Democratic Republic of the Congo Market Entry

Democratic Republic of the Congo Market Entry
Basic data
Capital Kinshasa
Population 86.56 million
Language French
Religion Christianity 53%
State system presidential republic
Head of State Felix Tshisekedi
Head of government Jean-Michel Sam Lukonde Kyenge
Currency name Congolese franc
Travel
Time shift 0 h (in summer -1 h)
Economy 2021
Nominal GDP (billion USD) 112.6
Economic growth (%) 4.8
Inflation (%) ON
Unemployment (%) ON

According to cheeroutdoor.com, the Democratic Republic of the Congo is a country in Central Africa. The DRC gained independence from Belgium in 1960. Currently, the DRC is a unitary republic practicing a semi-presidential system with a multi-party political system. Executive power is vested in the government, which is headed by the president of the republic together with the prime minister. The new constitution was adopted on 18 February 2006. Among other things, the constitutional amendment of 20/1/2011 changed the system of presidential elections from two-round to one-round, which the opposition criticized as a move to facilitate the re-election of President Joseph Kabila Kabange, which took place on 28/11/2011. The country’s political stability remains very fragile. One of the main leaders of the opposition, Félix Tshisekedi, won the election, which took place on December 30, 2018, after a two-year delay.

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

In addition to the price of the product, a basic condition for success on the market is a long-term active export strategy focused on this country. You cannot wait for a really good contract in the Czech Republic. Czech companies have not yet built up a network of representatives in the Congo who would regularly treat the local market, but the honorary consul of the Czech Republic working in the country, Murtaza Rawji, could help in expanding business relations.

Although it is possible to export directly to the Congo, cooperation with a local representative or a company (importer) registered in the Congo is a competitive advantage. These persons must be sought actively, preferably personally on the spot. Companies that have a French-speaking contact person or direct representation in the country have a competitive advantage. Due to the complexity of the local business environment, it is of the utmost importance to negotiate all aspects of the business agreement in detail (preferably with the help of local legal counsel). Before concluding the contract, the partner must be carefully checked by a specialized company (due diligence). The situation in the DRC is complicated for Czech exporters for many reasons. In addition to factors operating in all countries of the region (very low purchasing power, geographical distance, corruption, bureaucracy), there are also specific factors such as orientation towards traditional (mainly Belgian, French) importer and supplier and the absence of a contractual basis. The local conditions are so complicated that it is impossible to establish yourself without long-term experience and contacts. Only the local representative is able to ensure that the goods are not stolen or damaged on the way from the port. The main distribution channels run from Europe (air connection Brussels-Kinshasa, sea connection from the ports of Antwerp, Ostend and Hamburg) to the ports of Matadi and Boma, or to Kinshasa International Airport. Consumer goods are imported into the DRC and distributed by large (often foreign) import companies that supply the Congolese elite, foreign workers, supermarkets and smaller shops in large cities. The main trade and distribution centers are Kinshasa, Lubumbashi, Matadi.

In the DRC, daily necessities are mostly sold in small shops and markets, which are abundant or directly on the street (75% is the informal sector). The best strategy to enter the market is through a local agent or distributor who knows the language and the local very complicated business customs. 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. Membership in the Federation of Congolese Enterprises (FEC) is a certain recommendation. Due to the number of frauds, there is always a thorough check of the partner (due diligence). For larger volumes or when selling machinery, 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 larger case, it is essential to

Instructions for use, information and promotional materials should be in French or the local language (Lingala, Swazi…). Most residents will prefer price over quality. For deliveries of machinery and more complex equipment, the customer usually expects a sufficient supply of spare parts and service.

The Czech exporter (importer of goods to the Congo) needs to document invoices (Commercial Invoice), if possible in French or another world language, but with a French translation and a description of the goods attached. The invoice must contain the names of the supplier and recipient of the goods, the name of the goods, the unit and total price and the quantity data. Unit price and total price must be quoted in cif parity, with specified gross and net weight and terms of sale. In addition, a Bill of Lading or Air Waybill with an electronic shipment number (Cargo tracking note), Packing List, certificate of origin and certificate of technical/health fitness are required. The inspection for the government is carried out by the French company BIVAC.

The duty is calculated ad valorem from the CIF value. Standard shipping documents are required. In principle, a 5% duty is paid on unprocessed raw materials, agricultural and veterinary goods, investment equipment; 10% duty on most imported food, consumer goods, spare parts and 20% duty on clothing, furniture, cigarettes and other finished goods. Duty-free imports of equipment and machinery can be carried out for 3, 4, 5 years by investors in zones a, b, c. Duty is also not paid when importing cement, equipment for agricultural production, pharmaceutical products and medical equipment are burdened with a 2% duty (customs exceptions are established every year by the budget law). However, several government agencies often levy various additional fees in an uncoordinated manner on top of these duties, which can reach up to 40%. The customs clearance system is very complex and corrupt.

The import of weapons, ammunition and pornography for commercial purposes is prohibited.

