Corporate Governance Code

Uniform Act of 15 December 2010 adopted by the Organisation for the Harmonization of Business Law in Africa (OHADA Uniform Act)

Current No. of listed companies

50 listed companies of which 1 is a Malian company.

Exchange

Regional Stock Exchange and Central Securities Depository (Bourse Régionale des Valeurs Mobilières) (BRVM)

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 candidate should:

• have up to CFAF 500 millions 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:

• CFAF 200 millions 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 within 2 years or 15% in case of introduction by capital growth.

For debenture loans:

• the minimal number of titles to the emission is of 25,000;
• minimal face value of the emission is of FCFA 500 millions.

Principal legislation

General Regulation on the organisation, operation and supervision of the West African Money Union Regional Stock Exchange,  Annex to the Convention on the composition, organisation, operation and powers of the Regional Council for Public Saving and Financial Markets (CREPMF) and the Organisation for the Harmonization of Business Law in Africa (OHADA).

Public offers / disclosure regulations

Civil Code based on the French civil law model and influenced by customary law.

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;
  • the Peddlers and Undertaking for Collective Investment in Transferable Securities (UCITS).

Takeover / merger regulations

Uniform act of OHADA relating to commercial companies and economic interest group. Find out more here.

Impact of regulatory regime on business

The minimum capital required for launching a business is about three times the level of average annual income, and obtaining necessary licenses is time-consuming and costly. The labour market remains underdeveloped. As Mali seeks to return to political stability with the help of the international community, the government must strengthen public financial management to restart economic growth. 

Legislation

Regulation No. 02/2002/CM/UEMOA of 23 May 2002 contains provisions relating to anti-competitive business practices. Ordinance No. 92-021/P-CTSP of 13 April 1992 refers to freedom of prices and competition within Mali territory.

Scope

Regulation No. 02/2002/CM/UEMOA defines anti-competitive practices of individuals and legal entities that affect the commercial acts in the WAEMU market.  Law No.16-006 dated 24 February organising competition ensures free and fair trade in order to promote competitiveness and innovation among businesses, it  applies the regulation in relation to all activities of manufacturing, distribution and services including those associated with public entities.

Corruption Perception Index score for 2017

28

Corruption Percentage Index rank worldwide for 2017

137

Ratified?

Yes

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

Yes

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

No

Signatories to United Nations Convention against Corruption (UNAC)?

Yes

UNAC ratified?

Yes

Arbitration

Arbitration is rarely used because it is relatively unknown and expensive. Mali is a signatory to the OHADA Arbitration Act.

Effectiveness of the court system

The system is effective although in practice it sometimes falters.

Enforcement of arbitral awards

It is possible to enforce an arbitral award by submitting an enforcement application (formule executoire) to the courts.

Enforcement of foreign judgments

It is possible to enforce foreign judgments through the use of the exequatur procedure. Recognition and enforcement of foreign arbitral awards in Mali is governed by the Uniform Act of OHADA on Arbitration dated 23 November 2017.

Judiciary

Supreme Court members are appointed by the Ministry of Justice to serve 5 year terms. Constitutional Court members are selected by the president, the National Assembly, and the Supreme Council of the Magistracy. Members serve single renewable 7-year terms

Structure of the court system

Highest Courts:

• Cour Suprême;
• Constitutional Court.

Subordinate Courts:

• Court of Appeal;
• High Court of Justice;
• Cours d'Assises;
• Administrative Courts of Appeal;
• Magistrate Courts;
• First Instance Courts;
• Labour Dispute Courts;
• Administrative Courts;
• Children's Courts;
• Special Court of State Security. 

An independent commercial court was established in 1991 to expedite the handling of business litigation. There are three commercial courts, and where there are no commercial courts, the local courts of first instance have the jurisdiction to hear business disputes. The commercial court handles cases involving foreign companies. Court of First Instance decisions are appealable in the Court of Appeal and Supreme Court.

Foreign investment incentives

Law No.2012-016 dated 27 February establishing the Investment Code proposes an advantageous fiscal regime for investors in order to promote foreign investment in the manufacturing and service sectors. It provides appropriate securities to safeguard the interests of investors.

The Investment Code excludes trading activities, defined as the resale of products purchased outside the company. Activities eligible for specific codes are also excluded from the scope of this Code as well as banking and financial services, and telecommunications activities.

General legislation

Civil Code

Industry specific legislation

OHADA Uniform Act

Capital gains tax

Capital gains generally are taxed as ordinary income. Rollover relief is available where a company undertakes to reinvest the gains under certain conditions.

The following capital gains are exempt from tax or receive special treatment:

• capital gains realised within a group of companies;
• unrealised gains from the revaluation of fixed assets if they are booked in special reserve and capital gains resulting from mergers, divisions or partial transfers of assets between group companies in Mali.

