Gabon is one of the developing countries in the continent of Africa. The economic growth of this nation relies mainly on the mass production of oil, which indeed is a precious commodity.
Company Formation in Gabon – Advantages
While many aggressive entrepreneurs consider vast reserves of this oil as golden opportunities for investment, the effect of fluctuating oil prices has a negative impact on the economy. For this reason, the company registration in Gabon is a risky endeavor. Despite some of the shortcomings facing the growth of these firms, Gabon company registration has several advantages which include:
- Gabon is among the counties with full membership of the World Trade Organization. The country joined WTO in 1995 and has been enjoying all the trade benefits provided by the membership.
- Although the economy of the country seems to be unpredictable, the prices of substantial oil and timber have enhanced its recovery after the global downtown. Gabon now has a fast-growing economy with a growth rate of about 4-5 percent for the past two years.
- Gabon produces more than 300,000 barrels of oil every day, which accounts for 50% of its economy. Perhaps this translates to extensive reserves of oil, timber, and manganese, which are the countries’ “hidden” treasures.
- With only two shareholders and one manager required in Gabon Limited Company (SARL), it means therefore that SARL can be owned by the foreigners as there are no restrictions on the shareholders.
- Gabon LLC requires a threshold amount of 1 million XAF (1,930 USD), which is a minimum share value.
- The global corporate bank accounts that are used to support Gabon company formation are quite easy to open.
Company Formation in Gabon – Disadvantages
Conversely, foreign investors willing to invest in Gabon should also take into account the drawbacks of the country; these include:
- Gabon company formation requires an average of two months to complete. This process itself is complex and time-consuming.
- According to Transparency International, Gabon is listed among the corrupt counties in the world.
- The corporate tax rate of 40%, as well as the VAT rate of 18%, deprives Gabon SARL more than anything else.
- Poor enforcement of property rights and high corruption is the main reason why Gabon was listed as the country with less economic freedom.
- Gabon was also identified as a country with difficulties in protecting investors, according to an international study.
- Electricity is among the challenges affecting business growth in Gabon.
Also, it is prudent for foreign companies to note that market data and statistics of Gabon are often imprecise, and business transactions may take a longer time than expected. While these shortcomings are common challenges investors can experience in any other country, Gabon is a developing country that offers a potential market for investors globally.
As alternative in Africa, you can form your company in Tunisia.