Investing

flag Central African Republic Central African Republic: Investing

FDI in Figures

FDI flows to the Central African Republic (CAR) have resumed since the 2013 civil war (which had caused almost all economic activity to stop and led investors to withdraw from the country), but they remain limited. According to UNCTAD’s World Investment Report 2022, FDI flows decreased from USD 35 million in 2020 to USD 30 million in 2021. The FDI stock increased from USD 718 million to USD 749 million. In 2022, global FDI momentum weakened in the context of the war in Ukraine, rising food and energy prices, financial turmoil and debt pressures (UNCTAD’s Investment Trends Monitor). The wood and diamond sectors attract most of the FDI, and France as well as China are the two main investors in the country.

The country has abundant natural resources (diamonds, gold, uranium and wood), which are largely untapped, as well as huge arable land. However, the unfavorable security climate and political instability are a source of concern for investors, in this country where the majority of underground wealth is controlled by armed gangs. Other factors limiting its attractiveness include insufficient infrastructure and a shortage of skilled labor. The country has, however, undertaken various reforms to attract investment, in addition to the ongoing efforts under the peace agreements. Among these reforms are the establishment of a public-private dialogue framework, tax incentives for businesses, the reduction of the minimum capital required to start a business and measures to protect minority investors. However, renewed violence and insecurity could delay their implementation (Coface).

 

Country Comparison For the Protection of Investors

  Central African Republic Sub-Saharan Africa United States Germany
Index of Transaction Transparency* 7.0 5.5 7.0 5.0
Index of Manager’s Responsibility** 1.0 3.5 9.0 5.0
Index of Shareholders’ Power*** 5.0 5.5 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

 
Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 2524
FDI Stock (million USD) 685.5690.9714.9
Number of Greenfield Investments* 1.00.00.0
Value of Greenfield Investments (million USD) 500

Source: UNCTAD - Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

 

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Tax Rates

Vaue added tax (VAT) - Taux sur la valeur ajoutée (Local name)
19% (standard rate).
Reduced rate of 5% on wheat flour, milk, frozen fish and refined oils.
Exports and international transport services are zero-rated.
Essential goods, medical services, sales of gold and diamonds are exempt from VAT.
Company Tax
30%
Withholding Taxes
Dividends: 15%; Interests: 15%; Royalties: 15%.
Social Security Contributions Paid By Employers
19% (12% family allowances; 4% old-age contribution; 3% professional risks)
Other Domestic Resources
Ministry of Finance, in French
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 
 

Individual Taxes

Personal income tax Progressive rates from 0% to 40%
XAF 0 to 378.000 0%
XAF 378.001 to 1.680.000 8%
XAF 1.680.001 to 3.360.000 15%
XAF 3.360.001 to 5.040.000 28%
XAF 5.040.001 and above 40%
 
 

Country Comparison For Corporate Taxation

  Central African Republic Sub-Saharan Africa United States Germany
Number of Payments of Taxes per Year 56.0 36.6 10.6 9.0
Time Taken For Administrative Formalities (Hours) 483.0 284.8 175.0 218.0
Total Share of Taxes (% of Profit) 73.3 47.3 36.6 48.8

Source: Doing Business - Latest available data.

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Investment Opportunities

Tenders, Projects and Public Procurement
Tenders Info, Tenders Worldwide
DgMarket, Tenders Worldwide
Setting Up a Company
Consult Doing Business Website, to know about procedures to start a Business in Central African Republic.
Useful Resources
Embassy of the Central African Republic in France (in French)
Business Portal for Africa
 

Business Setup Procedures

Setting Up a Company Central African Republic Sub-Saharan Africa
Procedures (number) 10.00 7.51
Time (days) 22.00 21.30

Source: Doing Business.

 
 
 

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Latest Update: December 2023