The African country is one of the largest and most diversified markets in the Gulf of Guinea. A central African nation, with a resilient economy, it acts as a strategic hub linking markets in West Africa to the central. Said to have the largest economy in the Economic and Monetary Union of Central Africa (World Bank, 2019), it is into the exportation of commodity products such as cocoa, coffee, banana, cotton, etc. Also, through manufacturing, its government has been able to develop the country and grow the economy. Since the macroeconomic environment has been steady, this has driven regional growth. Investing in this African country has many pros such as little competition, a large market, cheap labor, et cetera. There are five forms of business entities available for investors interested in establishing or buying a company within this territory.
Buying a Company
Contrary to what you might have heard, it is easy to buy a business here, especially a company about to close. Provided one has the finances to pay for the company, there are several entities available for sale either physically, or on online market platforms. Several people want to purchase a company for so many reasons such as expanding an existing one, creating a conglomerate, diversifying one’s business network, etc. You can purchase a closed-down establishment or an existing one and merge it with yours if they are similar. Note that caution must be taken when buying a business to avoid scams and identity thefts.
The steps to buying a business are simple and easy to follow. The first is to look for a business you want to buy and then carry out intensive research to ascertain if the entity is for sale. Next, ensure it owes no debt you will be liable to and can provide credible authentic financial records presented by the company’s auditors.
The final step is to hire a business services provider to facilitate the process of buying the company, from the first step to the final stage. A service provider can stand in for you during the transaction, that way you do not have to be present in the country. Aside from this, service providers also research on their own to offer their clients advice and provide credible information about the company they wish to buy.
Doing Business in Cameroon
The Centre de Formalities de creation d’Entreprise (CFCE) was established by the government to facilitate the creation of enterprises. With its easy and simple process, an enterprise with little capital can be created in at least 3 days. For large investments above 1,000,000 CFA, one needs to align with a notary. The investment Charter 2020 regulates foreign investments here. The business formalities center under the Investment Promotion Agency (Agence de Promotion des Investissements ‘CIPA’) serves as a one-shop for company formation services. There are lots of ways one can do business within the territory. One of them is setting up a company such as a limited liability company.
Types of Companies
The business structures available here are provided for by the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings. They include;
Limited liability company (SARL)
The common entity used by entrepreneurs to set up small and medium-sized enterprises in the country.
Public limited Company (SA)
This company requires a minimum share of 10 million CFA and a share capital above 10 million CFA if it wants to be publicly listed.
Simplified Limited Liability Company (SAS)
Societe par Action simplifiée in French, this entity does not have a minimum required share capital.
Corporations owned by foreigners can open branches of their businesses here.
Representative Office (Bureau de liaison)
An office that does not involve in selling or buying goods produced by its parent company.
Features of a Company
If you are establishing or buying an entity instead, knowing the types of structures available to you and their features is substantial. This will help you make better choices as to choosing a company to buy from. The following are company characteristics:
- Liability of Shareholders
- Foreign Ownership
- Registered Address
- Minimum Capital
- Number of partners, etc.