Mixed legal system of Islamic law, English common law and civil law.

Country overviewSudan flag


45,657,202 (as of 2021)


President Umar Hassan Ahmad al-BASHIR (since 30 June 1989)

Capital city


Other major cities

Omdurman, Portsudan

Major industries

Oil; cotton ginning; textiles; cement; edible oils; sugar; soap distilling; shoes; petroleum refining; pharmaceuticals; armaments; automobile / light truck assembly

Legal information

Foreign Investments
Foreign Direct Investment

The Republic of Sudan is moving forward to attract the attention of national and foreign investors. On 14 December 2020, Sudan has been officially removed from the United States of America ‘State Sponsors of Terrorism’ list.

Following such removal, Sudan has published several new legislations to set out a more flexible and effective legal framework. This includes, among others, the new Investment Encouragement Act,2021 issued on 11 April 2021 (the New Investment Act) cancelling the previous Investment Act, 2013 (the Old Investment Act).

The New Investment Act introduces new provisions, establishes additional investment authorities, and adopts advanced concepts in comparison with the Old Investment Act.

Pursuant to Article 21.1 of the New Investment Act, foreign investors enjoy accommodation in Sudan for the duration of the project. No fees or administrative interests shall be applicable to any economic activity licensed in accordance with the New Investment Act, except by virtue of an approval of the Ministry of Investment. In addition, the New Investment Act sets forth some tax and custom duty exemptions, in this regard please refer to our response under query 7 below.

Entry Strategies and Common Corporate Structures

Generally, doing business in Sudan requires the incorporation of local legal entity. Such entity may take the form of a branch or a company.

As a matter of Sudanese law, there are two forms of companies, namely:

(a)    Limited liability companies, which may take any of the following forms:

(i)    Limited by guarantee: whereby a minimum of two shareholders is required and each shareholder’s liability shall be limited to the amount that each shareholder undertakes to contribute to the company’s assets in case of liquidation. It is worth noting that such form of company is incorporated for the purposes of incentivising and promoting sciences or arts or to undertake charity works. In light of NewCo’s intended activities, it would not be adequate for NewCo to take the form of a private company limited by guarantee; or

(ii)    Limited by shares: whereby a minimum of two shareholders is required and each shareholder’s liability shall be limited to the unpaid portion of the shares held by it; and

(b)    Unlimited liability companies whereby the liability of shareholders shall not be limited.

Any of the abovementioned forms of companies may be either private or public. Shares of private companies may not be offered for public subscription. The memorandum and articles of association of a private company may specify a maximum number of 50 shareholders and may restrict transfers of shares.

With regard to incorporating branches in Sudan, Article 33 of the Companies Act provides that “any company incorporated outside Sudan and desires to undertake business in Sudan shall register a branch therein in accordance with the following conditions (a) the branch may not undertake any activity which does not fall within the purpose of the registered company abroad, (b) the branch shall deposit its annual budget in accordance with the customary accounting standards and system in Arabic and English”.

From a practical perspective, we have seen projects in Sudan undertaken by companies owned by foreign shareholders in the fields of, inter alia, oil and gas, mining, logistics, infrastructure, agriculture, telecommunication, transportation, and electricity.

Commercial Joint Ventures between Foreign Investors and Local Firms

Generally, foreign investors may establish companies in cooperation with local companies. Pursuant to the New Investment Act, all investments in Sudan enjoy fair and equitable treatment. Such principle shall apply equally to all foreign investors irrespective of the nationality of the shareholders.

Further, the Public Private Partnership Act, 2021 (the PPP Act) is applicable to all projects that are subject to partnership contracts entered into between the private sector and a governmental entity   in order to implement a partnership project, regardless of the type, form or nature of activity.

Regulating Activities by Foreign Investors

As clarified under our response to query 3 above, all investments in Sudan enjoy fair and equitable treatment. Furthermore, Article 27.1 of the New Investment Act provides for the incorporation of a company to guarantee insurance of national and foreign investment (the Insurance Guarantee Company) in accordance with the Companies Act of 2015. The purpose of the Insurance Guarantee Company shall include insurance against:

(i)    the risk of currency conversion;
(ii)    the risk of confiscation and nationalization:
(iii)    the risk of war, social dispute, and civil rebellion;
(iv)    the risk of terminating a contract in violation of the law; and
(v)    non-commercial risks pursuant to the relevant international conventions.

In relation to public private partnerships which are subject to the PPP Act, the aforementioned Act sets forth the following procurement methods:

  1. One phase open competition;
  2. Two-phase competition;
  3. Limited competition;
  4. Competitive discussion; or
  5. Any other method as may be prescribed by the PPP regulation or the Supreme Council for Partnership between the Public and Private Sector, a newly established entity under the PPP Act.

The PPP Act set out the procedures and conditions of the bid throughout three phases:

  1. The invitation, declaration and bid conditions;
  2. Bidders qualification; and
  3. The bid award.

With the exception of certain activities, such as importation and exportation and general commerce, generally, foreign investment is permitted in Sudan. Having said that, the New Investment Act provides that the newly established Investment and Private Sector Development Authority (the “Authority”) shall, on the basis of the recommendation of the Minister of Investment, issue a list including certain sectors and economic activities which are not subject to foreign investment. Given the novelty of the New Investment Act, such list has not yet been issued.


The Labor Act, 1997 (Labor Act) regulates the treatment of local employees. The labor contract is defined under the Labor Act as “any contract whether written or oral, explicit or implicit, by which a person is used under the supervision and management of the employer in consideration for a wage of whatever nature […]” That said, an employment relationship is established upon the fulfilment of the following two elements: (i) wage paid by the employer to the employee; and (ii) subordination relationship whereas the employee undertakes the work under the supervision and management of the employer.

For contracts exceeding 3 months, the employment contract must be drawn up in writing and  a copy of the same must be deposited with the labor office.  In this regard Article 28.1 of the Labor Act provides that “any contract for a period exceeding 3 months shall be written by the employer. The contract shall be executed in three copies signed by the parties, each party holds a copy and the third one shall be deposited with the labor office.”  The registration of the employment contract with the labor office generally takes up to 5-7 business days.

With regard to foreign employees, as a general principle, the employment of foreign personnel is subject to the permission of the Labor and Administrative Reformation Minister. In this regard, Article 5 of the Non-Sudanese Employees Recruitment Act, 2001 provides that “it is not allowed to grant the work permission to a non-Sudanese except (i) if there is no Sudanese citizen that is able to undertake the work, in such case priority is given to the resident non-Sudanese over the non-resident non Sudanese, and the citizens of Arabic and African States have priority over other non-Sudanese; and (ii) the non-Sudanese personnel holds the private or ordinary residency permit in accordance the Passport and Immigration Act, 19994 and the regulations issued in respect of the same, and has at least twenty one years old, considering the Labor Act, 1997”.  After such permission is obtained, a foreign employee is also subject to the Labour Act, 1997.

Capital Constraints

Article 22.1 of the New Investment Act refers to regulations of the Investment Act with regard to fixing minimum capital requirements for foreign investors. The Authority is competent to issue regulations required to enforce the provisions of the New Investment Act, which regulations have not yet been issued.

According to Article 22.2 of said Act, prior to obtaining a license to undertake economic activity in accordance with the New Investment Act, a foreign investor must pay an amount not less than USD 250,000 or its equivalent in foreign currencies admissible by the Central Bank of Sudan as evidence of commitment in accordance with the regulations. We expect the regulations to specify the relevant authority to which the investor is required to pay such an amount given that it is not determined under the New Investment Act. Such an amount will be used to finance the relevant project after obtaining the license.
There are foreign currency controls applicable in Sudan. Accordingly, in order for a foreign investor to be able to repatriate their profits offshore, their participation in a Sudanese company must be registered with the Central Bank of Sudan promptly upon making the investment. A similar registration requirement arises in relation to loans disbursed into Sudan in order to be able to make repayments offshore. Common mitigants for capital financing is for loans to be disbursed and repaid from offshore.

With regard to the labour constraints, please refer to our response under labour.


While Sudanese law recognizes different types of taxes including income taxes, Article 20 of the New Investment Act provides that an Investment Project is exempt from business profit tax for a period not exceeding (5) years from the commercial production date in accordance with the regulations. We expect that the exemption period will be fixed on a case-by-case basis within the limit of (5) years from the commercial production date. Capital expenditure of Investment Projects is exempt from Value Added Tax (VAT) in accordance with a list approved by the Ministry of Investment.
Further, the same Article provides for an exemption in favor of Investment Projects from the following customs duties (i) the fee applicable to the capital required for the setup and preparations of a project; and (ii) on specific transportation as determined by the regulations.

Intellectual Property

Trademarks are protected by virtue of Trademark Act, 1969 (the Trademark Act) whereas using a trademark previously duly registered by another person is penalised under such Act. In this regard, Article 27.6 (a) of the Trademark Act provides that “any person who, with intent to deceive, commits or attempts to commit, aide or abets any other person in committing any of the following acts, shall be guilty of according to this Act and shall be liable upon conviction to imprisonment for a period not exceeding one year or with a fine to be determined by the relevant court or with both;
(a) Uses a trade mark duly registered by another person under this Act, or an imitation of such trade mark, for goods in respect of which the mark is registered […]

Dispute Resolutions

We note that that both local courts and international arbitration are, in principle, available for foreign investors.

