In 2002, the government passed new laws to improve the Central Bank’s role as regulatory and supervisory authority and increase its independence. To facilitate mass banking and the establishment of a sound financial system inclusion, the Central Bank also defined a specific legal framework for microfinance. Act 11/020 of 15 September 2011 defines rules relating to the activity of microfinance. A new insurance legislation, Act No. 15/005 of 17 March 2015, was adopted with the objectives to liberalize the insurance sector and attract private insurance companies. This legislation has allowed the creation and the effective establishment of the Insurance Regulatory and Control Authority (ARCA – Autorité de Régulation et de Contrôle des Assurances) this year.
Agriculture Legal Framework
The NEW INVESTMENT CODE [Investment Code (cfr. Act No. 004/2002 of 21/02/2002)] has the following objectives:
a) Promote the establishment of civil engineering companies responsible for construction and maintenance of roads and highways as well as movements of people and goods, whether land transportation, river or air;
b) Promote investments that develop agriculture and agribusiness through mechanization in order to ensure food self-sufficiency and therefore reduce imports of commodities and allow both income growth in rural areas, improving the supply of food industries with raw materials and finally, enlargement of the domestic market of consumer goods;
c) Promote the heavy investments to establish a strong industrial base that will support sustainable economic growth; and
d) Encourage investment for developing the national natural resources on site in order to increase the added value and the exportable volume. Decree 13/049 of 10.6.2014 relating to the tax regime to be applied to companies eligible for the Strategic Partnership on the chain of value.
The above-mentioned Decree aims to establish a tax system of development as part of the legal framework for economic promotion and revival of the national industrial units likely to improve the living conditions of the national communities. This is an instrument of economic promotion that will assist the Government and the private sector to direct, organize and carry out investments of partnership programs in the areas and sectors that have significant potential for integration of which the realization allows a large segment of the population to take part in the economic and social activity on well-defined geographical areas.
AGRICULTURAL CODE (LAW NO. 11/022 OF 24 DECEMBER 2011 ON FUNDAMENTAL PRINCIPLES RELATING TO AGRICULTURE)
The agricultural Code aims to:
a) Promote the sustainable development of potentialities and agricultural space integrating social and environmental aspects;
b) Boost agricultural production by establishing a special customs and tax regime in order to achieve, inter alia, food self-sufficiency;
c) Boost exports of agricultural products to generate significant resources for investment;
d) Promote the local industry for processing agricultural products;
e) Bring new renewable energy technologies;
f) Get the province, the decentralized territorial entity and the farmer involved in the promotion and implementation of agricultural development.
Agriculture Act (Law Nr. 11/022 of 24 December 2011).
Key provisions on investment include the following:
• Expenses incurred by investors to build a road connection to their farm from a main road are tax deductible.
• Discounts on water and energy prices to farmers (electricity and petroleum).
• Water and energy produced by a farm for its own consumption are exempt from tax.
• Industrial farmers can make a non-taxable provision not exceeding 3% of their turnover for land rehabilitation, major risks and agricultural calamities. This provision is re-integrated to the taxable basis if it is not used within two years.
• Farming inputs are exempt from import and export duties.
• Exemption from property tax for land used exclusively for agriculture.
• Vehicles used exclusively for agriculture operations are tax-free.
• All combined administrative fees payable to government services at the border must not exceed 0.25% of the value of exported goods.
Energy Legal Framework
Law No. 14/011 of 17 June 2014 aims to regulate the energy sector in the DRC:
- Effective liberalization of the sector;
- The promotion and harmonious development of supply in urban, pre-urban and rural areas;
- The coverage in electricity need for all categories by the quality supplies;
- The guarantee of fair competition between operators and users’ rights.
This law applies to activities of production, transmission, distribution, import, export and marketing of electricity implemented by any operator.
Forestry Legal framework
Law on Forestry (Law Nr. 011/2002 of 29 August 2002 and Decree Nr. 05/116 of 24 October 2005)
This law defines the exploitation of forest resources throughout the country. It promotes the rational and sustainable management of natural forest resources to increase their contribution to the economic, social and cultural development of present generations, while preserving the forest ecosystems and biodiversity for future generations.
Housing Legal framework
- Land Law No 73-021 of 20 July 1973 on the general regime of property, land tenure and property and collateral regime.
