In accordance with its liberal economic principles, Gabon is open to foreign investors and the rights of free enterprise are guaranteed. 1. GENERAL LEGAL ENVIRONMENT A. Constitution & Other Sources of Rules: Gabon has a civil law structure with a hierarchy of legislation: lower laws need to comply with upper laws.
The higher rule is the constitution, ratified in 1991, which provides for a multiparty system and a parliamentary republic with two voting chambers: the National Assembly and the Senate. Below the constitution are acts of parliament on certain reserved areas listed within the constitution that are voted on by elected members of the National Assembly and the Senate, or upon specific authorisation from the parliament, which is then decided by the head of state through presidential ordinances.
Below these two upper authorities are regulations that include decrees (usually presidential decrees), as well as ministerial orders and decisions. The Constitution of the Republic of Gabon has been the subject of a reform embodied by Law No. 47/2010 dated January 12, 2011 (published in Official Paper No. 34 on February 1, 2011), which has amended 39 articles, among them Article 47. This henceforth gives the right to authorities to issue regulations within their competence for establishing public services including state-owned companies, a right that was previously held by the parliament.
Thus, this reform eases the modernisation of the public sector, which is illustrated in particular by the establishment of several public scientific organisations and administrative bodies, including in the areas of environment, scholarships and internships, and control agencies. Furthermore, while Gabon’s legal environment is stable, its compliance with international treaties and membership in various international organisations has resulted in many international laws being directly applicable within its borders or being duplicated in the domestic legal code. Organisations to which Gabon belongs include the Organisation for the Harmonisation of Business Law in Africa ( Organisation pour l’Harmonisation en Afrique du Droit des Affaires, OHADA); Economic Community of Central African States (Communauté Economique des Etats d’Afrique Centrale, CEMAC); African Intellectual Property Organisation (Organisation Africaine de la Propriété Intellectuelle); Inter-African Conference on Insurance Markets (Conférence Interafricaine des Marchés d’Assurances, CIMA); and the International Centre for Settlement of Investment Disputes. B. Judicial & Arbitration System: Apart from the constitutional and accounting courts, the main courts that deal with business matters are civil and administrative. Each of these courts implements the system of upper recourse from the lower court to the appeals court, and finally to the Supreme Court in compliance with conditions laid out in the law. Thanks to OHADA, apart from the judicial and state system, arbitration is now clearly regulated to offer an alternative method of solving disputes to economic actors. A national centre for arbitration is set to be put in place by the Chamber of Commerce of Gabon in order to develop and simplify arbitration in the country. C. Ownership of Property: Gabonese laws for private and commercial property do not provide for any restrictions on nationality for the possession and ownership of a property in Gabon. Any foreigner desiring to lease or acquire property for private or commercial needs may freely do so according to the law. D. Free Choice of Business & Freedom of Competition: All types of businesses are free to operate legally, even though nationals or CEMAC citizens can be granted certain priorities and incentives when carrying out a specific activity. Gabon is also a member of the World Trade Organisation.
Although prices and general conditions of sales and services have to be declared at the official body in charge of price control, prices and margins remain free. Additionally, domestic and CEMAC antitrust and anti-competition laws prohibiting some commercial practices, such as refusal of sale or abuse of dominant position, restrict free competition between traders. Concerning this, and in order to modernise the legislation in this area, the government intends to reform the rules of competition in Gabon. E. Free Choice of Management Structure: Regardless of the size of a business, Gabonese domestic and OHADA laws (common to 16 other African countries) for commercial companies offer a large choice of structures. The main structures used are as follows:
• Self-employed (entreprise individuelle) is the simplest form of business, which sets up commercial and tax registration of a person wanting to run a business in his/her own name;
• Private partnership (société civile), usually dedicated to civil and non-commercial purposes of at least two partners;
• Commercial partnership (société en nom collectif) dedicated to commercial purposes of at least two partners with unlimited liability without any minimum share capital;
• Limited liability company (LLC, société anonyme à responsabilité limitée) with a single or several shareholders and a minimum share capital of CFA1m (€1500);
• Public limited company (PLC, société anonyme) with a single or several shareholders and a minimum share capital of CFA10m (€15,000); and
• Branch of foreign companies registered at the commercial court and tax administrations. The branch of foreign companies’ regime has been subject to recent changes. Now, every branch of a foreign company (companies registered outside the OHADA territory) must be transferred to a company existing or to be created in one of the OHADA member states, within two years of its creation, being noted that this period may be extended by order of the trade minister, according to the Article 120 of the OHADA Uniform Act on commercial companies law.