Forms and conditions of operation on the market

On January 1, 1998, an agreement between the 15 African countries of the CFA currency zone, called OHADA, entered into force, which promotes the development of the African Economic Community, a common trade policy and guarantees legal certainty and compatibility for traders and investors. The DRC acceded to the OHADA agreement in 2012, but its laws are still not fully aligned. Congolese commercial law allows both domestic and foreign companies to operate as, among others, “Société en Commodite Simple, Société Privé à Responsabilité Limitée” (SPRL), Société à Responsabilité Limitée (SARL, min. 7 shareholders, president’s permission required) and “Société Cooperative”. With the exception of so-called small businesses, the operation of which is reserved by law only to citizens of the DRC, and business in agriculture, foreign investors can own all shares in the company.

Foreign companies registered in the Congo have the same rights and obligations under the law as local companies. The same regulations and rules also apply to their registration. Small business, reserved by decree for DRC citizens only, is for small traditional artisans, retailers, businesses with less than 10 employees, small carriers with less than 10 vehicles, restaurants with less than 3 employees, small hotels and stall vendors. In 2013, the government established the so-called Guichet Unique, which helps in establishing a business. He should theoretically be able to handle all formalities within 3 days. In reality, setting up an office is a difficult procedure due to complex and ever-changing regulations, taking an average of 31 days, according to WB data. Investors are also assisted by the Agence Nationale pour la Promotion des Investissements (ANAPI). Visa, work, tax and customs regulations can change – setting up an office is therefore best left to a local lawyer. To establish a company (office, branch…) it is necessary to open an account in the bank and deposit the share capital into it, and to verify the partnership agreement with a notary, which is published in the Journal. The company is registered in the commercial register. You must also apply for a company registration number (Ministry of Economy), an import-export registration number (Ministry of Trade) and a tax registration number (DGI tax office). The company must also be registered with the Labor Inspectorate of the Ministry of Labor and the National Employment Office. Employees are registered with the social welfare office. Kinshasa also requires and issues business permits to companies operating in the capital.

Marketing and communication

The most effective advertising is on television (two state and four private channels broadcast in Kinshasa) and especially radio. Billboards are only effective in big cities. Newspaper advertising reaches a relatively small number of people and is expensive. Local languages ​​are heavily used in advertising (Lingala in Kinshasa, Swahili in Lumumbashi and the East). Promotion should be left to a local partner. Modern means such as Instagram and Whatsapp also work.

Issues of intellectual property protection

Rights must be registered locally and enforced under local laws. The owner of the patent should register it in the DRC (with the Ministry of Trade). Registered patents and trademarks of foreign entities enjoy 20 years of protection in the DRC. The DRC is a member country of WIPO (World Intellectual Property Organization), as a signatory country of the Paris and Berne Agreements, it has accepted a number of commitments to protect patents and intellectual property. As a WTO member, the DRC is a signatory to the TRIPS Agreement. In theory, according to the law, intellectual property is protected in the DRC, in reality these rights are violated and their enforcement does not exist. Despite laws and participation in international conventions, very little has been done so far to stop the sale of pirated music, videotapes, computer software, medicine, clothing, etc. The government is addressing the basic existential problems of the population,

Public procurement market

Tenders (appel d’offres) are announced for state contracts. Despite the fact that the law on public procurement was adopted in 2010 and the Autorité de Régulation des Marchés Publiques was established at the prime minister’s office, which should be responsible for the announcement and management of public procurement (ARMP-rdc.org/), the most important are still direct contacts with ministries and especially in the presidential office. Participation in contract tenders requires long-term monitoring of the situation with necessary lobbying of the relevant central authorities and provision of relevant information even before the official announcement of tender conditions. This is not possible without constant presence and contacts. The one who has the best contacts and can offer good payment terms will prevail. International organizations announce tenders through the local organization BECECO (Bureau central de cooperation),

Payment terms, payment ethics and resolution of commercial disputes

The DRC is a member of the International Center for the Settlement of Investment Disputes (ICSID), it is not a member of the so-called New York Convention from 1958 (membership is being prepared). It is also a member of the WTO and since 1989 has been a member of the MIGA (Multilateral Investment Guarantee Agency). By acceding to the agreement, OHADA (Organisation pour l’Harmonisation des Droits des Affaires en Afrique) adopted a convention that harmonizes the legal norms of fifteen member countries with foreign countries in the area of ​​resolving trade and investment disputes (these are authorized to be resolved by the court in Abidjan). In 2008, commercial courts were established in Kinshasa and Lumumbashi. The wording of the concluded contract is of fundamental importance in the resolution of commercial disputes, where the method of dispute resolution should be directly enshrined. According to the OHADA convention, any dispute can be settled in the court in Abidjan, which gives a better chance of success. The resolution of disputes is usually associated with high costs and the enforcement of law is very difficult and lengthy. An agreement, a commercial out-of-court settlement, or arbitration is always more appropriate (it can also be a local, generally respected lawyer). On paper, Congolese commercial dispute resolution regulations are satisfactory, but in reality, proceedings in a local court are time-consuming and costly, with an uncertain outcome. Courts can be easily bribed. A foreigner will always be at a disadvantage against a local entity. Furthermore, full knowledge of Congolese commercial law and procedural customs is always required (local legal representative required). Therefore, the wording of the concluded contract, where the method of dispute resolution should be directly enshrined, is of fundamental importance in the resolution of commercial disputes. It is advisable to agree on the location of any court abroad, most often it is Belgium or France.

