STEPS TO REGISTER A COMPANY IN CAMEROON

Register a company in Cameroon

According to Article 3 of the Uniform Act relating to Commercial Companies and Economic Interest Groups in Cameroon, any person, whatever their nationality, wishing to engage in a commercial activity in the form of a company shall choose a form of company which suits the activity envisaged from among those provided by the Organisation for the Harmonization of Business Law in Africa (OHADA) Law. In this context, to register a company in Cameroon, the founder must ascertain the type of company (private, private limited or public limited company). To register a company in Cameroon, the founders must understand the principle of a corporate legal entity. In setting up a company in Cameroon, the minimum share capital to set up a private limited company is 1.000.000 (one million) FCFA whist that of a public limited company is 10.000.000 (ten million) FCFA. The promoter of a company must understand the concept of the shareholding structure of a company. Shares are the unit of holding or right of ownership by an investor in a company. The share structure of a company illustrates contributions made to the share capital of a company. A limited company in Cameroon can be set up by a person aged 18 years and above who is not insane, bankrupt or convicted of a crime. To register a company in Cameroon, all provisions of the OHADA Uniform Act on General Commercial Law, Commercial Companies and Economic Interest Groups must be strictly applied. The requirements for registering a company in Cameroon as well as the winding up procedure are governed by the OHADA law. A look at the scope of Company registration in Cameroon brings into mind many questions. Before we engage the discussion on the procedure to register a company in Cameroon, it will be important for some pre-registration issues to be properly clarified below;

  • How many shareholders should a company have upon registration in Cameroon?

According to Article 309 of the Uniform Act relating to Commercial Companies and Economic Interest Groups of the OHADA Law stipulates that a private limited liability company may be formed by a natural person or a corporate body, or by two or more natural persons or corporate bodies.

Article 385 of the Uniform Act relating to Commercial Companies and Economic Interest Groups of the OHADA Law stipulates that a public limited company may have only a single shareholder.

  • What type of shares can be allotted by founders in view to register a company in Cameroon?

The shares which can be allotted by founders of a company are ordinary shares and preference shares.

  • What should promoters look out for prior to register a company in Cameroon?

Promoters desirous to register a company in Cameroon must consider the following;

  1. The name of the company should not be against public policy,
  2. The shareholders should be 18 years and above,
  3. The shareholders should not be bankrupt, insane or have a criminal record etc.
  • What are the types of Companies to register in Cameroon?

Any person wishing to register a company in Cameroon must know there are two types of companies to wit; a private limited liability company and a public limited liability company.

A Private limited liability company is a business entity whose owners have limited liability with private ownership as shares are prohibited from being publicly traded. In Cameroon, the initials LTD, SARL, are added to the names to differentiate it from other businesses

A Public limited liability company is a business entity where shares are offered to the general public. Shareholders also have limited liability. In Cameroon, the initials PLC, LLC, SA, are added to the name in order to distinguish a public limited company from other businesses.

  • What are the contributions to be paid to the capital of a company registered in Cameroon?

Each partner may contribute to the capital of a company in the form of money (as a contribution in cash), services (as a supply of labour) and rights on movable or immovable , tangible or intangible property (as a contribution in kind). Any other contribution shall be forbidden in accordance with article 40 of the OHADA Uniform Act relating to commercial companies and economic interest groups.

  • What is the minimum share capital for a registered company or business in Cameroon?

Public Limited Company – 10.000.000XAF

Private Limited Company – 1.000.000XAF

Partnership – No minimum capital

Limited Partnership – No minimum capital

  • Can a shareholder of a registered company in Cameroon be a manager?

As regards a private limited company, Article 323 of the Uniform Act relating to Commercial Companies and Economic Interest Groups of the OHADA Law stipulates that a private limited company shall be managed by one or more natural persons, whether or not they are partners of the company.

As regards a public limited company, Article 495 of the Uniform Act on Commercial Companies and Economic Interest Groups of the OHADA Law stipulates that a public limited company with a managing director may choose a managing director from among the shareholders whilst Article 477 and 485 of the Uniform Act on Commercial Companies and Economic Interest Groups of the OHADA Law stipulates that a public limited company with a board of directors shall appoint a chairman and general manager from among the members of the company.

