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Foreign Direct Investment

Overview
The Sudan in addition to the oil and mining sector is endowed with potential agricultural, animal resources and other non-hydrocarbon sectors providing sufficient inter -sector linkages. The Ministry of Investment, implements investment government policy. Legal and institutional framework supports an investment climate apt to attract foreign direct investment. The Ministry of Investment is a member of World Association of Investment Promotion Agencies (WAIPA). Foreign investment in the Sudan is protected by binding international instruments. The Sudan is a member of World Bank's Multilateral Investment Guarantee Agency (MIGA), and the International Center for the Settlement of Investment Disputes (ICSID).World Bank Guidelines are used by foreign investment promotion agencies, including the Sudanese agency. It is expected that the  International Finance Corporation (IFC), the private sector investment arm of the World Bank Group, whose mission is to promote sustainable private sector investment in developing countries, in coordination with Foreign Investment Advisory Services (FIAS) will act within the ambit of its mission, insofar as the Sudan is an emerging economy having considerable investment potentialities. In line with United Nations Conference on Trade and Investment (UNCTAD) declared policy, it is also envisaged that domestic policies and international action would be mutually supportive in bringing about investment inflows. The Sudan is also a member of the African Development Bank, the Islamic Development Bank, the Inter-Arab Investment Guarantee, and the Agreement on Promotion and Guarantee of Investment among the member states of the Organization of the Islamic Conference.

Constructive effect of FDI
 Our firm recognizes that foreign direct investment (FDI) has a constructive effect on a country's economy in terms of added financial, technological, managerial and financial wealth coupled with it. Active openness to technology, marketing channels, organizational and managerial expertise adds to domestic savings, investment and eventually secures an effective utilization of economic resources. Higher levels of investment and productivity are key elements to stirring growth in a developing country and raise living standards. Attracting investment is a competitive exercise which requires stable, sound macroeconomic policies where risk environment is highly low. Stable, transparent and predictable open investment polices lend confidence to take the risk inherent in investing capital. Our firm recognizes potential investors' legitimate concern that political and social disturbances, currency risk, financial risk and government regulations are the most serious risks that forestall the investment decisions. Again, our firm recognizes that private sector investment depends on an investment climate characterized by a good legal framework maintained by constitutional guarantees against expropriation. Similarly, a favorable investment climate requires good governance in connection with quality of business regulations sustained by institutions competent to implement them.

Scope of our Investment Legal Services.

Our firm is well-situated to provide legal advice to potential investors and to lend the requisite support in dealing with public authorities as regards administrative approval requirements including applications, forms, and identification of problem areas ( if any). Our firm would undertake to complete all the required administrative measures till obtaining the licenses required in a relatively short period. In addition to that, our firm is prepared to provide, as and when required, legal advice as to prevailing corporate law, commercial law, finance and baking laws, tax law, customs, intellectual property and any law affecting investment in the Sudan.

Areas of focus
 Our legal services normally focus on the following:

  • Legal advice as regards the suitable legal form. In practice there are no administrative restrictions on foreign investment in the Sudan. International companies may open locations in the Sudan under a range of legal forms governed by the investor's strategies, plans and the degree of freedom that the Sudan operations are authorized by the parent company. Each option implies a specific obligation with regard to company law. A potential investor may form a strategic alliance with an already existing Sudanese's company on the basis of mere contractual arrangements. A foreign entrepreneur may start as a sole proprietor having a business name. A foreign company may establish an entity in the form of a branch or a subsidiary having an independent existence from its parent company. An investor may elect to set up a joint-venture in the form of a partnership or a limited liability company which is the form most often chosen by investors. Companies which elect to scrutinize for business in the Sudan before embarking on a project may decide short term solutions by allocating a liaison office which does not engage in commercial activities, or a sale representative whose mission is to take orders and put them forward to his or her company.
  • Our firm is prepared to undertake all the legal work as regards application for registration accompanied by all the required legal documents up to obtaining a certificate of incorporation and follow-up services ensuring compliance, including filing of annual returns showing an audited balance sheet and profit and loss account statement. Our firm shall provide any potential investor of minimum equity capital requirements which is determined by the area of the economic activity. 
  • Our firm is prepared to provide legal opinion as regards any matter relating to investment guarantees prescribed under the law. The legal regime in the Sudan provides guarantee of free transferability of profits, dividends and capital abroad. The Encouragement of Investment Act 1999 clearly empowers a foreign investor to remit dividends or net profits attributable to investment, payment in respect of loan servicing where a foreign loan has been obtained, remittance of proceeds (net of all taxes and other obligations) in the event of sale or acquisition of the enterprise. The law also provides guarantee against expropriation, nationalization and similar measures. This is clearly provided for under the relevant investment law buttressed by constitutional provisions to effect of protecting investment against arbitrary measures. As regards insurance against non-commercial risks, the Sudan is a signatory to the World Bank's Multilateral Investment Guarantee Agency (MIGA) convention. The Convention provides coverage against non-commercial risks such as transfer restrictions, breach of contract, war and civil disobedience.
  • Our firm can provide legal opinion as regards the ambit of the benefits and incentives offered under the law to investors such as income and business profits tax relief, relief from customs duties, and relief from tax export and depreciation allowance. Investors under the Sudanese investment legal regime are exempted from payment of business profits tax for a period of ten years for strategic projects, and five years for non-strategic projects calculated from the date of commencement of production. This exemption may be extended for another period as the minister of investment deems fit.  Again, an automatic exemption from payment of customs duties, surcharges and any other similar duties relating to imported machinery, equipment or apparatus necessary for production. The exemption covers all imported goods used by the investor's project. In connection with export the exemption covers relief from export tax and duties in respect of project's products, including production charges and any other similar duties. Capital allowances are granted to investors who own depreciable assets and use the assets in the production of income. Depreciation allowance is calculated during the year of complete tax exemption on the basis of replacement value. Depreciable assets are grouped in classes and the applicable allowance rates prescribed under the regulations are applied. Any loss incurred during the period of complete or partial exemption is to be considered as if incurred during the last year of such a period. The expenses incurred before production begins, and depreciation deductions arising within the period of exemption, are deemed to be a loss liable to be deducted from profit.
  • Our firm provides legal advice to investors, as regards the requisite legal machinery, conducive to obtain an allocation of land necessary for the setting up of the investment project. An allocation of land freely or at a reduced price, represents one of the additional incentives, provided for under the Sudanese investment legal regime.
  • Advice to private sector investors on the purchase of state-owned enterprises or the restructuring of Build-Operate and Transfer (BOT) projects.
  • Advice as regards the regulatory framework in connection with privatization. We also advice on amendments that are required to be effected in order to scrutinize the enterprises' operations once they have been privatized.
   
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