Key Benefits:
Law n ° 2017-07 of 06 January 2017 on the provision of incentives for special economic zones
The State of Senegal has adopted the Law on Special Economic Zones, which repeals Act No. 2007-16 of 19 February 2007 establishing and laying down the rules for the organisation and operation of the integrated special economic zone. The Act defines a new governance framework for all special economic zones in Senegal and sets the legal and institutional bases for security for investors.
The success of the special economic zones is also based on a set of incentives that attract potential investors to the destination of Senegal.
To this end, the present draft law sets out the rules governing the incentive arrangements applicable in SEZs.
This arrangement aligns with international best practices and takes into account the evolution of competing economies. It must enable our country to be competitive, in particular on the costs of factors of production and the quality of services and infrastructure offered in SEZs.
The following innovations are introduced in this Bill:
A grouping of incentives;
Liberalisation of the sale and purchase of electricity;
Taking into account the provisions derogating from the labour legislation;
Rules for the protection of private property within SEZs.
There are seven (7) chapters:
-Chapter I deals with general provisions;
Chapter II deals with the land tenure of special economic zones;
Chapter III deals with the tax and customs arrangements of those areas;
Chapter IV deals with currency regulation;
Chapter V lays down the derogations to the labour legislation;
Chapter VI sets out the provisions on access to electricity;
Chapter VII deals with the final provisions.
This is the economy of this bill.
The National Assembly adopted, at its meeting on Friday 30 December 2016,
The President of the Republic enacts the following legislation:
Chapter I. - General provisions
Article 1. - Purpose
The purpose of this Act is to define the incentive arrangements applicable in special economic zones (SEZs) through:
The land status of special economic zones, the rules for the allocation and management of land included in their plate;
The tax and customs arrangements applicable to those zones;
The regulation of exchange rates applicable to the operations of undertakings operating within SEZs;
The system of derogations from the common rules on labour law;
Access to electricity.
Article 2. - Definitions
For the purposes of this Law:
1. Administrator: the entity responsible for the administration and management of special economic zones, by providing services to investors in a space provided for this purpose. This is APIX-SA under the authority of Act No. 2007-13 of 06 February 2007 authorising the creation of an anonymous company with a majority public interest known as " APIX-SA ";
2. Admission: the act of bringing into a special economic area, without the imposition or collection of customs duties or taxes, goods which are usually subject to duties and taxes when they enter the National customs territory;
3. Developer/developer agreement: the concession agreement signed by the competent authority and a promoter/developer of the SEZ in accordance with this Act and the regulations establishing the terms and conditions under which Promoter/developer of the SEZ is authorized to develop and empower ZES lands, to create infrastructures in the SEZ and to promote, operate, manage the SEZ, and to offer complementary services;
4. Economic entity: the entity incorporated or organized legally for profit, private or public purpose, including any company, company, partnership or partnership, individual enterprise, joint venture or other association;
5. Economic entity of foreign nationality: (i) the economic entity (excluding a branch) whose domicile or residence, the head office, the place of incorporation is situated in a foreign country or territory, or (ii) the branch of a Economic entity of foreign nationality operating in the Republic of Senegal;
6. SEZ enterprise: the economic entity which has received an authorisation issued by the administrator of the SEZs to carry on a trade or any other economic activity, in order to carry out, in particular, any industrial, commercial, service, Logistics, tourism and real estate or to create an industrial unit in the SEZ, including a promoter/developer of the SEZ;
7. An exempt undertaking: the economic entity which has obtained the legal status of a business of the SEZ, which is authorised to carry on economic activities in the SEZ and which benefits from the customs and tax advantages provided for by the present Law.
