Chad has three agro-climatic zones and is Africa’s fifth largest country in terms of geographic/surface area. Chad is a landlocked country bordered to the north by Libya, to the east by Sudan, to the south by the Central African Republic (CAR), and to the west by Cameroon, Nigeria, and Niger (with which it shares Lake Chad). Douala, Cameroon, is the closest port and is 1,700 kilometres from the capital, N’Djamena. Chad is one of six African countries that comprise the Central African Economic and Monetary Community (CEMAC), a common market. Chad has one of the lowest levels of human development in the world, according to the UN Human Development Index (HDI), and poverty affects a large proportion of the population.
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The Chadian government (GOC) welcomes foreign investment, particularly from companies based in the United States. Foreign investment is encouraged in agribusiness, construction, building, and heavy equipment, automotive and ground transportation, education, energy and mining, environmental technologies, food processing and packaging, health technologies, information technology, industrial equipment and supplies, information and communication technology, and services.
Facts about Chad economy:
Chad is dealing with security issues related to border conflicts as well as the effects of climate change, which is exacerbating desertification and the drying up of Lake Chad.
With over 450,000 refugees from Sudan, the Central African Republic, and Nigeria, Chad continues to deal with the consequences of neighbouring country tensions and hosts a large number of refugees, who account for roughly 4% of the country’s total population.
Despite progress in poverty reduction, with the national poverty rate falling from 55 percent to 47 percent between 2003 and 2011, the number of poor people is expected to rise from 4.7 million to 6.3 million between 2011 and 2019. According to the World Bank’s Human Capital Index, the country ranks last.
Chad joined the ranks of oil-producing countries in 2003, and its economy has been heavily reliant on oil since then. The previously agrarian economy of the country saw per capita GDP rise from around $497 in 2001/02 (less than half of the average in Sub-Saharan Africa) to around $823 in 2017.
After two years of a deep recession brought on by a drop in oil prices, the economy began to show signs of recovery in 2018. GDP increased by 3.2 percent in 2019 but is expected to fall sharply to 0.8 percent in 2026 due to the economic impact of the COVID-19 pandemic.
As a result of the increase in oil prices and strong oil export performance, the external current account deficit fell from 6.6 percent to 4.7 percent between 2018 and 2019. The government is continuing its fiscal-accommodation efforts by increasing revenue and reducing recurring costs.
Oil exports will continue to be a major driver of GDP growth in the medium term. Furthermore, the privatisation of the public cotton company is expected to significantly improve the agricultural sector’s contribution to GDP growth.
Chad’s economy remains fragile and vulnerable to significant risks, such as volatile oil prices and regional insecurity. To mitigate these risks, Chad would benefit from investment in key sectors such as infrastructure, education, and health.
Can a foreigner register a company in Chad?
A foreign company may register a business in Chad as a branch office either independently or with a Chadian partner.
Advantages and disadvantages of doing business in Chad?
The advantages of establishing a business in Chad include the following:
- It is possible to register a company with one shareholder, one director and capital CFA 1 Million.
- Since 2008 foreigners are eligible to up to 3 years of “tax holidays”.
- Chad currently has a politically stable government that aims to improve the economic and social conditions of the country. They want to attract foreign investment; hence the business environment is slowly improving.
There are however still several challenges.
- Firstly, to register a business in Chad is a very complex and strenuous process which take at least three months to complete.
- Licencing requirements are very bureaucratic and unclear, costly and offer plenty opportunities for officials to request bribes.
- All foreigners who want to start a business must enter into a lease agreement with a landlord for industrial or office space, since registered and virtual offices are not allowed.
- With Chad being a French speaking country, foreigners have to provide certified translations of all their corporate documents.
- Even something as mundane as getting connected to the local electricity network is a nightmare and very costly.
- Sales and profits can be low since the country only has a small population and a low GDP per capita.
- The corporate tax rate is 35%, one of the highest in the world, and all companies, even if running at a loss, have to pay a minimum corporate income tax of 1.5 percent of its annual turnover.
- Employers have to pay social security contributions of approximately 28 % of an employee’s gross salary.
- VAT registration is mandatory with the standard VAT rate being 18%.
- Chad is ranked as the 5th worst place in the world for paying taxes and ranked at 135th out of 137 for its global competitiveness due to government instability and inefficiency, poor work ethics and an inadequately trained labour force.
Types of businesses to register in Chad
There are five main types of companies in Chad:
Corporation (Societé Anonyme, SA): A “Societé Anonyme” has the same characteristics as a “Societé Anonyme Francaise.” There must be at least seven shareholders. Financial responsibility of shareholders is limited to each individual’s capital contribution.
Limited Liability Company: (Societé a Responsabilité Limité, SARL): This category corresponds to the French SARL. A SARL requires a minimum of two individual partners. SARL partners cannot cede ownership without consent of 3/4 of the association.
Affiliate or Branch Office (Succursale): A foreign company may start a business in Chad as a branch office either independently or with a Chadian partner.
Economic Cooperative (Groupement d’Intéret Economique): A formal relationship between a group of businesses or organizations for the purpose of increased competitive advantage. Common among agricultural producers and artisans.