This law decrees precise standards, which regulate the purchasing area, of sales and leasing of land and / or concessions. It should oversee the decisions of sellers, lessees and buyers about the procedure for all transactions for the issuance by the Congolese State of ultra secure real estate titles.
Bakajika Law of June 7, 1966 (The soil and subsoil belong to the State).
It stated, “the soil and subsoil belong to the State.” This law was intended to bring order in the land sector.
- Ministerial Order No. Cab/MINA/TUHITPR/007/2013 of 26 June 2013 concerning the regulations of granting building permits in the Democratic Republic of Congo.
Any person wishing to undertake a property development, urban innovation, building or structure of any kind in durable materials and according to the rules of art throughout the Democratic Republic of Congo, should first obtain a building permit from the relevant administration of Urban and Housing Planning.
- Circular Note n°005/CAB/MIN/AFF FUNC/2013 of 12 June 2013 on the procedure and the transfer period of land and property rights.
Hydrocarbon Legal Framework
The DRC oil and gas sector was until recently governed by Ordinance-Law No. 81-013 establishing general legislation on mines and hydrocarbons, as modified by Ordinance-Law n°82-039 dated 5 November 1982 and Law n°86-008 dated 27 December 1986 (the Mines and Hydrocarbons Law). However, since 2002, the mining sector has been governed by a separate mining code, which rendered many provisions of the Mining and Hydrocarbons Law obsolete.
After several years of deliberations on the reform of oil and gas legislation, the DRC adopted Law n°15/012 dated 1 August 2015 establishing a general regime for hydrocarbons (the Hydrocarbons Law). The legislative reform process was recently concluded by the adoption of Decree n°16/010 dated 19 April 2016 establishing hydrocarbons regulations (the Regulations), which, among other things, adds more details to the applicable fiscal regime. This briefing summarizes the main provisions of the new Hydrocarbons Law and Regulations relevant to oil companies engaged in upstream activities.
The Hydrocarbons Law specifies that the State owns all national hydrocarbon resources up to the point of export, but that rights to carry out petroleum exploration or exploitation operations may be granted to local or foreign legal entities selected through competitive bidding on the basis of technical and financial criteria established by the Minster of Hydrocarbons and approved by the Council of Ministers. Such rights are granted pursuant to a petroleum contract (as further discussed below). The Hydrocarbons Law no longer provides for concessions, unlike the old Mines and Hydrocarbons Law.
Foreign entities must form local subsidiaries under DRC law in order to engage in petroleum exploration or exploitation activities.
Exploration rights are valid for 3 years (or 4 years for areas with difficult geological or access conditions), renewable twice for the same period. The maximum duration of exploration rights under the Mines and Hydrocarbons Law was 8 years..
Exploitation rights are granted for a maximum period of 20 years, renewable once for a maximum of 10 years (comparable to concessions under the Mines and Hydrocarbons Law). Holders must commence work within 12 months after the approval of the development and production plan.
It is noteworthy that under the Hydrocarbons Law, the State-owned oil company (presumably COHYDRO (Congolaise des Hydrocarbures) created by Decree-Law n°245 dated 9 August 1999) is entitled to a 20% minimum stake in upstream petroleum activities pursuant to an association contract to be entered into with third parties (which does not create a separate legal entity).
Infrastructure Legal framework
- Law n ° 14/011 of 17 June 2014 relating to the liberalization of the energy sector to the private. It applies to the production, transmission, distribution, import and export and marketing. It does not apply to plants with installed capacity is less or equal to 50kw. Non-commercial use, signal distribution facilities or of speech, scientific research facilities and of State security.
- Bill on public-private partnership is awaiting consideration by the National Assembly. This bill provides for the following forms: service contract, management and maintenance contract (leasing), rental and construction-management, build-transfer-management, etc.
Mining Legal framework
The current Congolese Mining Code was enacted by the Congolese Congress on 11 July 2002 (Mining Code). The implementing measures of the Mining Code are set forth in the Mining Regulations of 26 March 2003 (Mining Regulations).
New Mining Code will aim, in particular, to:
- Enhance the government’s control over the mining sector;
- Further regulate elements related to the social and environmental responsibility of mining corporations; and
- Incorporate the latest changes in the Congolese administrative context, for instance the introduction of the VAT in the Congolese tax regime;
- Address financial and accounting manipulations (such as high interest rates applied by the operator’s affiliate companies acting as lenders) used by mining companies to funnel company profits to their foreign shareholders’ groups.
