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15 May 2018

Equatorial Guinea modifies and clarifies law on admission of EG nationals in the capital of foreign companies

On 20 April 2018, Decree n°72 (the Decree), dated 18 April 2018, was published in Equatorial Guinea's (EG's) Official Bulletin. The Decree modifies Decree 127/2004 and clarifies the participation of EG nationals in the Oil and Gas (O&G) sector. Prior to the Decree, foreign companies were required to have EG national participation in the share capital of their companies. Under the new decree, local participation is only required for the O&G sector.

The Decree provides that:

  1. The share capital of companies operating in the O&G sector or related subcontractors shall be composed of Equatorial-Guineans or by companies exclusively created by Equatorial-Guineans.
  2. In the O&G sector, participation of Equatorial-Guinean shareholders in companies created by foreign investors in Equatorial Guinea or in foreign companies registered in the country, shall not be lower than 35% of the share capital. National participation shall not be less than three local partners. The Board of Directors shall be composed by a minimum of one-third nationals (this should only concern public limited companies as far as private limited companies do not have a board of directors).
  3. Foreign companies with headquarters overseas and incorporating in Equatorial Guinea for the purposes of a Public Works Agreement, shall enter into participation agreements with Equatorial Guineans with respect to benefits generated in public markets and investments with a national coefficient set between 5% and 10% of the net benefits.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

FFA Ernst & Young, Malabo

  • Alexis Moutome
    alexis.moutome@gq.ey.com
  • Maxime Mbassi
    maxime.augustin.mbassi@gq.ey.com
  • Davy Ondo
    georges.obiang@gq.ey.com

Ernst & Young Advisory Services (Pty) Ltd., Africa ITS Leader, Johannesburg

  • Marius Leivestad
    marius.leivestad@za.ey.com

Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London

  • Rendani Neluvhalani
    rendani.mabel.neluvhalani@uk.ey.com
  • Byron Thomas
    bthomas4@uk.ey.com

Ernst & Young LLP, Pan African Tax Desk, New York

  • Silke Mattern
    silke.mattern@ey.com
  • Dele A. Olaogun
    dele.olaogun@ey.com
  • Jacob Shipalane
    jacob.shipalane1@ey.com

Ernst & Young LLP, Pan African Tax Desk, Houston

  • Elvis Ngwa
    elvis.ngwa@ey.com

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ATTACHMENT

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Document ID: 2018-5655

 
 

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