Trade Inquiries: FAQs
Table of Contents
How to set up a company in Senegal?
Opportunities for public private partnership mode of
investment in Senegal?
Compiled
Applicable Tax for Foreign Contractor
Opportunities/
Incentives available in Senegal
The incentive scheme applicable in SEZs
Investment opportunities in
SEZs
Power
Supply Situation / Opportunities in Renewable Energy
Senegal’s
Foreign Trade Structure
How
to open a company in Senegal
Senegal's Investment Promotion Agency
SA (APIX) maintains a “Guichet Unique,” or one-stop-desk like Single Window to
assist foreign investors or any entrepreneur interested in establishing a
business in Senegal and qualifying for investment incentives. In this
connection, Apix Sa can assist you set up your company in Senegal.
The most common entity is SARL (Limited Liability Company). Foreign
entrepreneurs may also choose to set up a public limited company, branch or
representative office or other types of entities like:
o Single proprietorship;
o Economic Interest Groups (GIE);
o Limited Companies (SARL)
o Business corporations (SA)
o Co-partnership (SNC)
There is a document entitled “The
Entrepreneur’s Guide” and prepared by Apix which provides useful information on
how to set up a company in Senegal.
Senegal’s banking
system is governed by the Central Bank (BCEAO) common to the eight members
(Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and
Togo) of the West African Economic and Monetary Union). These countries use the
CFA franc (XOF) as its currency. The French Treasury guarantees the conversion
rate of 1 Euro = CFA franc 655.957.
As of May 2020, there
are twenty six (26) registered banks in Senegal with some having their
corresponding banks in India. According to official sources, there is a
possibility to open a letter of credit (LC).
Senegal has decided to
adopt a new development model to accelerate its progress toward emerging market
status. This strategy, entitled the Emerging Senegal Plan commonly known by its
French acronym PSE, now constitutes the reference for economic and social
policy in the medium and long term. As part of PSE, Senegal has set up an institutional
and legal framework for Public Private Partnership (PPP) aiming at developing
and implementing projects in the form of PPPs in order to achieve the
objectives set by PSE. For more flexibility, the Government of Senegal will
introduce a new law on public-private
partnerships to encourage investment from private sector at national as well as
international level. The Bill has yet to be passed by the Parliament.
Senegal
tax year is the calendar year ends on 31 December. The financial statements and
the taxable income statements must be be filed by April 30 of each year. Otherwise, penalties apply for late filing, late payment,
failure to file and filing an incorrect return. The amount of the penalty
depends on the nature of the tax and/or violation.
Senegal
has a single VAT rate of 18%. VAT
on tourism activities is 10%. A 17% special tax on financial activities
(mainly banking, money transfers, and change operations) is applicable instead
of VAT.
The
corporate tax is 30% in Senegal. In a deficit year, The CIT (Contractual
Minimum Tax) is charged instead. The CMT is based on the annual turnover, which
must not be under CFA 500,000 or over FCFA 5million.
When
it comes to withholding taxes,
Senegal
charges a 20% withholding tax on payments to foreign suppliers with no base in
Senegal for services rendered or used in Senegal, unless other or different tax
agreements apply.
The
employer deducts the withholding tax from the employee’s wages. The amount is
determined by the tax authorities. The employer must pay an employer tax of 3%
on the entire payroll.
More
details on other taxes are also available on the following links: https://www.taxesforexpats.com/senegal/guide
Opportunities
Senegal offers various
opportunities in sectors such as agriculture & agribusiness, digital
economy, mines, seafood and aquaculture, rice, health, tourism.