To this end, two orders were adopted: Order No. 009/PR/MECIT/DGI of February 10, 2012 determining the branches’ duration, and Order No. 92/MPMEAC of November 19, 2012, setting the conditions for granting the exemption provided by Article 120 of the OHADA Uniform Act for commercial companies law. F. Amendments to Uniform Acts: These three uniform acts have been published in the OHADA Official Publication of February 15, 2011 and have been applicable since May 16, 2011.
The uniform act relating to general trade law has introduced a simplification of administrative formalities in favour of a new class of economic actors – the “enterprising” – and a change in the Trade and Property Credit Record, which is now supplemented by a securities record specialised in the registration of guarantees, securities and privileges.
The uniform act on the securities law reorganises the securities system by introducing the concept of a security officer (a legal entity, mainly a financial or credit institution, whose main role is to create, manage and implement security). The security officer focuses on reforming pledges, collateral or mortgages. In addition, the new uniform act dealing with securities makes it possible to make guarantees regarding future goods, mainly raw materials. This provides the opportunity for economic actors (e.g. states) to make pledges or collateral on future production ( energy, mainly oil), thereby facilitating the movement of capital from banks and foreign investors.
Finally, the other improvement noted is the redefining of collateral and pledges. Indeed, dispossession is not the criterion for distinguishing between these two concepts. Only tangible personal property can now be subjected to collateral and intangible personal property may be pledged. It is also worth noting the framing of three types of pledges: namely, collateral bank accounts, financial title accounts and intellectual property pledges.
The uniform act relating to the cooperative companies law is an innovation of the OHADA law, and tends to frame the implementation of cooperatives and the rules that are inherent to their operation.
For this purpose, “a cooperative company is an independent group of persons voluntarily united to meet their economic, social and cultural needs and aspirations through a company whose ownership and management are collective and where power is democratically practised and according to cooperative principles”, according to the OHADA law.
There are two types of cooperative companies:
• Simplified cooperative companies; and
• Cooperative companies with boards. It is expected that these classifications will allow for the structuring of agricultural policy by the Gabonese state, by promoting implementation within different areas of cooperative groups.
A project to amend the uniform act relating to commercial companies and the law on economic associations (groupement d’intérêt économique, GIE) sets out the following major legal and structural changes:
• Use of a notarised deed for the drafting of statutes may be mandatory when a state party to the treaty requires so in its national law;
• Expanding the consideration of industrial contributions to all forms of companies, except for limited companies;
• Introduction of simplified share companies (société anonyme simplifiée, SAS) characterised by operating terms freely defined by the statutes (capital amount, nominal shares, designation of bodies);
• Introduction of variable capital companies for all types of companies, namely PLC, SAS, commercial partnership, limited partnerships and GIE;
• Recognition of partners and shareholders’ agreements; penalising the executives of a foreign subsidiary that has neither merged with an existing or yet-to-be-created company in the country of one of the parties, nor been liquidated according to the prevailing conditions after a period of more than two years (or four years in cases of exemption) following its creation;
• Concerning PLCs: ability to determine in the statutes the nominal amount of shares, the removal of the notarised statement of subscription and payment, the introduction of the preference shares, the possibility of free assigning of shares to employees, terms for convening meetings and boards electronically;
• Concerning LLCs: removal of the requirement for the immediate release of the shares at the subscription in the LLC (except in the case of contributions in kind), lowering the minimum capital to CFA100,000 (€150) and not CFA1m (€1500), possibility to determine the nominal value of shares in the statutes. G. Reliable and Controlled Banking Systems: Banking regulations derive from CEMAC regulations, which are updated from time to time to reflect new banking authorisations and constraints. Furthermore, no banking activity is authorised if it is not provided by a commercial bank agreed upon and audited by the Banking Commission for Central Africa. H. New Financial Market Regulations: Libreville has been appointed to accommodate the CEMAC stock exchange. Financial regulations have been enacted by CEMAC and the CEMAC Authority for Regulation of Financial Market of Central Africa in order to authorise, in particular, listings of companies and bonds (including both state-owned and private companies). I. Controlled Insurance System: Insurance regulations derive from CIMA regulations, under which no insurance can be offered in a CIMA country, if it is not provided by an agreed insurance company. In addition, no risk in a CIMA country can be insured if it is not subscribed with an agreed insurance company.