Visas, fees, specific conditions for traveling to the territory

A valid passport, visa and international vaccination card are required to enter the country (yellow fever vaccination is strictly checked, even on the way back). It is recommended to keep the original documents and prove them with copies.

Visas to the DRC are issued by:

Embassy of the Democratic Republic of the Congo in Prague

Soukenická 34,

110 00 Prague 1

phone: +420 222314656, +420222316762 mobile 606900686

email: [email protected], [email protected]

The price of a regular visa up to 90 days is approx. 3,000 CZK, for multiple entries approx. 7,000 CZK. Processing takes about 2 weeks.

It is necessary to be equipped with an international vaccination card. Vaccination against yellow fever is mandatory and is checked at the borders.

It is possible to travel from the Czech Republic to the DRC by Air France, Turkish Airlines, Ethiopian Airlines, Brussels Airlines. ASKY connects Kinshasa with other capitals of African countries. When arriving at Kinshasa/Ndjili International Airport (FIH), it is necessary to have a partner waiting for the arrival at the airport, otherwise he exposes himself to the possibility of bureaucratic delays and requests for bribes. The situation with taxi services is also very bad; there are very few cars, the prices are exorbitant. Better hotels provide transportation from the airport, sometimes help with immigration and customs formalities (cost 30-80 USD). A $55 fee is required upon departure.

Classic crime is high in Congo (children living on the streets are very dangerous), especially in big cities. Therefore, you must always be very careful, do not display expensive jewelry or cameras, and do not carry large sums of money with you. In Kinshasa, some markets on the periphery and fringes of the city should be avoided. It is not recommended to walk, move unaccompanied in the evening, travel alone in a car. The car must always be locked from the inside. Police officers often harass drivers/foreigners, do not return documents during checks and demand bribes. It is recommended not to give the original document to anyone and to submit only copies of the document.

Photography requires caution, it can be a source of extortion. It is forbidden to photograph strategic objects. When photographing people, it is necessary to request the consent of the photographed person.

Before departure, the traveler should register in the voluntary database of citizens of the Czech Republic when traveling abroad (DROZD).

Employment of citizens from the Czech Republic

The employer must obtain a work permit for its foreign employee from the National Committee for the Employment of Foreigners established by the Ministry of Labour. An employment contract must be submitted for this. On the basis of a work permit, an employee can apply for a work visa, which entitles him to a long-term stay (visa d’établissement). This is granted by the Immigration Office (Direction générale d’immigration – DGM).

Employment of local forces is governed by the Labor Code of 2002 (amended in 2014), which meets ILO criteria. It strongly protects the rights of employees (among other things, it sets out the requirements of the employment contract, working conditions for women and minors, the right to vacation (min. 12 days, increases by 1 day for every 5 years of service), introduces a 45-hour work week (6 days), additional payments for overtime work, child allowances, transport allowances, establishes employers’ social insurance contributions, establishes the obligation to provide health care for employees, introduces the principle of equal pay for equal work regardless of origin, gender and age, the permission of the Ministry of Labor is required for dismissal, further enshrines the right to collective bargaining, methods of resolving labor disputes and fines for breaking the law, etc.

Fairs and events

The FIKIN Fair (Foire Internationale de Kinshasa) takes place every odd year during July.

 

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

Medical care is strictly paid. Even for minor injuries, a so-called registration fee is required, which sometimes exceeds the price of the treatment itself. Quality travel insurance with the possibility of repatriation to Europe or South Africa is recommended. In case of illness, we recommend contacting:

  • Center Médical Diamant, phone +243 976 000 063
  • Center privé d’urgence (for a longer stay – registration is required), tel. +243 89 89 50 302 or 089 89 50 301
  • Clinique Dr Lelo, 15 avenue Kasaï Barumbu, phone: +243 99 82 45 339 and +243 99 97 62 900 or 099 82 45 339 and 099 97 62 900
  • Center médical de Monkole, 4804 avenue Ngafani, Kinshasa – Mont Ngafula, phone +243 89 24 426 or 089 89 24 426.

Police: 112

Firefighters: +234 999 369 936

Important web links and contacts

  • www.irinnews.org
  • www.africatime.com/rdc
  • www.lobservateur.cd
  • www.laprosperiteonline.net
  • www.digitalcongo.net
  • http://radiookapi.net
  • www.bcc.cd
  • www.imf.org/external/country/COD/index.htm
  • www.worldbank.org/afr/cd/index.htm
  • www.fec.cd
  • www.anapi.org/fr
  • www.mediacongo.net/promoin.asp
  • www.ministeredubudget.cd

Democratic Republic of the Congo Market Entry