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Corporate, Insurance and Employment matters

Angola

(a) Corporate vehicle

(i) Project company incorporation:

(A) Type of corporate vehicle

Please refer to the "Introduction to Power Sector" section.

(b) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

Private companies can lend and/or issue guarantees freely.

(ii) Are there any restrictions on dividend distribution?

There are no restrictions on dividend distribution since the deduction of the legal redemptions and payment of all taxes due are met.

(c) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

Mandatory insurance has been introduced lately. Presently, a company shall have workers compensation insurance and car insurance is also going to be mandatory in 2010.

(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

Insurance and insurance mediation activity in Angola can only be performed by companies duly authorised to operate as such by the government.

The reinsurer activity may be performed by companies previously authorised to exercise the insurance and reinsurance, international reinsurer agencies with head office in Angola and international reinsurer agencies from which the Angolan government is a shareholder.

(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?

There are no restrictions other than the obligation of contracting with an Angolan insurance company.

(d) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

In order to work in Angola, foreign citizens shall obtain a working permit. This permit, which application shall be submitted to an Angolan consulate/ embassy, must be used within 60 days after its issuance and is valid for one year, but can be renewed. There is a fee that must be paid for the application, which varies according to the country where the permit application is filled.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

As mentioned above all foreign employees shall have a working permit to work in Angola. The Angolan General Labour Law establishes the responsibilities of employees and employers. The regulations encourage the recruitment of Angolan citizens and require equal payment for both national and foreign staff with the same attributions and responsibilities. Foreign staff in Angola is limited to 30% of the workforce of the company.

Guinea

Corporate vehicle

(i) Project company incorporation:

(A) Type of vehicle: what is the most appropriate type of corporate vehicle for a project and can you describe its key features (e.g. limited liability, shareholding requirements, share capital requirements)?

The legal form of the company for the power generation sector is a "Societe Anonyme" (SA).

Its key features are:

  • Can be managed by one person or associated entity.
  • An SA may be administered by a Board of Directors from 3 to 12 members with a Managing Director.
  • An SA may also be administered by a single administrator, with combined power of Managing Director and Board Chairman.
  • Shares can be transferred, sold, or assigned by private treaty

(B) Thin capitalisation: are there any issues relating to thin capitalisation?

TO BE VERIFIED

(C) Indigenous shareholdings

We have come across requirements in certain jurisdictions to have a specific percentage of shares in a project company held by nationals of the jurisdiction. Please advise whether any such requirements apply in the country. Please indicate any prescriptive requirements or limitations in respect of incorporating a special purpose company such as:

(I) Requirement for a certain amount of equity to be held by indigenous entities
There are no limits on shareholding by foreign investors. A Guinean "Societe Anonyme" may be 100% foreign owned.

(II) Thin capitalisation requirements
The minimum capital for S.A is Guinea Franc (GNF) 10,000,000 (approx of USD 10,000), with a minimum par value per share of GNF 10,000 (approx of USD 10).

(III) Can a limited liability company be established?
A limited liability company can be established as a "Societe a Responsabilite Limitee" (SARL). Note that an SA also has limited liability.

(IV) Is it possible to use a foreign company or a branch of a foreign company to act as Project Company?
There are in law, two suitable forms for establishing a company for foreigners which are: a creation of a S.A under Guinean law (see above), or an opening of a branch of a foreign company. A creation of a branch is not appropriate for this kind of project.

(D) What is the estimated timescale for incorporation in the country? Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

The estimated timescale for incorporation is 40 days. The fees payable to governmental authorities to create an S.A is GNF 100,000 (approx USD 100) for companies.

(a) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

Yes, a private company is free to lend and/or issue guarantees, under the Uniform Act of OHADA adopted on 17 April 1997 on the organization of security. But the company may not advance funds, grant loans or provide a security for the subscription or purchase of own shares (article 639 of the Uniform Act of OHADA).

(ii) Are there any restrictions on dividend distribution?

There are no restrictions on dividend distribution; but rather an obligation. The Uniform Act of OHADA adopted on 17 April 1997 on the companies act provides in its article 146, that the payment of the dividend must be made within a maximum period of nine months after the close of the annual accounting period.

(b) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

Article 7 of Ordinance No. 003/PRG/SGG/88, on 28 January 1988 establishing the Labor Code provides that, in order to hire foreign workers, an "authorization" from the "Department of National Employment and Manpower". This will be subject to conditions determined by ministerial decree.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

See above (i)

Ivory Coast

(A) Project company incorporation:

(I) Type of vehicle: what is the most appropriate type of corporate vehicle for a project and can you describe its key features (e.g. limited liability, shareholding requirements, and share capital requirements)?

The legal form of the company for the project company is a "Societe Anonyme" (SA).

Its key features are:

  • Can be managed by one person or associated entity.
  • An SA may be administered by a Board of Directors from 3 to 12 members with a Managing Director.
  • An SA may also be administered by a single administrator, with combined power of Managing Director and Board Chairman.
  • Shares can be transferred, sold, or assigned by private treaty

(a) Corporate vehicle

(i) Project company incorporation:

(A) Type of corporate vehicle

Different types of corporate vehicle are possible in Ivory Coast "Societe Anonyme" and "Societe a Responsabilite Limitee". Please contact us directly for further information on this point.

(B) Issues relating to thin capitalisation

Interest expense may be disallowed where it arises on shareholder loans in excess of fixed capital.

(C) Requirement to have indigenous shareholdings

There is no requirement for a certain amount of equity to be held by indigenous entities:

Foreign investor may own 100% of the shares of its company.

(I) Thin capitalisation requirements

The minimum capital for S.A is CFA10,000,000 (approx of USD 22,000).

(II) Can a limited liability company be established?

A limited liability company can be established as a "Societe Anonyme" known as SA or as a "Societe a Responsabilite Limitee", known as SARL.
(III) Is it possible to use a foreign company or a branch of a foreign company to act as project company?

It is possible to use a foreign company or a branch of a foreign company to act as a Project Company in Ivory Coast.

(D) Estimated timescale for incorporation in the country. Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

The estimated timescale for incorporation in the country is 40 days. The fees or other costs payable to governmental authorities are:

Stamp duties of CFA 500 (US$1.10) per page for the registration of the minutes.

A Registration fee which varies according to the amount of the equity capital is payable: If it is up to CFA 5 billion (US$11m), the registration fee will be 0.6% of the amount of the capital; and if it is over CFA 5 billion, the registration fee will be 0.2% of the amount of the capital.

Tax return on incorporation: CFA 5,000 (US$11).

(b) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

A private company is free to lend and/or issue guarantees.

(ii) Are there any restrictions on dividend distribution?

The procedure of payment of dividends is fixed by the shareholders at a general meeting.

Distribution of the dividend must be made within a maximum period of nine months after the close of the financial year.

Except, in the case of a reduction in capital, no distribution can be made to shareholders, if the equity, following a distribution, would be less than the amount of the capital.

(c) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

The only mandatory insurance is for motor vehicles and imported goods (CIF shipping).

(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

There is no mandatory requirement to place insurance with domsestic insurers.

(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?

No restriction is set out by the insurance code for local insurer or reinsurer in granting security.

(d) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

A foreign employee is only permitted if the position in question has not been filled by Ivorian employee following a public advert for the position for at least a period of 2 months. The employer has a period of 6 months to put in place the appropriate work permit and residence card.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

It is possible to dismiss any foreign employee working in Ivory Cost, in order to replace that employee with an Ivorian. Although the law does not set out expressly that it is authorised to dismiss a foreign employee for the sole reason to replace it by an Ivorian, existing precedent suggests it is lawful.

Kenya

(a) General corporate issues

(i) Project company incorporation:

(A) Type of corporate vehicle

(I) Any of the following vehicles governed by the Companies Act would be a suitable project vehicle depending on the structure of the project and based on the project vehicle's ownership and taxation issues: a private limited liability company which must have a minimum of two shareholders and two directors and the registration currently takes up to one month due to the restructuring of the Companies registry;

(II) a public company requires a minimum of seven shareholders and two directors. This vehicle may be favourable for trying to raise funding for the project through equity and eventual listing on a stock exchange (a company must fulfil the requirements of being a public company in order to be eligible for listing). The registration period is also approximately one month; and

(III) a branch of a foreign company with established premises in Kenya for purposes of carrying on business in Kenya. This would also require a month to register.

(B) Issues relating to thin capitalisation

The Income Tax Act (Cap 470), contains provisions on thin capitalization of foreign controlled companies where a company incorporated in Kenya is controlled by a non-resident person alone or together with four or fewer other persons and, the highest amount of all loans advanced to that company at any time during the year are more than three times the sum of the revenue reserves and the issued and paid up capital of that company. The Kenya Revenue Authority bars any tax deduction on the part of the interest that exceeds the prescribed ratio of debt to capital (3:1).

(C) Requirement to have indigenous shareholdings

There are no specific restriction(s) on indigenous shareholding, however there may be statute based restrictions; for instance in the insurance industry.

(I) Thin capitalisation requirements

See above.

(II) Can a limited liability company be established?

See above.

(III) Is it possible to use a foreign company or a branch of a foreign company to act as project company?

It is possible provided the company first acquires a certificate of compliance pursuant to part X of the Companies Act.

(D) Estimated timescale for incorporation in the country. Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

There are generally no minimum capital requirements for companies however the industry minimum has been set at K.Shs.2,000.00. In addition, there are specific statutes which may provide for minimum capitalization requirements depending on the industry or nature of business governed by those statutes.

(b) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

A private company can lend money but can only issue guarantees if the same is provided for in its memorandum and articles. Where companies are not related commercial benefit must be proved.

(ii) Are there any restrictions on dividend distribution?

There are no restrictions on the distribution of dividends.

(c) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

There are no mandatory insurance requirements in relation to the Project assets or project company.

(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

Ideally insurance business (other than reinsurance business) should be placed with a Kenyan insurance company. However, insurance can be placed with foreign companies with prior written approval of the Commissioner of Insurance.

(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?

The Insurance Act (Cap 487), provides that an insurer is only permitted to secure temporary loans or overdrafts by way of a mortgage or charge which is not over ten per cent (10%) of its admitted assets.

(d) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

Foreign employees would require work permits as prescribed under the Immigration Act (Cap 172). An application for a work permit is made to the Ministry of Immigration and approval that takes between 2 - 6 months. Upon approval a security bond is required in the sum of K.Shs.100,000.00 and the fee payable is K.Shs.100,000.00. In addition, the approval of a work permit also ensures residency.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

There is a requirement that all foreigners should register for and obtain an alien registration card.

Madagascar

(a) Corporate vehicle

(i) Project company incorporation:

(A) Type of corporate vehicle

The most appropriate type of corporation is a "Societe Anonyme" (SA) similar to an unlisted English public company.

Its key features are:

(I) Liability limited to paid up share capital.

(II) Board of directors.

(III) Managing director with delegated authority.

(IV) Shares can be transferred, sold, or assigned by private treaty.

(B) Issues relating to thin capitalisation

There are "ratio'' issues relating to thin capital depending the company activities.

(C) Requirement to have indigenous shareholdings

There are no limits on shareholdings by foreign investors. A Malagasy "Societe Anonyme" may be 100% foreign owned.

(I) Thin capitalisation requirements;

Minimum capital requirement for incorporation is MGA 10,000,000 (Approx US$ 2,000).

There are rules that apply to the ratio of equity and debt finance.

(II) Can a limited liability company be established?

A limited liability company can be established either as a Societe Anonyme (above) or as a "Societe a Responsabilite Limitee" (SARL).

(III) Is it possible to use a foreign company or a branch of a foreign company to act as Project Company?

For large capital projects such as power generation, sponsors are strongly advised to set up a local subsidiary (SA see above). A branch is not appropriate for this type of activity.

(D) Estimated timescale for incorporation in the country. Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

The estimated timescale for incorporation is 6 weeks from first meeting to receiving the certificate of incorporation from Companies Registry. The approximate cost setting up an SA is US$ 1,750 including disbursements.

(b) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

A Malagasy private company is free to lend or issue guarantees. Lending money to the public is a regulated banking activity.

(ii) Are there any restrictions on dividend distribution?

There are no restrictions on dividend distribution.

(c) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

There is no mandatory insurance set out in the Insurance Code (law no 99-029 dated on 19th August 1999).

(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

There is no minimum requirement or any other restrictions to place the insurance with local insurers. The insurance is governed by the code 99- 023 dated on 19th August 1999.

(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?

There are no restrictions in respect of granting security rights over insurance or the reinsurance. Cut through clauses in re-insurance are acceptable.

(d) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

The Labour Code (Law 2003-044 of 28th July 2004) is also applicable to foreign employees. Any foreign employees should have an employment contract with the authorization from the Ministry of Employment which will form the basis of the Foreign employee's visa.

EDBM is responsible for issuing foreign employee visas.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

There are no restrictions that apply to foreign employees or to the contractors or subcontractors. They must respect the legislation and regulations in force. Efforts must be made to recruit and train suitable local staff.

Mali

(a) Corporate vehicle

(i) Project company incorporation:

(A) Type of corporate vehicle

The legal form of the company for the project company is a "Societe Anonyme" (SA).