  • How is the office of the management of a company registered in Cameroon structured?

The management of a company registered in Cameroon is structured depending on the type of company registered. For a private limited company, the management is the responsibility of a manager appointed by the partners in the Articles of Association or in a subsequent instrument in accordance with articles 323 of the OHADA Law governing commercial companies and economic interest groups in Cameroon. For a public limited company, the management structure depends on whether the company has a board of directors or not. A public limited company with a board of directors shall be managed either by a chairman and managing director or a chairman and a general manager per article 415 of the OHADA Law on commercial companies and economic interest groups whilst a public limited company without a board of directors shall be managed by a managing director per article 494 of the same law.

  • Can a foreigner own a company in Cameroon?

Under Cameroon Law a foreigner can own 100% of shares of a limited liability company.

  • Can an expatriate not having a registered address in Cameroon, register a company in Cameroon?

Yes. an expatriate desirous to register a company in Cameroon will either lease an office space in Cameroon to be used as the company head office or pay a law firm a fee to provide a temporal office address to be used for registration and administrative purposes only, pending the actual lease of an office space for the company.

  • What permits are required by foreigners doing business in Cameroon?

Foreigners must obtain a resident permit and a work permit from the competent immigration authority in conformity with Decree No. 2007/255/PR of September 4th 2007 which governs immigration in Cameroon and lays down the conditions which foreigners must satisfy in order to be issued a residence permit and work permit in Cameroon.

  • What are the mandatory requirements for foreigners wishing to register a company in Cameroon?

Foreigners wishing to register a company in Cameroon must fulfil the following mandatory requirements;

  1. Must possess a valid passport.
  2. Must be of age 18 years and above.
  3. Must not be bankrupt from their country of origin.
  4. Must provide an authorizing document from the parent company if a subsidiary branch is to be registered in Cameroon.
  5. Must not suffer from insanity.
  6. Must possess a good criminal record which is evidenced through a non-crime certificate.
  • Can a company be completely registered in Cameroon but not fully operational?

Yes. The fact that a company is fully registered in Cameroon does not imply that it is operational in Cameroon.

  • What is the prove that a company registered in Cameroon is fully operational in Cameroon?

For a company registered in Cameroon to be fully operational, it must show proof of the following;

  1. A certificate of Incorporation (MO Form)
  2. A Tax Payer’s Registration Number
  3. A business License
  4. A notarized lease agreement
  5. A localization plan
  6. A Certificate of non-indebtedness
  7. An attestation of Bank account creation
  8. A physical office location
  9. A matriculation number from the National Social Insurance Fund for the newly registered company in Cameroon
  10. A matriculation number per staff/worker from the National Social Insurance Fund etc.
  • How soon can a lease agreement be signed in Cameroon?

A lease agreement can be signed within 7 days from the time the lessor (landlord) and lessee (company representative) agree on the rate and term of the lease.

  • Does a registered company in Cameroon require authorization to operate?

This will depend on the objectives of the company as stated in its Articles and Memorandum of Association. Companies registered with objects to render financial services, forest exploitation, mining activities, petroleum exploitation, import and export activities etc. will require a special license in order to operate in Cameroon. However, companies engaged in general commerce do not require a special authorization to operate in Cameroon.

  • How can a registered company in Cameroon protect its brand and services?

A company registered in Cameroon can benefit from protection on its Trademark, Trade Name, Service Mark, Industrial Designs, Geographical Indications, Literary and Artistic Property, Patentable Invention, and Utility Models by complying with the requirements for their registration and protection at the African Intellectual Property Organization/Organisation Africaine de la Propriete Intellectuel (OAPI) in conformity with the Bangui Agreement of February 24th 1999.

  • What is the liability for promoters to register a company or business in Cameroon?

Private Limited Company: Liability is limited to the amount of share capital contributed.

Public Limited Company: Liability is limited to the amount of share capital contributed.

Limited Partnership: Unlimited Liability of partners.

  • What is the status of a company fully formed but not registered?

A company fully formed but not registered has the status of a sleeping partnership.

