2013 Investment Climate Statement - Benin

2013 Investment Climate Statement
Bureau of Economic and Business Affairs
April 2013

Openness to, and Restrictions Upon, Foreign Investment

The Government of Benin (GOB) encourages foreign investment. The Presidential Investment Council (PIC), established in 2006 to reinforce dialogue between the GOB and investors, aims to speed implementation of reforms and improve the business environment. In 2012, a reinvigorated PIC worked to reduce, and where possible, eliminate administrative barriers to business startup by bringing together various licensing offices under one roof. The PIC also held a 2012 roundtable to bring together local and foreign private investors and government representatives.

Benin's investment code, revised in July 2008, establishes benefits under different investment regimes and grants extensive discretionary power to the Investment Control Commission at the Ministry of Commerce (MC). The MC has a 'guichet unique' (single investment office, as noted above) to minimize bureaucratic delays for investors and facilitate swift registration of new businesses. Using the center, processing times for construction permits have been reduced from six months to as few as four weeks and it is possible to register a new company within two weeks.

In addition, in 2011 the GOB established a one-stop/full-service office to expedite customs clearances, reduce the cost of clearances, and minimize processing of cargo at the Port of Cotonou. Beninese law guarantees the right to own and transfer private property. Benin's court system enforces contracts, but the legal process is often slow. An American firm wishing to establish a business in Benin should work with an established local partner and retain a competent Beninese attorney. A list of English-speaking lawyers and legal counselors is available from the Embassy's commercial section and on the Embassy's website http://cotonou.usembassy.gov.

Opportunities for foreign investment may arise from privatization of the following parastatals: SBEE (electricity), SONEB (water), SOBEMAP (port cargo handling), Benin Telecoms S.A., and La Poste du Benin S.A. (mail). Foreign companies are invited to bid on privatizations. The bidding process is open and well-publicized.

Key economic indices:



Index or Rank

TI Corruption Index



Heritage Foundation’s Economic Freedom index



World Bank’s Doing Business Report



MCC Government Effectiveness


85 per cent

MCC Rule of Law


64 per cent

MCC Control of Corruption


63 per cent

MCC Fiscal Policy


72 per cent

MCC Trade Policy


17 per cent

MCC Regulatory Quality


85 per cent

MCC Business Start-Up


18 per cent

MCC Land Rights and Access


20 per cent

MCC Natural Resource Protection


82 per cent

MCC Access to Credit


50 per cent

MCC Inflation


96 per cent

Conversion and Transfer Policies

Benin is a member of the West African Economic and Monetary Union (WAEMU). Benin's currency is the CFA Franc, issued by the Central Bank of West African States (BCEAO). The CFA Franc is pegged to the Euro at CFA 655.957/Euro. The currency exchange rate as of January 18 is approximately CFA Franc 491/dollar.

Foreign exchange is readily available. There are no restrictions on the remittance of profits by companies that invest in Benin. Remittance of profits by individual resident investors is not restricted.

Expropriation and Compensation

The GOB is forbidden to nationalize private enterprises operating in Benin by its 1992 privatization law. However, in 2006 the GOB took over the management of previously privatized oil company SONACOP on the grounds that the company was in complete financial disarray, lacked funds for its operations, and was unable to provide oil products to its gas stations throughout the country.

Dispute Settlement

Benin is a member of the Organization for the Harmonization of African Business Law, known by its French acronym OHADA, and has adopted OHADA's Universal Commercial Code to manage commercial disputes and bankruptcies. Benin is also a member of OHADA's Common Court of Justice and Arbitration and the International Center for the Settlement of Investment Disputes (ICSID).

Benin's civil courts handle commercial cases, although the backlog of civil cases may result in delays of more than two years before a case proceeds to trial. Benin's courts will enforce foreign court judgments.

Two investment disputes involving U.S. companies remain in litigation.

Performance Requirements and Incentives

Benin's 2008 Investment Code contains incentives including tax reductions for investors. Depending on the size of the investment, investors may not owe tax on profits, exports of finished products, or imports of industrial equipment for up to one year from the date the business is registered. To obtain these incentives, investors must meet several criteria including employing a minimum number of Beninese nationals, safeguarding the environment, and meeting nationally accepted accounting standards. The Investment Control Commission monitors companies that receive these incentives to ensure compliance.

Right to Private Ownership and Establishment

The right to private ownership and investment is respected. Beninese law guarantees freedom of commerce; choice of customers and suppliers; free movement throughout the country; the right of foreign employees and their family members to leave the country; and freedom from government interference in the management of private enterprises.