Its key features are:

  • Can be managed by one person or associated entity.
  • An SA may be administered by a Board of Directors from 3 to 12 members with a Managing Director.
  • An SA may also be administered by a single administrator, with combined power of Managing Director and Board Chairman.
  • Shares can be transferred, sold, or assigned by private treaty

(B) Issues relating to thin capitalisation

Use of shareholder loans to finance project ahead of capital is discouraged. [7]

(C) Requirement to have indigenous shareholdings

The Malian legislation does not require foreign investors to be partner with the Malian State or a Malian Entity. Foreign investor may own 100 % of shares.

(I) Thin capitalisation requirements

The minimum capital for S.A is CFA 10,000,000 (approx USD 22,000).

(II) Can a limited liability company be established?

A limited liability company can be established as a "Societe a Responsabilite Limitee" (SARL) or as a "Societe Anonyme" (SA).

(III) Is it possible to use a foreign company or a branch of a foreign company to act as project company?

A foreign company can operate in Mali by establishing a branch.

(D) Estimated timescale for incorporation in the country. Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

Since the creation of the new one-stop centre, the estimated timescale for incorporation in Mali is 30 days.

The fees payable to governmental authorities to create an SA is CFA 8,500.

(b) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

Yes.

(ii) Are there any restrictions on dividend distribution?

The distribution of the dividend must be made within a maximum period of 9 months after the close of the annual accounting period.

Except, in the case of a reduce capital, no distribution can be made for shareholders, if the equity become, following this distribution, lower than the amount of the capital.

The procedure of payment of dividend is fixed by general assembly.

(c) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

[ ][8]

(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

[ ][9]

(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?

[ ][10]

(d) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

Yes. Preference must be given to Malian employees unless suitably qualified personnel are not available.[11]

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

See above at d(ii).

Mauritius

(a) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

Private companies have the capacity to lend and/or issue guarantees subject to the provisions of the CA 01.

(ii) Are there any restrictions on dividend distribution?

Dividend distribution may be effected provided that it is made out of retained earnings and that the relevant company satisfies the solvency test prescribed by the CA 01.

(b) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

There are no mandatory insurances to be placed under the laws of Mauritius in the present case.

(ii) Placement of insurance: is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

There is no minimum requirement.

(iii) Security over insurances: are there any restrictions in respect of granting security rights over the insurances or reinsurances? For instance, can a local insurer or reinsurer grant security (by way of assignment or otherwise) over its policies of insurance or reinsurance?

There are no restrictions in respect of granting security rights over the insurances.

(c) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

Except for an investor, a self-employed non-citizen or a professional (a 'Professional') who has applied for an occupation permit through the Board of Investment, a non-citizen must apply to the Ministry of Labour, Industrial Relations and Employment who shall issue the work permit within 2 weeks of the effective date of the application for the permit if the application is approved.

Otherwise in respect of an application made through the BOI by a Professional, the application takes three days to process and to issue an occupation permit which is issued for a maximum period of three years.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

Please see the above.

Morocco

(a) Corporate vehicle

(i) Project company incorporation:

(A) Type of corporate vehicle

Limited Liability Companies ("LLC") are the most appropriate type of corporate vehicle. LLC can be incorporated in KoM within 14 days.

(B) Issues relating to thin capitalisation

A company must have a minimum of Euro 1,000 in share capital.

(C) Requirement to have indigenous shareholdings

No requirements apply in KoM.

Please indicate any prescriptive requirements or limitations in respect of incorporating a special purpose company such as:

(I) Thin capitalisation requirements

Euro 900 in share capital and approx. Euro 29,000 for a stocks company.

(II) Can a limited liability company be established?

Yes.

(III) Is it possible to use a foreign company or a branch of a foreign company to act as project company?

Yes.

(D) Estimated timescale for incorporation in the country. Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

The estimated time period for incorporation of a company is 14 days.

(E) Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

The fees payable are approx. 6.000 MAD (Euro 500).

(b) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

Yes.

(ii) Are there any restrictions on dividend distribution?

There are no restrictions on dividend distribution except when such dividends are fictitious.

(c) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

The project company or project is required to have worker accident insurance and the mandatory illness contribution.

(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

There is no minimum requirement to place the insurance with local insurers or any other similar restrictions. However, reinsurance can be placed internationally with special approval from the foreign exchange authority.

(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?

Please contact us for further information.

(d) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

An expatriate employee is required to obtain a registration certificate; it is a title of stay, issued to expatriates living in Morocco for more than three (3) months.

The residence certificate, after an expatriate has resided in morocco for four years.

The procedure for the application, for a certificate of registration or resident's permit, is as follows:

In order to do that, an expatriate must contact the police prefecture of Rabat providing a file, which contains:

  • Three (3) certified copies of the foreigner’s employment contract;
  • Three (3) certified copies of their passport: page with the picture, page of the eventual visa and page in where appears last entrance date to Morocco;
  • Three (3) copies (of which one is certified true copy) of the lease contract in the expatriate name (two (2) copies of the certified true copy);
  • Three (3) copies (of which one is certified true copy) of the Lydec contract (or any other state control) in the expatriate name (two (2) copies of the certified true copy).
  • If the expatriate is domiciled by the employer, the employer must provide a guarantee certificate which eliminates the requirement of the above two items.

    • Two (2) registration request slips (printed white);
    • Three (3) registration request slips (card form);
    • Eight (8) pictures;
    • Special bill stamp of 60 MAD (~ 6 €).
    • Please note that these documents are valid for every resident's permit. For the married persons, the same list is to be provided for the spouse and for children of more than sixteen years old.

After the filing of these documents in the police prefecture, foreign department, a receipt is issued to the applicant waiting for the establishment of the resident's permit at the level of DGSN (“Direction Générale de la Sûreté Nationale”, or “General Direction of the National Safety”) in Rabat.

This receipt must be controlled every month in case the resident's permit was not issued by DGSN yet within 30 days.

It is recommended to take steps of registration also in the General Consulate of the delegate‘s country of origin.

It is necessary to draft an employment contract. The file must be submitted to the ministry of employment – work administration - immigration department - Rabat.