  • What is the timeframe for a company fully formed to commence registration formalities in the Trade and Personal Credit Register in Cameroon?

Per Article 27 of the OHADA Law on the Harmonization of Business Law in Africa and the registration of commercial companies and economic interest groups, a fully formed company in Cameroon has a period of 1 month to commence the registration procedure.

  • What is the time frame to register a company in Cameroon?

The time frame for incorporating a company in Cameroon takes between 15-21 working days.

  • What can amount to irregularities in the registration of a company in Cameroon?

The following can amount to irregularities in the registration of a company in Cameroon;

  1. Misleading information
  2. Errors from the Registrar of companies
  3. Errors of information from the company founders etc.
  • How can irregularities in the registration of a company in Cameroon be fixed?

The competent court may order any natural person or corporate body registered in the trade and Personal Property Credit Register to have either;

  1. Information added to or amended in the Register
  2. Necessary information added or amendment made to the Register in case of an incorrect or incompatible declaration
  3. Its removal from the Register effected.
  • How long does it take to open a corporate bank account in Cameroon?

It takes between 1-2 weeks to have a corporate bank account for a newly registered company in Cameroon.

  • Is the global fee/rate to register a company in Cameroon fixed?

The global rate/fee to register a company in Cameroon is not fixed. It is most influenced by the verbal rent rate per town.

Can a registered company in Cameroon be exonerated from business tax?

Yes. This is done by an application for the exoneration of business tax for a period of 2 years after obtaining the certificate of incorporation. Within these 2 years, the company is to declare its activities on or before the 15th of each month in order to enable the state assess what tax regime the company should be placed.

  • Are there any government grants available for registered companies in Cameroon?

Yes. Government grants are available for registered limited liability companies in Cameroon operating in the industrial, agricultural, forestry, tourism, mining and ICT sectors. The scheme of this grants/incentives is to encourage companies which reinvest their profits in the renewal of their production tool.

  • Can a foreign company register a subsidiary branch in Cameroon?

A branch office of a foreign company which is not located in a member state of the OHADA region has only a 2 (two) years validity period after which it must be transformed to a fully incorporated subsidiary unless a waiver is obtained from the minister of trade.

  • Steps to register a business in Cameroon?

A business is recognized as per the Uniform Act on General Commercial law of OHADA as an establishment. A business is registered at the Commercial Court upon the provision of a valid identification document, a copy of marriage certificate (for women), proof of address (residency), a criminal record, lease documents and the payment of the prescribed fee. The tax and insurance registration formalities must be complied with before a business can begin operations. This procedure is same for Cameroonians and foreign nationals. Consult Doing Business Website, to know about procedures to start a Business in Cameroon.
Trade Register

  • Can a company registered in Cameroon hire expatriate staff?

Yes. But the employment contract must have the visa of the Minister of employment.

  • What are the Investment potentials and Economic outlook of Cameroon?

Cameroon as a country offers exceptional investment opportunities to foreign investors looking to grab a share in the rich market of Central Africa. According to The World Bank, Cameroon has the largest and most diversified economy in the Central African Economic and Monetary Community (CEMAC). The country’s growth rate increased to 3.9% in 2018, a rate that is projected to increase even further to an estimated 4.4% by the end of 2019, spurred by higher exports to the European Union following an Economic Partnership Agreement (EPA) and increased energy supply due to new hydroelectric dams.

What are the requirements for registering a company in Cameroon?

To register a company in Cameroon, investors and founders are advised to solicit the services of an accredited corporate attorney who shall conduct a corporate name search, advice on the company objectives, shareholding structure of the company, the company manager, the start up share capital, share distribution ratio, tax registration requirements and the choice of registered office location.

PROCEDURE TO REGISTER A COMPANY IN CAMEROON

What is the procedure for company registration in Cameroon? How to register a company in Cameroon? What are the steps to register a company in Cameroon?

