Any company conducting business in Cameroon is required to register a Cameroon representative office with the Trade and Personal Property Rights Register. A Foreign company wishing to set up business operations in Cameroon must take steps in obtaining local incorporation of the Cameroon branch or subsidiary which has a separate entity in Cameroon. Another alternative option is for the foreign company to engage in the process of setting up a representative office in Cameroon.
Before you set up a Cameroon representative office, foreign companies must adhere to the strict rule provided under The OHADA Uniform Act Relating to Commercial Companies and Economic Interest Groups which dictates that:
“To do business in Cameroon, a foreign investor must incorporate a foreign entity in Cameroon and until it is incorporated, it shall have no place or business or address of service of documents or processes in Cameroon for any purpose other than receipt of notice or other documents as matters preliminary to incorporation”.
In some of our write-ups, we discussed the procedure to register a foreign-owned company in Cameroon and how to set up a business in Cameroon. Today we shall discuss the importance of a representative office in Cameroon.
Oftentimes, investors are faced with the growing need for their products or services entering into a new market. Investors rely on the direct or indirect presence of entry into the market space. One of the direct presences is the setting up of a Cameroon representative office through agents to supervise business activities.
Generally, Foreign companies who are interested in doing business in Cameroon can incorporate a wholly foreign company in Cameroon. Also, foreign companies may set up a representative office in Cameroon, which must be registered with The Trade and Personal Property Rights Register. However, the representative office in Cameroon cannot engage in business, negotiate or conclude contracts. The representative office in Cameroon only serves as a liaison or promotional office. The expenses run in the representative office in Cameroon must be an inflow from the foreign company.
THE KEY FEATURES IN SETTING UP A REPRESENTATIVE OFFICE IN CAMEROON ARE;
- The office has no legal status and as such cannot be sued or sued in itself; it is oftentimes a temporary administrative arrangement.
- The liabilities of a representative office in Cameroon extend to the parent company which is a foreign company.
- The only allowed activities of a representative office in Cameroon are for conducting market research, acting as storage of goods, or serving as a promotional office. It is restricted from performing contracts, entering into negotiations, etc.
- A representative office in Cameroon is not subject to tax payment since it cannot generate income, provided that a proposed representative office does not include certain objectives in its MEMART, which could make it liable for taxation.
OBJECTIVES TO SET UP A CAMEROON REPRESENTATIVE OFFICE
The objective of setting up a representative office in Cameroon would determine whether such a company can enjoy representative status without being subjected to taxation or not. However, for a representative office in Cameroon to be exempted from taxes, its objectives must fall within the following categories:
- Market research and intelligence
- Storage and/or display of goods.
- Obtaining information and conducting analysis
- Serving as promotional office
- Provision of logistics in respect of the above
REPRESENTATIVE OFFICE AND BRANCH OFFICE IN CAMEROON
If the word “branch” is construed to imply a subsidiary, then it is totally different from a representative office in Cameroon. Several people often use the words “branch office”, “representative office” and “subsidiary” interchangeably. The fact is that a subsidiary office is construed as an ordinary company in Cameroon, although owned by another company, either a foreign or local company.
A branch or subsidiary of a foreign company is entitled to carry out any desired business in Cameroon and is subject to corporate taxation like a local entity. Therefore, foreign companies can set up representative offices for the purpose of promoting the business. However, such offices cannot engage in business nor conclude contracts. The above-listed features must be considered before a foreign investor decides on the option suitable for the exposure of its business.
Finally, it is also worthy of note to state that the procedure in Cameroon only be incorporated just the way an ordinary new or subsidiary company is incorporated, which implies that a representative office in Cameroon must be registered with The Trade and Personal Property Rights Register.
Article by Barr. Mafany Victor Ngando
“The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances”