• Choice of the appropriate entity and management structure

  It should not be automatically assumed that the establishment of a commercial company will be the appropriate vehicle for an investment in an OHADA Member state. In fact, the choice of vehicle (for an investment) will first depend on the type and expected volume and duration of activity. For instance in certain cases, a branch office of a foreign company or of a company already registered in a member state may be sufficient and more flexible. In other cases a GIE may be the idea solution if the intention is to share certain facilities with other partners or to develop a common project without necessarily making profits.

  If it is decided that a commercial company will be the appropriate entity to be created, the number of shareholders and their respective envisaged roles, along with the amount of capital to be invested and the question of whether the company will want to make public offerings, will all have an influence on the type of company to be established. As a general rule, it is usually considered that the S.A. is best suited to companies involved in major investments or when it is wished to organize management powers through joint venture agreement or shareholders agreement. Otherwise, for smaller investments, especially those where the investor has 100% control, an SARL may well be sufficient.

• Protection of the investment against risks.

  The member states are parties to numerous multilateral and bilateral treaties which will need to be carefully examined to determine whether they offer protection to an investor in the country concerned. For example any bilateral investment treaties lay down conditions that must be complied with by the host state in the event of an expropriation and contain the host state's advance consent to ICSID arbitration if disputes arise in connection with the investment.

  In addition, foreign investments in many OHADA countries may be covered by the World Bank's multilateral Investment Guarantee Agency (MIGA). At regional level, the African Export-Import Bank (Afrexim Bank) as well as the African Reinsurance Corporation may be useful in providing some coverage of risks.

• Exchange controls

  The determination of the rules applicable to exchange controls will be of great importance in assessing what actions will be required of the investor in connection with the transfer of funds into and out of the country concerned. Such rules may be applicable when capital is transferred at the beginning or end of the investment, and they may also have an impact on transfers of funds relating to inter-company loans, the distribution of dividends, technical or management agreements of other transfers.

• Tax structure

  In general, many areas of the tax legislation of the member states are often similar to the corresponding French tax legislation. However, any new French tax legislation usually takes some time to be incorporated in the member states systems, and there may be local variations.

  It should always be verified whether there is a tax treaty between the country of origin and the country of investment and, if there is, how it may best be used to minimize tax exposure. Additionally, when an investor is envisaging investments in several member states, it is sometimes useful to examine whether tax schemes in relation to the investment as a whole, may be set up to limit taxation or if specific holding regimes might be applicable in many countries for example for offshore companies or companies located in free zones.

  When envisaging the purchase of an activity in a member state, it is also advisable to make a comparison between the respective tax costs of purchasing a company's shares or purchasing its business (fonds de commerce) any specific advantages might be granted to the investors business.

  For example, certain tax benefits will usually be accorded, depending upon the amount of the investment, the sector concerned, and the prospective number of employees. Investment codes also generally put in place a system of investment protection.

  In some countries, such as Mali, the scope of application of the investment code is limited to commercial activities. Moreover, particular activities may be excluded from the benefit of the investment code, but may be dealt with elsewhere for example, petroleum activities are often excluded but these may be dealt with in specific petroleum legislation, which will itself often comprise the applicable investment framework.

  Even if the investment code is not applicable to a particular investment, but if the investment is perceived as important for the state concerned, it may be possible for the investor to enter into an incentive agreement with the state. In such an event incentives and guarantees similar to those contained in the investment code are usually provided in the form of a ministerial decree or an establishment agreement (convention d'établissement). Care needs to be taken in the negotiation and drafting of these documents if they are to have a substantive effect.

• Specific Laws

  Depending upon the nature of the investment project, it will sometimes be necessary to take into account specific laws such as those applicable to public tenders, concessions or agreement for the delegation of public services, environment regulations, insurance regulations, and sector specific legislation.

• Necessary authorizations

  In some of the members' states, an authorization is needed in order to operate as a foreign shareholder of a foreign–owned company.

  Moreover, in most member states, the directors of a company will need to obtain a commercial identity card (carte de commercant). This card is issued automatically, after registration of the company with the RCCM and once certain formalities have been accomplished.

   
  
  

  Special authorizations may also be necessary to operate in a given sector, particularly in what have traditionally been considered as strategic sectors, such as petroleum or mineral products. Permits and or concessions or production sharing agreements, which will need to be negotiated separately, will include details of authorizations and conditions of operation.

• Employment law obligations

  Most of the member states have enacted employment laws or codes which regulate employment conditions and social security matters. In addition, a collective bargaining agreement may be applicable to the particular activities envisaged by the investor. These should be reviewed to assess their consequences.

  When an investor enters into a partnership with a state-owned company or when it takes on employees of an existing company specific obligation may be imposed on the investor with regard to employment. These should be assessed to determine what liabilities may result for the investor, in particular as regards employee's rights and pensions.

All the member states except the Comoros are members of OAPI.OAPI Rules should be taken into account when trademarks, patents, licenses or other intellectual property rights need to be protected and or used in connection with the investment project, and there may also be specific national rules covering intellectual property.