Chad Market Entry

Chad Market Entry
Basic data
Capital Ndjamena
Population 16.43 crores
Language French
Religion Islam 53%
State system presidential republic
Head of State Mahamat Idriss Déby Itno
Head of government Albert Pahimi Padacké
Currency name Central African Franc (XAF)
Travel
Time shift -1 h
Economy 2021
Nominal GDP (billion USD) 27.4
Economic growth (%) 0.7
Inflation (%) -0.6
Unemployment (%) ON

This is a country accredited to the Embassy of the Czech Republic in Nigeria.

According to cheeroutdoor.com, the Republic of Chad (République du Tchad) is a landlocked state without direct access to the sea. The territory of the entire republic consists mainly of semi-desert and desert. Fertile soil is found only in the southwest of the country in a narrow strip around Lake Chad and the area near the border with the Central African Republic and Cameroon. Chad is a unitary republic practicing a presidential system of power with the existence of multiple political parties. Lieutenant-General Idriss Déby Itno has been the head of state since December 2, 1990, but on April 20, 2021, General Idriss Déby was killed on the battlefield. His son Mahamat was chosen to succeed him. An interim government is currently in power. Further military unrest or a military coup cannot be ruled out.

Basic conditions for the use of Czech goods on the market

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

The situation in Chad is complicated for Czech exporters for many reasons. In addition to the factors operating in all countries of the region (very low purchasing power, geographical distance, laboriousness of the case, distrust in the seriousness of the partner, corruption…) there are also specific factors such as orientation towards traditional (mainly French and Arab) suppliers and the absence of a contractual base . Establishing a relationship with a local reliable partner (importer, distributor, representative) is a basic condition for successful business. Goods are imported to Chad by trucks through the port of Douala. The transport time can be extended for months. In Chad, daily necessities are mostly sold in small shops and markets, of which there are a large number or directly on the street (80% is the informal sector). Shops and supermarkets exist only in large cities. Direct personal contact with the client and the price is a basic prerequisite for sales success. The best market entry strategy is through a local agent or distributor familiar with the language and local business practices, working either on an “ad hoc” commission basis or on a long-term contractual basis. The most suitable for the supplier is to find a reputable partner who would work on his own account and pay for the offered goods himself when taking them. For larger volumes, you can consider opening a sales agency or branch. Forms of business “joint-venture” between domestic buyers and foreign suppliers are proving themselves. For any major case, it is essential that the local representative has good contacts with the local administration. Due to the number of frauds, there is always a thorough check of the partner (due diligence). For deliveries of machinery and more complex equipment, the customer usually expects a sufficient supply of spare parts and service. Being a landlocked country, importing goods into the country is quite a complicated process. In order to import/export, the company must have a registration issued by the Ministry of Trade and Industry.

The Czech exporter must deliver invoices to the importer in Chad in four copies, if possible in French or another world language, but with a French translation and a description of the goods attached. All invoices must include the names of the supplier and recipient of the goods, the name of the goods, the unit and total price and the quantity details. The unit and total price must be quoted in CIF parity, with specified gross and net weight and terms of sale. In addition, a certificate of origin of the goods (2 copies) issued by the Chamber of Industry and Commerce in the country of origin, Bill of Lading or Air Waybill, packing list must be provided.

Import duties from countries outside the CEMAC community are derived from prices at CIF parity. Transport insurance must be paid by the importer for the section between the home and Cameroon port of Douala and the Chadian land border. Insurance can be obtained from the Chadian government agency Star Nationale, or from its correspondent insurance company in Paris (Faugere and Jutheau). • basic products (medicines, vaccines, medical equipment, rice and flour) – the rate is 5%, raw materials and basic equipment – ​​the rate is 10% • semi-finished products (especially most imported food products, tools, tires) – the tariff rate is 20% • ordinary consumer goods (canned food, electronics, etc.) – 30% rate Luxury goods are subject to a so-called additional tax (droit d’accise sur taxe) in the amount of 20-30% – this includes, for example, televisions, audio-visual equipment, air conditioners units, car radios, CD players, beer, alcoholic beverages, jewelry, cosmetics, cigarettes. A special tax of 51% applies to imported passenger cars. VAT is 18% (with the exception of basic commodities (bread, medicines, milk, meat, poultry…) and goods originating in CEMAC countries). The importer also pays a so-called statistical tax of 2% and CEMAC solidarity tax of 1.45% CIF.