Documents to be provided are:

  1. Work certificate of the headquarters, listing different occupied functions;
  2. Estrangement Certificate in due form issued by the headquarters;
  3. Certified true copies of certificates and diplomas;
  4. Certificate of last employers otherwise certificate of the latest employer;
  5. Certified true copy of the pages of the passport: page with the picture, page of the eventual visa and page in where appears last entrance date to Morocco;
  6. Yellow printed form in five (5) copies said “printed form of foreigners employment contract” supplemented by the company in Morocco, signed by the employer and by the concerned person;
  7. White printed form said “job visa” in two (2) copies supplemented and signed by the expatriate;
  8. Important remark: the expatriate does not need the ANAPEC certificate (“Agence Nationale de Promotion de l’Emploi et des Compétences”, or “National Agency for the Employment and Competences Promotion”). However, their expatriation period cannot exceed 3 years.
  9. For the first request, the visa relating to employment contract will be granted for one (1) year period.

The ANAPEC will have to issue a certificate certifying the absence of national candidates for the occupied position.

Foreign employee can be seconded or expatriated.

Hence, the seconded remains tied to the social regime of his country of origin. In that case, a certificate of the social regime office of his country of origin is compulsory and must appear in the personal file of the expatriate. On the other hand, the expatriate will raise Moroccan obligatory regime. In that definite case, he will have to be affiliated to the National Office for Social Security (“Caisse Nationale de Sécurité Sociale” or “CNSS”).

There are some sensitive employment sectors such as the army, defense, nuclear research, where foreign persons are not permitted to work.

Mozambique

(a) Corporate vehicle

(i) Project company incorporation:

(A) Type of vehicle: what is the most appropriate type of corporate vehicle for a project and can you describe its key features (e.g. limited liability, shareholding requirements, share capital requirements)?

There are two main types of companies in Mozambique: (1) the joint stock corporation – “Sociedade Anónima de Responsabilidade Limitada (“SA”) – and (2) the private limited liability company by quotas – “Sociedades por Quotas” (“Lda”).

Since the latest revision to the Commercial Code, there is no minimum required capital to incorporate a company. Nevertheless, as per the law, share capital should be deemed fit for the relevant activity to be undertaken. A minimum of 3 shareholders is required to incorporate a SA company, whereas Lda companies require 2 shareholders.

In practice, Lda’s are the most widely used type of company. It is a convenient form of organization for small and/or closely-held enterprises due to its less complex administrative and supervisory structure. One of the main Lda features is the fact that its members (quotaholders) are liable not only for their own capital contributions but also, jointly with the others, for all contributions necessary to pay up the company’s share capital.

Differently, a SA has a more complex administrative and supervisory structure. It is an appropriate form of organisation for large and widely held enterprises

Typically, a SA is an attractive structure when a large number of shareholders are involved or otherwise it is important from the standpoint of marketing to clients to show a more robust form of company. Another reason to opt for a SA is the ability to hide the identity of the shareholders through the issuance of bearer shares. This is not possible in a Quota Company as the names of the shareholders are subject to public record in the relevant Articles of Association and in the Legal Entities Registry Office.

From a tax standpoint, there are no substantial differences between the two types of company.

(B) Thin capitalisation: are there any issues relating to thin capitalisation?

Yes. Pursuant to the CIRPC provisions, where shareholder’s loans overlap twice the company’s share capital, interest on the surplus can not be deducted as tax prejudice.

Moreover, please note that, as per the Mozambican Commercial Code, the company’s net position be less than 50% of its share capital, the board shall propose either the company’s dissolution or the share capital reduction, except where the shareholders decide to contribute cash to reinstate the share capital amount.

(C) Indigenous shareholdings: We have come across requirements in certain jurisdictions to have a specific percentage of shares in a project company held by nationals of the jurisdiction.  Please advise whether any such requirements apply in the country.  Please indicate any prescriptive requirements or limitations in respect of incorporating a special purpose company such as:

(I) Requirement for a certain amount of equity to be held by indigenous entities;

For power companies the law does not require any amount of equity to be held by Mozambican nationals.

(II) Thin capitalisation requirements;

Please see above.

(III) Can a limited liability company be established?

Yes. Please see above.

(IV) Is it possible to use a foreign company or a branch of a foreign company to act as project company?

The law does not prevent foreign companies to act as Project Company. Nevertheless, in practice, either a subsidiary or a branch shall be used so as to develop a power project. Otherwise same would hardly be approved. 

(D) What is the estimated timescale for incorporation in the country? Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

Timescale

It is not easy to provide an estimate timescale for company’s incorporation and/or registration purposes while it will always depend on various circumstances. Nevertheless, it is worth to mention that as a result of GoM’s strategy for improving the business environment in Mozambique up until 2012, certain conditions for timescale reduction are being implemented throughout the country.

As a result, at present and in normal circumstances, incorporation and registration of companies usually takes roughly one month. However, the reduction of certain bureaucratic procedures is still required, and the extension and full implementation of GoM’s strategy abovementioned in all provinces is mandatory.

Costs

Costs payable to the relevant authorities – i.e., MIC, Legal Entities Registry Office, Notary Office and Oficial Gazzette – are levied both on the share capital value and on the length of the Articles of Association approved. Thus, there are not fixed costs and, should that be of interest, the applicant shall request and estimative prior to the incorporation of the company and/or registration of the branch.

(b) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

Yes, provided that the law does not prevent the relevant assets/rights to be issued as guarantees.

(ii) Are there any restrictions on dividend distribution?

Yes. Dividends may not be distributed where (i) losses from previous exercises have not yet been covered/reimbursed and (ii) where the legal or statutory reserve has not been catered for. Moreover, the distribution of dividends is subject to prior resolution of the board or the General Assembly which shall describe the profits, the available reserves and the total amount to distribute.

There may also exist dividend repatriation limitations where the foreign shareholder of Mozambican company is not covered by a duly approved investment project.

(c) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

Yes. The Mozambican law sets forth certain mandatory insurances applicable to the project as follows:

Power Industry - The Electricity Law sets forth that power companies shall grant security by means of an insurance policy covering (i) losses and/or damages to premises, or equipment, (ii) property loss or damage or bodily injury suffered by any third party in the course of the operations (iii) liability to employees engaged in the operations, and (iv) any third party liability resulting from the operations.

Moreover, please note that Concession Contracts and/or PPA’s may also include insurance clauses requiring those engaged in power projects to keep insurance of such type and in such amount as is customary for similar projects in the international power industry and in accordance with international good practices. Such insurance may cover (i) loss or damage to the machinery, equipment and other assets acquired or used in the operations, (ii) property losses or damages or bodily injuries suffered by any third party in the course of the operations, (iii) liability to employees engaged in the operations, (iv) any third party liability resulting from the operations. As a rule, the insurance shall have a minimum value which shall also be set out in the Contract. 

Environment – The Environmental Law sets forth that everyone performing activities bearing a high risk of environmental degradation must take out third party liability coverage.

Worker’s compensation - The Labour Law determines that employees must have collective insurance so as to cover work-related accidents and occupational diseases and, in case of activities comprising high professional risks. The relevant insurance policy must cover all employees subject to such risks.

