INVESTING IN COMOROS

The Comoros have significant advantages in favour of investment: a membership in the franc zone, an attractive legal framework, a will to liberalise the economy and boost the private sector, the proximity of the Eastern and Southern African market membership to economic zones and the harmonisation of Business Law (COMESA, OHADA)

THE MEMBERSHIP TO THE FRANC ZONE

The franc zone comprises 14 countries of Sub-Saharan Africa, the Comoros and France. The membership of the Comoros to the franc zone, with the discipline that this implies, ensures a control of money creation by the Central Bank of the Comoros. The principle of convertibility and fi xed parities preserve the country from a risky and misguided monetary policy, which could affect the income of investors.

The monetary cooperation agreement between France and the Comoros was not affected by the switching to Euro, which became on the 1st January 1999 the currency of eleven European countries members of the European Economic and Monetary Union (EMU). Thus, the anchorage of Comorian franc to Euro will lead to an intensifi cation of trade between the two areas and contribute to the economic and monetary stability of the Comoros. Moreover the stowing of Comorian Franc to Euro offers for the euro zone countries new opportunities of investment and trade in the country, as it reduces the exchange risk.

AN ATTRACTIVE LEGAL FRAMEWORK

1. The investment code

The Comorian right to investment is governed by the provisions of Law No. 2007-05/AU. By adopting this law, the Comoro’s
legislature is based on rules that are today dedicated, in most states by the new law of investment. These rules are
to effi ciently encourage private sector initiatives, to carry out liberalisation and ensure legal security for investment and
provide for them the incentive measures.
Thus, the code has ensured that no obstacle can be opposed by the public authorities at the initiative of the operators,
subject only to public order. To avoid discrimination, the law has assimilated the foreign and domestic entrepreneurs. In
addition, the law has made provision for new legal and judicial measures likely to ensure entrepreneurs the protection of
their rights and benefi ts are expected to attract investors.

2. The Labour Act

It is governed by the law of 18 February 1984. This code is simple. It preserves the essential interests of workers (trade
union rights, employment contracts, health and safety) without overburdening employers with social charges. The employment
contract is sometimes passed freely without writing. Wages are liberal, the minimum wage has still not been offi cially
set. The statutory workweek is 40 hours per week. The statutory leave is 2 and half days per work month. As for social
benefi ts, the employer must pay 2.5% to 5% of gross salary to fund Social Security. This law has not been subjected to
any amendment since its adoption in 1984.

A WILLINGNESS TO LIBERALISE THE ECONOMY AND BOOST THE PRIVATE SECTOR

1. The liberalisation of the economy
To compensate the defi ciencies of the public sector and deal with
severe budgetary constraints, since 1995 the Comorian Government
initiated a program of privatisation of public companies in order to
seek new capital for essential investments in improving the quality of
public services accessible to the population.
This program is designed in particular to increase the private sector’s
participation in fi nancing activities by supplying money to essentially
modernise the economic production device, by contributing fresh capital
in the production device and to increase productivity and competitiveness
of companies.
Thus the Federal Assembly voted on June 19th 1995, Law No. 95-
008 on concession or deprivation of capital public corporations. The
privatisation program essentially concerns the fi eld of telecommunications,
air transport and hydrocarbons.

2. La relance du secteur privé
The Comorian private sector faces several obstacles including the narrowness of the local market, the inadequacy of
industrial infrastructures, the weakness of domestic savings, high transaction costs, unskilled workforce and a lack of
corporate culture. However, the Government wants to revive this sector through the four (4) priority measures selected
by the strategy paper for growth and poverty reduction (SPPR). It includes:

• Reforming the business taxation and improve the legal, administrative and regulatory framework governing the
private sector
• Promotion of the development of tourism sector in mid-term.
• Promotion of the fi nancial services in support of private sector.
• Favouring the emergence and development of services in support to the private sector.

THE MEMBERSHIP TO ECONOMIC ZONES AND HARMONISATION OF BUSINESS LAW

The Comoros are also part namely of COMESA and the OHADA

1. THE COMESA

The Common Market of East Africa and Southern Africa (COMESA) is a regional integration grouping composed of 20
African countries including the Comoros, which have agreed to promote regional integration through trade development
and to develop their natural and human resources for the mutual benefi t of their populations. The goals and objectives as
defi ned by the Treaty and its Protocols are to facilitate the suppression of structural and institutional weaknesses of member
states, so that they are able to achieve community development and support. The areas of concentration of COMESA
are the trade of goods and services, including mechanisms for payment and settlement, the promotion and facilitation of
investment, infrastructure development, electronic commerce, peace and security.
The COMESA is one of the groups of economic cooperation and regional integration that has been most successful in
Africa. It has several achievements including trade liberalisation with the establishment of a free trade zone since January
2001, the regulation of trade by discrete criteria and clear rules of origin, establishing an instrument of trade facilitation
and removal of non-tariff barriers and the establishment of rules, regulations and procedures harmonised regional public
procurement under the project of reform of public procurement.

2. THE OHADA

The Comoros are part of the Organisation for the Harmonisation of Business Law in Africa (OHADA) which comprises
the 16 member countries of the franc zone. The Treaty of OHADA has set itself a goal: «Harmonisation of Business Law
in the States parties, through the development and adoption of simple modern common rules adapted to their economic
situation by implementation of appropriate judicial procedures, by encouraging the use of arbitration for the contract
dispute.»
The fi eld of unifi ed law concern «the overall rules relating to company law and the legal status of traders, debt recovery,
security and means of enforcement, at the speed of recovery of business and judicial liquidation, the arbitration law, labour
law, accounting law, law of sale and transport and any other matter that the Council of Ministers will unanimously
decide to include.

The uniform acts in force in the Comoros are:

• The uniform act on the general commercial law
• The uniform act on the law of commercial companies and economic interest group
• The uniform act on the organisation of safety
• The uniform act on the organisation of simplifi ed recovery procedures and ways of execution.
• The uniform act on the organisation of collective procedures, discharge of liabilities.
• The uniform act on the right of arbitration.
• The uniform act on the right of accounts.
• The uniform act on the contract of carriage of goods by road.

 

DOCUMENTS TO BE SUBMITTED UPON REGISTRATION OF A COMPANY AT THE REGISTER OF TRADE AND CREDIT (RCCM)

• Two certified copies of the status.
• Two copies of the declaration of regularity and conformity.
• Two copies of P.V of the certified list of directors.
• Certificates of managers’ criminal records (bulletin No. 3).
• Certificate of capital payment.
• Certificate of possession or lease contract.
• Name and surname of partners with jointly and severally social liabilities.

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