Investment Promotion Law May Have Limited Benefits
A new investment promotion law has been introduced in Burundi, offering various benefits to investors. However, these benefits are subject to certain conditions and limitations.
Benefits for Investors
The law provides exemptions from transfer tax on land or building acquisitions, Value Added Tax (VAT) and customs duties on imports of construction materials, equipment, and production inputs. Additionally, investors may benefit from a reduction in corporate tax rates over a five-year period, with certain exceptions.
- Exemptions:
- Transfer tax on land or building acquisitions
- VAT on imports of construction materials, equipment, and production inputs
- Customs duties on the same goods
- Corporate tax rate reduction: up to 5 years
Duration and Extensions
The benefits are valid for up to five years, except for specific sectors where the duration may be extended up to ten years. The sectors will be determined by decree. If an investor has not completed their investment activities within the initial five-year period, they may request an extension of up to two years, provided that the request is made at least 30 days before the expiration of the initial period.
Special Fund for the Promotion of Exports
The law establishes a Special Fund for the Promotion of Exports, which will be managed by the Ministry responsible for trade. The fund aims to promote exports and support local businesses.
- Managed by: Ministry responsible for trade
- Purpose: Promote exports and support local businesses
Application Process
Investors who apply for benefits must submit a file containing various documents, including:
- Business plan
- Copy of Trade and Companies Register
- Proof of payment of a non-refundable application fee
Post-Certification Requirements
Once certified, investors are required to carry out their projects in accordance with their business plans and provide regular updates on their investments. They must also keep financial and accounting records and submit them to the Agency within three months of each tax year.
- Carry out project according to business plan
- Provide regular updates on investment activities
- Keep financial and accounting records
- Submit records to the Agency within 3 months of each tax year
Promoting Exports and Supporting Local Businesses
The law also includes provisions aimed at promoting exports and supporting local businesses, including:
- Creation of a Special Fund for the Promotion of Exports
- Establishment of a Burundi Development Agency (ADB) to promote and facilitate investment and exports