Motor vehicles – third party liability insurance is mandatory for all motor vehicles.

(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

As a rule, pursuant to the Insurance Law and the Insurance Regulations, only Mozambican insurance and reinsurance companies and Mozambican branches of insurance and reinsurance companies with registered offices abroad are allowed to carry out the insurance and reinsurance business in the country, provided that it has been authorised by the Ministry of Finance for such purpose and is registered with the Insurance General Directorate (Inspecção Geral de Seguros - IGS).

The above statutes also limit the execution of insurance policies abroad by an insured or the policyholder. Nevertheless, taking out insurance abroad may be authorised by IGS in the following cases (i) when it is evidenced that the local authorised insurers have refused to subscribe the policy, or (ii) when it is evidenced that the foreign insurers offered better conditions than those offered by the local insurers.

Again, please note that Concession Contracts and/or PPA’s may also include insurance clauses pertaining to insurance policies placed internationally as is customary for similar projects in the international power industry and in accordance with international good practices.

(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?

In principle, the law does not prevent granting securities over the insurances or reinsurances. Nevertheless, certain restrictions may indeed arise including, but not limited to, (i) regulatory consents so as to grant such securities notably by way of assignment and (ii) foreign exchange authorisation where payments to non-resident entities are required. Thus, this issue shall always be assessed on a case-by-case basis.

(d) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

Yes. The rendering of work in Mozambique by foreigners has both labour and immigration implications.

As a general rule, expatriate employees are only entitled to work in Mozambique under a Mozambican law employment contract entered into with a Mozambican employer (either a Mozambican company or the Mozambican branch of a foreign company) under the following regimes:

Communication (or “Quota”) Regime

Depending on the total number of employees (with reference to the previous calendar year), a given percentage of foreigners may be hired by means of simple notice to the Ministry of Labour as follows (i) 5% for companies having more than 100 employees, (ii) 8% for companies having between 10 and 100 employees and (iii) 10% for companies having up to 10 employees.

Under this regime, the employer is required to notify the foreign employee’s admission to the relevant Provincial Labour Department, describing the level of implementation of the available expatriate quota after the relevant admission and enclosing both the corporate and the employee’s documentation as required.

Authorisation Regime

Whenever the employer has reached its expatriate quota, the hiring of additional foreigners is subject to a prior authorisation from the Ministry of Labour. This authorisation is granted by the Minister on a case-by-case basis, and provided that the following compulsory requirements are met (i) inexistence of Mozambican nationals qualified to carry out the work in question, and/or (ii) insufficient Mozambican nationals duly qualified to meet the demand.

Short Term Assignments (“STA”) Regime

Pursuant to the Expatriate Regulations, expatriates are entitled to work in Mozambique for short terms of up to thirty (30) days, renewable for a maximum of ninety (90) days per year. Thus, STAs are neither subject to the quota regime, nor to authorisation from the Ministry of Labour. In this case, the employer shall rather submit a letter to the relevant Provincial Labour Authority.

Investment Projects’ Regime

Investment projects duly approved by CPI may provide a specific hiring regime by setting forth either a different percentage for the quota regime or other specific rules for expatriate hiring purposes. Therefore, the expatriate hiring procedure would be simpler, for the employer would only need to attach to the communication to the labour authorities a copy of the relevant investment project’s terms of authorisation expressly stating the number of foreign workers to be admitted and/or any other approved hiring conditions.

Expatriates working in Mozambique without a work permit obtained pursuant one of the foregoing hiring regimes are deemed to be illegally working in the country. If a labour inspection identifies such a situation, the relevant expatriate worker will be immediately suspended and severe fines may be applied both to the employer and to the expatriate. Under certain circumstances, the Minister of Labour may further prevent foreign workers to develop any further activity in the country and/or expel them from Mozambique.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

Notwithstanding the abovementioned, the Labour Law sets forth that the employer shall procure to provide national workers with work positions of high technical complexity and/or management in the company. On the other hand, the law also sets forth that foreign employees shall have equal treatment under the terms of   International Rules and applicable reciprocity clauses. Please also refer to our response to (i) above.  

Niger

Corporate vehicle: Project company incorporation

(i) Type of vehicle: what is the most appropriate type of corporate vehicle for a project and can you describe its key features (e.g. limited liability, shareholding requirements, and share capital requirements)?

The legal form of the company for the project company is a “Société Anonyme” (SA).

Its key features are:

  • Can be managed by one person or associated entity.
  • An SA may be administered by a Board of Directors from 3 to 12 members with a Managing Director.
  • An SA may also be administered by a single administrator, with combined power of Managing Director and Board Chairman.
  • Shares can be transferred, sold, or assigned by private treaty

(ii) Thin capitalisation: are there any issues relating to thin capitalisation?

The authorities discourage financing via shareholder loans instead of capital.

(iii) Indigenous shareholdings: We have come across requirements in certain jurisdictions to have a specific percentage of shares in a project company held by nationals of the jurisdiction.  Please advise whether any such requirements apply in the country.  Please indicate any prescriptive requirements or limitations in respect of incorporating a special purpose company such as:

(A) Requirement for a certain amount of equity to be held by indigenous entities;

The Nigerian legislation allows foreign investor to owe 100 % of shares of its company.

(B) Thin capitalisation requirements;

The minimum capital for S.A is CFA 10,000,000 (approx of USD 22,000).

(C) Can a limited liability company be established?

A limited liability company can be established as an SARL “Société à Responsabilité Limitée” or as an SA “Société Anonyme”.

(D) Is it possible to use a foreign company or a branch of a foreign company to act as Project Company?

It is possible to use a foreign company or a branch of a foreign company to act as a Project Company. However, foreign companies acting directly or as a branch require an “authorisation d’exercice” issued by the Ministry of Trade and Industry or the Prefect of the implementation zone of the project. An SA is therefore to be preferred.

(iv) What is the estimated timescale for incorporation in the country? Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

The estimated timescale for incorporation in the Niger is 30 days. The specific fees and costs payable to governmental authorities for incorporation are: a Registration fee of the Statutes and a Registration fee at the “Greffe du Tribunal”. There are also a fees of CFA 600,000 (US$1,400) for an SA and CFA 300,000 (US$700) for an SARL.

 

(a) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

Private company is free to lend and/or issue guarantees.

(ii) Are there any restrictions on dividend distribution?

The procedure of payment of dividend is fixed by general assembly.

Distribution of the dividend must be made within a maximum period of nine months after the close of the exercise.

Except, in the case of a reduction in capital, no distribution can be made to shareholders if the equity would become, following this distribution, lower than the amount of the capital.