The developer/developer, defined below, is also considered an exempt business;
8. Non-exempt undertaking: the economic entity which has obtained the legal status of a SEZ undertaking, which is authorised to carry on economic activities in the SEZ and which does not enjoy the benefits referred to in Articles 9 and 10 of this Law;
9. Export: the act of shipping national or nationalised goods or the provision of services directly from the SEZ outside the customs territory;
10. Import: the act of bringing goods into the customs territory;
11. Deficit goods: goods that cannot be represented and for which the exempt business cannot produce either an export or sales declaration, or a report of destruction or loss, duly signed by the authorities Competent;
12. Promoter/developer of SEZ: the economic entity that has signed a developer/developer agreement with the competent authority, in accordance with the Law on Special Economic Zones;
13. ZES grounds: all public and private land originally or subsequently designated for use in SEZs pursuant to Articles 4 to 7 of the Law on Special Economic Zones;
14. National customs territory: the part of the national territory outside Area A, in which national customs legislation applies;
Area A: the zone as defined in Article 6 of the Law on Special Economic Zones;
Area B: the area as defined in Section 7 of the Special Economic Zones Act;
17. Special economic zone, in short " ZES " : the geographical area in the territory of the Republic of Senegal designated as the location of the zone in accordance with Articles 4 to 7 of the Law on Special Economic Zones. This space is intended to be an investment pole par excellence by providing a competitive environment for business and investment;
18. Integrated special economic zone: the special economic zone referred to in Article 1 of Act No. 2007-16 of 19 February 2007 establishing and laying down the rules for the organisation and operation of the integrated special economic zone.
Article 3. - Duration and Conditions of Benefits
The benefits of this Act shall be guaranteed for a period of twenty-five (25) years from the date on which the licence of the exempt business is issued. This period shall be renewable once in accordance with terms and conditions laid down by decree.
Companies that meet the conditions of eligibility specified by decree are eligible for the exemption scheme in Area A.
The authorisation granted to exempt undertakings may be withdrawn for non-compliance with the eligibility criteria, in particular that relating to the export threshold.
The arrangements for the withdrawal of such authorisation shall be laid down by regulation.
Chapter II. - Land tenure of special economic zones
Article 4. - Public utility of a special economic zone
The decree establishing a special economic zone shall constitute a declaration of public utility and shall render the lands within the right-of-way of the SEZ assignable.
Any investor holding a land title may request the erection of its perimeter into a special economic zone. In this case, after the opportunity study provided for in the article
3 of the Law on Special Economic Zones and the signature of a developer/developer agreement between the investor and the administrator, the zone may be declared a special economic zone. The decree establishing that perimeter in a special economic zone does not constitute a declaration of public utility.
Article 5. - Establishment and delimitations of the perimeter of special economic zones
The delimitations of special economic zones and their cadastral references are those laid down in Chapter II of the Special Economic Zones Act.
The perimeter of an existing SEZ may be extended by decree on areas contiguous to the zone. In the case of land depending on the public domain, the national domain and the private domain of the State, the transfer of management takes place after their incorporation into the State's private domain following the legal procedures and formalities required by that State. Effect.
In accordance with paragraph 2 of this Article, the management of additional land included in a SEZ shall be transferred to the administrator for the purposes of
Administration and management of the said area.
The allocation of land to undertakings operating in a SEZ is carried out in the form of an emphyteutic lease issued by the administrator and registered in the book
Land.
Article 6. -Rules for the protection of private property within SEZs
The State shall ensure the right to private property of any property, as well as the protection of any attribute and any aspect of the right of private property, in the SEZ. This protection applies in particular to the occupation and possession of all private property rights, as well as to all transfers and other ownership arrangements within the SEZ. In accordance with the provisions of paragraphs 2 and 3 of this Article, all private property, including investment in SEZs, shall be protected against any direct or indirect administrative or regulatory decision, which is Arbitrary and/or discriminatory.
In accordance with customary international law concerning international obligations in respect of expropriation and nationalization, the Government of Senegal, including its national and territorial authorities, shall not expropriate or Nationalise any private property, including investment in SEZs, in a direct or indirect way, except for reasons of public utility, on a non-discriminatory basis and taken under the conditions laid down in the legislation Relevant Senegalese, including the regular application of the law in respect of Acquisition of property rights.
