Openness to Foreign Investment
The current Investment Code is the official source for laws and information related to the country's investment regime. It is designed to encourage direct investment, facilitate administrative procedures, and enhance investment security. Direct investment includes contributions in kind, labor, and capital, and can be made by individuals or legal entities, regardless of nationality, residence, or scale of the investment or enterprise (Art. 1 of the Code).
The Investment Code has reorganized the legal and institutional framework, extending the capacity of the Consolidated Office for Investments as a "One-Stop Investment Shop" (Guichet Unique) for potential investors. The creation of the "Guichet Unique" in 1998 simplifies and facilitates the following:
-- Applications for investment licenses
-- Administrative formalities and procedures
-- Establishment of business enterprises
-- Acquisition of work permits for foreign nationals
In 2006 and 2007, both the transitional and the new government have continued to encourage private investment in Mauritania. The Minister of Economy and Finance reorganized several departments within the Ministry and integrated the “Guichet Unique” into the Department of Private Sector Development in order to combine investment promotion and the development of the private sector. The new government also established the “Delegation for the Promotion of Private Investment,” which is intended to foster private investment by simplifying administrative procedures. The Minister also announced plans to revise the Investment Code in order to make it more attractive to foreign investors. In addition, the Minister of Oil and Mines announced plans to revise the Oil Code to attract greater foreign investment.
The transitional government created the Presidential Council for Investment in Mauritania (PCIM) in January 2007 and the new government has continued to support it. The PCIM is comprised of 21 board members, including chairmen of international and Mauritanian companies, members of international professional organizations, and local community members. The President of the PCIM is the Head of State. The board is required to meet twice a year and it retains the right to invite any person who might contribute to the accomplishment of PCIM goals. The main goals include: (a) contributing to the promotion of investment opportunities; (b) identification of investment barriers and incentives to investment promotion; and (c) evaluation of relevant recommendations relating to administrative procedures and institutional rules aiming to attract more foreign investors.
Privatization, liberalization, and investment incentives have figured prominently in Mauritania's World Bank and IMF inspired economic programs. The following are the legal guarantees offered to any entity (domestic or foreign) wishing to invest capital under the investment code:
-- Freedom of establishment and capital investment, in accordance with the laws and regulations in place (Art. 3.1)
-- Freedom to transfer foreign capital (Art. 5.1)
-- The ability to transfer professional income of foreign employees (Art. 5.2)
-- The equal treatment of Mauritanian and foreign individuals and legal entities (Art. 6)
The Investment Code and the "Guichet Unique" govern foreign investment in Mauritania. These laws apply to all sectors of the national economy, with the exception of the following sub-sectors, which are governed by specific laws and regulations:
-- Purchasing for resale on the local market without further processing
-- Activities governed by current legislation on banking regulations, except for leasing activities
-- Activities governed by current regulations on insurance and reinsurance
-- Activities in the mining and hydrocarbon sectors
-- Communications and telecommunications
-- Water and electricity supply
The "Guichet Unique" selects and recommends investment projects to the Council of Ministers, whose meetings are chaired weekly by the Head of State. In general, all projects submitted to the Council of Ministers are accepted. In 2006, the Government approved 13 industrial projects covering all economic sectors except mining and hydrocarbons. These projects totaled 7.2 billion ouguiyas (USD 26.5 million) and created 490 jobs. According to government officials in charge of investment promotion, foreign direct investment has been increasing in number and value since 2002.
Vendors for large government-directed projects are usually selected through a tender process. After issuing an invitation to tenders, the Central Market Commission ("Commission Centrale des Marchés") selects the offer that best fulfills government requirements. The screening process is intended to be transparent, routine and non-discriminatory; it should not impede investment nor limit competition.
No sector is closed to investment. The mining, fishing, agricultural, banking, hydrocarbon and tourism sectors actively seek foreign direct investment. The Investment Code identifies activities eligible for the Duty-Free Zones Program ("Points Francs"), which guarantees certain advantages, such as exemption from export duties and taxes (Art. 8.1). This provides incentives for businesses that produce goods and services intended exclusively for export, and/or that develop exports of Mauritanian-manufactured products. However, businesses that are not qualified for these incentives are demanding a revision of the Investment Code to allow universal incentives.
Foreign investors generally receive the same treatment as Mauritanian investors, subject to the provisions of treaties and agreements concluded by the Government with other countries (Art. 6.1, 6.2 and 6.3 of the investment code). Foreign investors have the same access as Mauritanians to courts of law (Art. 7.1 and 7.2). Nonetheless, the success of foreign investors will depend in large part on their successful collaboration with local partners who understand the local market and government. Contracts are protected by the civil and commercial codes, although court enforcement and dispute settlement can in practice be difficult to obtain.
