Top 5 Things to Consider When Registering a Business in Cameroon

Do you plan to register a business in Cameroon? If yes, then you have taken a significant step towards building a successful business. That not withstanding, there are certain key factors you need to consider before taking this bold step. You need to make sure that the process is smooth and fully compliant with local laws. Talking about local laws, I mean you have to be compliant with the OHADA (Organization for the Harmonization of Business Law in Africa) framework. I will be sharing with you some top things you need to consider when registering your business in Cameroon.

5 top things to keep in mind when registering your business in Cameroon

1. Choosing the right business structure

Take note that the legal structure you choose will have a lasting impact on your business. The most common business structures in Cameroon are sole proprietorship, partnership and limited liability company. Each of them have their own legal implications, tax obligations and the level of liability protection.

The next points will duel mostly on limited liability company, which is one of the best business structures to choose.

Read Also: Sole Proprietorship or Limited Liability Company: Which is Best for You?

2. Understanding minimum share capital requirements

The OHADA Law, in which Cameroon is a signatory has put in place specific minimum share capital requirements depending on the type of limited liability company you want to register. For instance, the minimum share capital requirements for a private limited liability company is XAF100,000. What does this mean? It means the company should have a certain level of financial stability from start.

Why does this matter?

This need is essential, not only for legal compliance, but also to establish credibility with investors, banks and business partners.

3. Preparing a comprehensive Articles of Association

A memorandum and articles of association serve as the constitution of your company. It outlines the internal management structure of the business as well as the roles of company directors. It also outlines the rights of shareholders and other aspects of governance in the company. This means a well drafted article of association is necessary to avoid future conflicts.

Why does it matter?

A well drafted articles of association will help clear expectations and goes a long way to prevent disputes among shareholders in future.

4. Taxation & Compliance Obligations

As a prospective business owner, knowing and understanding your business’ tax obligations is crucial. The tax system in Cameroon has many different types of taxes. Examples include company tax, personal income tax, VAT and business license tax (commonly known as ‘patente’). Before you register your company, you need to know these tax requirements to avoid being penalized.

Why does it matter?
You or your business can be penalized for not meeting your tax obligations. This can result in legal issues, hefty fines and even to the closure of your business.

5. Choosing the Right Location

Where you choose to locate of your business has a significant impact on its success. There are some locations in Cameroon that offer tax incentives like tax breaks for businesses that choose to locate there. Another thing you can take into consideration includes easy access to needed resources. Other locations have more rigorous regulations or higher operational costs.

Why does this matter?

Choosing a strategic location can help reduce cost, improve operational efficiency as well as attract the right customer base.

These top five factors will set you on the right path when registering your business in Cameroon. We are at your disposal in case you need help to go through the complexities of the registration process. We will make sure that your business is compliant with the OHADA and local regulations.

Need Assistance? Reach out to us today, and let’s get your business off to a strong start!