Setting Up a Company and Doing Business in Senegal

Investing in Senegal

 Our services include

• Senegal business registration
• Government license registration 
• Corporate bank account opening services in Senegal and abroad 
• Employee recruitment strategies
• Visa strategies
• Senegal office rental solutions.

With its growing economy, openness to foreign investment, and political stability, Senegal is a popular destination for setting up a company in West Africa. However, as with all countries, there are many different ways to do this, and it will ultimately depend on your nationality as well as the structure and nature of your business (not all legal company structures are open to foreigners).

Types of Companies in Senegal

There are many different types of legal structures for your business, each with its own financial, social, and administrative rules. The most common are:

• Sole Proprietorship
• Limited Liability Company (LLC - known as SARL in Senegal),
• Public Limited Company (PLC - known as SA (société anonyme) in Senegal)
• Economic Interest Grouping (known as GIE in Senegal)
• You can also establish the following structures, but they are less common:
• Company in Collective Name (SNC)
• Limited Partnership (SCS)
• Cooperative Company

Requirements and Procedures for Starting a Business in Senegal

• Hiring or appointing an auditor is not required.
• The liability of each partner is unlimited and extends to the entrepreneur's personal property.
• The company is managed by the entrepreneur.
• For sole proprietorships, the company will be taxed on profits of 50 million CFA from goods and services.

Investing and Trading in Senegal

With expert assistance, setting up a company in Senegal is simple.

It is possible to register a limited liability company (SARL) in Senegal with at least one shareholder and one director of any nationality, who do not need to reside in Senegal.

For the setup of a SARL (LLC) in Senegal, there is no minimum paid-up capital requirement, even if the entity is foreign-owned. However, the "norm" is 1,000,000 F CFA (US$1,900).

World Company Setup assists the Client with company formation from A to Z, without our client needing to travel to Senegal to complete the Senegal company formation procedures.

Our clients can sign the overseas company incorporation documents abroad. The documents do not need to be attested or notarized at the Senegal Embassy in the Client's country of residence.

Clients establishing a branch or subsidiary in the country will need to translate the parent company documents into French. The translations can be done directly in Senegal.

It is competitive for foreign investors and entrepreneurs to do business in Senegal.

• The costs of doing business in Senegal are low.
• The average monthly salary in Senegal is US$150. 8 per square meter.
• Business and trade between Senegal and neighboring countries are facilitated by good road, rail, sea, and air connections.

Senegal is one of Africa's politically stable democracies. Entrepreneurs find a safe environment in which to establish their businesses.

Senegalese companies that qualify for Free Export Enterprise status and export more than 80% of their products can benefit from various tax advantages, including:

• A reduced corporate tax rate of 15%
• Tax exemption on registration fees, stamp duty, and employee payroll tax

They also benefit from:

• Tax exemption on manufacturing equipment and raw materials.
• Companies investing more than 100 million XOF (approximately US$170,000) in various sectors under the Investment Code are eligible for:
• Exemption from customs duties
• Suspension of VAT for at least three years;
• Companies established in special economic zones in Senegal also benefit from:
• A reduced corporate tax rate of 15%
• Exemption from import and export duties.

Clients wishing to set up in Senegal for certain non-income-generating projects can register their projects with the Tax Department without forming a company.

French is the national language of Senegal. All business documents must be translated into French before company formation.

Bank accounts in US dollars are not an option for companies registered in Senegal, except for diplomatic missions and larger organizations that have a headquarters agreement with the Senegalese government.

The branches of foreign companies can exist for a maximum of two years. After that, it is a legal requirement to convert such entities into a subsidiary LLC.

Local legislation requires all domestic transactions to be conducted in the local currency (West African CFA Franc).

For the reasons above, companies are rarely permitted to open foreign currency accounts in Senegal. The request must be made to the Central Bank, and approval is usually only granted to consulates/embassies and multinational corporations and global NGOs with special agreements with the government.

The Right Sectors in Senegal for Investors

As a West African distribution hub. Although the regional transport infrastructure is inefficient, Senegal has some of the best port facilities in West Africa. For example, the port of Dakar is used by landlocked West African countries to receive shipments.

As a Francophone African headquarters: As one of the more stable and investment-friendly French-speaking countries in Africa, Senegal is an excellent choice of location for a business serving the former French and Belgian colonies of Africa.

Senegal Tax Rates

The standard corporate tax in Senegal is 30% on both local and international income for all tax-paying companies.

A minimum tax of 0.5% of the previous year's turnover is applied to companies that do not generate taxable profits within a fiscal year.

Capital gains in Senegal are treated as ordinary business income and are subject to the standard corporate tax rate. The tax can be deferred in the event of a merger or acquisition of another legal entity.

Branches of foreign companies pay a 30% corporate tax on branch earnings sent abroad, plus a 10% withholding tax. In some cases, an 18% VAT may apply to branch remittances.

A capital duty is taxed at a rate of 1% on capital exceeding 100 million XOF (approximately US180,000);otherwise,thetaxisUS60.

A 1% tax is applied to capital increases, and a 1% tax is applied to real estate contributions.

A transfer tax is levied at 10% on real estate, 1% on shares and shareholders' current accounts, and 10% on goodwill.