1. What information is required to register a company in Cameroon?

To register a company in Cameroon, the corporate attorney is enjoined by law to request some mandatory information from the company promoters/founders. This information enables the registration of a company in Cameroon to be successful irrespective of whether the founders/promoters are in Cameroon or abroad. According to Article 262 of the Uniform Act relating to commercial companies and economic interest groups of the OHADA Law, the following information is required from the company founders;

  • Name of company (private or public limited company)
  • Objectives of the company
  • Copy of shareholder (s) identification documents (national identity card, passport, residence permit for foreigner and birth certificate of minor)
  • Non-crime certificate or non-conviction certificate of shareholder(s)
  • Certificate of proficiency (where applicable)
  • Company registered address
  • Company startup capital etc.

2. What documents have to be prepared by the commercial attorney?

Legal assistance in registering a company in Cameroon

  • Memorandum and Articles of Association of the company
  • Notarized statement of subscription and payment of shares
  • Notarized certificate of appointment of company manager
  • Declaration of regularity and conformity with the OHADA Law
  • Notarized list of company shareholder(s) and company manager
  • Location and localization sketch of business premises.

3. COMPANY REGISTRATION IN CAMEROON – LICENSING

The following business licences and tax registrations are obligatory for all companies in Cameroon;

  • Registration of the company in the Trade and Personal Property Credit Register (RCCM)
  • A business license (Patent) to be acquired from the Tax Department after payment of an annual fee
  • Obtain an accredited tax number from the Tax Department
  • Register employees along with the company at the National Social Insurance Fund (CNPS) and the Labour Office

4. DOCUMENTS DELIVERED UPON COMPLETION

What documents prove that a company is registered in Cameroon?

  • Certificate of Incorporation
  • Certificate of business registration
  • Memorandum/Articles of association duly stamped
  • Notarized statement of subscription of Shares
  • Tax Payer’s Card
  • Certificate of non-indebtedness
  • Duly signed notarized sketch

SETTING UP A COMPANY IN CAMEROON: HUMAN RESOURCE MANAGEMENT

Any person wishing to register a company in Cameroon must understand the nature of labour laws in Cameroon as well as the working contracts for the staff to be employed. The following issues will guide the promoter regarding working contracts;

  • Working Contracts: Work contracts are outlined by the law and collective conventions applicable in Cameroon. Company agreements and individual negotiation complement it. Its form is extremely rigid. However, hiring conditions and lay-off conditions are very flexible.
  • Minimum Wage: The minimum wage was XAF 36,270 per month in 2014 according to the ILO (latest available data). At the beginning of 2018, this amount was still in force and several proposals for its increase were discussed.
  • Average Wage: The ILO does not have data for the average wage in Cameroon. The average monthly salary is estimated at 136,000 XAF in 2018.
  • Legal Weekly Working Duration: The legal duration of work is 40 hours in the non-agricultural sector and 48 hours for the agricultural sector.
  • Contributions Paid: Contributions Paid By the Employer: Depending on the employee regime, between 9.65% and 16.2% of wages. Contributions Paid By the Employee: 4,20% of the gross wage, 1.5% of the land bank rate and 1% for the national employment fund on gross salaries.

ACCOUNTING AND TAX FOR COMPANY REGISTERED IN CAMEROON

Setting up a company in Cameroon: Accounting Rules

Any person desirous to register a company in Cameroon must understand the accounting rules and standards for a Cameroon registered company. They are as follows;

  • Tax Year: Fiscal year extends from 1st January to 31st December.
  • Accounting Standards: The accounting standards are based on the Organization for the Harmonization of Business Law in Africa (OHADA). .
  • Accounting Regulation Body: The Ministry of Commerce. (Ministry of Commerce)
  • Accounting Reports: At the end of each accounting year, the manager discloses the financial statements synthesis, in compliance with the Uniform Act regulations concerning the organization and harmonization of accounts. The Manager must prepare an annual report.
  • Publication Requirements: An annual report must be published. Any modification in the presentation of the financial statements synthesis must be indicated in the annual report and, if possible, in the report of the auditor. The accounting documents must be submitted.
  • Professional Accountancy Bodies: National Order of Certified Public Accountants of Cameroon. (National Order of Certified Public Accountants of Cameroon)
  • Certification & Auditing: The verification of accounts is undertaken by auditors. They are engaged in certifying the regularity and the true nature of the financial statements and to give their certification with certain reservations or to refuse it, precising the reasons. You can contact external auditors.

