Exchange

Regional Stock Exchange and Central Securities Depository (Bourse Régionale des Valeurs Mobilières) (BRVM) - visit website here.

The BRVM covers 8 countries jointly, namely Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo.

Current number of listed companies

50 listed companies of which 1 is a Beninese company.

Listing rules

To take part of the market, a security (share or bond) is registered in a compartment of the quotation of the BRVM. The stock exchange has two compartments for shares and a compartment for debenture loans.

Key requirements for the first compartment are that the company:

• have a legal form of a Société Anonyme (S.A.);
• have a minimum share capital of CFAF 100 millions;
• have up to CFAF 500 million market capitalisation;
• have a net profit on turnover of 3% in each of the last three years;
• present its certified accounts for the last 5 years;
• make a commitment to sign a contract of market animation;
• spread in the public at least 20% of its capital, from the initial public offering; and
• make a commitment to publishing biannual estimations of turnovers and tendencies of results (in essence, non-mandatory requirement to publish balance sheet biannually).

Key requirements for the second compartment include the following:

• have a legal form of a Société Anonyme (S.A.);
• have a minimum share capital of CFAF 100 millions;
• have up to CFAF 200 million market capitalisation;
• 2 years of guaranteed accounts;
• an undertaking to sign a contract of market animation; and
• an undertaking to spread in the public at least 20% of its capital corresponding to a minimum of between 2 and 10 millions of shares.

Key requirements for the third compartment, include the following:

• have a legal form of a Société Anonyme (S.A.);
• have a minimum share capital of CFAF 10 millions;
• 2 years of guaranteed accounts;
• an undertaking to provide a Business Plan covering at least 3 years;
• an undertaking to provide a listing sponsor; and
• an undertaking to spread in the public at least 10% of its capital corresponding to a minimum of 500.000 shares.

For debenture loans:

• the minimum number of titles for admission is 25,000;
• the minimum face value of the admission is CFAF 500 million.
• an undertaking to sign a contract of market animation;
• a mandatory requirement on dematerialization of titles.
• an undertaking to provide a financial rating (in the absence of a rating higher than investment grade, a financial guarantee will be required).

Regulatory body or bodies

The Regional Council for Public Saving and Financial Markets has the mission of protecting the Public Saving invested in securities, financial products negotiable on the Stock Exchange or any investment that seeks WAEMU's Public Saving.
It is therefore the only one authorised to:

• regulate and authorise market operations;
• formulate, if necessary, a veto on the introduction of companies in the quotation of the BRVM;
• authorise and control the whole market private companies, notably:
  • the BRVM;
  • the DC / BR;
  • the commercial stakeholders including the brokerage firms (SCI);
  • the Asset Management Companies (SGP);
  • the advisors in Transferable securities;
  • the Business developers; and
  • the Peddlers and Undertaking for Collective Investment in Transferable Securities (UCITS).

Principal legislation

• General Regulation of the BRVM
• General Regulation of the CREPMF

Corporate Governance Code

Click through to download a copy of the “Uniform Act relating to commercial companies and economic interest group”

Takeover / merger regulations

• General Regulation of the BRVM
• General Regulation of the CREPMF

Legislation

There is no Competition law in Benin. However, two laws on trade and regulation of prices are forthcoming. In 1990, Benin opted for a pluralist democratic regime and a policy of economic liberalisation.

Since the beginning of 2003, the policy on Competition in the domestic market has been governed by WAEMU regulations.

Impact of regulatory regime on business

• The encouragement of free and open markets
• The provision of fair and equal competitive conditions to all market participants
• The promotion of allocative efficiency
• The maximisation of consumer welfare
• The establishment of transparency and fairness in regulatory processes

Scope

WAEMU regulations cover anti-competitive practices, abuse of a dominant market position, and State aid respectively.

Signatories to United Nations Convention Against Corruption (UNAC)?

Yes

Ratified (UNAC)?

Yes

Signatories to the African Union Convention on Preventing and Combating Corruption?

Yes

Ratified?

Yes

Corruption Perception Index score for 2022

43

Corruption Perception Index rank worldwide for 2022

72

Signatories to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions?

No

Structure of the court system

Enforcement of foreign judgments

Foreign judgments are enforceable in Benin if they originate from countries whose courts are recognised under the Reciprocal Enforcement of Foreign Judgments Act (Cap 8) (the REFJA) as "superior courts". Courts of Lesotho, Botswana, Sri Lanka, Mauritius, New South Wales, Zambia, Seychelles, Somalia, Zimbabwe, Kingdom of Swaziland and the United Kingdom have been listed under the REFJA (Extension of Part II) Order and, as such, final (i.e. non appealable) judgments from superior courts of those countries under which a sum of money is payable would be enforceable in Benin.

