Chad has a mixed legal system of civil and customary law.
President Idriss Déby Itno, Lt. Gen. (since 4 December 1990)
Oil, cotton textiles, meatpacking, brewing, natron (sodium carbonate), soap, cigarettes, construction materials
French (official), Arabic (official), Sara (in south), more than 120 different languages and dialects
Muslim 52.1%, Protestant 23.9%, Catholic 20%, animist 0.3%, other Christian 0.2%, none 2.8%, unspecified 0.7%
- Capital markets
Current number of listed companies
5 listed companies
Regulatory body or bodies
Commission for the Supervision of Financial Market of Central Africa ("Commission de Surveillance du Marché Financier de l'Afrique Centrale")(COSUMAF)
- Regulation no.06/03 Economic and Monetary Community of Central African States (CEMAC)
- UMAC dated 12 November 2003 regulating the organisation, functioning and supervision of financial markets in Central Africa
- General regulation of COSUMAF dated 15 January 2009
Corporate Governance Code
Takeover / merger regulations
Public offers / disclosure regulations
General regulation of COSUMAF dated 15 January 2009
- Competition regulation
Law No 043-PR-2014 relating to competition is the relevant legislation applicable in Chad. In addition, as a member of the Commission of the Economic and Monetary in Central Africa (CEMAC), Regulation no.1/99/UEAC-CM-639 dated 25 June 1999 of Central African Economic and Monetary Community on anti-competitive business practices is in force in Chad. The National Competition Council (Conseil National de la Concurrence), which falls under the Ministry of Commerce, is the enforcer of the legislation.
Impact of regulatory regime on business
Any economic concentration is subject to prior notification of the National Competition Council.
Law applies to economic concentration where two companies in the concentration have up to 30% of the market.
The provisions of the law cover the following points:
- Free Prices;
- Anti-competitive practice;
- National Competition Council;
- Price transparency;
- Economic concentration; and
- Corruption / transparency
Corruption Perception Index rank worldwide for 2017:
Signatories to the African Union Convention on Preventing and Combating Corruption?
Corruption Perception Index score for 2017:
Signatories to United Nations Convention Against Corruption (UNAC)?
Signatories to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions?
Chadian's domestic arbitration law is governed by OHADA Uniform Act on Arbitration. Chad is also a contracting State to the ICSID Convention. Pursuant to Article 69 of the ICSID Convention, Chad enacted Act No. 6 of 8 January 1966 approving the ICSID Convention and the Decree No. 15/PR of 21 January 1966 on the ratification of the Convention on the Settlement of Investment Disputes between States and Nationals of other States to make the Convention effective in the jurisdiction.
Effectiveness of the court system
There is limited capacity within the judiciary to address commercial issues, including contract disputes. In the absence of an effective judiciary, companies usually try to resolve disputes directly.
Judges are appointed by the Chadian President without National Assembly confirmation, making them potentially vulnerable to influence from the executive branch.
Enforcement of foreign judgments
Decisions by foreign courts are not enforceable in Chad unless and until they have been granted exequatur by a Chadian court.
Perception of the local courts
In general, the courts are perceived by the local population to be weak and subject to direct influence by the government.
Structure of the court system
The judiciary is independent from the Executive and the Legislature. Judges retain their position for life, and they are only subject to the law in the exercise of their function. The judiciary comprises the Supreme Court, Courts of Appeal, Criminal Court, and the Courts of First Instance. The administration of the judiciary (including the appointment, promotion, discipline and responsibility of judges, etc.) is the responsibility of the High Council of the Judiciary (HCJ). The HCJ proposes Judges to the President for appointment and promotion. The Council is chaired by the President of the Republic, with the Minister of Justice and the Chairperson of the Supreme Court respectively as first and second Vice-Chairs. The other members of the HCJ are judges elected by their peers. When sitting on disciplinary matters, the HCJ is presided over by its second Vice-Chair.
- Enforcement of arbitral awards
Arbitral awards can only be subject to compulsory enforcement by virtue of an exequatur awarded by the competent judge in the member State.
