As Global Interest for South Sudan Grows, What Framework Regulates Investments into the World’s Newest Economy?
By Shantel Mufandaidza
Four city investment drive
The civil war in South Sudan undoubtedly hampered investment in the country since its independence in 2011. The unstable political climate drove international investors to either withdraw or withhold investing into the country until the political climate stabilised. However, a peace agreement was finally signed in 2017 among the different factions, restoring peace. Since then the government has been on a mission to put oilfields back into production and attract investment into the country’s economy. It also recently conducted an “Invest South Sudan Road Show drive,” which saw a high-level delegation of government officials and industry experts travelling to Washington, New York, Dubai and Johannesburg to highlight available investment opportunities, especially in agriculture, energy, finance, and infrastructure.
Investment Promotion Act of 2009 and the Southern Sudan Investment Authority
Setting the tone for an investor-friendly backdrop, is the Investment Promotion Act of 2009 (“the Act”), simple to understand the law which governs investment into the country. While establishing the Southern Sudan Investment Authority (“SSIA”) an entity created to oversee and drive investments into the country, the purpose of the Act is also to promote and ease investment in the country. It gives guidance on how to invest in South Sudan, in which areas, and clarifies the various tax incentives such as tax deductions on machinery, training costs of South Sudanese citizens and costs incurred on mineral explorations available to investors. Under the Act, the SSIA’s main aim is to strengthen, grow and diversify the economy, realise self-sufficiency, create a surplus for exports, realise economic co-operation and integrate with regional and international communities.
All new investors must apply to the SSIA for an Investment Certificate, which entitles holders to the various incentives and benefits listed in the Act such as tax deductions on equipment and training costs. There is a list of requirements needed by a potential investor to be granted an Investment Certificate such as the Investors Articles of Association, Certificate of Registration, Tax Clearance as well as Membership of South Sudan Chamber of Commerce, Industry and Agriculture. The Investment Certificate also acts as a “fast track” method for investors to get the various operating licenses required in their industries. In granting the certificate, the SSIA will also consider factors such as employment creation, the acquisition of new skills or technology, contribution to tax revenue, and any other beneficial factors to South Sudan. This is in line with the country’s local content message of ensuring that the country’s wealth benefits South Sudanese citizens. As South Sudan systems are not yet digitized and the information isn’t always readily available, one would need a local partner with in-depth knowledge of the lay of the land to aid in obtaining the Investment Certificate.
A clear benefit of investing in South Sudan and obtaining an Investment Certificate, is its simple immigration laws. When an investor invests in the country and acquires an Investment Certificate, one automatically qualifies for an entry or work permit that is valid for two years and upon expiry, the holder of the certificate shall be entitled to have the permit reissued. This eliminates the headache of having to go through the immigration hurdles of applying for work permits and the costs involved with the applications.
One of the main concerns for any investor is the ease of repatriation of funds after investment. Subject to tax and other lawful obligations, businesses can unconditionally transfer their investment capital, foreign loan servicing payments and other proceeds in and out of the country. This is, in fact, a recurring message of South Sudanese authorities to investors, constantly insisting on the freedom they have to get their money in and out of the country.
The country’s current priority investment industries are in agriculture, energy sector, pharmaceutical and infrastructure projects. As South Sudan is a new country and a “blank canvas” per se, there is a great opportunity for Investors with heavyweight financial backing to come and invest in the industries the government is pushing forward as priority investment industries and, during the Investment drive road show, country officials indicated that there was a lot of untapped land suitable for agriculture, untapped mines, unexplored oil reserves as well as high potential in the aquaculture sector. Some of the benefits of investing in the country are the guaranteed equal treatment of national and foreign investors being the policy of non-discrimination of investors, guarantees against expropriation of any enterprise as well as protection of intellectual property.
If you are interested in finding out more about South Sudan and need a local partner, please contact Centurion Law Group and we will be more than happy to assist you.
- November 5, 2020
- November 3, 2020
- October 27, 2020
- October 16, 2020
- October 12, 2020