There are no regulations regarding product labeling, instructions in French or Arabic are recommended. The same applies to food labeling – production and expiration dates are checked. Goods should meet European/French standards. The export value of the goods is determined in FOB parity. A company registered with the Ministry of Trade and Industry can export. An export license is required for selected commodities (e.g. cattle, leather, gum arabic). The license is issued by the Ministry of Finance and its issuance is subject to graduated fees. The certificate of origin is issued for exporters by the Chamber of Commerce CCIAMA.

It is prohibited to import weapons, ammunition and explosives and dangerous chemicals, as well as pornography, drugs, narcotics, charcoal and plastic bags into Chad without the permission of the relevant ministry. The import of live animals is only possible with an international or national vaccination card and with a complete vaccination. A special permit from the Ministry of Health is required to import medicines.

Forms and conditions of operation on the market

On January 1, 1998, an agreement between the 15 African countries of the CFA currency area (and Guinea) called OHADA (Organisation pour l’Harmonisation du Droit des Affaires en Afrique) entered into force, which promotes the development of the African Economic Community, a common commercial policy and guarantees traders and investors legal certainty and compatibility. Chad acceded to the OHADA agreement and commercial law here does not differ from European (French) law, with exceptions. Domestic as well as foreign companies can operate as, among others, a branch (succursale), Société a Responsabilité Limitée” (SARL – spol. s ro) or “Société Anonyme” – only certain basic different requirements for the amount of minimum capital apply (SARL 1 million FCFA, SA 10 million FCFA). Foreign companies registered in Chad are considered domestic entities and have the same rights and obligations under the law as local companies. The same regulations and rules also apply to their registration. With the exception of sectors important to national security, there is no limit on the share of foreign capital in a company. The rules for setting up an office are codified in the Commercial Code and implementing regulations, the procedure is basically similar to that in the Czech Republic. The company is established at the founding general meeting, where the founding partners or their representatives meet (power of attorney certified by a Czech notary in French or with an official translation, in the case of natural persons a copy of the passport or OP, in the case of legal entities, an extract from the OR with translation). The capital is deposited into a bank account. The social contract must, among other things, contain the exact name and seat of the company, legal form, share capital, date of establishment, names of all statutory representatives. Supporting documents must be officially translated into French. Documents are usually written in French in Chad. The company then contacts the local Chamber of Commerce (Chambre de Commerce) (a copy of the partnership agreement certified by a notary, a declaration of integrity, a certified copy of the OP or passport of the partners, and for foreigners also a residence permit, proof of depositing the basic assets in a bank (account statement) are required, photograph of associates), which contacts the Agence Nationale des Investissements et Exportations (Guichet Unique). She then arranges registration in the register of companies, social, employment and tax authorities. The final step is to obtain a license from the Department of Commerce. The incorporation of the company must be publicly published.

Marketing and communication

Due to the limited infrastructure in the country, advertising in one of the local languages ​​through radio is of the greatest importance. TV advertising is only effective in big cities. Local dailies and weekly newspapers also accept advertising, but due to the low level of education, it has only a limited impact. It should be taken into account that Chad is a country with a predominantly relatively conservative Muslim population. The local customer also usually requires the foreign partner to supply sufficient promotional materials in French. Billboard advertisements are common in larger cities. PR agencies are not. Due to the Muslim focus and therefore conservative worldview in marketing, we recommend using a classic, not controversial, approach. It is also possible to use modern procedures, such as IG and whatsapp.