The CIMA Code was modified integrating a new part relating to microinsurance, by the adoption of Regulation No. 0003/CIMA/PCMA/PCE/2012 dated April 5, 2012 organising microinsurance operations in the CIMA member states, published in the CIMA Official Report 14th edition of June 27, 2012. This microinsurance regime helps to protect people with low incomes from specific risks in return for the payment of contributions. J. Foreign Exchange Regulations: Foreign exchange regulations derive from CEMAC and are based on the principle of free payment and movement of capital supported by relevant documentation and made through agreed banks. There is, however, a specific control process for, in particular, foreign direct inward and outward investment in companies and businesses, the repatriation of export proceeds, and loans and borrowing by residents of non-CEMAC countries. The CFA agreement with France guarantees the availability of foreign exchange and the unlimited convertibility of the CFA franc to the euro at a fixed rate, which provides considerable monetary stability and simplifies multinational transactions. l. Labour & Social Law: Under the existing Labour Code, there are different types of labour contracts that may be offered by a Gabonese employer to an employee, each of which has its own regime:
• Limited-term contracts;
• Unlimited-term contracts;
• Contracts concluded for completion of a task; and
• Daily or weekly contracts. Depending on the type of contract signed and the reason of the termination of the contract, a more or less strict administrative procedure must be respected by the terminating party. Working hours and annual leave are also covered. The length of paid annual leave is equal to two business days per month worked. Leave time is increased according to the age of the employee, the length of time spent working at the company and the employee’s family situation.
With regard to expatriate recruitment (except in economic zones with a special regime), foreigners cannot be employed in Gabon for more than three months without holding an individual work permit and having their contracts approved by the labour authorities. The individual work permit for a foreigner must be obtained upon handing in an application accompanied by the supporting documentation (application form, information questionnaire, statutes of the company, corporate documents, CV, copy of diploma, work certificates, labour contract, etc.).
Social security registration and contributions are mandatory for all employees, regardless of whether they are Gabonese nationals or expatriates. The contributions are assessed on the total compensation received by the employee, with an annual upper limit of CFA18m (€27,000), including benefits in kind, which are evaluated according to the General Code. The total percentage of social security contributions is 22.6%, corresponding to family allowances, occupational injury, retirement, medicine distribution and hospital costs. The contribution is shared between the employer (20.1%) and the employee (2.5%).
To enhance the effectiveness of these services, the government has instituted a reform of social security organisms by creating a new entity, the National Fund of Health Insurance and Social Guarantee, which is primarily responsible for health and maternity benefits for public agents and employees of the private sector. The effectiveness of this for employees of the private sector is currently being assessed. 2. LEGAL FRAMEWORK FOR INVESTMENTS A. Investment Charter: The Investment Charter is intended to encourage and stimulate productive investments in Gabon. It not only serves as a reminder of Gabon’s compliance with international treaties relating to foreign investments, but also provides for additional general rights for investors.
These rights include freedom of enterprise and property ownership, transparency of business law under OHADA authorisation, transparency of social laws, independence of justice, non-discrimination between nationals and foreigners, free conversion of local currency and free transfer of profits in accordance with CEMAC foreign exchange regulations, and taxation at international standard rates.