(b) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

Mandatory insurance is only for motor vehicles and imports (CIF).

(ii) Placement of insurance: is there any minimum requirement to place the insurance with local insurers or any other similar restrictions?  If so, can reinsurance be lawfully placed internationally?

There is neither requirement nor restriction to place the insurance with local insurers.

(iii) Security over insurances: are there any restrictions in respect of granting security rights over the insurances or reinsurances?  For instance, can a local insurer or reinsurer grant security (by way of assignment or otherwise) over its policies of insurance or reinsurance?

No restriction is set out by the insurance code for local insurer or reinsurer in granting security.

(c) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits?  Please give an indication of the process and costs in relation to obtaining work and residence permits.

Employment contracts of foreign workers must be in writing and submitted for a visa to the Labour Ministry office. The process is set out in the Labour Code in articles 41 to 44.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

There are no restrictions that apply to foreign employees and foreign contractor/subcontractors. However,  foreign employees are subject to obtaining a work permit for 5 to 10 years renewable. This is issued by the Ministry of Trade and Industry or the Prefect of the place of  project implementation. 

 

Nigeria

(a) Corporate vehicle

(i) Project company incorporation:

(A) Type of corporate vehicle

The EPSRA does not require any specific type of vehicle through which power projects may be executed as it provides that such an independent power producer could be an individual, a company, a partnership or any other association of individuals whether incorporated or not.

We however note as a matter of practice and from our experience that a limited liability company is mostly utilized from of corporate vehicle in Nigeria for businesses of this nature.

(B) Issues relating to thin capitalisation

There are no stipulated capital requirements for independent power producers in Nigeria. However, where such an independent power producer is intended to be a company registered under the Companies and Allied Matters Act, Chapter C20, Laws of the Federation of Nigeria ("CAMA"), it is important to note that a company is required to have a minimum of N10,000 (ten thousand Naira) authorised share capital in the case of a private company or N500,000 (five hundred thousand Naira) in the case of a public company. Furthermore, companies with foreign participation are required to have a minimum of N10,000,000 (ten million Naira) authorised share capital.

Additionally, the NERC requires applicants for any form of electricity-related licence to furnish evidence of its funding arrangements and capital base as part of the consideration for the grant of the requisite license.

(C) Requirement to have indigenous shareholdings

(I) Thin capitalisation requirements

(II) Can a limited liability company be established?

(III) Is it possible to use a foreign company or a branch of a foreign company to act as project company?

There is no requirement under CAMA or EPSRA that Nigerian nationals must hold a proportion of the shareholding of the entity applying for a generation license. Indeed, pursuant to the Nigerian Investment Promotion Commission Act, Cap. N17, Laws of the Federation of Nigeria, 2004 ("NIPC Act"), a hundred per cent foreign ownership of a Nigerian company is permitted. However, a foreign company intending to engage in power projects or indeed any business in Nigeria must incorporate a local company or acquire shares in a locally incorporated entity through which it may engage in such projects.

Please note, however, that in view of the current local content policy (which is in the process of being legislated upon) of the Government which is presently predominant in the oil and gas industry, it may be forward-looking for any foreign investor in major projects such as power projects to ensure a level of local shareholding in its local subsidiary.

Further to the incorporation of a company under CAMA, such local subsidiary or entity will also be required to obtain the requisite foreign investment approvals from the Nigerian Investment Promotion Commission as a result of the foreign shareholding in the company.
(D) Estimated timescale for incorporation in the country. Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

The incorporation process involves an initial step of ascertaining the availability for registration of the chosen name of the company.

The estimated time frame for the incorporation of a company is usually 4 (four) weeks from the receipt of confirmation of the availability of the desired name from the Corporate Affairs Commission ("CAC").

There is however an expedited "One-Day" incorporation procedure which attracts an additional payment at the CAC. The estimated timeline for incorporation where such an expedited procedure is adopted is about 2 (two) weeks.

There are fees payable to the relevant governmental authorities involved in the incorporation process, namely the Stamp Duties Office and the Corporate Affairs Commission, which are largely determined by the share capital of the company. There are also fees payable in respect of the obtention of the requisite foreign investment approvals.

(b) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

Yes, subject to the provisions of its memorandum and articles of association.

(ii) Are there any restrictions on dividend distribution?

A company is prohibited from declaring dividends if there is reasonable grounds for believing that the company is or would be unable, after payment of the dividend, to pay its liabilities as they fall due.

(c) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

Neither the EPSRA nor the regulations made pursuant thereto require any mandatory insurance for power projects or the project companies. However, the project company would, under the Insurance Act, be required to take and maintain three particular insurance policies: (i) Motor Vehicle Insurance; (ii) Insurance of a Building under Construction; and (iii) Insurance in protection of interests of the beneficiaries.

(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

The Insurance Act requires a prospective insured to place the insurance with a local insurer. Such Nigerian insurance company may then reinsure such property or liability overseas but only where the Nigerian insurance industry lacks the capacity to retain the risk.

(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?

There are no restrictions on the creation of security over insurance or reinsurance policies.

(d) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

Yes, there is legislation which regulates foreign employees in Nigeria.

Specifically, the Immigration Act requires any non-Nigerian who wishes to take up employment- in Nigeria to obtain a permit issued by the Ministry of Internal Affairs.

Where the project company wishes to employ expatriates it will be required to obtain expatriate quota position approvals which are usually required in respect of managerial and technical positions. Please note however, that except for the position of the managing director, the project company's application would only be considered where there are no qualified personnel in Nigeria to hold the positions for which expatriate quota approvals are sought, or where such personnel exist but are not available in sufficient number.

The employment of expatriate staff in Nigeria is used as a tool to ensure technology transfer and therefore, quota applications are generally required to be supported by a detailed training programme for Nigerian staff, and a management succession schedule; and two Nigerians are required to understudy each expatriate employed.

The statutory fees for the processing of the expatriate quota application form is N25,000; but where the project company applies for the expatriate quota jointly with its business permit application, it will not be required to make this payment. The official fee for obtaining a managing or technical director's quota position, which position could be permanent until reviewed (p.u.r.), is $10,000, whilst all other quota positions attract an official fee of N10,000 for each application. Please note that the p.u.r quota is usually not granted to first time applications. Where the application is approved, the applicant is to pay a further sum of N10,000 for the collection of the quota position. The project company will also be required to apply for the residence permit of each of the expatriates for whom the expatriate quota is sought.