Corporation tax

30% for companies (limited liability and public liability companies)

Dividends

There is no distinction between residents and non-residents at this level. Dividends are distributed in proportion to the contribution of each partner or shareholder. It is to be noted that dividends are distributable if, after the determination of net income, the legal reserve is equal to 10% of the net income and free reserves are deducted from the net income.

Exchange control

Residents and non-residents (individuals with principal activities abroad, foreign officials serving in a Member State of the WAEMU and national or international legal entities for companies located abroad) are required to comply with the WAEMU provisions on external financial relations of the WAEMU Member States. The WAEMU regulations reflect a desire to liberalise advanced current transactions and capital transactions.

Current operations aimed abroad: these operations are mostly authorised and executed in accordance with the principle of freedom for authorised intermediaries.

Capital transactions with foreign countries: in general, all transactions from the EU are free from restrictions except for the import of gold which is subject to the prior approval of the Ministry of Finance. All other outgoing payments are subject to an exchange authorisation application to the Ministry of Finance. Exchange transactions, capital movements, and regulations of any kind between a Member State of WAEMU and abroad, or in the WAEMU between a resident and non-resident, can only be performed through the Central Bank of West African States (BCEAO), the Post Office, an authorised intermediary, or an authorised foreign exchange dealer. Foreign currency held in a Member State of WAEMU must be transferred or deposited with an authorised intermediary or, if applicable, the BCEAO whether these assets belong to a resident or a non-resident. Furthermore, the same article states that residents must transfer to an approved intermediary bank all income received or denominated in foreign currencies abroad or paid by a non-resident.

Export processing zone

Mali has some free points in place.

Interest

Interest paid to a non-resident is subject to a 10% withholding tax;  6% income from bonds, and a 13% rate applies  for interest, arrears and other income from bonds represented by negotiable securities in representation of loans contracted by companies having their registered office in Mali or which carry out an activity in Mali and are constituted in a form which would make them taxable if they had their registered office in Mali . The rate may be reduced under tax treaty.

Losses

Tax losses are deducted from the tax on corporate profits and may be carried forward for 3 years. The carryback of losses is not permitted.

Payroll tax and social security

The applicable rate to taxable income shall be determined as follows for each income:

• From CFAF 0 to CFAF 330,000: 0%
• From CFAF 330,000 to CFAF 1,200,000: 2%
• From CFAF 1,200,001 to CFAF 1,800,000: 10%
• From CFAF 1,800,001to CFAF 2,600,000: 26%
• From CFAF 2,600,001 to CFAF 3,500,000: 33%
• From CFAF 3,500,001to CFAF 4,100,000: 36%
• Beyond CFAF 4,100,001n: 40%

Gross tax reduction for the applicable dependents is determined as follows:

• Single, Divorced, Widow, without dependent children: 0%
• Married, without dependent children: 10%
• Dependent child up to the tenth included: 2.5%.

Personal income tax

35% on industrial and commercial profits for individual operators or partnerships.

Real property tax

Real property tax is charged on developed land, although a tax holiday may be granted for new buildings and buildings in specified development areas (examples of rates - 8% for banco buildings, 12% for hard and semi hard buildings).

Royalties

Royalties paid to a non-resident are subject to a 17.5% withholding tax, unless the rate is reduced under a tax treaty.

Stamp duty & company registration

Stamp duty is imposed at varying rates on transactions, including the execution of various documents and deeds.

Technical service fees

Technical service fees paid to a non-resident are subject to a 17.5% withholding tax, unless the rate is reduced under a tax treaty.

Thin cap regulations

There are no specific thin capitalisation rules, but limits are imposed on interest paid to business partners. The maximum interest is the loan rate of the BCEAO, plus 3 points at the time the interest payment is due.

Transfer pricing

There are no Transfer Pricing regulations in Mali. However, article 81 of the General Tax Code regulates related party/company transactions and provides that in determining the taxable income from industrial and commercial transactions derived by companies dependent or controlled by an enterprise situated outside a member State of the West African Economic and Monetary Union (WAEMU), profits indirectly transferred to the latter, either by an increase or decrease of the purchase or selling price, or by any other means, shall be added to the tax base.

Per the code, the Malian tax Administrator may make adjustments to the tax base in order to determine the arm's length transfer price where there exists a relationship of dependency and/or control between the resident entity and its foreign party. Adjustments made on profits indirectly transferred are based on the economic realities of the transaction. The tax directorate in the exercise of its duty may fully or partially repair omissions in the tax base or recover any tax, duties, or fees due, as well as fix errors impairing the determination of the transfer price.

Article 81 covers a broad scope of transactions (industrial and commercial); it also empowers the tax authorities to make adjustments on any other transaction that artificially reduces the taxable profits. On the other hand, the level of dependency and control required for tax adjustment is not defined. This gives room for appreciation of a transaction and any subsequent adjustment of the transfer price at the discretion of the tax inspector. On this basis, taxpayers are required to comply with competition rules, and produce sufficient information/documentation on the nature of the transaction, as well as the economic reality of the prices in order to substantiate the transfer price.

Value added tax

18%