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Company formation in Africa

Multinational corporations and governments around the world are increasingly looking to Africa as a new destination for doing business. Africa's economy has been growing at a rate of approximately 5.3% per year for the past decade, and six of the ten fastest-growing economies in the world are located here. In these countries, there is a rapidly growing middle class, contributing to rapid urbanisation that is increasing faster than the infrastructure of their cities can keep up with. It is a popular misconception that many economies in Africa are highly dependent on energy production. In reality, the oil and gas sector made up only 11% of Nigeria's GDP in 2014, while the construction sector accounted for 20%.

When considering doing business in Africa, it's not a case of choosing either just one country or all 54; it makes more sense to take a regional approach. For example, sub-Saharan Africa refers to countries to the south of the Sahara Desert, such as Angola, Kenya, South Africa and Nigeria. Many companies already doing business in Africa separate their North African and sub-Saharan African operations, due to the strong economic, linguistic and cultural differences between the two regions. Here are our top five African countries for doing business:

Mauritius

Mauritius is well known for offering a highly conducive business environment for investment and business growth. The process of setting up a company and starting new business activities in Mauritius is believed to be straightforward and relatively simple. Mauritius' economy is mainly based on textiles, tourism, sugar and financial services, although recently other sectors, such as renewable energy and information technology, have been expanding rapidly. The World Bank has positioned Mauritius as 49th on its Doing Business 2017 ranking, mainly due to its business-friendly approach to dealing with construction permits, enforcing contracts and protecting minority investors. Another ranking of African countries places Mauritius in first place, based on factors such as law and safety, economy, human development and human rights.

Rwanda

Despite nearly a decade of civil war in Rwanda, the country's leaders and citizens alike have worked to achieve a healthy business climate and a strong overall economy. According to the World Bank, Rwanda is the second easiest place to do business in Africa, and it is placed 56th in the Doing Business ranking. This is due to the fact that procedures for registering a property, getting credit and trading across borders have all been made significantly easier. Currently, tourism is the fastest-growing sector in Rwanda. According to our research, businesses can be established and running in as little as three days.

Botswana

Since gaining its independence, Botswana has had one of the fastest per-capita economic growth rates in the world. While the government is working to diversify the country's profitable industries, diamond and other precious metal mining is currently the most vital contributor to its economy. Recently, Botswana has managed to shorten the time needed for various processes, including importing and exporting as well as business start-up procedures. In addition, technology upgrades have reduced the average court time for commercial disputes to 625 days (from 987 days in 2008). Thanks to these improvements, Botswana takes 71st place in the World Bank's Doing Business 2017 ranking.

South Africa

South Africa's key industries are automobile manufacturing, tourism, mining and information and communication technologies. South Africa has succeeded in simplifying its import and export procedures, resulting in less time and fewer documents being required. In addition, the South African authorities have simplified the tax code, reducing the number of hours spent on preparing tax reports. The World Bank ranked South Africa 74th for ease of doing business in 2017.

Kenya

Another country to keep an eye on is Kenya, which is currently making huge investments in industries including telecommunications, transport and energy. With a tech-savvy workforce and high-speed internet, Kenya stands out as one of the top countries in Africa for tech start-ups, while its diversified economy, strong property rights, outstanding tourism sector and improving infrastructure make it a great location for starting a new business in general. If you have any further questions regarding forming a company or banking in Africa. Please contact us now.