassy they are hesitant to invest in Cameroon due to corruption concerns.
Resources to Report Corruption
Me Charles NGUINI
Transparency International Cameroon
Nouvelle route Bastos, rue 1.839, BP : 4562 Yaounde
(+237) 33 15 63 78
10. Political and Security Environment
Cameroon faces several political and security challenges. An armed separatist uprising is entering its third year in the Anglophone Southwest and Northwest Regions. Boko Haram attacks continue in the Far North Region. In the Adamoua and East Regions, a wave of kidnappings and other criminal activity, coupled with an influx of refugees from the Central African Republic, has led to increased instability and a reinforced military presence. Terrorists and separatists alike have targeted economic assets in order to affect political change. The country is growing increasingly politicized and insecure.
11. Labor Policies and Practices
In Cameroon, the median age is 18. Officially, the unemployment rate hovers around 4 percent based on International Labor Organization (ILO) standards, but the reality is that this rate is likely much higher with youth unemployment potentially as high as 75 percent. Under-employment is even higher, with rates of 12.3 percent and 63.7 percent, respectively, for visible and invisible under-employment according to a recent World Bank study. Unskilled labor is prevalent in the agricultural and service sectors, and under-employment is prevalent in manufacturing, commerce, technician or technical trades, and mid-management jobs.
There are shortages of technical trade skills in every sector of the economy. Truck and automotive maintenance is widely practiced in the informal sector. Rudimentary or artisanal agriculture, fishing, and textile manufacture sectors are still in need of significant development, and a lack of skilled workers tends to be the norm across the country.
The government does not require companies to hire nationals. However, foreign nationals are required to obtain work permits prior to formal employment. While foreign nationals are automatically issued work permits for companies of the industrial free zones regime, their number may not exceed 20 percent of the total work force of a company after the fifth year of operation in Cameroon if benefiting from the Industrial Free Zone (IFZ) regime.
Although union and contract agreements vary widely from sector to sector, in general, Cameroon functions as an “employment at will” economy, and labor laws differentiate between layoffs and firings. Layoffs are often considered as alternative solutions to dismissing workers based on performance fault or economic grounds. There is no special treatment of labor in special economic zones, foreign trade zones, or free ports.
While the labor code applies to enterprises of the Industrial Free Zone (IFZ) regime, some matters are governed by special provisions under the 1990 law establishing IFZ. These include the employer’s right to determine salaries according to productivity, free negotiation of work contracts, and automatic issuance of work permits for foreign workers. The Ministry of Labor monitors labor abuses, health and safety standards, and other related issues, but enforcement is poor. Labor laws are waived through the regime of Industrial Free Zones to attract or retain investment. As indicated earlier, the waivers include the employer’s right to determine salaries according to productivity, free negotiation of work contracts, and automatic issuance of work permits for foreign nationals.
There are independent labor unions and others that are affiliated with the government under existing laws and regulations. Over 100 trade unions and 12 union confederations operate in the country. However, the labor union movement is highly fractured and somewhat ineffective in promoting workers’ rights. Some union leaders accuse the government and company managers of promoting division within trade unions to weaken them, as well as protecting non-representative trade union leaders with whom they can negotiate more easily.
Cameroon’s labor dispute resolution mechanisms are outlined in the labor code. The procedure differs depending on whether the dispute is individual or collective. Individual disputes fall under the jurisdiction of the civil court dealing with labor matters in the place of employment or residence of the worker. The legal procedure is initiated after the labor inspector fails to settle the dispute amicably out of the court system. Settlement of collective labor disputes is subject to conciliation and arbitration, and any strike or lock-out started after the procedures have been exhausted and have failed is deemed legitimate. While the conciliation procedure is conducted by the labor inspector, arbitration of any collective dispute that has not been settled by conciliation is handled by an arbitration board, chaired by the competent judicial officer of the competent court of appeal. Workers who ignore procedures to conduct a legal strike can be dismissed or fined. For more information (see: https://www.ilo.org/dyn/natlex/docs/WEBTEXT/31629/64867/E92CMR01.htm)
Strikes occur regularly, though they are often due to lack of payment by the employer and are resolved quickly. No strike occurred that posed an investment risk.
The labor code lays down principles of labor laws regarding employment, dismissal, remedies for wrongful dismissal, compensation for industrial injuries, and trade unions. But, most jobs do not have binding contracts and employers generally seem to have the upper hand in labor disputes. There is informality even in the formal sector, which is against the law. Because of this landscape, it is important for U.S. companies to ensure compliance with the local labor laws and to abide by international best practices.
There were no new labor related laws or regulation enacted during the last year. The Embassy is unaware of any pending draft bills.
12. OPIC and Other Investment Insurance Programs
Cameroon and OPIC signed an Investment Guarantee in 1967. OPIC has one operational program in Cameroon. In January 2018, a delegation of executives from OPIC visited Cameroon to evaluate an ophthalmology hospital, funded by OPIC, which treats 18,000 cataract cases every year, the leading cause of blindness in the region. An OPIC team visited a local cocoa and coffee producer in Nkongsamba in late 2018 to explore a potential new investment.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical Source
USG or International Statistical Source
USG or International Source of Data:
Host Country Gross Domestic Product (GDP) ($M USD)
Foreign Direct Investment
Host Country Statistical Source
USG or International Statistical Source
USG or International Source of Data:
U.S. FDI in partner country ($M USD, stock positions)
Host country’s FDI in the United States ($M USD, stock positions)
Total inbound stock of FDI as % host GDP
UNCTAD data available at https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Country-Fact-Sheets.aspx
Table 3: Sources and Destination of FDI
Cameroon is not included in the IMF’s Coordinated Direct Investment Survey.
Table 4: Sources of Portfolio Investment
Cameroon is not included in the IMF’s Coordinated Portfolio Investment Survey, as the nascent Douala Stock exchange has minimal opportunities for outside portfolio investment.
14. Contact for More Information
U.S. Embassy Yaounde
+237 22220 1500