Sole Proprietorship (Entreprise individuelle): A private business owned by one individual with unlimited liability. Foreigners require a residence permit issued within the previous three months and a copy of a commercial lease to qualify.
How do I register a business in Chad?
To establish offices in Chad, a company must provide the following documents to the Formalities Center (Centre de Formalité des Entreprises) at the Chadian Chamber of Commerce:
- Copy of articles of incorporation or bylaws, and annexes;
- Decision of the General Assembly or decision of the Board of Directors (Societé Anonyme—See Below);
- Proof of identity of company executives/owners;
- Criminal records or affidavit of no criminal record;
- Residence permit (for foreigners);
- Lease or title of Property;
- Three colour photos of the Chief Executive Officer;
- Notary and registration fees of approximately $280 plus 1.5 to 5 percent of capital.
Engaging a lawyer or notaire to prepare these documents may reduce delays caused by missing documentation. The Formalities Center will then forward all documents to the Guichet Unique, a one-stop shop registration service located at the National Agency for Investment and Exportation (ANIE). Three business days are required to process an administrative authorization to establish a business. Fees for processing vary according to the size of the company.
Hiring employees in Chad
To succeed in Chad, you’ll need a team of employees you can rely on to contribute to the expansion of your company’s revenue and profits. If you intend to hire people from all over the world, you’ll need to discover how to obtain a Chad work visa for each and every foreigner who will be working for you. You’ll have to complete this process on top of everything else you’ll be doing, like running a new firm, dealing with overseas payroll, and sourcing the best perks for your employees.
Chad has several different types of work visas. All foreigners entering Chad must have a valid passport as well as a visa, unless they are citizens of Benin, Burkina Faso, Cameroon, the Republic of Central Africa, the Democratic Republic of the Congo, Gabon, Niger, or Equatorial Guinea.
Citizens of any of these countries are permitted to enter and remain in Chad for up to 90 days without a valid visa. In addition, certain individuals may be able to obtain visas on arrival if they have an Entry Authorization document issued by Chad authorities in their possession. Only inhabitants of Benin are eligible to get a visa on arrival without the need for an authorization letter.
Business visas and tourist visas are the two most common types of visas for everyone else to obtain. Individuals who need to attend sales meetings, conferences, or seminars, as well as those who need to travel for business or to perform services, are awarded business visas.
The categories are further subdivided into choices for single-entry and multiple-entry submissions respectively. The validity period for single-entry visas is one month, whereas the validity period for multiple-entry visas is three months. Depending on the terms of an employee’s employment agreement and the length of their stay, you may be able to extend their visa as well as acquire a work permit.
Obtaining Work Permits in Chad – Requirements
The prerequisites for obtaining a Chad working visa vary depending on the type of visa your employees will require. Some of the most typical documents required for both are as follows:
- An authentic, signed passport that is valid for at least six months beyond the duration of the visit.
- Two blank passport pages for stamping with visas
- A completed and signed application form
- One recent photo that is the size of a passport
- Your company’s or another local sponsor’s letter of invitation describing the applicant’s purpose for travelling should be sent.
- Proof of the length of stay, the location of the lodging, the name of the host, and his or her contact information
- A letter on your firm letterhead introducing the candidate and informing them of their employment status is required.
- It is necessary to provide proof of flight itinerary from the airline or travel agency, or a copy of the applicant’s plane tickets in order to be considered financially responsible.
- A certificate proving that you have been vaccinated against yellow fever
Visas for Chad are typically completed in four business days, but you can pay an extra cost for expedited or emergency service, depending on your demands, if you require it.
The process of applying
All individuals wishing to work in Chad will require a work permit in order to remain compliant with the country’s laws. Employers must submit a request to the National Office for Employment Promotion (ONAPE) before to establishing a work contract with a foreigner.
The request must be approved by the ONAPE. To be qualified for a work permit, all expats must have the proper legal documentation, which includes the following:
Employment authorization for a period of no more than one year will need:
- A resident identification card
- A long-term visa as well as a return visa are required.
- A labour contract having a set end date and a limited length
- On behalf of your employees, you will also need to register with the IRS and the Social Security Administration.
FAQ
What advantages are there in doing business in Chad?
- It is possible to register a company with one shareholder, one director and capital CFA 1 Million.
- Since 2008 foreigners are eligible to up to 3 years of “tax holidays”.
- Chad currently has a politically stable government that aims to improve the economic and social conditions of the country.
What challenges can I expect when expanding my business to Chad?
- Licencing requirements are very bureaucratic and unclear, costly and offer plenty opportunities for officials to request bribes.
- Foreigners have to provide certified translations (to French) of all their corporate documents
- Sales and profits can be low since the country only has a small population and a low GDP per capita.
- The corporate tax rate is one of the highest in the world.
- Employers have to pay social security contributions of approximately 28 % of an employee’s gross salary.
- VAT registration is mandatory with the standard VAT rate being 18%.
What type of business can I register in Chad?
There are five main types of companies in Chad:
- Corporation
- Limited Liability Company
- Affiliate or Branch Office
- Economic Cooperative
- Sole Proprietorship
What is the corporate tax rate in Chad?
The top corporate tax rate is 35 percent.
How long does it take to register a business in Chad?
It takes at least three months to incorporate a business in Chad.
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