With sustainable growth and a greatly improved Doing business, sub-Saharan Africa, for many economic operators, is becoming more and more attractive. But whether they are actors foreign to the continent or already benefiting from the first installation on a single national market, setting up in sub-Saharan Africa always requires in-depth preparation. Why? Because the markets, often uneven, respond to complex regulations for different environments. Succeeding in your establishment therefore necessarily requires an understanding of this plural environment, both in terms of its regulatory, fiscal and strategic aspects.
Understanding your environment
With an appreciable rate of foreign operator approvals, the sub-Saharan region is undoubtedly a dynamic entrepreneurial territory. But whatever the relevance of your positioning, the success of your establishment consists in knowing how to meet the regulatory prescriptions of your host country. From a legal point of view, this will, for example, involves identifying the most relevant entry vehicle. Liaison office? Branch? Society? This choice of structure cannot be thought of above ground, and the most successful settlements are those that rely on local teams to support your structuring. Always to ensure the compliance of your activity, it will be necessary, depending on your field, to proceed, in addition to registrations, to obtain the appropriate licenses and approvals and identify all your legal obligations, without forgetting to build an HR policy following the region. These are all questions whose answers vary according to the territory, and whose processes are added if your establishment is intended to be pan-African.
Profit repatriation guarantees and tax incentives
Estimated at $ 42 billion for 2017, Foreign Direct Investment (FDI) to sub-Saharan Africa remains one of the economic engines of the region. From intra or extra-regional sources, they bear witness to the efforts of public policies to encourage investment. These incentives constitute real opportunities and can guide your choice of location. Thus, each country identifies priority sectors to be supported financially. Once again, given the permanent changes in sub-Saharan public finances and rapid changes in the markets, the detection of tax advantages should be considered locally. What are the eligibility criteria? Areas of activity? Free zones? The durations and the territories? Of course, detecting and capturing these benefits only makes sense in an ability to repatriate the related benefits. This is why the success of your establishment is based on a successful tax strategy, that is to say, designed both for the host country and the country of repatriation.
Adapt your strategy
The development of a business model in sub-Saharan Africa cannot be reduced to replicating or importing what would have worked abroad. Because human, marketing and technological conditions differ from one territory to another, a successful establishment finally requires the implementation of efficient processes. Which? Those who respond best to the major trends in the region. For example, from a purely strategic point of view, knowing how to reason preferably on Pan-African markets rather than exclusively national ones. It is also, in a policy of deals and transactions, knowing how to identify the best partners directly in the field and profitable activities, especially when the quality of accounting and financial information still needs to improve. Finally, in your daily life, know how to bet on operational excellence, by pooling the back office to external services. These are all processes which bear witness to the specific characteristics of sub-Saharan Africa, and which call for, for a successful establishment, to always opt for good governance, good regulation and good strategy.
Pension funds, energy, insurance and agri-food manufacturers, large SMEs in any other sector … Whether you are already present or not on the continent, PwC supports you in your new establishment in the sub-Saharan region. For this, we advise you on all of our businesses in your strategic, transactional and operational aspects. We will mainly work on the following missions, from the development of your project to your daily tasks:
- Study of your implementation project and market study,
- Creation and registration of your companies, branches, liaison offices, Assistance in obtaining approvals and licenses for your regulated professions,
- Country Risks Analysis and data collection,
- Development of your entry and exit business models,
- Regulatory compliance and risk management,
- Legal, tax and HR support,
- Insurance, audit and statutory auditor,
- Advice and management of your transactions,