This guarantee also applies to an equivalent administrative or regulatory decision which results in an economic result similar to an expropriation or nationalization, such as the forced sale of property rights as a result of Decisions or resolutions on the geographical delimitation of land.
In the event of an expropriation for reasons of public utility or of non-discriminatory nationalisation in respect of cause or reason of public utility which is legally provided for, the person concerned by the measure benefits from a prompt, just, Effective and advance compensation. The compensation is equivalent to the fair market value of the ZES investment expropriated or nationalized, immediately before the expropriation or nationalization takes place ("date of expropriation or nationalization") , and it does not take into account any change in value resulting from the fact that the proposed expropriation or nationalization was already known.
The valuation criteria for compensation are the value of exploitation or nationalization, the value of the assets, including the declared tax value of the tangible property, and any other criteria necessary for the calculation of fair value Market. Compensation shall be paid without delay and payment shall be made in a freely negotiable currency. The compensation shall include interest calculated on the basis of a reference rate determined by the administrator, from the date of expropriation for reasons of public utility or nationalization until the date of payment of the compensation.
Notwithstanding the provisions of paragraphs 1, 2 and 3 of this Article, any non-discriminatory administrative or regulatory decision taken by the State of Senegal or by the Administrator in the SEZ and motivated by the protection of social welfare as Public health, safety and environmental protection is neither an expropriation nor a nationalization.
Chapter III. - Applicable tax and customs arrangements in the zones
Special economic
Article 7. - Exempt Businesses and Benefits
Exempt businesses, other than proponents/developers of SEZs, operate in Area A of the activities listed by Order in Council.
Exempt undertakings shall be eligible for all customs and tax benefits in accordance with this Law and the regulations made for its application.
Developers/developers are exempt companies in Zones A and B.
Article 8. - Non-exempt businesses
The undertakings of a SEZ whose object is the purchase, processing or sale of hydrocarbons or which carry on banking, financial or insurance activities in Area A, with the exception of those whose activity is exclusively for the purpose of Export, are non-exempt undertakings. Companies in a special economic zone, licensed as a telecommunications network operator, are also non-exempt undertakings.
Non-exempt businesses are not entitled to any of the customs or tax benefits provided by this Act.
Goods delivered in Area A for non-exempt undertakings are subject to the common tax and customs rules.
Article 9. -Tax and customs benefits
Exempt undertakings shall enjoy the right of admission duty free of all duties and taxes levied on the customs cord, excluding Community levies on goods, products, raw materials, equipment, other goods and Services and the right of export free of charge outside the national territory of the same goods.
Exempt businesses are subject to a corporate tax at the rate of 15 % on their taxable income determined in accordance with the provisions of the General Code of Taxes. Where an exempt undertaking carries out part of its turnover on the national customs territory, it shall apply an additional tax of 3 % on that part of the turnover carried out within the borders.
An exempt undertaking shall be exempted from the payment of taxes collected in favour of the budget of the following State or public authorities or similar bodies, national or local:
1) income tax on securities collected by the company on distributed dividends;
(2) a lump-sum contribution to the employer's office or any other tax on the wages paid by the undertakings and borne by them;
(3) rights of registration and stamp relating to acts of incorporation and amendment of the statutes of companies, rentals of immovable property in the SEZ and acts relating to the purchase, sale or pledging of assets;
4) Corporate Minimum Tax on Corporations;
(5) land contributions on land and buildings owned in the special economic zone;
(6) contribution of patents;
7) special tax on passenger cars of legal persons.
Article 10. - Relief of Duties and Taxes on Goods
Any goods, including production goods, equipment, raw materials, inputs, semi-finished products and finished goods, permitted in Zone A of a special economic zone, shall be exempt from the payment of all duties, taxes, charges, Levies or other customs charges, excluding Community levies. In export, the goods staying there are free from any payment of duties and taxes of exit.
