Cameroon has a mixed legal system of English common law, French civil law and customary law


Country overviewCameroon flag

Population

25m

President

President Paul BIYA (since 6 November 1982)

Capital city

Yaounde (capital) 2.432 million

Other major cities

Douala 2.949 million

Major industries

Petroleum production and refining; aluminum production; food processing; light consumer goods; textiles; lumber; and ship repair.

Currency

CFA Franc

Languages

24 major African language groups, English (official), French (official)

Major religions

Catholic 38.4%, Protestant 26.3%, other Christian 4.5%, Muslim 20.9%, animist 5.6%, other 1%, non-believer 3.2%

Capital Markets
Exchange

Douala Stock Exchange

Central African Stock Exchange (Bourse des Valeurs Mobilières de l'Afrique Centrale) (BVMAC)

Current number of listed companies 

Douala Stock Exchange: Information not available

Central African Stock Exchange (Bourse des Valeurs Mobilières de l'Afrique Centrale) (BVMAC): 5 listed companies

Listing Rules

The BVMAC is a public limited company with a public service mission, in charge of the organisation and management of the sub-regional financial market. The BVMAC sets the conditions for admission to the permanent stock market listing, the method and rules of listing, the method of stock orders entries, the conduct of meetings and the official publication of the stock prices. It also lays down the procedures for the practical implementation of public offers and the mandatory financial coverage of brokerage firms. The main function of the BVMAC is the management of the quotation system and the registration of trades in listed securities. As a market operator, the BVMAC determines the practical rules of operation and admission of securities on the stock exchange as well as the market compartments.

Regulatory bodies

Douala Stock Exchange: Capital Markets Authority (Commission des Marchés Financiers) (CMF)

Central African Stock Exchange (Bourse des Valeurs Mobilières de l'Afrique Centrale) (BVMAC): Commission for the Supervision of Financial Market of Central Africa (“Commission de Surveillance du Marché Financier de l'Afrique Centrale”) (COSUMAF)

Principal Legislation

Douala Stock Exchange:

Law No. 99/015 of 22 December 1999 related to the creation and the organisation of a financial market. Find out more here.

Central African Stock Exchange (Bourse des Valeurs Mobilières de l'Afrique Centrale) (BVMAC):

Corporate Governance Code

Uniform act of the Organisation for the Harmonisation of Business Law in Africa (OHADA) on Commercial Companies and Economic Interest Groups.

Uniform act of OHADA on General Commercial Law

Takeover / Merger Regulations

Uniform act of OHADA on Commercial Companies and Economic Interest Groups

Public offers / Disclosure regulations

General regulation of COSUMAF dated 15 January 2009

Competition Regulation
Legislation

Law No. 98/013 of 14 July 1998 relating to Competition is the relevant legislation applicable in Cameroon. In addition, as a member of the Commission of the Economic and Monetary in Central Africa (CEMAC), Regulation No. 1/99/UEAC-CM-639 of 25 June 1999 is in force in Cameroon. The enforcer of the legislation is the National Competition Authority: the Commission Nationale de la Concurrence (“CNC”), which falls under the Ministry of Commerce.

Scope

Competition law in Cameroon protects the economic sector and consumers from any kind of improper action engaged in by companies. It acts in a general way to increase economic efficiency and the rate of economic growth. In some cases, Cameroonian competition law will allow unfair practices if their positive effects (e.g. employment, growth of the economy) are considered sufficiently positive. Under the law, there are no individual fines and directors cannot be imprisoned.

Corruption / transparency
Corruption Perception Index rank worldwide for 2017

153 

Signatories to United Nations Convention Against Corruption (UNAC)?

Yes

(UNAC) Ratified?

Yes

Corruption Perception Index score for 2017

25

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

No

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

No

Ratified?

No

Disputes
Arbitration 

As a state member of OHADA, Cameroon is subject to the OHADA Arbitration Law dated 11 March 1999 which governs the arbitration law of all members of OHADA. It is intended to apply to any internal or international arbitration, whether ad hoc or institutional.

The Uniform Act on Arbitration (Uniform Act) does not limit arbitration to commercial and professional matters - individuals and corporate bodies alike may refer their dispute to arbitration.

Structure of the court system
  • The Supreme Court;
  • The Courts of Appeal
  • The lower courts in administrative litigation
  • The lower courts of Auditors
  • The Military Courts
  • The County Courts
  • The First Instance Courts
  • The Traditional Courts
Judiciary 

There are two kinds of magistrates in Cameroon:

  • The Magistrates of the seat; and
  • The Magistrates of public ministry
Enforcement of Foreign Judgements

The President of the Court of First Instance is the judge of the enforcement of judgments and public acts of foreigners and foreign arbitral awards. The Judge verifies that:

  • the decision is made by a competent court in his home country;
  • the parties have been duly summoned, represented and declared in default;
  • the decision is enforceable in his home country origin;
  • the decision is not contrary to public order or Cameroon, or a final judgment rendered in Cameroon.

