REFORMS UNDERTAKEN BY THE GOVERNMENT
Since 2006, the Government of Benin has initiated a series of reforms to boost the economy of the country.
These reforms relate to all aspects of socio-economic life and have helped to positively impact the economy, thanks in part to the improved competitiveness of the Port of Cotonou, the easing of formalities for setting up and running companies as well as tax incentives offered to investors.
These reforms focus on:
- Domestic macro-environment
- Business creation
- Facilitated access to production factors
- Enforcing contracts
- Financing companies
- Protecting investors
- Reducing informal costs.
- The domestic macro-environment of Benin is characterized by the peace in the country, security, political stability marked by the proper functioning of the Institutions of the Republic, the regular organization of elections and peaceful power shift.
- Good governance and policy predictability, transparency, accountability, applying realistic and courageous macroeconomic policies and the fight against corruption.
Objective: Simplifying the business creation process through substantial reduction in financial costs, deadlines and procedures:
- Reduced financial costs:
- through the removal of the requirement for a minimum share capital
- formalization costs lowered from XOF 500,000 in 2012 to XOF 57,000 in 2014
- formalization procedures are reduced from 4 to 2 (suppression of notary and statement of account information prior to issuing tax identification number)
- time for formalities is reduced from 15 days in 2012 to just 8 hours (working days) in 2014 thanks to the creation of a one-stop office
- In other words, currently in Benin, with XOF 57,000 (EUR 86.89) and in 8 working hours, and without minimum capital, you can create your company. Investing in Benin becomes far easier, faster and less expensive.
Organizations supportive of companies
- Creation of a Resource Centre for Entrepreneurship through the Business Promotion Centre
- Promotion of agricultural entrepreneurship by training young people enrolled in agricultural entrepreneurship promotion projects under the model of “Songhai Centre in Porto-Novo”
- Funding youth entrepreneurship through a National Entrepreneurship Promotion Fund for this category of the population
- Establishment of business incubators in ICT through e-business
- Free supervision of feasibility studies for project sponsors through the Integrated Growth and Competitiveness Program
- Creation of Investment and Exports Promotion Agency (APIEx).
REDUCED CONSTRAINTS FOR ACCESS TO PRODUCTION FACTORS
Reduced time for the issuance of:
- building permit (30 days officially, but just 15 days in fact) and creation of a one-stop office for formalities
- certificate of compliance and habitability (reduced from 45 days to 25 days).
Deferral of costs and time for:
- the connection of wired telephone (apportionment of connection costs on the first two bills)
- access to water (from 34 days to 6 days)
- access to electricity (apportionment of connection costs up to 40% on the first 3 bills)
- Land reform with the application of the Law on Land Code in the Republic of Benin.
- Reorganization of the Commercial Section of the First Class Magistrates’ Court of Cotonou
- Work reorganization at Court Registries to prevent build-up of court decisions
- Two bills respectively on the establishment of the Commercial Court and the Public Private Partnership (PPP).
- Facilitated access to credit by centralizing all operations relating to securities and leasing contracts in the Trade and Personal Property Credit Register of Cotonou.
It is now possible to search through the Trade and Personal Property Credit Register of Cotonou by using debtor’s name or the type of movable property.
Improved investor protection, through the adoption of the Revised Uniform Act on the Law on Trading Companies and Economic Interest Groups on 01/30/2014 in Ouagadougou, Burkina Faso:
- Strengthening of the rights of minority shareholders
- Increased responsibility for corporate leaders
- Improved access to information on the company and its operations for shareholders.
- Signing of bilateral Agreements on reciprocal investment promotion and protection between Benin and its partners.
REDUCTION OF INFORMAL COSTS
- Creation by law of an independent Observatory for the Fight against Corruption with extensive investigative powers.
- Monitoring the effectiveness and performance in implementing reforms by Ministries, and assessment and recommendations by the Council of Ministers
- Better information and communication by the different organizations and Ministries involved in the management of the business environment which inform future entrepreneurs.
For more information, read the “Plaquette des Réforms 2015” by the Presidential Investment Council. DOWNLOAD HERE.
CREATION OF INVESTMENT AND EXPORT PROMOTION AGENCY (APIEx)
APIEx actually combines the roles currently played by the Investment promotion centre (CPI), the Beninese Agency for the promotion of trade (ABePEC) and the One-stop formality office (GUFE).
APIEx will serve as a single interlocutor with all national or foreign investors / entrepreneurs, interested in conducting any private investment project. In other words, APIEx will be the only interface between the private investor / business leader and public administration.
The Decree establishing the APIEx, issued on September 12, 2014, provides for the start of the operational phase of the Agency for 12 September 2015.
The process to make APIEx operational is ongoing.
Source: Presidential Investment Council (http://www.spcibenin.com)
TEN (10) GOOD REASONS TO INVEST IN BENIN
- An ideal location: at the crossroads of the UEMOA and ECOWAS, it is the main gateway to Nigeria for over 300 million people;
- The proximity of the Port and Airport of Cotonou, and finalized plans to build a second international airport and a deep sea port;
- Immediate availability of production factors: several interconnection projects are being finalized.
- Reduced formalities with a beneficial Investment Code.
- Significant customs and tax benefits are available on the Industrial Free Zone and developed industrial zones.
- A favourable political context with emphasis on good governance.
- A legal environment constantly strengthened.
- A steadily growing economy.
- The availability of skilled labour.
- The Government’s determination to firmly fight against corruption, with the establishment by an Act of the National Authority for the Fight against Corruption, and by a regulatory decision, of the Auditor General.
The Investment Code
The Investment Code has been drafted by the Investment Promotion Centre (CPI) which is a body under the Ministry for Development, Economic Analysis and Planning (MDAEP). The Code provides a generally satisfactory framework of incentives to potential investors. It highlights:
- general provisions on investments in the Republic of Benin;
- the different types of schemes and their benefits as well as the procedure for registration in either scheme;
- the steps to follow to be approved under the Investment Code, including the list of documents required depending on the scheme chosen by the investor.
The Petroleum Code
The Petroleum Code has been drafted by the Ministry in charge of Petroleum and Mining Research. It includes definitions, general and specific provisions relating to oil operations and environmental protection for all people desirous to carry out or who are already running research, exploitation, processing or transport of hydrocarbons within a defined perimeter.
The Mining Code
The Mining Code has been prepared by the Directorate General of Mines. It includes general, tax, special and temporary provisions for persons who may be or are already allowed to conduct research activities or mining operations.