Section 4 of the REFJA and the REFJA Rules sets out in detail the procedure for the application for registration, which should be done within six years from the date of the judgment save where the judgment is subject to appeal, in which case, the six year period will begin to run from the date of the determination of the appeal.
In order to enforce a foreign judgment, the judgment creditor must apply to the High Court of Benin by way of Chambers Summons, supported by an affidavit. The procedure is prescribed in Government Notice No.15 of 1936.

Benin is not a signatory to the 1971 Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters.

Arbitration

Benin has signed the 1907 Hague Convention for the Pacific Settlement of International Disputes. This revised the 1899 Hague Convention for the Pacific Settlement of International Disputes, which first established the Permanent Court of Arbitration (PCA).

The Uniform Act on Arbitration (the Uniform Act) governs any arbitration taking place in an OHADA Member State, whether the arbitration involves parties from an OHADA country or from a foreign State. Framed after the UNCITRAL Model Arbitration Law, its purpose is to promote arbitration as an efficient means of dispute settlement.

The Arbitration Centre CAMEC (Centre d’arbitrage de médiation et de conciliation) attached to Benin’s Chamber of Commerce and Industry is based in Cotonou. Another arbitration body is the Chambre de conciliation et d’arbitrage de l’Association interprofessionnelle du coton, also in Cotonou.

Perception of the local courts

The legal system in Benin was formerly based on French and customary law. Each district has a court with the power to try cases, and each province has a court that acts as an appeals and assizes court. At the lowest level, each commune, village, and city ward has its own court.

The Beninese Court is facing problems of corruption, inadequate staff and lack of financial and material means.

Stamp duty

There are fixed rate charges for the stamping of business contracts and other documents.  Ad valorem charges are made as described in "Capital duty" below, and "Transfer tax" above, and at rates of 1% (short leases or hires), 3% (shares), 5% (mergers), 5% (long-term lease or sale of moveable property), and 12% (sale of a business).

Structure of court system

• Constitutional Court
• High Court of Justice
• Supreme Courts
• Courts of Appeal
• Primary Courts

Effectiveness of the court system

After the adoption of Law 2016-15 of 28 July 2016 for the creation of a court dedicated to commercial disputes, the efficiency of the judicial system has improved significantly. The time taken to process a case, regardless of its complexity, is shorter, making the local court more efficient.

Recognition and enforcement of foreign arbitral awards in Benin is governed by the Uniform Act on Arbitration dated 11 March 1999.

Benin became a signatory to the New York Convention on 16 May 1974 and it entered into force on 14 August 1974. The Common Court of Justice and Arbitration is both an arbitration institution and a judicial court, with a remit covering all the OHADA States.

Foreign investment incentives

The Government of Benin (GOB) encourages foreign investment. The Decree no. 2016-279 of 03 May 2019 abrogates Decree no. 2006-299 of 27 June 2006 creating the Presidential Investment Council (PIC). The GOB set up the  PICto reinforce dialogue between the GOB and investors, and to speed up implementation of reforms to improve the business environment. The PIC includes local and foreign private investors and government representatives. The PIC also facilitates potential investment in Benin.

Law n°2020-02 of 20 March 2020 on the Investment Code in Benin establishes benefits under different investment regimes and grants extensive discretionary power to the Investment Control Commission at the Ministry of Commerce (MC). The MC has a” guichet unique” (single investment office) to apparently minimise bureaucratic delays for investors.

Foreign Investor Rules

Benin adopted an investment code in 1990 designed to attract private sector investment. The Beninese government requires that private companies are partly owned by Beninese nationals.

For listed companies, to be classified as foreign direct investment, the foreign-owned shares must be equal to at least 10% of the value of the company.