What are the tax requirements to register a company in Cameroon?

The shareholder(s) must adhere to the Cameroon General Tax Code to ensure that the company is issued a tax payer’s card and a certificate on non-indebtedness. Failure to obtain a valid tax payer’s card and certificate of non-indebtedness, the company shall not be given the opportunity to run a corporate bank account. Companies are assessed and placed under 2 tax regimes in accordance with the Cameroon general tax code.

Simplified Tax regime: Applicable to companies with an annual turn over of above 10 million Fcfa but below 50 million Fcfa.

Actual Earnings Tax regime: Applicable to companies with an annual turn over above 50 million Fcfa.

Accounting and tax rates applicable to a company registered in Cameroon are subject to the following quota;

  • Personal tax rate for First XAF 2 million of annual taxable income is 10%
  • Corporate tax rate is 38.5%
  • Withholding tax on dividends is at a rate of 19.25%
  • Capital gains are taxed in Cameroon at the rate of 38.5%

Main Allowable Deductions and Tax Credits

  • The Cameroon tax code does not provide any mechanism for the deduction of start-up costs, but these maybe deductible over a period of two (02) to five (05) years based on the accounting principles of the Organization for the Harmonization of Business Law in Africa (OHADA)
  • Depreciation of tangible and intangible assets is tax deductible at rates ranging from 1% to 100%. Deduction of depreciation can be carried forward indefinitely.
  • Any payment made for the purchase of intellectual property (within the Central African Economic and Monetary Community) is deductible up to 2.5% of taxable income.
  • Donations to charities are not deductible while payments to research and development organisations, educational, sports, philanthropic and social organisations are deductible at the rate of 0.5% of the annual turn over. Donations made to combat Covid 19 epidemic are fully deductible.
  • Tax losses can be carried forward up to four years. The carry back of losses is not permitted.

Professional Tax

All companies are subject to a professional tax (business license tax) at varying rates based on their turnover. It amounts to 0.159% of the turnover of large companies (a minimum contribution of XAF 5 million and a maximum of XAF 2.5 billion), 0.283% for medium-sized enterprises (a minimum contribution of XAF 141,500 and a maximum of XAF 4.5 million) and 0.494% for small businesses (a minimum contribution of XAF 50,000 and a maximum of XAF 140,000). Newly incorporated businesses are exempt from this tax in their first year of operation.

Overview of Cameroon’s tax measures in response to Covid-19
Directorate General of Taxes
Ministry of Economy and Finance.

Stamp Duty

Stamp duties range from XAF 1,000 to XAF 1,500. Registration fees are also levied on most transactions (listed by the General Tax Code) at rates ranging from 1% to 15%. The sale of a company is subject to 15% transfer duty. The Registration and Stamp Duty Office of the Department of Taxation is the competent organization.

Property Tax

The property tax is levied at 0.1% of the assessed value of a property.

INSURANCE REQUIREMENTS

What are the insurance obligations to register a company in Cameroon?

Shareholders and the appointed company manager are enjoined to register a company in Cameroon with the National Social Insurance Fund (CNPS) and place all workers under an insurance scheme in accordance with the CIMA Insurance Code of 2009.

Social security contributions payable by the employer amount to 11.2% of the salary. Social contributions payable by the employer to the National Social Insurance Fund (CNPS) in respect to family benefits shall be 7% for domestic workers, 5.65% for agricultural schemes and 3.7% for workers in private education.

Social security contributions to be paid in respect to old age, invalidity and death pension is fixed at 8.4% of the taxable salary.

Social security contributions to be paid to the National social insurance fund in respect to industrial accidents and occupational diseases is fixed at 1.75% of the salary for group A companies, 2.5% of the salary for group B companies and 5% of the salary for group C companies.

What are the requirements for a registered company to be engaged in international trade in Cameroon?

Economic operators involved in International Trade are duty bound to adhere to law No. 2010/004 of 18th April 2016 governing external trade and decree N0. 2017/6523/PM of 7th June 2017 so as to obtain an import and export license in Cameroon.

Article by Barr. Agbor Kima Divine Ngema

Kima & Partners Firm