In this respect, the current Mining Code provides for a 10-year stability guarantee. This stability guarantee provides that rights attached to valid mining rights at the promulgation date of the Act modifying the Mining Code will remain unchanged and vested for a 10-year period.
This 10-year period will start either from:
- The entry into force of the Act modifying the Mining Code, for mining rights which are valid at that time; or
- The date a mining right is granted provided it has been granted under a valid research permit that existed at the time of the entry into force of the Act modifying the Mining Code.
- From a political point of view, the redefinition of the DRC’s provinces is also likely to have some impact on operators. Since July 2015, after the government gave effect to the increase in the number of provinces, from 11 to 26, mandated in the 2006 constitution, the main copper-producing region – Katanga – has been split into four separate provinces. The 400-kilometre (249-mile) journey from Kolwezi to the Zambian border now crosses two provinces – Haut-Katanga and Lualaba – instead of just one.
At the regional level, in July 2012 the DRC joined the Organization for the Harmonization of Business Law in Africa (OHADA). OHADA law is of particular interest to mining companies, as it primarily covers commercial, corporate, loan-guarantee, accounting and arbitration law. OHADA law entered into force in the DRC on 12 September 2012. In addition, a one-stop shop for business start-ups (Guichet Unique) was recently instituted and shows encouraging development.
The Mining Cadastre receives applications for mining rights, grants mining rights and keeps records of mining rights, among other functions. Moreover, the DRC has created a national transparency initiative committee with respect to the management of extractive industries in the DRC. Any regulation is issued by the Ministry of Mines, which supervises mining activities at national level.
| Kinds or license | Costs |
| PR (Research license) | 3.06$/square for the first 2 years |
| 31.69 USD/ square for the two other years | |
| 52.10 USD/ square for the 2 years of the first renewal | |
| 149.22 USD/ square for the 2 years of the second renewal | |
| PE (Operating license) | 511.09 USD/ square and per year |
| PER (Rejection operating license) | 817.74 USD/ square and per year |
| PEPM (Operating license of Small Mine) | 235.10 USD/ square and per year |
| ARPC (Research license of quarry products) | 5.11/ square and per year |
| AECP (Operating license of permanent quarries) | 204.43/ square and per year |
The mining sector in the Democratic Republic of Congo is regulated by Law No. 007/2002 of 11 July 2002 on the Mining Code and Decree No. 038/2003 of 26 March 2003 on Mining Regulations.
The new Code performs a classification of mineral deposits in mines and quarries. It’s precise that the President of the Republic may declassify or reclassify a mining substance into quarry product and vice versa.
The Mining Code pursues the following objectives:
- Create a win-win framework for all;
- Develop and encourage infrastructure for all;
- Develop human capital of DRC;
- Develop the processing capacity locally;
- Develop the DRC as a destination for foreign capital and technology;
- Encourage the immediate development of the country and not speculation.
Transportation Legal frameworks
3.1. Road transport
The law 78-022 Act of 30 August 1978 on new Highway Code, effective in July 25, 1979, regulates traffic on public roads of pedestrians, vehicles and draught-animals, load or saddle or cattle.
3.2. Rail transport
The railway sector is under a State monopoly in the DRC. The decree of the Sovereign King of October 10, 1908 on the policy of the railways, coordination of previous measures on the Railways Police as amended respectively by the 82 / TP orders of 18 September 1928 and 41/06 of 13 February 1954 on the same subject, is the principal legislation that governs the railway transport activities on the one hand, either the International Union of Railways, the Union of African railways or by the rail transportation public enterprises themselves.
3.3. Air transport
It is governed by Law No. 10/014 of 31 December 2010 on International Civil Aviation to, inter alia, provide the country with adequate and efficient aviation legislation.
3.4. Maritime transport
The ordinance-law 66-98 of March 14, 1966 establishing the Code of Maritime Navigation is the basic framework of the legislation for maritime transport in the DRC.
3.5. River and lake transport
The ordinance-law 66-96 of March 14, 1966 establishing the Code of river and lake navigation is the backbone of the legislation of the sector.
Tourism Legal framework
The revival of tourism has been included among the DRC government’s priorities. This sector, byproduct of the environment, was set up in the Ministry which will incessantly provided with a framework legislation being drafted.