Doing business in Burkina Faso involves understanding the country’s legal and administrative framework, identifying key sectors, and being aware of the challenges.
Here is a general guide on how to approach doing business in Burkina Faso:
1. Business Setup and Registration
The process is generally streamlined through the Centre de Formalités des Entreprises (CEFORE), which acts as a one-stop shop for company registration, tax identification, and social security.
- Choose a Legal Structure: Common options are:
- Limited Liability Company (Société à Responsabilité Limitée – SARL): Suitable for most small to medium enterprises. Has a relatively low minimum share capital (e.g., around 1,000,000 CFA francs).
- Public Limited Company (Société Anonyme – SA): Suited for larger businesses. Requires a higher minimum share capital.
- Branch Office (Succursale): Allows a foreign company to operate under its existing brand.
- Reserve Your Business Name: Check and reserve the name through the appropriate authority, often CEFORE or the Guichet Unique de Formalisation des Entreprises (GUFE).
- Prepare Documents: This includes the Articles of Association (in French), valid ID/passport of shareholders and directors, proof of business premises, and proof of capital deposit.
- Register with CEFORE: Submit your incorporation documents to CEFORE. This will lead to registration with the Commercial Court Registry (RCCM).
- Obtain a Tax Identification Number (NIF): This is mandatory for tax compliance.
- Social Security and Labor Compliance: If hiring staff, register with the Caisse Nationale de Sécurité Sociale (CNSS) and submit employment contracts to the Ministry of Labor.
- Open a Business Bank Account: Open a corporate account at a local Burkinabè bank.
2. Key Investment Sectors
Burkina Faso’s economy is largely driven by its natural resources and agriculture. Key sectors for investment include:
- Mining: Gold is a primary export, with opportunities in exploration, extraction, processing, and providing equipment/services to the industry.
- Agriculture and Agro-processing: Vast arable land makes it suitable for crops like cotton, maize, sesame, and livestock. There are opportunities in modern farming, irrigation, and food processing.
- Renewable Energy: The country has high solar radiation, making solar power projects, both on-grid and off-grid, a significant investment area to address the national energy deficit.
- Infrastructure: Opportunities exist in transportation networks (roads, railways) and urban development.
- Services: Growth in telecommunications, banking, and financial technology (Fintech).
3. Regulatory Environment and Incentives
- OHADA Law: As a member of the Organization for the Harmonization of Business Law in Africa (OHADA), the legal framework for business is standardized, which can offer some reliability for foreign investors.
- Foreign Ownership: Generally, 100% foreign ownership of companies is allowed, except in sectors like mining, where the state is entitled to at least 10% of the share capital in exploitation companies.
- Investment Code: Tax exemptions and incentives may apply to investments, especially in priority sectors.
- Repatriation of Funds: Foreign investors are typically entitled to transfer funds, dividends, and receipts from liquidation, though transfers must be completed through certified intermediates.
4. Challenges to Consider
While there are opportunities, investors should be aware of the following challenges:
- Security and Political Instability: The security environment in the region can be a major risk factor, affecting business confidence and operations.
- Infrastructure: Weakness in infrastructure, particularly high energy costs, electricity shortages, and poor transportation networks (being landlocked), can increase operating costs.
- Bureaucracy and Corruption: Despite simplification efforts, navigating the full administrative process can sometimes take longer than officially stated.
- Workforce: A lack of a highly skilled and educated local workforce can be a challenge.
- Language: French is the official business language; English is not widely spoken.
5. Seeking Assistance
It is highly recommended to seek professional assistance:
- Burkina Faso Chamber of Commerce: A key resource for market guidance and business links.
- Local Lawyers and Consultants: They can provide expertise on company formation, tax compliance, and navigating local regulations.
- International Trade Councils/Embassies: These bodies often provide country-specific commercial guides and support for investors from their respective countries.