Setting Up and Operating an Investment in Burundi
The government of Burundi has undertaken several legal reforms and has established regulatory institutions in various sectors of the economy to create a conducive environment for investment.
The Government of Burundiβs official attitude toward foreign direct investment is reflected in the new Investment Code, which ostensibly aims to attract and reassure foreign investors. The new Code encourages and promises to facilitate acquisitions, production, transformation and distribution of goods and services.
Burundi has over the last few years greatly benefited from the deliberate government efforts that have seen a total revamp of its economic policies with a view to bolstering economic development in the country. The investment Code led to the establishment of the Burundi Investment Promotion Authority (API) which provides streamlined and fair handling of all investors, whether local or foreign.
API offers a one-stop center/shop (with five counters i.e. Burundi Revenue Authority (OBR), Commercial/ Tribunal Court (TC), National Institute of Social Security (INSS), Labour Inspection Unit and Burundi Investment Promotion Authority (API)) for registering a business and issuing the required legal documents within 24 hours. The promulgation of a new Corporate Code reduced the procedures from 11 to 2. Currently, for a cost of Burundi Francs BIF40 000 (USD 25), the investor can get at API, in just one day, the company statutes; the Tax Identification Number (TIN) and the trade registry certificate and membership card of INSS and fees payment slip.
The Government of Burundi has set priority economic sectors from which investment projects are eligible for incentives. The agricultural sector including agro processing, fisheries and livestock, energy and mining and as well as transforming and manufacturing industry are seen as most important to boost the economy. Innovative technology transfer and export oriented can qualify for physical incentives.
The investor benefits from a tax rate reduction of taxes on profits of 2% if he employs between 50 and 200 Burundians full time and5% if he employs more than 200 Burundians. In agriculture and manufacturing sectors, 1 billion BIF (USD 550,000.00) is the minimum capital requirement. In energy and mining, 20billion BIF (USD 11,000,000) is the minimum capital requirement
The Government of Burundi has embraced economic liberalization in all sectors and a lot of government entities have been privatized. Thus, attracting private investment in sectors like telecommunication and energy. Burundi permits foreign investors to repatriate profits earned without any limitations.
The Investment Code contains provisions regarding the resolution of conflicts between investors and the state. Burundi ratified the Convention on the Settlement of Investment Disputes between states and nationals of other states. A dispute with the Government of Burundi (for example, regarding an eventual expropriation) may be brought before the International Centre for Settlement of Investment Disputes (ICSID). Alternatively, the Multilateral Investment Guarantee Agency (MIGA), also a member of the World Bank Group, may intervene in case of such a dispute arising. As well as insuring investors against risks, the MIGA mediates disputes between investors and Governments and tries to prevent those disputes growing out of proportion.
Burundi joined, on April 9, 2014, the Apostille Convention on mutual legal assistance and international administrative to simplify the authentication of documents used abroad to facilitate the free movement of people, goods and services. Further, since May 9, 2014, Burundi is member of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Sentences.
Burundiβs investment regime takes into account Most Favoured Nation and National Treatment Principles. In other words, the regime does not discriminate against foreign investors, nor are there any general limits on foreign ownership or control of enterprises. There is no explicit discrimination against foreign investors at any stage of the investment process, nor are there any laws or regulations specifically authorizing private firms to adopt articles of incorporation or association which limit or prohibit foreign investment, participation, or control. Burundiβs economy has been liberalized and is open to foreign investors.
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