However, Decree No. 637/PR/MECIT dated May 16, 2011 implementing the Investment Charter has been adopted and published in order to facilitate, for certain activities, the realisation of foreign investments in Gabon on obtaining the prior authorisation of the minister of economy. This decree applies in particular to the following:
• Investments made by foreign individuals or foreign legal entities and non-resident Gabonese;
• Operations aiming to take control of a company by obtaining the majority of the voting rights or operations of acquisition or transfer of companies; and
• Certain operations which are not in principle regarded as direct investments within the meaning of the decree but may be subject to prior authorisation. Activities subject to prior authorisation are:
• Activities linked to gambling;
• Activities of research, development and produc tion regarding the illegal use, as part of terrorist activities, of pathogens or toxic agents or preventing the health consequences of such use;
• Activities concerning equipment designed to intercept correspondence and detect from a distance conversations, without prejudice to the penalties provided by the penal code;
• Service relating to the assessment and certification provided by new ICT products and systems;
• Activities relating to the means of encryption and encryption services;
• Activities carried out by companies depositary of national defence secrets;
• Activities of research, production or trade of ammunition, powder and explosives meant for military purposes or war equipment and its equivalent;
• Activities carried out by companies under contract to study or supply equipment related to national defence or public safety, either directly or by subcontracting for the production of a good or service;
• Activities related to sustainable use of forest products; and
• Activities related to mining and hydrocarbons exploration and exploitation. It should be noted that prior authorisation is subject to review by the minister of economy. The decision to grant this authorisation results from an order issued by the minister of economy.
The order is immediately applicable and provides that foreign investment already made in the sectors covered by this order must be “regularised” within a time limit of one year of the publication of the decree. Moreover, apart from this general legal framework for investments, additional legal incentives exist in the context of specific laws with regard to certain types of activities and transactions. B. Small & Medium-Sized Enterprises: According to the law on small and medium-sized enterprises (SMEs), established commercial companies with headquarters in Gabon and which are owned or controlled by Gabonese nationals with an investment of less than CFA1bn (€1.5m) and a turnover of less than CFA2bn (€3m), employing at least 50% of Gabonese people may, in particular, benefit from:
• Privileged access to public procurement;
• Exemption from corporate income tax for five years;
• Preferential tariffs on refined petroleum products and transportation;
• Reduction by the state of the effective interest rate of loans;
• State payment of feasibility studies;
• State grants for agriculture, wood and fishing investment in non-urban zones. A certified centre of management is set to be created by the Chamber of Commerce of Gabon to help self-employed and SMEs in the management and the development of their businesses. C. Framework of Capital Equity Operations: Capital equity operations are governed by the Decree No. 955/PR/MECIT of August 1, 2011. This set the conditions for activities exercised in relation to equity.
These activities consist of making investments in companies listed and not listed on the stock exchange performed as usual by specialised companies on their own or on behalf of third parties. These companies of capital equity are subject to authorisation from the minister of economy and a yearly audit. D. Tourism Investments: According to the 2000 Presidential Ordinance on Tourism, enterprises operating in the tourism sector and investing at least CFA800m (€1.2m) may, in addition to tax incentives, benefit in particular from:
• Entrance facilitation for tourists;
• State safety for protection of tourism sites;
• State assistance to train tour guides;
• Temporary free communication facilities on national radio and TV for the promotion of activities; and
• 10-year exemption from Customs duties on equipment and transportation vehicles of tourists. E. Agriculture Investments: According to the Agriculture Code, certain agriculture companies may be eligible to benefit from the following:
• Credit facilities;
• State grants; and
• Free import on certain agricultural products. Moreover, the tax and customs incentives provided by the Agricultural Code have been extended through the adoption and publication of Law No. 002/2013 of January 22, 2013. This law defines firms benefitting from this extension and taxes covered by the incentive plan, such as, but not limited to, the value-added tax (VAT) exemption as provided. F. Mining Investments: Mining remains one of the key sectors for the development of Gabon’s economy. The 2000 Mining Code provides for a secure legal environment for mining, during both the exploration and exploitation phases. Upon application demonstrating the financial and technical capabilities of a company or individual, a mining title is generally granted by the state to the applicant. This mining title is also supported by a mining convention that has been negotiated with the state. The mining convention, for which a model is currently proposed by the mining administration in accordance with the Mining Code, most notably provides for:
• Mining title’s rights and obligations;
• Work and budgets programmes;
• Early termination process;
• Guarantees for exploitation in the event of a commercial discovery;
• Facilities for authorisation of personnel;
• Training and recruitment of nationals;
• Financial, tax, Customs and property rules regarding exploration;
• Health, safety and environmental requirements;
• Assignment of mining rights;
• State participation;
• State control of mining operations;
• Methods of settlement of disputes; and
• Information exchange with the mining administration. G. Passing of a New Public Works Contract Code: The year 2012 saw the introduction of a new public works contract code, namely the Decree No. 254/PR/MEEDD of June 19, 2012 which abrogates the Decree No. 1140/PR/MEFPB of December 18, 2002. The major points are:
• Lowering the procurement threshold for state, public institutions and state-owned companies contracts, to: i) CFA35m (€52,500) for works contracts; ii) CFA20m (€30,000) for supply contracts; and iii) CFA15m (€22,500) for the services and intellectual services contracts. For local authorities and their public institutions contracts, the major developments include:
• CFA20m (€30,000) for works contracts;
• CFA10m (€15,000) for supply contracts;
• CFA5m (€7500) for the services and intellectual services contracts.
