GENERAL INFORMATION
Cameroon is an independent state in West Africa. It is bordered on the west by the Atlantic Ocean and Nigeria, on the east by Chad and the Central African Republic, and on the south by the People's Republic of Congo, Gabon and Equatorial Guinea.
Area: 475 440 km2
Population: 19.2 million
Capital: Yaoundé
Currency: CFA Franc
GDP: USD 44.6 billion (2010)
Internet domain: .cm
Languages: French, English (official languages)
Working week: Monday - Friday
Exports: Crude oil; petroleum products; lumber; cocoa beans; aluminium; coffee; cotton
Imports: Machines and electrical equipment; foods; fuel
COMPANY LAW
Business vehicles
There are two forms of companies commonly used by foreign investors:
- A private limited company.
- A public limited company.
Incorporation
The following steps need to be taken in order to incorporate a company:
- All companies must be registered with the Registre du Commerce et du Credit Mobilier (RCMM).
- Once a company has been registered with the RCCM it acquires its own separate legal personality.
- From the date of registration, the company is considered to be a corporate body.
- Authorisation to invest in Cameroon is required.
- There are certain consents, permits, licenses and/or approvals that are required, depending on the company's intended activities.
- A company name reservation is not necessary and defensive company name registrations are not possible in Cameroon.
- It takes between two and four months to incorporate a company.
Regulatory Reporting
Companies are required to file their annual financial statements yearly and monthly VAT filings are required.
Share capital
The minimum share capital required to incorporate a company is USD 1 852.
Management
A private limited company must be managed by 1 or more natural persons, whether or not they are shareholders of the company. They must be appointed by the shareholders in the articles of association or in a subsequent instrument. The decision must be taken by a majority vote by the shareholders holding more than 50% of the registered share capital. Such decisions must be notarized and the maximum term is 4 years, renewable. The timeframe for such appointments, including the legalization procedures, is between thirty to sixty days.
Local representatives (i.e. directors, company secretaries and auditors) are required.
The directors of the company (i.e. board) are in charge of the management of the company, and as such are accountable to the shareholders.
Are local shareholders required?
Local shareholders are not required, however, for certain sectors such as mining, oil and gas there is a requirement for local shareholders to be given a minimum number of shares.
Branch Company
It is possible to establish a branch in Cameroon. The branch may be an establishment of a foreign company or a natural person.
Subject to international agreements or laws to the contrary, the branch will be governed by the laws of the country of origin. The branch must be registered in the Trade and Personal Property Credit Register.
A company in existence or to be created must be associated with a branch, not more than 2 years after the branch is set up, unless the obligation is waived by the Minister in charge of trade in the country of origin. A notarised resolution from the parent company authorising the opening of a branch of that company in a foreign country will be required for this purpose.
COMPETITION LAW
Law
- Law No 98/013 (Competition Act).
- Decree No 2005/1363/PM (Competition Decree).
Competition Law is enforced by the National Competition Committee, based in Yaoundé.
Mergers
A merger is notifiable where the following thresholds are met:
- The joint turnover of the parties exceeds ±USD 740 000, or;
- The parties' combined market share exceeds 30%.
A merger may not be implemented prior to notification thereof.
Restrictive Practices
The Act regulates restrictive practices and certain agreements or arrangements are strictly prohibited, for example, price setting and bid rigging.
Abuse of Dominance
The Act prohibits the abuse of a dominant position. Firms with a 30% market share are considered to be dominant.
Sanctions
The Act provides for the imposition of a financial penalty of 50% of the entity's profit or 20% of the entity's turnover during the year preceding the year in which the contravention was committed.
CONSUMER PROTECTION
Currently Cameroon does not have any promulgated consumer protection laws. However, Cameroon may have some specific statutes which contain provisions that directly or indirectly relate to consumer protection under certain circumstances.
DATA PROTECTION
Currently Cameroon does not have any promulgated data protection laws. However, Cameroon's constitution recognises a right to privacy. Some specific statutes may also contain provisions that directly or indirectly relate to data protection.