Deep offshore as well as potential onshore oil and gas reserves have attracted major foreign companies. The Government is currently revising the Oil Code to attract greater foreign investment. Mining, which initially focused on iron development, continues to offer good potential. Among the many unexplored natural resources are gold, diamonds, copper, gypsum, uranium and hydrocarbons.
The new information technology sector is growing and there have been major foreign and domestic private investments in telecommunications, in particular, Mauritanian-Tunisian, Mauritanian-Moroccan and the recent Mauritanian-Sudanese joint ventures. In addition, the country offers potential in the hospitality and tourism sector. However, major investment is needed to create the necessary infrastructure and specialized services.
With the exception of fishing companies (where foreign investment is limited to a 49 percent share), Mauritania has no discriminatory policies against foreign investment, imports, or exports. Mauritania is a signatory of the EU/ACP Lomé Convention, which gives underdeveloped nations certain advantages and preferential treatment when exporting or importing some products to or from EU member countries. Mauritania is also a member of the Arab Maghreb Union, which was created in 1988 to work toward the political and economic integration of Algeria, Libya, Mauritania, Morocco, and Tunisia. Stated economic goals include a common market with a single currency, Maghreb-wide corporations, unified customs zones, and freedom of movement for capital and individuals.
Mauritania has been a member of the Multilateral Investment Guarantee Agency (MIGA) since 1996, which protects direct foreign investment against political risks. Mauritania also has bilateral agreements with France, Belgium and Romania for investment promotion and protection. Other agreements exist with Burkina Faso, Cameroon, Gambia, Ghana, Mauritius, Italy, Lebanon, Qatar, Yemen, Korea, the Arab League, Egypt, and OPEP Funds. Negotiations are underway for investment treaties with South Africa and Malaysia.
Conversion and Transfer Policies
The local currency, the ouguiya, is freely convertible within Mauritania but its exportation is not legally authorized. Hard currencies can be easily found either in commercial banks or in parallel markets. The exchange rate gap between the two markets closed considerably in 2006, from nearly 12 ouguiya in January 2006 to about five ouguiya in February 2007, due to the monetary policy implemented by the Central Bank in 2006.
Hard currency is now available in commercial banks. The Central Bank, the Ministry of Fisheries, and the Ministry of Economy and Finance decided that fish export revenues collected from fishing licenses must be deposited in local primary banks instead of the Central Bank. Only 50 percent of SMCP (Société Mauritanienne de Commercialisation de Poisson) receipts in foreign exchange can be transferred to the Central Bank. This measure allows for the availability of foreign exchange deposits in the commercial banks. As a result, individuals and companies can easily obtain hard currencies through their banks for the payment of purchases or the repatriation of their dividends, as long as these transactions are legally justified.
Other important measures that the Central Bank introduced in 2006 include the signature of agreements with European banks to allow the transfer of funds of foreign investors in the country and the authorization to open bank accounts in hard currencies for both Mauritanians and foreigners. Foreigners may repatriate their assets in hard currency directly from their local bank account to their foreign bank account, or through a third-country bank. This measure has simplified foreign payments and money transfers.
Performance Requirements and Incentives
There are no performance requirements beyond those that might be indicated in individual investment agreements and no requirements for local financing. There are some rules governing the percentage of host country nationals employed, but the Government is flexible on this point. Industrial fishing crews are encouraged to have an average of five Mauritanian crewmembers per vessel. Foreign firms are encouraged to participate in government-financed research and development programs.
Right to Private Ownership and Establishment
Protection of Property Rights
Transparency of Regulatory System
Private sector associations exist and their laws and regulations do not discriminate against foreign investment.
On February 22, 2006, the Government officially adopted the Extractive Industries Transparency Initiative (EITI) in order to increase transparency in the use of revenues drawn from the mining and petroleum industries. The Government established the Mauritanian Investment Window ("Guichet Unique") in 1997 in order to streamline bureaucratic procedures for investment. This office has since been renamed the Consolidated Investments Office, and its services have been expanded. As a result, transparency has increased and bureaucratic procedures have been reduced.
Efficient Capital Markets and Portfolio
During December 2006, the Council of Ministers gave the Central Bank increased authority to monitor the stability of financial systems and to help the government carry out its economic policy. Since January 2007, the Central Bank is now subject to an external audit in addition to its own internal audit. The Governor of the Bank will be held responsible by the Government for the annual balance sheet.
There is no stock market or other public trading of shares in Mauritanian companies. Individual proprietors, family groups, and partnerships generally hold companies. Outsiders cannot freely buy into them and portfolio investment is limited.
Bilateral Investment Agreements
The government agencies that develop trade and investment standards are:
Direction de la Promotion du Commerce Extérieur (DPCE)
Direction du Développement du Secteur Privé (known as "Guichet Unique")
Direction de l'Industrie
Direction de Promotion des Produits de Pêches
Direction des Hydrocarbures