• Creation of a regulatory agency for public works contracts designed to provide support to the General Direction of Public Works Contracts;
• Framing of the procurement process for all public service delegations; and
• Introduction of public partnership contracts in this project. H. Change of the Land Ownership System: The system of land ownership is now framed by Order No. 005/2012 of February 13, 2012 abrogating Law No. 15/63 on land ownership.
This new legal framework introduces the possibility of computerisation or dematerialisation of the land record, decentralising the administration of conservation, and reducing the procedures regarding registration and title deeds or mortgages transfer. This will help speed up the process of carrying out real estate transactions for all investors. I. Upstream Hydrocarbons Investments: Waiting for the enactment of a Hydrocarbons Code, which should provide for downstream, mid-stream and upstream hydrocarbons activities, the current hydrocarbons law in force provides that the state of Gabon remains the owner of its natural resources, but that an exploration and production-sharing contracts (EPSCs) can be negotiated between oil operators and the state.
The draft of the new Hydrocarbons Code plans to regroup all provisions in force in the Gabonese republic dealing with hydrocarbons. It contains in particular provisions relating to tax, Customs, health, environment, security and oil subcontracting. In addition, it institutes provisions regarding state participation in the oil titles and permits granted to oil operators.
This participation, set between 15% and 25% by the code, will be, once passed, an obligation for the state, as it is to date a right provided in some oil contracts. The code also institutes provisions relating to conversion and storage activities, subject to specific regulations currently in force, and regulates the exercise of these activities depending on whether a technical approval is granted by the energy minister, who is in charge of hydrocarbons.
Gabon is one of the few producer countries that does not have a Hydrocarbons Code. Two laws, No. 14/74 of January 21, 1975 on the regulation of research and exploitation of hydrocarbons activities and No.14/82 of January 23, 1983 on the regulation of research and exploitation of hydrocarbons activities, and the specific provisions of the EPSC ( including organisations agreements) are the only basis for the code. An EPSC between an operator and the state is based on a model of contract that provides for the legal, financial, technical, economic and tax conditions of exploration and production. While the EPSC model changes according to the area in question, the general legal terms for the regulations currently include:
• Rights and obligations deriving from exclusive exploration and exploitation authorisations granted by the state;
• Work and budget programmes;
• Exclusive exploration financing by the oil operator;
• Guarantees for exploitation in the event of a commercial discovery;
• Petroleum costs rules;
• Production sharing between the oil operator(s) and the state;
• Financial, tax and Customs regime applicable to the oil operator and its subcontractors;
• Training and recruitment of nationals;
• Health, safety and environmental requirements;
• Assignment of petroleum interests;
• State control of mining operations;
• Stability clause;
• International Chamber of Commerce arbitration clause; and
• Accounting procedure applicable to oil operations.
The framework of investments will be set out in the new Hydrocarbons Code, and the contractual framework between the state and oil operators will be also reviewed following the conclusions drawn from an official audit conducted by an international audit firm that is appointed by the government. J. Free Economic Zones: In an effort to attract private investors, Gabon has set up special economic zones benefitting from particular legal, fiscal and social regimes. It is in this context that the project of the special economic zone of Nkok has been launched in partnership with Olam International Group, which aims to promote new investments, mainly in the area of timber processing. The objective of this zone is to provide a flexible framework in terms of administrative procedures, to provide relevant information to entrepreneurs implementing an actual interface between companies and the administration.
This legal framework comes with tax incentives and exemptions of corporate income tax, VAT, Customs duties on imports, taxes on funds transfers, and with flexible conditions for the employment of foreign workers and measures to reduce electricity costs. These provision have been implemented by Decree 461/PR/MPITPHTAT of October 10, 2012