Incitation à l'investissement

Tax incentives

The tax incentives available to eligible investors are as follows:

• Exemption from customs duties on raw materials and equipment and especially special vehicles;

• Exemption from transfer duties in case of acquisition of fixed assets (land or building);

• Payment of countervailing duties of 5% instead of 10 to 25% on semi or finished products intended to carry out its investment project (consumables are not concerned);

• 5% or 2% reduction in the income tax rate (30%) depending on whether the promoter claims and proves that he/she employed at least 200 employees during the year or 20 and 200 Burundian employees;

 

After promulgation of the new code:

• Recognition of import VAT;

• Amortization of assets at 100%.

Special Economic Zones (SEZ)

Special Economic Zones are currently considered as indispensable tools for attracting both domestic and foreign investment. This mechanism is also included in the Protocol Establishing the Customs Union of the East African Community (Articles: 29, 31 & 32).

The Special Economic Zones (SEZ) policy of the East African Community (EAC) currently being drafted defines an SEZ as being an area or a part of the customs territory, geographically defined, placed under an administrative and management authority, restricted access, where appropriate and any goods brought in can generally be considered for import duties and taxes as being outside the customs territory. A SEZ is governed by liberal and specific economic laws that grant more incentives to accredited investors than those subject to common law.

A SEZ has a developed infrastructure or has the potential to be developed for the operation of various activities deemed to be of economic importance. A SEZ can also provide essential transport and logistics infrastructure such as ports, highways, railways and airports, social services and residential areas.

The SEZ project is of strategic economic importance for Burundi as a privileged crossroads for the distribution of goods in eastern Democratic Republic of Congo, Rwanda and Kigoma Region in the United Republic of Tanzania. The other member countries of the East African Community, in particular Rwanda, Tanzania and Kenya, have already adopted this investment promotion tool. To that end, Burundi has decided to adopt the best practices that have already proven themselves not only in the Community but also in other emerging countries such as China, India and Egypt.

To facilitate the implementation of this flagship project, a joint commission chaired by the CEO of the Investment Promotion Authority is set up to identify the field and define the administrative and legal framework of the project.

Elements of the business plan

 Business Plan contents

  • Amortization table of fixed assets,
  • Loan amortization table (if applicable),
  • List of jobs to be created with various categories,
  • Operating expenses table,
  • Estimation turnover table,
  • Forecast of operating accounts for at least 5 years and maximum 10 years,
  • Project profitability test (preferably project NPV),
  • Estimated cost of goods and materials to be purchased locally:
    • building materials
    • production equipment
    • raw materials and / or semi-finished products
    • packaging
  • Comprehensive and quantitative list of goods and materials to be purchased locally:
    • building materials
    • production equipment
    • raw materials and / or semi-finished products
    • packaging
  • Estimated cost of goods and materials to be imported:
    • Building materials
    • production Equipment
    • raw materials and / or semi-finished products
    • packaging
  • Comprehensive and quantitative list of goods and materials to be imported:
    • construction materials
    • production equipment
    • raw materials and / or semi-finished products
    • packaging

Project registration procedures

  1. Documents to be attached to the application for the incentives in accordance with the investment code are:

• Copy of the identity card of the person in charge of the company,

• Copy of the TIN (Tax Identification Number),

• Copy of the Trade Registry Certificate;

• Copy of the statutes of the company,

• Copy of the title ownership or copy of a notarized lease contract showing the landlord's phone number in case of rental,

• Copy of construction plans if necessary,

• Building authorization,

• Calculation notes for multi-storey buildings,

• Certificate of environmental compliance,

• Authorization to build a factory.


2. Business Plan content

  • Amortization table of fixed assets,
  • Loan amortization table (if applicable),
  • List of jobs to be created with various categories,
  • Operating expenses table,
  • Estimation turnover table,
  • Forecast of operating account for at least 5 years and maximum 10 years,
  • Project profitability test (preferably project NPV).



 3.Priority Sectors

The priority sectors are determined by Ministerial Ordinance N ° 540/534 of 05/04/2013 on facilitation measures for implementation, monitoring and evaluation of eligible investments to incentives in accordance with the Investment Code.

 According to article 10, the priority sectors for investment are:

  • Agriculture, Fishing and Livestock Sector,
  • Public Health Sector,
  • Energy and Mining Sector,
  • Tourism sector,
  • Transformation industry sector,
  • Infrastructure, Transport of goods and persons Sector,
  • Education Sector,
  • Information Technology Sector, (except for mobile telephony),
  • Buildings and Public Works Sector,
  • Environment Sector.
  1. Application fee

    The application fees are set by Ministerial Ordinance N ° 540/534 of 05/04/2013 concerning facilitation measures for implementation, monitoring and evaluation of eligible investments to incentives in accordance with the Investment Code.

     According to article 5, the diagram of the expenses of the file shall be as follows:

  • For a project with investment cost less than or equal to 500 000 000 BIF: USD 500
  • For a project with investment cost between 500 000 001 BIF and 1 000 000 000 BIF: 2500 USD,
  • For a project with investment cost between 1 000 000 001 and 5 000 000 000 BIF: USD 5,000
  • For a project with investment cost exceeds 5 000 000 000 BIF: 10,000 USD,

      5. Specific conditions according to sectors

Some sectors must meet specific features to be eligible for incentives in accordance with the Investment Code, these include the tourism sector and the infrastructure sector (office buildings).

For the tourism sector:

  • For a hotel project in Bujumbura to be eligible it must be a minimum of three-star hotel comfort with at least 20 bedrooms.
  • Beyond 20km from Bujumbura, a minimum comfort level of two-star hotel with a minimum of 15 bedrooms is required.

These standards reference for the classification of hotels according to the number of stars are in line with the East African Community and those of the Burundian Bureau of Standards.

Vehicles to be accepted as part of a hotel project eligible to incentives according to the Investment Code must be commercial vehicles in particular:

  • Minibuses with number of seats between 8 and 12 maximum
  • Vans not exceeding 1.5 T of cargo

Tourist vehicles imported as part of an investment project are exclusively dedicated to tour operator activities.

For the infrastructure sector (office buildings):

The eligibility of an office building must be supported mainly by its size:

Usable sheltered space area of at least 2000 sq. m and the availability of a parking spot (area of ​​at least 1000 sq. m at the rate of 20 sq. m / parked vehicle).