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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
Senegal offers various opportunities in sectors such as agriculture & agribusiness, digital economy, mines, seafood and aquaculture, rice, health, tourism.
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:
· information and communication technologies
· supply of medical 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
§ Domestic fuel (biomethane) power plants
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