DISPUTE RESOLUTION
Court structure
Each region has a Magistrate's Court and a High Court. Appeals from these courts are heard by Provincial Courts of Appeal who, unlike the Common Law Court of Appeal, may re-examine the facts of a dispute. The Supreme Court gives final judgment on appeals from the provincial Courts of Appeal and is the final level of appeal in civil, penal, commercial and labour matters. Unlike the Courts of Appeal, the Supreme Court may only review the application of the law.
Time in which matters can be heard
The Cameroonian judicial system is acknowledged to move notoriously slowly, with cases potentially dragging on for years.
Legal Practitioners
There is a split bar in Cameroon where solicitors are registered with the Law Society of Cameroon and barristers with the Cameroon Bar Association (Ordre des avocats au barreau du Cameroun, Yaounde).
Alternative dispute resolution
Arbitration is a recognised form of dispute resolution in Cameroon and is the preferred form of dispute resolution for most commercially focused enterprises. Cameroon is one of sixteen states who are members of the Organisation for the Harmonisation of Business Law (OHADA). The OHADA states adopted the Uniform Act, 1999 on Arbitration which sets out the basic rules applicable to any arbitration within those states. The Uniform Act, 1999 is based on the UNCITRAL model law and supersedes the national laws on arbitration within the OHADA. The GICAM Arbitration Centre (Centre d'arbitrage du Groupement interpatronal du Cameroun) is based in Douala and is the foremost arbitration institute.
EMPLOYMENT LAW
Governing legislation
The Labour Code Law No. 92/007 of 1992.
Particulars of employment
An employment contract may be recorded in a form that is convenient. The maximum probation period is 6 months, except for managerial staff for whom the period may be extended to 8 months.
Forms of contracts
- A contract for an unspecified duration.
- A fixed term contract limited to a maximum term of two years and renewable to one additional term.
- A company seeking to hire a foreign employee must obtain approval from the Ministry of Labour and Social Welfare.
Termination / Dismissal
- An employment contract of unspecified duration may be terminated at any time by the will of either party subject to the condition that previous written notice was given to the other party setting out the reason for the termination. Such notice shall not be set off against the worker's leave period.
- Whenever an employment contract of unspecified duration is terminated without notice or without the full period of notice being observed, the responsible party shall pay the other party compensation equal to the remuneration with the inclusion of any bonuses and allowances which the worker would have received for the period of notice not served; provided that the contract may be terminated without notice in cases of serious misconduct (subject to the findings of the court regarding the gravity of the misconduct).
- Employment contracts of specified duration may not be terminated prior to its expiry save in the case of gross misconduct, force majeur or by the written consent of both parties.
- Any wrongful termination of the contract may entail damages. In all cases of dismissal, it shall be up to the employer to show that the grounds for dismissal alleged by him are well founded.
- Unless otherwise agreed, the provisions regarding notice and termination shall not apply to probationary hiring contracts which shall be terminable without notice and without either party claiming compensation.
Dispute resolution mechanisms and remedies
Any individual dispute arising from an employment contract or from a contract of apprenticeship shall fall within the jurisdiction of the Court dealing with the labour disputes in accordance with the legislation on Judicial organisation.
EXCHANGE CONTROL
There are exchange controls in Cameroon and there are specific licenses and registrations which are required. Exchange control is regulated by the Commission Bancaire de l'Afrique Centrale (COBAC).
Foreign investors are free to transfer funds out of Cameroon representing normal and current payments for supplies and services effectively performed, particularly in the form of royalties and sundry remunerations.
TAX LAW
Income tax
Taxation in Cameroon is applied both directly and indirectly while customs duties are prescribed at different rates on various goods under the Cameroon Tax Code. A non-resident is taxed on Cameroon sourced income, whilst residents are taxed on their worldwide income.
Types of taxable income
The types of taxable income in Cameroon include income tax, withholding taxes on dividends, interest and annuities (residents), withholding taxes on management, professional and training fees, royalties, rents, lease, dividends, interest, pensions, payments to sportsmen or entertainers and capital gains tax (CGT).
Tax rates
The income tax rate for all companies is 35%.
Dividends and interest (residents and non-residents) are taxed at the rate of 16.5%, royalties (non-residents) at 15% and CGT at 16.5%.
Double taxation treaties
Cameroon currently has double taxation treaties with Canada, Central African Republic, Chad, Congo, Equatorial Guinea, France, Gabon, and Tunisia.
Originally published April 2015
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