Article 11. - Rules governing goods at the entrance and exit of the SEZ
Any movement of goods entering or leaving Area A and any transfer of goods between undertakings of the SEZ, as well as any loss or destruction of goods incurred by an exempt undertaking, shall be subject to Customs declaration or a form, except in the case of derogation from the customs authorities, in accordance with the implementing regulations. The administrator and the Senegalese customs authorities may also request any company of the ZES to provide additional information on its admissions, imports, exports and any other transactions for control purposes.
Exempt businesses, operating authorized economic activities in Area A, may sell their goods in the national customs territory. In this case, such sales, as well as any goods in deficit, are subject to common law, including customs legislation. The duties and taxes of entry to be collected shall, where appropriate, be calculated on the basis of the original value of the product or its constituent parts or of the inputs initially allowed in Area A.
However, these imported goods are not subject to any collection of taxes or duties if the duties and taxes previously paid on those same goods have not been refunded. It is applied to goods leaving Area A to the national customs territory the most-favoured-nation regime at the time of entry into the national customs territory.
Article 12. -Exclusion
There is no exemption for fuel for passenger vehicles of exempt undertakings.
Chapter IV. - Regulation of Foreign Exchange
_ Article 13. -Arrangements for the regulation of foreign exchange
All natural and legal persons may execute their current payments to foreign nationals according to the principle of freedom by authorised intermediaries. Capital operations may also be carried out in accordance with the exchange regulations in force within the West African Economic and Monetary Union.
These current capital and payment transactions carried out through authorised intermediaries may include in particular:
(1) the transfer of the sums necessary for the contractual depreciation of the debts and the reimbursement of short-term credits for the financing of commercial and industrial operations;
(2) the transfer of proceeds from the liquidation of investments or the sale of foreign securities by non-residents;
(3) payments resulting from the delivery of goods, costs of port services, warehouse services, shopping, customs clearance, customs and any other incidental costs of the traffic of goods;
(4) salaries, wages and fees, social insurance contributions and allowances, pensions and annuities arising out of a contract of employment, employment or rent of services or having a public debt character;
(5) patent rights and royalties, licenses and trademarks, copyrights, film and other royalties;
6) the interest and dividends, shares and profits of the companies of capital or persons, mortgage interest or immovable property, rent and fermages, business profits, pensions and annuities arising out of a contract Of life insurance and any other periodic capital remuneration.
All natural and legal persons working in the SEZ may apply for the opening of a foreign currency account in accordance with the regulations in force.
Chapter V. - Regime derogating from the common rules on labour law
Article 14. - Provisions relating to labour legislation
The derogations provided for in the Labour Code, the regulations made for its application and the collective labour agreements are applicable to SEZ undertakings, in particular:
Derogations from the legal duration of work such as equivalence, extensions, recovery of lost working time, overtime, individualised hours, part-time work, temporary work, Performance pay or part;
Derogations from the fixed-term contract of employment such as the rules of the Labour Code applicable to the worker employed on time or on the day, to the seasonal worker, to the worker employed in addition to the employee, to the worker Committed to the temporary replacement of a worker of the undertaking, to the worker of undertakings in a sector of activity in which it is customary not to resort to an open-ended contract;
The removal of the prior administrative authorisation in the case of redundancies for economic reasons or internal reorganisation.
Any company in the ZES benefits from the right to employ staff of foreign nationality and of Senegalese nationality.
The provisions of the Labour Code relating to the visa of the Director-General of Labour for any contract requiring the installation of the worker outside his or her habitual residence shall apply to enterprises of the SEZ.
Exempt businesses may work with the same worker, from the date of registration, for a number of fixed-term employment contracts for a period of time limited to five (05) years.
Chapter VI. -Access to electricity
Article 15. -Purchase from independent producers
Enterprises in special economic zones can purchase electricity for their own consumption from independent producers.
Article 16. -Transportation and distribution costs of electricity
The costs of transmission and/or distribution of electricity, as determined by the Electricity Regulatory Commission, shall be borne by the purchaser where appropriate.
This Law shall be enforced as the law of the State.
Done at Dakar, January 06, 2017.
Macky SALL
By the President of the Republic:
The Prime Minister,
Mahammed Boun Abdallah DIONNE
