Setting Up a Business in Chad: Key Steps

Setting up a business in Chad rests on a foundation shared by seventeen African countries: OHADA law, which defines company types and the rules for forming them. National formalities for registration, tax and social security come on top. With proper preparation the path is well marked; difficulties most often arise from choices made too quickly at the outset.

1. Choose the legal form

The choice of structure determines the shareholders’ liability, how the company operates and its ability to take on investors. The most commonly used forms are:

• The sole proprietorship and the “entreprenant” status, for a business run alone, without creating a separate legal entity.
• The limited liability company (SARL), including with a single shareholder: liability is limited to contributions and operation is simple.
• The simplified joint-stock company (SAS), whose articles are given great freedom to organise management and relations between shareholders.
• The public limited company (SA), suited to larger projects; the Uniform Act sets its minimum share capital at ten million CFA francs.
• The branch, for a foreign company wishing to operate in Chad without creating a subsidiary — in principle a temporary solution under OHADA law.

2. Draft the articles and pay up the capital

The articles are the company’s contract: purpose, registered office, duration, capital, contributions, directors’ powers, majority rules, transfer of shares. Articles copied from a template rarely deal with the situations that matter, such as a new shareholder coming in, a founder leaving or a disagreement over strategy.

Cash contributions are deposited in an account opened in the name of the company being formed or with a notary, and payment is recorded in the form required by the Uniform Act. Contributions in kind must be valued, with a contributions auditor involved in the cases provided for by law.

3. Register the company

The company acquires legal personality upon registration with the Trade and Personal Property Credit Register (RCCM). It must also obtain its tax identification number (NIF) and register with the National Social Insurance Fund (CNPS) as soon as it employs staff. The National Agency for Investment and Exports (ANIE) centralises part of these formalities.

4. Obtain activity-specific authorisations

Some activities may only be carried out with an approval, licence or authorisation: banking and microfinance, insurance, telecommunications, mining and hydrocarbons, transport, health, education and private security, among others. These authorisations must be identified before incorporation, as they sometimes determine the company type, the capital or the shareholding.

5. Meet the obligations that follow incorporation

• Keep accounts in line with the OHADA accounting system and draw up annual financial statements.
• Convene the shareholders each year to approve the accounts and keep the company’s registers.
• File tax and social security returns on time.
• Draw up written employment contracts and register employees.
• Update the RCCM whenever something changes: director, registered office, capital, purpose.

The most common mistakes

• Starting to trade before registration, which makes those acting on behalf of the company being formed personally liable.
• Choosing a company type solely on the basis of its set-up cost.
• Putting nothing in writing between shareholders about roles and exit terms.
• Mixing up the company’s assets with those of its director.

Formalities, timeframes and costs change. Before committing, have the requirements applicable to your project checked as at the date you proceed.