Press

• Law n°2022-13 of 05 July 2022 on the Organic Law on the High Authority for Audiovisual and Communication
• Law 97-010 of 20 August 1997 on the liberalisation of the audiovisual and special penal provisions for Press and Audiovisual Communication in the Republic of Benin.
• Law n°2015-07 on the information and communication code in the Republic of Benin

Advertising

• Law no. 94-009 of 28 July 1994, on the creation, organisation and operation of social, cultural and scientific offices
• Law n°2022-13 of 05 July 2022 on the Organic Law on the High Authority for Audiovisual and Communication
• Decree 2005-252 of 6 May 2005 approving the Benin Radio and Television Office (ORTB)

Pharmaceuticals

• Decree No. 2018-262 of 28 June 2018 prohibiting advertising of medical professions, medical activities, medicines and other medicinal products

Interest

Interest paid to a resident or non-resident generally is subject to a 15% withholding tax rate. A 6% rate applies to income arising from bonds, which may be reduced by the Beninese government under some conditions. With regard to bonds issued by WAEMU countries or by local authorities, the rate is reduced to 3% if the bond duration is between five and ten years, and to 0% if the term of the bonds is greater than ten years.

Personal income tax

Personal income tax rates of Benin are progressively between 10% - 35%.

An individual, either a Beninese or a foreign national, whose tax domicile is in Benin, is generally subject to personal income tax on worldwide income. Foreign-source income that already has been taxed may be exempt if there is a tax treaty between the two countries. Individuals not domiciled in Benin are subject to tax only on Benin-source income.

Exchange control

The CFA Franc is linked to the Euro at a fixed exchange rate and unlimited convertibility to the Euro is guaranteed.

The CFA members (Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo) have agreed to apply exchange control regulations modelled on those of France. Transfers within the CFA zone are not restricted. Dividends paid out of revenue and capital on disinvestment may be remitted.

Technical service fees

Technical service fees paid by resident companies to non-resident companies are subject to a 10% withholding tax. Technical service fees paid by resident companies to other resident companies are subject to a 1% or a 5% withholding tax. Technical service fees can be deducted if they are not excessive and do not have the character of an indirect transfer of profit (to the extent of 20% of overhead).

Transfer pricing

A transfer tax of 8% is levied on the transfer of land and buildings. The transfer of shares is subject to a fixed rate stamp duty.

Pre-tax profits indirectly transferred abroad (by adjusting sales or purchase prices, or by any other means) to a company outside Benin that controls or is controlled by the Beninese corporate taxpayer may be added back to taxable income.

Judiciary

Constitutional Court: Seven members, of which four are appointed by the National Assembly and three are appointed by the President.

High Court of Justice: Thirteen members, of which seven are the members of the Constitutional Court and six are appointed by the National Assembly.

Supreme Court: The President of the Supreme Court is appointed by the President.

Payroll tax and social security

The employer's contribution is 15.4% of gross salary (6.4% pension and 9% family allowance), plus 1%- 4% as industrial injury insurance, depending on the degree of risk in the employment.

A 4% rate applies, based on a widely defined concept of emoluments.

Value added tax

The standard VAT rate is 18%. Exempt activities include imports of certain products, banking and general insurance. Externally financed government contracts are exempt under certain conditions. Exports of goods and services are zero-rated.

Real property tax

An annual real property tax is levied on the owner of property in "main" towns at a rate of 6% of the rental value for developed property, and 5% for undeveloped property. The charge may be reduced where the property remains vacant.

Losses

Losses may be carried forward for 3 years.  Losses arising due to excess capital allowances may be carried forward indefinitely.  Losses may be carried back to the third year preceding the loss.

Capital deductions

Capital gains tax

Capital gains derived from the disposal of business assets are included in ordinary income and taxed at the company rate. The taxation of certain capital gains may be deferred if the taxpayer reinvests the gains before the expiration of a three-year period, subject to certain conditions.

Royalties

Royalties paid to resident individuals are considered non-commercial profits and are subject to personal income tax at progressive rates. Royalties paid to resident companies are not addressed in General Tax Code, so they are subject to corporate income tax at the rate of 30%.

Corporation tax

• The standard corporate income tax rate of Benin is 30%.
• The tax rate is between 35% - 45% for oil companies carrying out research, exploitation, production and sale of hydrocarbons.

Export processing zone

n/a

Dividends

Dividends received from domestic companies are not included in taxable income when determining corporate income tax liability.

Dividends paid to residents and non-residents generally are subject to a 15% withholding tax. This rate is reduced to 10% for income properly distributed from shares and to 7% for income properly distributed from shares of companies listed on a stock exchange approved by the Regional Council for Public Savings and Capital Markets (CREPMF, in French) of the WAEMU.

Thin cap regulations

There are no specific thin capitalisation rules, but loan interest due to shareholders will be disallowed to the extent that it arises from interest rates more than three percentage points above the base rate of the West African States Central Bank.