Recognition and exequatur of the arbitral award requires that the party wishing to rely on it shall establish the existence of the arbitral award. The existence of the arbitral award is established by the production of the original arbitral award accompanied by the arbitration agreement or copies of these documents, and also satisfying the conditions required to prove their authenticity. Where the documents are not written in French, the party shall have to produce a translation certified by a translator registered on the list of experts established by competent courts.
The recognition and exequatur will be refused where the arbitral award is manifestly contrary to international public policy of the Chad.
The decision refusing the exequatur of the arbitral award can only be set aside by the Common Court of Justice and Arbitration. The decision granting the exequatur is not subject to any recourse. However a petition for nullity of the arbitral award shall, as a matter of law, and within the limits of the seizing of the competent judge of the member state, effectively provide recourse against the ruling allowing exequatur by the court.
- Foreign investments
Foreign investment incentives
The Government of Chad officially encourages foreign investment, particularly from regional partners in CEMAC, the Economic Community of Central African States (CEEAC) and OHADA. These groups seek to standardise tax policy, customs practices, and commercial law and in the case of CEEAC, support a free trade zone of member states.
Chad has also adopted a new Investment Charter in 2008 to offer incentives for foreign companies interested in establishing operations in Chad. According to the 2008 Investment Charter, foreign firms are given five years of tax-exempt status. Export taxes have largely been eliminated, and a value-added tax has been adopted throughout the CEMAC region that in principle allows goods to circulate duty free among member states.
- Law No 010/PR/2010 on anti-smoking fight; and
- Order No 039/PR/PM/MSP/SE/2015 on the regulation of packaging and labelling of tobacco product in the Republic of Chad.
- Law No 17/PR/2010 relating to the press regime in Chad
- Law No 009/PR/2010 relating to the audio-visual communication in Chad
- Law No 014/PR/2014 of 21 March 2014 on electronic communications
Industry Specific Legislation
- Ordinance no. 68-027 1968-10-28 PR governing the cinematography, import, export and exploitation of cinematographic films and on sounds recording.
Personal income tax
Residents are taxed on worldwide income. Non-residents are taxed on income sourced in Chad.
- 20% to the fraction of income not exceeding 300,000 francs
- 25% to the fraction of income between 300,000 and 800,000 francs
- 30% to the fraction of income between 800,000 and 1,000,000 francs
- 40% to the fraction of income between 1,000,000 and 1,500,000 francs
- 45% to amounts of income between 1,500,000 and 2,000,000 francs
- 50% to the fraction of income between 2,000,000 and 3,000,000 francs
- 55% to the fraction of income between 3,000,000 and 6.000.000 francs
- 60% to the fraction of income above 6,000,000 francs
For taxpayers whose income per share does not exceed 300,000 francs, the contribution is reduced by 20%
When the net income per share is between 310,000 and 600,000 francs, the fee is reduced by 10%
Transfers within the State members of CEMAC are free but subject to declaration.
Transfers of funds within the Country are subject to a transfer fee determined by free competition and not exceeding 0.25%, excluding the VAT.
Transfers of funds abroad are subject to a transfer fee determined by free competition and not exceeding 0.50%, excluding the VAT.
Stamp duty applies to all civil and judicial acts and writings that can be produced in court and to be used as proof.
Payroll tax and social security
- 10.5 % contribution of the employee
- 7.5% contribution of the employer
- Social security: 17%
Transfer pricing does not exist in Chad. Tax on transfer is included in the Value Added Tax.
Royalties paid to non-resident companies are subject to a withholding tax of 25%.
Losses may be carried forward for three years.
Real property tax
12% of the rental value of assets
Technical service fees
Value added tax
20%. Capital Gains Tax is not included in the corporation tax.
- Resident companies: 40% on profits or 1.5% on turnover
- A resident company is either incorporated in Chad or has a permanent domestic establishment.
- Non-resident companies: 40% on profits or 1.5% on turnover
- Non-resident companies are taxed on income sourced in Chad.
Newly listed companies: New incorporated companies or companies undertaking new activity are exempt from the payment of corporation tax for the first five years of operation of the company or the new activity.
Export processing zone
There are no export processing zones.
Dividends are considered as income. Please refer to the section on personal income tax.
Thin cap regulations
There are no specific thin capitalisation rules.