Issues of intellectual property protection

Rights must be registered locally and enforced under local laws. The owner of the trademark should register it in Chad (with the Ministry of Trade and Industry). Chad has adopted laws promulgated by the African Intellectual Property Office (OAPI, based in Yaoundé), which aims, among other things, to protect patents. As a member of the OAPI, Chad has accepted a number of obligations arising from international treaties for the protection of patents, intellectual property, including the Paris and Berne Agreements. As a WTO member, Chad is a signatory to the TRIPS Agreement. Chad is also a member country of WIPO (World Intellectual Property Organization). Despite participating in these international conventions, very little has been done to stop the sale of pirated music, videotapes, computer software, medicine, clothing, etc. The government of Chad is addressing the basic existential problems of the population, protection of intellectual property is not one of its priorities. You can defend yourself preventively by contractual treatment or a procedure applied in other export countries with the risk of intellectual property abuse.

Public procurement market

Public contracts (so-called tenders) are published in the daily press and are supervised by the Ministry of Infrastructure and Public Procurement together with the Prime Minister’s Public Procurement Unit. Even so, they tend to be “tailored” to the presumed winner. Even in Chad, it is impossible to enter a competition for larger tenders without preparation and survey of the terrain, knowledge of local competition and conditions. Participation in contract tenders requires long-term monitoring of the situation with the necessary preliminary lobbying of the relevant central authorities and the provision of relevant information even before the official announcement of tender conditions. This is practically impossible without a permanent presence on the local market. From which it follows that even if the tender is published, its winner is practically decided.

Payment terms, payment ethics and resolution of commercial disputes

Even in Chad, a well-written business contract (preferably by a local lawyer) is of fundamental importance for the prevention and resolution of business disputes, it is always necessary to thoroughly check with whom we conclude the contract (due diligence). In the contract always specify the place of dispute resolution, Chad recognizes the decisions of foreign courts and arbitrations. Commercial disputes in Chad are resolved by commercial courts. However, the resolution of disputes is usually associated with high costs and the enforcement of law is very difficult and lengthy. A foreigner will always be at a disadvantage against a local entity. Furthermore, full knowledge of French law and procedural customs is always required. A settlement of the dispute by agreement is strongly recommended to avoid lengthy and costly negotiations and out-of-court settlements. Chad respects international arbitration in the resolution of disputes between foreign investors and the state – it is a member of the International Center for the Resolution of Investment Disputes. Chad is a member of the WTO, and has also signed a convention prepared by the OHADA organization, which harmonizes the legal norms of fifteen member countries in the area of ​​resolving trade and investment disputes and bankruptcies. Chad is also a member of the MIGA agency. In any case, we recommend incorporating into the contract a provision on the basis of which any arbitration proceedings would take place outside of Chad. The legal and business environment in Chad is rated as the most difficult in the world, a foreigner is always at a disadvantage. Claims and financial performance are difficult to collect thanks to slow and corrupt courts. When paying for goods, it is necessary to demand payment in advance or in cash upon handing over the goods in the Czech Republic, or an irrevocable letter of credit, otherwise the exporter has little hope of getting his money. Maturity of invoices 1-6 months.

Visas, fees, specific conditions for traveling to the territory

Chad is one of the countries with which a visa regime is in place and when traveling to this country you need to have the appropriate visa (a thirty-day tourist visa can be obtained without an invitation, a ninety-day business visa based on a written contract with a Chadian partner). There is no Chadian embassy in the Czech Republic, and a visa must be applied for at the Embassy of the Republic of Chad in Moscow, which consularly covers the Czech Republic:

Embassy of the Republic of Chad

Academic Pilouguina 14/3, Apt. 895-896

117393 Moscow

phone: 007495-936 17 63, 936 17 66

e-mail: [email protected]

office hours: Mon–Fri, from 09:00 to 16:30

You can also try to apply for a visa at the embassy of Chad in Berlin or Paris, rejection cannot be ruled out.