Article 34 of the Investment Act provides for a dispute settlement mechanism whereby any dispute in relation to an investment shall be settled by the competent court unless the parties agree to arbitration or conciliation, to the extent the dispute does not fall under the umbrella of the conventions stated under Article 34.2 of the New Investment Act (e.g. the Settlement of Investment Disputes Between Arab States Convention of 1974). In addition, pursuant to the New Investment Act the head of the judiciary shall establish specialised courts to hear disputes in relation to investments and the public prosecutor shall establish prosecutions specalised in violations relating to investments.

With regard to arbitration, we note that Sudan is a party to the New York Convention for the Enforcement of Arbitral Awards. Pursuant to article 48 of the Arbitration Act of 2016, an arbitral award shall not be enforceable except after confirming the following:

(i)    the award or order is issued by an arbitral tribunal or centre pursuant to the applicable arbitration law of the State where the award has been issued, and the award shall be final in accordance with the provisions of such law;

(ii)    the party against which the award is issued has been summoned and duly presented;

(iii)    the award or order is not inconsistent with an award or order previously issued by Sudanese courts of the same substantive issue of the dispute;

(iv)    the award or order is not inconsistent with public order or morals in Sudan; and

(v)    the country where the award is issued and requested to be executed is executing Sudanese court judgments, centres and tribunal awards in its jurisdiction, or by the judgments conventions ratified by Sudan.

However, Sudanese law provides for an annulment procedure of arbitration awards in specific exceptional cases, including the absence of an arbitration agreement or its nullity, denial of justice/due process or failure to observe due process or if the tribunal did not apply the agreed upon applicable law to the dispute.

Public Procurements and Financing

Historically, Sudanese law did not permit interest to be charged on the basis of Islamic Shari’a principles. However, the Central Bank of Sudan Act, 2002 (CBOS Act) has been recently amended whereby the definition of the term ‘finance’ now expressly includes reference to conventional financing alongside the longstanding Islamic financing. In conjunction therewith, Article 110 of the Civil Transactions Act, 1984 (Civil Transactions Act), which historically prohibited the application of interest, has also been amended to read as follows: “save for financial and banking activities in accordance with the conventional regime, the Court shall not in any way apply interest, provided that the provisions of this Article (110) shall not apply to any agreement signed before the 18th of August 1983.” Due to the relevant novelty of the abovementioned amendments, to the best of our knowledge, they have not been sufficiently tested before the Highest Courts of Sudan.

We expect project financing to improve in Sudan as a result of such legislation amendments.

Public procurement and financing are governed by several legislations including, among others, the PPP Act, Investment Act, CBOS Act, Civil Transactions Act, and Arbitration Act.

Corruption / Transparency

The Anti-Corruption Authority and Public Monies Refund Act (Anti-Corruption Act), 2021 lists the entities subject to said Act, including the Cabinet, public authorities, companies contributed by the Government through any portion, Central Bank of Sudan, State-owned banks or banks contributed by the Government through any portion, as well as private sector institutions subject to the Anti-Corruption Act as determined by the Anti-Corruption and Public Monies Refund Authority (the Anti-Corruption Authority). That said, the investor shall comply with the Anti-Corruption Act to the extent such investor is subject to the Anti-Corruption Act by virtue of the decision of the Anti-Corruption Authority.

Article 5 of the Anti-Corruption Act lists the acts and crimes deemed as corruption including bribery, abuse of power by any person for the purpose of achieving interest for the benefit of himself or third party, in addition to tax and customs evasion.    

It is worth noting that, according to Article 9.(c) of the Anti-Corruption Act, the Anti-Corruption Authority has the right to “submit the infractions and violations related to the financial or administrative corruption resulted from the investigations to the justice or supervisory entities or any other competent entity by virtue or other law, as the case may be, in addition to serving a notification to the entity of the violator person”.  Pursuant to Article 23, the public prosecution is competent to file and supervise the criminal proceedings with regard to the complaints submitted to it from the Anti-Corruption Authority.  

The Anti-Corruption Act establishes a unit competent to, among others, “investigate corruption or public funds cases, matters, complaints, or claims, as well as the criminalized returns obtained through the corruption”. That said, in our reading, an investor may file a claim to such unit if it witnesses any corruption practice. The applicant, witnesses, experts, and their relatives enjoy protection in light of the corruption cases. In this regard Article 21.1 of the Anti-Corruption Act provides that “the Anti-Corruption Authority shall provide the necessary protection in favor of the applicants, witnesses, experts as well as their relatives and the persons close to them, in light of the corruption cases, for any potential aggression, revenge, or frighten through […]