Any official of the project company employed under an expatriate quota position will be deemed to be resident in Nigeria and therefore subject to Nigerian personal income tax law.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

See our response to paragraph 1.5(c) (i) above. Please note that the Government is currently implementing a Local Content Policy which advocates preference for indigenous manpower, goods, materials and companies in employment and the award of contracts, especially in the energy sector. It would thus be forward-looking for a project company to source its manpower and raw materials locally and utilise Nigerian companies for its ancillary services except in the absence of qualified local capacity.

South Africa

(a) Corporate vehicle

(i) Project company incorporation:

(A) Type of corporate vehicle

The usual form of vehicle for a power project is a limited liability company. Depending on whether the company is a private or public company, there is a requirement for either one or 7 shareholders. Authorised and issued share capital is not required to be large and can be small numbers. However, the existing Companies Act will be replaced during the course of 2010. Some of the changes to the existing companies law are considerable and it is recommended that specific advice be sought in respect of the impact of these changes on a particular company.

It is not possible for a foreign company to operate in South Africa as the legislation requires that, within a few days of establishing a presence in South Africa, a foreign company must either establish a South African company to undertake its activities in South Africa or it must incorporate itself as a branch office under the South African Companies Act. Failure to do so is a criminal offence.

(B) Issues relating to thin capitalisation

Thin capitalisation is an issue that arises under the Income Tax Act in respect of companies that have foreign shareholders and should be carefully considered in respect of each company. It is advisable that specialist tax advice is sought in respect of each company that will have a foreign shareholding.

(C) Requirement to have indigenous shareholdings

South Africa has legislation implementing broad based black economic empowerment ("BBBEE"). All tenders issued by any of the 3 tiers of the State, organs of state and state owned enterprises have specific BBBEE requirements. These requirements generally fall into 4 broad categories: (1) equity holding and company management requirements; (2) employment requirements; (3) subcontracting and purchasing requirements, and (4) corporate social investment requirements.

These requirements have their foundation in the Broad-Based Black Economic Empowerment Act; the Codes of Good Practice issued under that act, and the Preferential Procurement Policy Framework Act. It is important to note that these pieces of legislation only lay down the basic requirements and it is usual for tenders issued by any tier or organ of the State or state owned enterprise to have more onerous requirements. Accordingly, the requirements of each tender need to be individually considered and addressed, using specialist advice.

In addition, as the legislation places obligations on all private sector entities to achieve various levels of black economic empowerment, it is usual for private sector entities to place obligations on their suppliers of goods and services in respect of black economic empowerment.

Whilst the legislation is a good starting point for determining the various levels of black economic empowerment that are to be achieved, it must be appreciated that the definitions and determination of levels of black economic empowerment are complex and that the requirements imposed by various tenders add additional requirements and complexities. Accordingly, it is important to obtain specialist advice on the black economic empowerment requirements in respect of any tender or project.

(D) Thin capitalisation requirements

As above.

(E) Can a limited liability company be established?

Please refer to local counsel.

(F) Is it possible to use a foreign company or a branch of a foreign company to act as project company?

Please refer to local counsel.

(G) Estimated timescale for incorporation in the country. Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

It is possible to acquire a so-called shelf company from the auditing or law firm that is being briefed. This is a company that is a newly incorporated company which has never traded, has no assets or liabilities and is incorporated for the purpose of being sold by the law or auditing firm to a client. The constitutional documents and name of the company can then be amended to suit the purchaser. This is the quickest manner of proceeding.

The incorporation of a company can take several months, depending on how long it takes to gather all the information and documents required for a registration and to settle the constitutional documents, but the registration of a company, once the complete papers are properly lodged at the Companies Office, does not take more than a few weeks.

Creation duty is payable on the creation of share capital of a company and then the issue of all or part of that share capital. Whilst the rate of this duty is not high (0.5%), it is advisable to consider the amount that would be payable if the number of authorised and or issued shares is to be large.

(b) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

Please refer to local counsel.

(ii) Are there any restrictions on dividend distribution?

Other than the account rules and standards, there are not restrictions on dividend distribution.

(c) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

There are no insurances which the project company or the Project is required to have by law other than the insurances required by the Safety legislation and the Unemployment Insurance Act.

(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

Insurances must be placed with insurers registered in South Africa. These local registered insurers then reinsure their exposure lawfully in the international reinsurance market.

(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?

There are no restrictions in respect of granting security rights over the insurances or reinsurances. It is common practice for the borrower to grant a security cession of over its insurances and claims against that insurance and for the local insurer and the reinsurer to agree to the granting of that security over its policies of insurance or reinsurance.

(d) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

It is essential for foreigners working in South Africa to obtain work permits and residence permits. These permits can be difficult to obtain and renew, if not undertaken correctly, and it can be time consuming to obtain them. It is a very specialist area of law and it is advisable to consult an expert in this area. The use of foreign employees on a permanent basis may also have an adverse impact on issues such as the BBBEE, NIPP and CSDP compliance by the project company.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

There no restrictions that apply to only to foreign employees and foreign contractors/subcontractors. However, it is not possible for a foreign company to establish a business operation in South Africa and operate it. Having employees working in South Africa would be evidence of establishing a business operation in South Africa. In terms of the Companies Act, that company will have to conduct its business operations in South Africa either through a branch company or a locally incorporated subsidiary, which would be the employer of the employees in South Africa.

Tanzania

(a) Corporate vehicle

(i) Project company incorporation:

(A) Type of vehicle

The business form most commonly used is the private company limited by shares which requires at least 2 shareholders and has limited liability for its shareholders up to the amount of committed capital.

The incorporation of a company is effected by filing constitutional documents for the company together with certain prescribed information and fees. It is also possible to register a branch of a foreign company and obtain a Certificate of Compliance from the Business Registration and Licensing Agency ("BRELA"). It is also necessary to register as a tax payer and obtain a business licence.

A company can be incorporated with any amount as its authorised share capital. There is a minimum capital requirements of Tanzanian Shillings 20,000 (approx USD 20), and other requirements in certain cases, for instance in the banking and insurance sectors.

(B) Issues relating to thin capitalisation

In certain cases interest deductions for payments made are limited.

(C) Requirement to have indigenous shareholdings

There are no requirements in the power sector for a percentage of shares in a project company to be held by Tanzanians.

(I) Companies may either be private companies or what are commonly known as "public companies". A public company must have 50 or more shareholders.

(II) Every listed public company or issuer to reserve at least forty percent (40%) of its ordinary shares for investment by Tanzanian investors.

(III) Companies incorporated outside Tanzania which have established a place of business in Tanzania must apply to be registered as a foreign company.

(IV) Foreign nationals and foreign companies cannot own land in Tanzania. However, a Tanzanian company wholly owned by foreigners or majority owned by foreigners can hold land if it holds a Certificate of Incentives issued by the Tanzanian Investment Centre.