Ambassade du Chad au Berlin, Lepsiusstrasse 114, 12165 Berlin Tel.: (0049)-3031991620 Fax: (0049)-30319916220

e-mail: [email protected]

Ambassade du Chad and Paris

65, rue des Belles Feuilles,

75116 Paris

phone: +33-1 45.53.36.75

Email: [email protected]

The Embassy of the Czech Republic in Abuja recommends that travelers to Chad be met at the airport by a local business partner or another serious person familiar with local conditions. It is strictly forbidden to photograph military and government buildings throughout the state. It is possible to travel to Chad by air with Air France from Paris, Turkish Airlines from Istanbul, Royal Air Maroc from Rabat, Egypt Air from Cairo, Air Senegal from Dakar, Air Ivoire from Abijan, Ethiopian Airlines from Addis Ababa. The ASKY airline provides connections between the capitals of West and Central African states. Before traveling to Chad, every traveler should complete all recommended vaccinations – against yellow fever and others.

Before the trip, it is therefore recommended to inform yourself about the current security situation in a specific area, or to inform the ZÚ Abuja about your expected place of stay through the voluntary registration of DROZD. Like everywhere else in sub-Saharan Africa, classic crime is growing very fast in Chad, especially in the cities. ZÚ Abuja fundamentally does not recommend moving unaccompanied, on foot, in the evening and at night. Car movements must be carried out in the light, driving at night is risky (banditry, unmarked roads, unlit vehicles, herds of cattle on the road, etc.), the car must be locked while driving. It is also not recommended to carry large sums of money or expensive items.

Employment of citizens from the Czech Republic

According to available data, only 2% of employees may be of foreign origin. Companies can apply to the labor office (ONAPE) for an exemption if they can prove that there is no Chadian workforce with the appropriate qualifications available for the job. The employer must obtain permission to employ foreigners and a work permit from the Ministry of Labor for the future employee, this is issued for one year. An employment contract must be submitted for this. Based on the work permit, the employee can apply for a work and exit visa and a resident card. Employment is governed by the Labor Code, which is based on the French model. It strongly protects the rights of employees (among others, it enshrines the right to collective bargaining, the method of resolving labor disputes, introduces collective agreements, a 39-hour work week, overtime pay, working conditions for women and minors, the obligation to protect health,

Fairs and events

There are no significant fairs and exhibitions in the territory.

 

Practical telephone numbers (emergency services, police, firemen, information lines, etc.)

We recommend using state medical facilities only as a last resort.

There are private French clinics operating in Chad (International SOS and EuropAssistance can be recommended) at a good level. Medical care must be paid in cash, therefore it is necessary to arrange a good additional health insurance with the relevant workplace in the Czech Republic.

  • Police: 17
  • Gendarmerie: 52.46.44
  • Firefighters: 18
  • ZÚ France: +235 22522576, +235 22522578, +235 22523460, +235 22523793
  • ZÚ of Germany: +235 2516202

Important web links and contacts

  • www.eiu.com
  • www.presidencychad.org
  • www.gouvernementdutchad.org/fr
  • www.izf.net/affiche_oscar.php?category_id=290
  • http://web.worldbank.org/
  • http://onrtv.td/fr/
  • http://www.infotchad.com/
  • http://www.alwihdainfo.com/ACTUALITES_r1.html

Internet addresses of important commercial and economic chambers and business associations

  • see: http://www.infotchad.com/TD_Ministeres.asp, http://www.infotchad.com/TD_Organismes.asp
  • Agence nationale des investissement et des exports (ANIE): www.anie-tchad.com
  • Ministere du Commerce, de l’Industrie et de le Tourisme: http://ministerecommerce-td.org/
  • https://www.nordeatrade.com/

Chad Market Entry