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FDI in Figures

According to UNCTAD’s 2022 World Investment Report, FDI inflows into Burundi, although still limited, increased exponentially from USD 1 million in 2019 to USD 6 million in 2020 - despite the global economic crisis triggered by the Covid-19 pandemic - and remained on the same level in 2021. The total FDI stock stood at USD 242 million in 2021, or around 7.3% of the country’s GDP. Regarding the sectors that receive FDI in Burundi, agriculture is the main one, followed by mining and services. According to UNCTAD, the agriculture sector attracted 60% of the total FDI stock in Burundi, while the mining sector received 16%, and the services sector 12%. The main countries investing in Burundi are Belgium (mainly in the mining sector), France (agriculture, energy, and telecommunications sectors), and China (construction of infrastructure). The ongoing construction of hydroelectric dams, international support in the country's agricultural policy and the development of rare earth production should attract foreign investment. However, disputes around contract renegotiations that lead to the suspension of foreign mining companies’ operations in April 2021 (including UK-based Rainbow Rare Earths) could dampen future investment (Coface). As of 2023, all foreign mining companies’ operations remain pending revision and renegotiation of new contracts and agreements based on the implementation of the new mining code.
 
In recent years, the government has made progress in terms of improving the business climate (notably through the adoption of a new investment law). Foreign investors enjoy the same rights as domestic ones and can engage in all forms of activities. There are no general limits on foreign ownership or control, and foreign investments are not subject to any screening mechanism. However, in the mining sector, at least 10% of the shares must be owned by the government, and the investment code was revised in 2021, raising the minimum investment amounts to be eligible for certain benefits from USD 50,000 to USD 500,000 for all investors. Foreign investment in arms, ammunition and other military and paramilitary activities are subject to restrictions. Political instability, high cost of public services, ambiguous trade policies, poor infrastructure, corruption, low-skilled labour, limited privatization program and lack of foreign exchange are all factors limiting the influx of FDI into the country. Burundi’s geographical position makes it a regional commercial hub but the country has not taken advantage of it so far. The country also has large deposits of copper, cobalt and nickel, largely untapped. Overall, Burundi has a poor investment climate and ranks 170th out of 176 countries in the 2023 Index of Economic Freedom. In the latest Global Innovation Index, Burundi ranks 130th out of 132 economies.

 

Country Comparison For the Protection of Investors

  Burundi Sub-Saharan Africa United States Germany
Index of Transaction Transparency* 8.0 5.5 7.0 5.0
Index of Manager’s Responsibility** 7.0 3.5 9.0 5.0
Index of Shareholders’ Power*** 2.0 5.5 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

 
Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 91013
FDI Stock (million USD) 233.8241.7254.6
Number of Greenfield Investments* 0.00.00.0
Value of Greenfield Investments (million USD) 000

Source: UNCTAD - Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

 

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Tax Rates

Value Added Tax (VAT) - Taxe sur la Valeur ajoutée (Local name) since July 2009.
18% (standard rate).


10% reduced rate: imported foodstuff, processed agricultural products and agricultural fertilisers.
Exports and international transport are zero-rated. Telephone calls are exempt from VAT.

Company Tax
Higher of 1% of turnover or 30% of profits
Withholding Taxes
Dividends: 0% (resident, taxed as normal earnings)/15% (non-resident), Interests: 0% (resident companies, taxed as normal earnings)/15% (individuals; non-resident companies), Royalties: 15%.
Bilateral Agreement
Burundi and Spain are not bound by a Double Taxation Agreement.
Social Security Contributions Paid By Employers
6% (8.8% for employees in arduous work).
The minimum monthly earnings used to calculate contributions are the legal monthly minimum wage.
Other Domestic Resources
Tax Authority of Burundi
Overview of Burundi's tax measures in response to Covid-19
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 
 

Individual Taxes

Personal income tax Progressive rate from 0% to 30%
From BIF 0 to BIF 1,800,000 0%
From BIF 1,800,001 to BIF 3,600,000 20%
From BIF 3,600,001 and above 30%
 
 

Country Comparison For Corporate Taxation

  Burundi Sub-Saharan Africa United States Germany
Number of Payments of Taxes per Year 24.0 36.6 10.6 9.0
Time Taken For Administrative Formalities (Hours) 232.0 284.8 175.0 218.0
Total Share of Taxes (% of Profit) 41.2 47.3 36.6 48.8

Source: Doing Business - Latest available data.

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Investment Opportunities

Tenders, Projects and Public Procurement
Matchdeck.com, Tenders in Burundi
African Tenders
DgMarket, Tenders Worldwide
Setting Up a Company
Consult Doing Business Website, to know about procedures to start a Business in Burundi.
Useful Resources
Economic Developments and Prospects in Burundi - African Economic Outlook
Contact the Spanish Embassy.
Contact the Embassy in Spain.
Business Portal for Africa
 

Business Setup Procedures

Setting Up a Company Burundi Sub-Saharan Africa
Procedures (number) 4.00 7.51
Time (days) 5.00 21.30

Source: Doing Business.

 
 
 

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Latest Update: December 2023

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