Investment
Incentives
In
Senegal, investment is supported by an attractive incentive policy based on
regularly updated legal, tax and customs measures. Tax relief measures,
guarantees and advantages are granted to investors through the new investment
code, the free export company regime. For instance, the new investment code provides specific incentives
to stimulate investment in key sectors such as agriculture and agribusiness,
fisheries, livestock and related industries, manufacturing, tourism, and
mining, among other sectors. Investment
incentives include :
·
Customs duty exemptions (over
03 years);
·
Suspension of VAT (over 03
years);
·
40% tax credits for the
eligible and deductible investment within 05 years;
·
Free export company status for
agricultural, industrial and telecommunications companies deriving at least 8%
of their turnover from exports
·
Export Oriented Company Status
This status is granted to companies which export at
least 80% of their production. Agriculture in the broad sense, industry
and tele-services are the sectors eligible for EFE status. Several
advantages are granted to companies, in particular the reduction of the
corporation tax (15%) instead of 30%, the exemption from the tax on the wages,
on the registration and stamp duties, on the contribution of the patents, the
exemption from duties and taxes on production equipment and raw materials, and
more.
Incentives are granted
by the tax code and several laws, including the investment code, the mining
code, the petroleum code, the environment code, the export oriented companies
law.
Investments valued
higher than FCFA 250 billion (approximately US$ 500 million) are entitled to
particularly advantages negotiated directly between the investor and the
Ministry in charge.
A
modern single window centralizes, facilitates and accelerates administrative
formalities. For more details, please visit: www.investinsenegal.com
·
the duty of admission free of
all duties and taxes collected at the customs cordon, excluding community
levies on raw materials, equipment, other goods and as well as the duty of
duty-free export outside the national territory of the same goods ;
·
exemption from the payment of
all income taxes;
·
a 15% corporate income tax
rate;
·
the possibility of concluding
fixed-term contracts over a period of five (05) years;
·
exemption from the flat-rate
contribution payable by the employer or any other tax based on the salaries
paid by companies and borne by them;
·
an exemption from the minimum
flat-rate corporate tax.
The main vocations of the SEZs are the following
activity sectors:
·
agribusiness
·
industry
·
information
and communication technologies
·
tourism
·
supply of
medical services
·
Services
Energy supply and
distribution is a high priority for the Government of Senegal. The latter has made power sector development a key
component of its Plan
Senegal Emergent,
which aims to make Senegal an emerging economy by 2035. Priorities include
lowering the cost of generation by reducing dependence on imported liquid fuels
and increasing electricity access – particularly in rural areas. Senegal has
significant potential to develop solar and wind power – as well as the
opportunity to develop its offshore natural gas resources.
In the energy sector which absorbs CFAF 1,645.1 billion (around US$ 3 billion) or 12% of PAP-2, the continued orientation of the energy mix towards renewable energies is underway, with projects for the creation of solar power plants, in particular the Scaling-Solar (60 MW), the extension of the Malicounda solar power plant (22 MW), the SOLARYS project (3X12 MW), the solar park of the Organization for the development of the Senegal river (OMVS), the 159 MW wind farm at Taïba Ndiaye. The power station Malicounda HFO (125 MW) and projects to install storage infrastructure for oil and gas terminals are also among the priorities over the period 2019-2023. Regarding gas to power project, the objective is to convert in 2022 SENELEC power plants into gas, allowing thereby Senegal to have the best mix in the world with only gas, wind energy, solar and hydroelectricity.
Different investment opportunities in renewables include:
§ Solar
energy
§ Hydropower
§ Domestic
fuel (biomethane) power plants
§ Biofuels
§ Wind
Senegal’s main exports are petroleum products,
gold, phosphoric acid, seafood products, cement, peanuts, cotton and cotton
fabrics, salt, phosphates, hides and skins, fertilizers, zircon, titanium, Soups and broths and preparations therefor
Senegal’s main imports are machineries and equipment (for agriculture, food industries and other industries, other machines and equipment), cereals (wheat & meslin, rice, millet & sorghum, other cereals), transports equipment and spare parts, Petroleum oils and oils obtained from bituminous minerals, crude, finished petroleum products, Base metals and articles of base metal, Plastic and artificial materials, pharmaceutical products, Products of para-chemical industries
Please see: https://asp.embassyofindiadakar.gov.in/eoia/aWn_list.asp?s_keyword=setting+up
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