(V) Contracts entered into pursuant to a public procurement process or a privatisation process may also impose certain restrictions on the shareholding of the party contracting with the public entity. For instance, the contracting party may be required to ensure that a specified percentage of the shareholding is held by Tanzanian citizens.

(D) Estimated timescale for incorporation in the country. Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

The estimated timescale for incorporation in Tanzania is 2 to 4 weeks.

There any nominal fees and costs payable to governmental authorities in respect of incorporation.

(b) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

A private company is free to lend and issue guarantees, subject to its memorandum and articles of association.

(ii) Are there any restrictions on dividend distribution?

A private company is free to pay dividends, subject to its memorandum and articles of association and subject to having distributable reserves.

(c) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

There are limited compulsory insurances, such as workers compensation insurance.

(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

There is no minimum requirement to place insurance with local insurers or any other similar restrictions.

(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?

There are no restrictions in respect of granting security rights over the insurances or reinsurances.

(d) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

In December 2006, the Tanzanian legislature enacted new legislation relating to employment and related matters with the aim of consolidating the law into one statute. The Employment and Labour Relation Act, 2004 regulates, amongst other things, conditions of employment for employers and employees. The new legislation has made significant changes to labour law in Tanzania. The laws currently governing labour and employment matters are:

(A) The Employment and Labour Relations Act, 2004 (the "ELRA");

(B) The Employment and Labour Relations (Code of Good Practice) (the "CGP");

(C) The Labour Institutions (Regulation of Wages and Terms of Employment) Order, 2007 (the "Order");

(D) The Labour Institutions Act, 2004;

(E) National Social Security Fund Act (the "NSSFA");

(F) Accidents and Occupational Diseases (Notification) Act 2002; and

(G) The Occupational Health and Safety Act 2003.

(H) Expatriates who want to work in Tanzania are required to obtain an entry permit under the Immigration Act (Chapter 54) (the "IA").

(I) The policy and practice of the Labour and Immigration authorities is to decline applications for work and residence permits where local skills are available to meet the requirements.

(J) The application fees for class A permit are US$ 1,620 for larger investors who have registered under the Tanzania Investment Act. For smaller investors the application fees are US$ 620. The application fees for class B permit are US$ 620.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

There are no specific restrictions that apply to foreign employees and foreign contractors/subcontractors.

Uganda

(a) Corporate vehicle

(i) Project company incorporation:

(A) Type of corporate vehicle

There is no specific requirement for a particular form of business association/corporate vehicle under the Electricity Act 1999, however the most common vehicle is a private company limited by shares. A private company limited by shares cannot have less than 2 shareholders nor can it have more than 50 shareholders.

There are no minimum share capital requirements for a company limited by shares under the Electricity Act, 1999 or the Companies Act Cap 110

(B) Issues relating to thin capitalisation

This is provided for under the Income Tax Act of Uganda.

(C) Requirement to have indigenous shareholdings

There are no legal requirements to have a specific percentage of shares or equity in a project company held by indigenous nationals. It is also possible to use a company formed and registered in a foreign jurisdiction for a project in Uganda, provided, within thirty days of such a company establishing a place of business in Uganda, such a company is registered with the Company Registry as a foreign company carrying on business in Uganda. There are however certain restrictions as regards the land that may be held by a foreign company.

(D) Estimated timescale for incorporation in the country. Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

The estimated timescale for the incorporation if a limited liability company in Uganda is 2-4 days and the incorporation fees payable are 0.5 % of the share capital plus nominal registration fees.

(b) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

A private company is free to lend and issue guarantees, subject to its memorandum and articles of association.

(ii) Are there any restrictions on dividend distribution?

The declaration and distribution of dividends are regulated by the Company's Articles of Association.

(c) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

There are certain mandatory insurances that ERA requires the Project Company to take. These are usually specified expressly in the licence for the particular IPP.

(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

All insurances must be placed in Uganda with local insurers by law. The local insurance company may reinsure abroad.

(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?

Security may be granted over insurance by way of an assignment of the right to insurance proceeds.

(d) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

The Employment Act 2006 governs employment law in Uganda. Under this Act there are no restrictions as to foreign employees, however under the Immigration Act Cap 69, no foreigner is permitted to work in Uganda without an entry/work permit.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

Specific detailed advice should be sought on this issue.

Zambia

(a) Corporate vehicle

(i) Project company incorporation:

(A) Type of corporate vehicle

A limited liability company is more appropriate. There are no shareholding restrictions. The minimum capital should be K5, 000,000 (with the current dollar/kwacha rate at US $1 to K4700

(B) Issues relating to thin capitalisation

None

(C) Requirement to have indigenous shareholdings

No such requirement compelling companies to have a certain amount of equity to be held by indigenous Zambians. However under the Citizen Economic Empowerment Act ("the Act"), companies that meet a particular threshold of Zambian shareholding stand to benefit from various incentives provided under the Act. Companies that fall in any of the following categories as defined by the Act stand to benefit;

Citizen Empowerment Company" means a company where twenty-five to fifty percent of its equity is owned by citizens;

"Citizen influenced company" means a company where five to twenty-five percent of its equity is owned by citizens and in which citizens have significant control of the management of the company;

"Citizen owned company" means a company where at least fifty point one percent of it equity is owned by citizens and in which citizens have significant control of the management of the company;

(I) Thin capitalisation requirements

No such requirement

(II) Can a limited liability company be established?

Yes

(III) Is it possible to use a foreign company or a branch of a foreign company to act as project company?

Yes

(D) Estimated timescale for incorporation in the country. Are there any specific fees or other costs payable to governmental authorities in respect of incorporation?

A company can be incorporated within 2-7 days. The fees for incorporating a company with a minimum capital of K5, 000,000 are K245, 000 or 2.5 % of the capital plus K120, 000 where the capital is above the minimum.

(b) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

Yes

(ii) Are there any restrictions on dividend distribution?

None except it must be out of profits

(c) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

No

(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

The law requires that all assets in Zambia must be insured by an Insurance Company registered in Zambia. However, reinsurance is lawful where the risk involved cannot be covered by the local insurance companies and approval of the Pensions and Insurance Authority.

(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?

No such restrictions

(d) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

Under the Deportation and Immigration Act, foreign employees must obtain a work permit and the number of foreign employees to be issued with permits will depend on the size investment made as under the Zambia Development Agency, an investor who makes an investment of over $500,000 will get additional incentive to bring more foreign employees into the country .

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

There are no restrictions applying to foreign employees provided they meet the conditions under the Immigration and Deportation Act. Further foreign contractors are also required to register with the National Construction Council of Zambia for them to participate in any public project.

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