Gambling Business in the Democratic Republic of Congo
This article discusses how to invest in the gambling business in the Democratic Republic of Congo.
Gambling is the wagering of money or something of material value (referred to as "the stakes") on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. Typically, the outcome of the wager is evident within a short period.
The term gaming in this context typically refers to instances in which the activity has been specifically permitted by law. The two words are not mutually exclusive; i.e., a “gaming” company offers (legal) “gambling” activities to the public. Also, the word gaming is frequently used to describe activities that do not involve wagering, especially online.
Gambling is also a major international commercial activity, with the legal gambling market totaling several billions of dollars. In other forms, gambling can be conducted with materials, which have a value, but aren't real money; for example, games like Pogs or Magic: the Gathering. This article therefore discusses how to invest in the gambling business in the Democratic Republic of Congo.
II. Forms of Gambling Allowed in Congo
Casinos are permitted and can freely been established. This is in accordance with the Interministerial orders No MJS/CAB/2100/ANT/0020/2005 and No 059/CAB/MIN/FINANCES/2005 from the 25th June 2005 fixing the rates of rights, taxes and royalties to collect from the initiative of the Ministry in charge of Youth and Sports.
Furher, article 10 of the order mentioned above goes far in defining companies of games of chance or lottery as authorized establishments in exploiting various lottery games like: the lottery of instantaneous bills, the lottery of matched number, etc.
So, casinos with all insides machines are allowed and do operate without problem.
III. A Congolese Company with Foreign Investments Being a Gambling Operator in Congo
It is important to note that not only Congo allows foreign investments in this area, but more and mostly the DRC incites foreign investors in creating an economic soft framework and in there is no restriction in creating a Congolese company with foreign investments as this company will be registered in Congo and operates under Congolese laws.
It is feasible and there is no restriction for that.
IV. Licensing of Gambling Business [Casinos]
Beyond documents which constituted the companies statutes, it should get these requires documents hereafter:
1. Write or produce the constitutive act of the company (statute)
2. Notarize constitutive act of the company (statute): 5 copies
The law requires that the company’s statutes, signed by the founders, be notarized by a public notary before registration with the Commercial Registry. A confirmation certificate of deposited document obtained from the notary must be annexed to the file.
3. Obtain extracts of the criminal record of the first directors
The criminal records of the first directors are obtained from the criminal police of the tribunal’s judicial inspection department.
4. Obtain a certificate of residency
This document is required only from the company’s managing director. The other founders are not required to provide the document.
5. Register with the Commercial Registry
To register with the Commercial Registry, the following documents must be filed:
- Identity card or passport (one copy).
- Certificate of non-civil-servant status (one).
- Certificate of residence (one).
- Specimen of signature in two or three samples (one).
- Declaration of conformity to the law, dated and signed by each founder.
- Letter addressed to the divisional clerk of the Business Court
If the founders are foreign, the company registration form of the New Commercial Registry (nouveau registre de commerce)
6. Obtain a national identification number from the Ministry of Economy
The time to obtain the national identification number has been reduced because the Minister of Economy has delegated his authority to issue the number to the Secretary General of the Ministry, who has expedited the process.
7 Register the company for tax with the “Direction Générale des Impots”
New companies must register with the “Direction Générale des Impots” to notify it of the company’s legal existence and to obtain the national identification number. This formality is done by sending a formal letter to the Tax department.
For all these documents and formalities, the maximum total is approx: USD 10,000.
Note: After one has obtained the certificate to operate, then there are certain taxes payable to the local authorities like:
- 5 Years operating License from the Ministry of Environment;
- Single tax on establishment of a business activity from Town Council at approx. USD 100 per year.
For the permit / authorization per se, the company need to obtain the permit from the Environmental Division at: USD 1500.
After which, there is need of applying for permit to the Minister of Youth and Sports in order to be operational and the fee is 5000 USD.
V. Taxation of Gambling / Casino in the DRC
During the operating, the company will get rates and taxes, customs taxes and some other royalties due to the treasure hereafter:
- According to the interministerial order mentioned above, the authorization/ permit for casinos and lottery costs 5000FF = USD 5000;
- The annual authorization renewal fee: 1000FF = USD 1000;
- According to the urban order No 026/BUR-MAIRIE/VILLE/L’SHI/2007 from the 10th May 2007 relating to the fixing of the taxes and the collection of the fiscal tax on the casino in the provinces/cities, the amount of 350.000 Congolese francs = Approx. USD. 400 as fiscal tax on the casino should annually be paid in the City account number.
- Tax [Tax ad valorem] on the players benefit: 10% on the benefit realized paid to the Minister of finance account in a Bank account.
VI. Payment of Custom Duties
The customs duties vary from 3% to 13% of the CAF value of the machine to be imported. There is no exportation custom duty. Please note that there are also Para fiscal taxes when importing goods such as:
- Administrative tax: 5% of the CAF value;
- OCC [Congolese office of control] tax: 3% of the CAF value;
- OGEFREM tax : 0,59% of the CAF value;
- FPI tax: 2% of the CAF value.
Please note that there are cases of preferences from payment of custom duties and for that, there is need of applying to the Customs department and our Law Firm can assist with that.
There are no restrictions concerning countries of importers of gambling machines and the parties are free to choose and buy from any producers or seller.
ABOUT THE AUTHOR: Prof. Dr. Joseph Yav Katshung
Professor of Law [University of Lubumbashi] and Attorney at Law (Yav & Associates). He is a founder and manager of one of the leading Law Firm based in the Democratic Republic of Congo.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.