Protection of Property Rights

Secured interests in real and personal property are recognized and enforced. Benin's legal system protects and facilitates acquisition and disposition of property, including land, buildings, and mortgages. Secured interests in property are registered with the Land Office of the Ministry of Finance. In January 2013, Benin’s National Assembly passed the Code Foncier (Land Property Act). Pending signature by the president and the drafting of regulations by affected ministries, the law would facilitate acquisition of land by investors for development.

Benin is a signatory to both WIPO Internet treaties. Enforcement of intellectual property rights is constrained by lack of enforcement capacity.

Transparency of the Regulatory System

The GOB has adopted policies favoring transparency to foster competition, but the regulatory burden is still often onerous. In 2009 Benin reformed customs procedures and has been implementing more rigorous inspection and tracking of imported goods, particularly through the Port of Cotonou.

Efficient Capital Markets and Portfolio Investment

GOB policy supports free financial markets, subject to oversight by the Ministry of Finance and Economy and the Central Bank of West African States (BCEAO). Foreign investors can seek credit from Benin's private financial institutions and the WAEMU stock exchange.

Competition from State-Owned Enterprises (SOEs)

Private enterprises compete with public enterprises on equal terms and conditions, except for public utilities (electricity and water) and land-line telephone service, for which the public telephone company retains a monopoly.

SOE senior management may report directly to a GOB ministry or board of directors, whose seats are allocated to senior government officials and political leaders, as well as representatives of civil society and other parastatal constituencies. SOEs are required by law to publish annual reports and hold regular meetings of their boards of directors, and financial statements are reviewed by certified accountants and private auditors.

Corporate Social Responsibility

A number of private corporations systematically support corporate social responsibility, notably cellular phone service providers and banks. Such CSR efforts often follow OECD guidelines, and are an important aspect of corporate public relations.

Political Violence

There has been no political violence affecting private investment in Benin since the end of the country’s socialist period in 1990.


Bribery is illegal and subject to up to ten years imprisonment. The GOB promulgated a decree on March 22, 2011 establishing the 'Programme de Verification des Importations de Nouvelle Generation' (PVI--New Generation Import Verification Program) to combat customs fraud. Although the program was temporary suspended in April 2012, it is expected the bid will be awarded in the first half of 2013 and the program reestablished

The GOB passed a specific anti-corruption law in 2011. The GOB has demonstrated strong political will to reduce corruption and has imposed administrative sanctions and removals from office against high-profile, allegedly corrupt officials. None, however, have faced prosecution in Beninese courts. In addition, corruption remains a problem in the customs service, government procurement, and the judicial system. Benin is a signatory to the UN Anticorruption Convention. Benin's State Audit Office is responsible for identifying and acting against corruption in the public sector.

Bilateral Investment Agreements

Benin has bilateral investment agreements with the United States, France, Germany, the United Kingdom, Switzerland, Portugal, Canada, Guinea-Conakry, Ghana, Mauritius, Chad, Mali, Burkina Faso, the Netherlands, and China.

OPIC and Other Investment Insurance Programs

The Overseas Private Investment Corporation (OPIC) offers financial underwriting for companies wishing to invest in Benin. Diplomatic missions purchase local currency (CFA) at the official BCEAO rate.


Unskilled and skilled labor and qualified professionals are generally available. The GOB adheres to international labor standards, and Benin's Constitution guarantees workers freedom to organize, assemble, and strike. GOB authorities can declare strikes illegal if they threaten public order or the economy, and strikers may be required to maintain minimum services. Approximately 75 per cent of salaried employees belong to unions. There are several union confederations, and unions are independent of government and political parties. Benin's labor code and practice remain highly favorable to employees. Most of the working population is engaged in agriculture or other primary-sector activities.

Foreign Trade Zones/Free Ports

A Foreign Trade Zone near the Benin-Nigeria border is currently operational. Foreign-owned firms have the same investment opportunities as host country entities. Companies must export at least 65 percent of their annual production to qualify for tax-free status and benefit from duty-free importation of equipment and other production inputs.

Foreign Direct Investment Statistics

The Heritage Foundation 2013 Index of Economic Freedom reports Benin Foreign Direct Investment inflow at USD 118.5 million. Leading private investments have been made by firms based in the U.S., China, France, Germany, India, Lebanon, Italy, and Switzerland. Foreign investors have purchased textile, cement, wood, and brewing companies, and have invested in services.