The judge disputes the execution notes in the findings of his decision. The exequatur may be granted partially to one or the other of the heads of the decision invoked. The judge's decision can only be subject to an appeal to the Supreme Court.

The enforcement of foreign judgments rendered in administrative matters is pursued before the president of the appropriate administrative court.

Foreign public documents, including foreign notarial deeds enforceable in their home country, shall be declared enforceable in Cameroon by the President of the Court of First Instance, taking effect where enforcement takes place or is contemplated. The judge verifies such acts if they have the necessary conditions for their authenticity in their home country and they are not contrary to public policy in Cameroon.

Enforcement of arbitral awards

Foreign arbitral awards have the authority of res judicata and may be recognized and enforced in Cameroon by the competent Judge, as provided by the relevant international conventions, and failing that, in the same conditions as those provided by the provisions of the OHADA Uniform Act on arbitration and the Law N ° 2003/009 of 10 July 2003 referring to the courts mentioned in the uniform act relating to arbitration law and fixing their mode referral.

The decision of exequatur is only subject to an appeal before the CCJA, the decision granting exequatur is not subject to appeal. Foreign arbitral awards are enforceable on the basis of the New York convention of 10 June 1958.

Foreign Investments

Law No. 2017/015 of 12 July 2017 amending and supplementing certain provisions of Law No. 2013/004 of 18 April 2013 setting incentives for private investment in the Republic of Cameroon.

The Cameroonian legislation does not prohibit foreign investment. However, foreign investors have to respect some minimum requirements. The Investment Code of Cameroon provides many investment incentives. It guarantees free transfer for foreign investors of any proceeds from their invested capital, including the funds remaining after liquidation.

Regulation
Tobacco

Order No. 967 of 25 June 2007 on health marking of the packaging of tobacco products.

Advertising

Law No. 2006/018 of 29 December 2006 related to the advertising in Cameroon.

Press

Law No. 90/52, amended by law no 96/04 of 04 January 1996 on freedom of mass communication.

Audio-visual communication

Law No. 2015/007 of 20 April 2015 governing the audio-visual activity in Cameroon.

Telecommunications

Law No. 98/014 of 14 July 1998 governing Telecommunications in Cameroon; and

Law No. 2005/013 of 29 December 2005 amending and completing some provisions of Law No. 98/014 of 14 July 1998 governing Telecommunications in Cameroon.

Taxation
Corporation Tax 

Resident companies

  • The corporate tax rate is 35%. Taking into account the 10% surcharge, the effective rate is 38.5%.
  • Resident corporations are taxed on their worldwide income. An entity is deemed to be resident if its registered office, centre of activity or management is located in Cameroon or if it has resident employees in Cameroon that provide services to customers.
  • Taxable profits are determined after deducting allowable expenses and charges. Expenses equal to or exceeding XAF 1 million are not deductible if paid in cash.

Non-resident companies:

  • An entity is deemed to be resident if its registered office, centre of activity or management is located in Cameroon or if it has resident employees in Cameroon that provide services to customers.
  • Non-resident companies are taxed the same rate but only on Cameroon-source income.

Newly listed companies (DSX):

  • The basic rate is reduced to 30% for the first 3 years a company is listed on the national stock exchange.
Exchange Control

All transfers of funds outside the Central African Economic and Monetary Community (CEMAC, consisting of Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea and Gabon), including loans obtained by resident companies from abroad and the solicitation of foreign securities in the CEMAC zone, must be declared and are subject to special control measures for statistical purposes.

Transfers of amounts in excess of XAF 5 million must be lodged with an authorized intermediary (i.e. a bank authorized by the central bank).

Documentation must be submitted to the authorities for currency transfers for the settlement of imports in excess of XAF 100 million.

All foreign direct investment exceeding XAF 100 million is subject to prior notification to the Ministry of Finance.

Expatriate employees may apply for authorization to repatriate 20% of their net earnings on a regular basis. However, if the family and dependents live outside the CEMAC zone, permission may be obtained to repatriate up to 50% of net earnings. Any savings accumulated by expatriates may be repatriated upon departure from Cameroon.

Capital Gains Tax

Capital gains are treated as ordinary business income and taxed at normal company tax rates.

Capital gains arising from the gratuitous allocation of shares, founders’ shares or debentures on the merger of limited liability companies or limited partnerships with share capital also are excluded, provided the company resulting from the merger has its registered office in Cameroon or another CEMAC state.

Upon the assignment, transfer or cessation of a company within 5 years following its creation or purchase, net capital gains will be assessed at half their value (1/3 of their value after more than 5 years).

Dividends

Dividends received by a resident company from a resident or non-resident company are subject to corporate income tax. The recipient may offset any Cameroon tax withheld from the dividends against its corporate income tax liability.
Foreign tax paid on dividends derived from a non-resident company is not creditable against Cameroon corporate income tax unless specifically provided for under a tax treaty.

The treatment of dividends received by corporate shareholders differs when the shareholder: (1) owns at least 25% of the shares in the affiliate; (2) the head office of the shareholder and its affiliate are located in Cameroon or another CEMAC state; and (3) the shares remain registered in the name of the shareholder for at least 2 consecutive years. Shareholders satisfying these requirements are entitled to be taxed on 10% of the net dividends received. Where the payer and recipient disclose the dividends in their respective financial statements in the same year, the withholding tax paid by the affiliate may be set off against the withholding tax payable by the shareholder on any dividend distributions subsequently made by such shareholder.

A withholding tax of 16.5% (15% withholding tax and a 10% local surcharge) applies to dividends paid to a resident and a non-resident. The rate may be reduced under a tax treaty.

Interest 

A withholding tax of 16.5% (15% withholding tax and a 10% local surcharge) applies to interest paid to a non-resident. The rate may be reduced under an applicable tax treaty.

Royalties 

Royalties paid to a non-resident are subject to a 15% withholding tax (the 10% local surcharge is not applicable), unless reduced under a tax treaty. However when such amounts are paid to a firm located outside the CEMAC that participates in the management of a Cameroon firm in which it holds shares, the royalties will be considered as sums accruing from the distribution of profits and subject to the 16.5% withholding tax.

Payroll Tax and Social Security 

The employer is required to make monthly contributions to the Housing Loan and Employment Fund in an amount equal to 2.5% of the total amount of the salary and fringe benefits.

The employer must pay 11.2% of the basic pay, allowances and benefits of its employees monthly to the National Social Insurance Fund (capped at XAF 300,000 per month). The employer also must contribute 1.75%, 2.5% or 5% of total salary, depending on the risk category of activities carried out by employees. Paid by both the employer and the employee. The employer must pay 11.2% of the basic pay, allowances and benefits of its employees monthly to the National Social Insurance Fund (capped at XAF 300,000 per month). The employer also must contribute 1.75%, 2.5% or 5% of total salary, depending on the risk category of activities carried out by employees. Paid by both the employer and the employee.

Value Added Tax
  • Taxable transactions – VAT is levied on the supply of goods; the provision of services; the import of goods; real estate activities; construction and delivery of buildings by real estate professionals; the sale of second-hand goods and equipment by professionals; transfers of non-exempt assets; and the leasing of underdeveloped land and unfurnished premises by real estate professionals.
  • Rates – The effective standard VAT rate is 19.25% (i.e. a 17.25% VAT and 10% surcharge). Exports are zero-rated. Certain essential goods are exempt.
  • Registration – All corporate businesses with taxable turnover are required to register. Non-resident VAT payers are required to appoint a solvent resident representative to be jointly responsible for the payment of VAT and the discharge of other VAT obligations.
  • Filing and payment – VAT returns, and any tax payable, are due by the 15th of each month following the month in which the transaction took place. Late payment incurs interest penalties at a rate of 1.5% per month, up to a maximum of 50% of the principal liability. Fines are levied for various omissions in discharging VAT obligations.
Losses 

Losses may be carried forward for up to 4 years, but may not be carried back.

Stamp Duty

Various stamp duties apply to contractual obligations and transfers or leases of property at rates ranging from 1% to 15%. Fixed stamp duties are levied on motor vehicle licenses, advertising materials, passports, visas and bills of lading.

Real Property Tax

Property tax is payable annually on real estate for which an ownership certificate or an administrative or judicial order has been issued. Tax is charged at 0.1% of the assessed property value, with the usual 10% local surcharge.

Personal Income Tax
Graduated Scale

A single income tax, based on graduated rates, applies to the net total income derived from various categories of income. Income categories include: salaries, wages, pensions and life annuities, income from stocks and shares, income from real estate, profits from handicraft, industrial and commercial activities, profits from agricultural activities and profits from non-commercial and related professions.

Progressive rates are imposed from 10% to 35%. A surcharge of 10% of the principal tax also is levied on the rates.

Residents taxed on worldwide income. Non-residents taxed on income accrued in or derived from Cameroon. An individual is resident in Cameroon if his/her principal center of interest or business is in Cameroon or place of abode is in Cameroon (i.e. more than 183 days in a tax year are spent in Cameroon).

Allowable deductions include business expenses, social security contributions, professional expenses (fixed at 30%) and a real estate deduction (fixed at 30%).