Setting Up a Company in Senegal: Comprehensive Insights

Setting up a company in Senegal involves choosing from various business entities, including the Senegal limited liability company (SARL), the Senegal public limited company (SA), branch offices, and representative offices. Each has its own requirements and obligations.

1. Senegal Limited Liability Company (SARL):
   • Requires at least 1 director and 1 shareholder of any nationality.
   • Minimum paid-up share capital of US$2,000.
   • Must maintain accounts in French, following the OHADA system.
   • Mandatory appointment of a statutory auditor and submission of annual audited financial statements.
2. Senegal Public Limited Company (SA):
   • Minimum capital of US$20,000.
   • Requires at least 1 shareholder and 1 director of any nationality.
   • Accounts must be maintained in French, adhering to the OHADA system.
   • Annual financial statements and audit are mandatory.
   • Must appoint an approved auditor.
3. Senegal Branch (Succursale):
   • Can be 100% foreign-owned, with operations defined by the parent company.
   • Requires a registered office and a resident agent in Senegal.
4. Senegal Representative Office (Bureau de représentation):
   • Can be 100% foreign-owned but cannot engage in income-generating activities in Senegal.
   • Expenses covered through foreign currency remittances.
   • Limited to market research and promoting the parent company’s business.

Senegal Company Registration Procedures:

1. Deposit Founding Capital with a Bank:
   • Founding capital can be deposited directly with a bank or through a public notary.
   • The account is liberated upon company registration.
2. Check the Company Name:
   • Verify name availability at the Court.
3. Notarize Company Bylaws and Bank Deposit:
   • Public notary required to notarize bylaws and deposit subscribed capital.
   • Notary involvement is essential.
4. Register Your Business at the One-Stop Shop:
   • Since November 2007, entrepreneurs can register at a one-stop shop, streamlining the process.
   • Various agencies coordinate to facilitate registration.

Accounting & Tax in Senegal:

Senegal Taxation:

• Standard corporate tax rate: 30% on both local and international income for tax-resident companies.
• Minimum tax of 0.5% of the previous year’s turnover for companies without taxable profits.
• Capital gains taxed at the standard corporate income tax rate.

Value Added Tax (VAT):

• All incorporated companies must register for VAT and file monthly returns.
• Standard VAT rate: 18% on goods and services.
• Lower rates for specific sectors.

Withholding Taxes & Double Tax Treaties (DTTs):

• 10% withholding tax on dividends.
• 8% to 16% withholding tax on interests.
• 20% withholding tax on royalties and technical services fees.
• Reduction of withholding taxes possible under DTTs.
• Senegal has DTTs with several countries.

Tax Credits and Incentives:

• Companies with Free Exporting Enterprise status may pay 15% corporate income tax.
• Senegal Investment Code applies to investments over US$180,000.
• Exemptions from VAT and customs duties for qualifying companies.

Tax Reporting, Accounting, and Auditing:

• Tax year: Calendar year.
• Annual tax returns due by 30 April of the following year.
• Audited financial statements required if certain thresholds are met.
• Monthly tax returns for all companies, including VAT, withholding tax, and income tax.
• Net operating losses can be carried forward for up to three years.

Tax Payment:

• Corporate income tax paid in two instalments (by 15 February and 30 April).
• No instalments for newly-incorporated companies in their first fiscal year.
• Full corporate income tax due before 15 June of the following fiscal year.

Setting up and managing a business in Senegal involves adhering to these legal and tax requirements, depending on your chosen business entity and activities.