Cameroon, arguably, is one of the most active startup ecosystems in Central Africa. With a population of 25 million, 23% of which is connected to the internet, the country is poised to become a regional hub for startups, albeit its controversial political regime. Under the draft 2021 Finance Law project, startups in the central African country, especially those in the field of information and communication technologies (ICT), would benefit from a range of tax incentives. 

Here Is What You Need To Know

• In the incubation phase, which cannot exceed 5 years, these startups will benefit from an exemption from all taxes, duties, taxes and fees, with the exception of social contributions. 
• Upon exiting the incubation phase and in the event of the startup being sold, a reduced rate of 10% will be applied to the capital gains on the sale.
• In the event of entry into the operating phase, the company also benefits for a period of five years from an exemption from the license registration fees as well as increase of share capital. Again, all taxes and employer charges on salaries paid to their employees, with the exception of social contributions would be exempted. 

Cameroon startups tax exemptions Cameroon startups tax exemptions

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• In addition, the draft text provides for the application of a reduced corporate tax rate of 15%; an application of a 50% allowance based on the calculation of the deposit and the minimum collection of corporate tax; an income tax credit of 30% on research and innovation expenses capped at CFAF 100 million; the application of a reduced rate of tax on income from movable capital of 5% on dividends paid to shareholders and interest paid to investors. 
• Beyond the fifth year of operation, a common law tax regime will be applied

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer