The Economic and Financial Commission of the Ivorian National Assembly adopted Thursday by a majority an ordinance adjusting the Investment Code that devotes a tax credit to any foreign firm that opens its capital to nationals.

The Minister to the Prime Minister, in charge of the Promotion of Private Investment, Emmanuel Essis Esmel, explained in his explanatory statement that this readjustment comes because of "certain inadequacies of form and substance that deserve to be corrected".

The sectors of activity eligible for the benefits of this Investment Code are classified into two categories: category 1 (agriculture, agro-industry, health and hospitality sectors) and category 2 (non-category 1 sectors of activity).

Companies approved for the creation of activities benefit from the advantages in the implementation of their investment programme during the establishment and operation phase, while those approved for the development of activities benefit from the advantages during the operating phase.

The authorisation scheme shall apply to investments made in connection with the creation or development of activities. For large companies, the minimum investment threshold is set at 200 million FCfa, excluding VAT and working capital.

For Small and Medium-sized Enterprises (SMEs), the minimum investment threshold is 50 million CFA francs, excluding VAT (value added tax) and working capital. In addition, for large shopping centers, the threshold is 10 billion CFA francs (zone A) and 5 billion CFA francs (zone B and C).

Article 23 sets out a tax credit of 2% granted to investors who operate in sectors of activity, defined in the Council of Ministers, and who opens his share capital at 34% to national investors. This share may not be reduced for a maximum period of 10 years.

In the hotel and health sectors, eligible for category 1, the company that builds the real estate infrastructure benefits from the advantages in the implementation phase and only the exemption from tax on the land assets during the operating phase.

The advantages granted during the implementation phase concern exemption from customs duties, with the exception of the statistical fee and Community levies and litigation; as well as the temporary suspension of VAT on the acquisition of taxable goods, services and works.

However, exemption from customs duties, temporary suspension or exemption from VAT relate to equipment and capital goods and the first batch of spare parts acquired locally or imported, as well as services and works in Côte d'Ivoire or abroad.

When the investor has not been able to carry out, for reasons beyond his control, the entirety of his project, at the end of the initial period of one year, he is granted by decision of the Approval Committee an additional period whose duration does not may exceed 24 months.

Mr. Essis welcomed this system which allows companies to have more controlled costs in terms of tax expenditures, while stressing that it is a question of adjusting local content to allow a greater increase in the participation of nationals in the capital of firms.

The readjusted Investment Code also allows referral to the local Court of Arbitration in terms of mediation to decide on disputes. He welcomed the fact that the reduction in investment thresholds further encourages massive investment within the country.

He noted that this is not a challenge to the 2018 Investment Code, but it is adjustments that have been made following an observation on the ground that has been carried out by both the private and public sectors. So, it was important that it be adjusted to be more efficient.

An evaluation of this Investment Code is planned at the end of the year to frame the text according to the government's priorities, especially in this period of health crisis related to the Covid-19 pandemic that has affected the country's economy.