MACIG Connect Series
Tuzzi Kiaku (TK): BFG was started jointly by myself and Malkot Lukobeka in 2011. Our motivation was to improve our country by founding a company that would facilitate foreign business operations. We wanted to help the DRC develop and help Congolese people find employment. I had been working for Freeport McMoran, coordinating all the travel arrangements and visa issues for foreign arrivals. This meant that we had a lot of contacts and experience handling immigration protocols and arranging work permits. We therefore decided to focus initially on providing assistance to foreign companies that are bringing over staff from other countries. Foreign investors know that the DRC has enormous potential but are weary of the corruption in the system and the difficulties of navigating the complex bureaucracy. In all of our dealings, we aim to be entirely transparent and maintain a high level of compliance.
Who are your main clients here? Do you have a particular relationship with the mining industry?
TK: We work with all kinds of clients. However, we do have a particular focus on the mining industry. This is partly because of our own history of working in the sector but also because of the predominance of mining in Katanga’s economy. Some of our largest clients include Ivanhoe Mining, Zest Energy and other contractors servicing the industry. We can take care of their needs from the moment that they decide to send somebody to the DRC. We arrange for an invitation letter all the way through to the issuing of a work visa or work permit.
The DRC has a reputation as a difficult operating environment for foreign companies. How long does it take to process a work visa?
TK: In the DRC, there are many different kinds of visa and it can be difficult for outsiders to know which one to apply for. It is important to point out that the work visa and the work permit are two different documents. The work permit is issued by the Ministry of Labor, while work visas are the responsibility of the Ministry of the Interior. Applying for a work permit can be a long experience, but we are able to speed up the process and make our clients’ lives very easy. The maximum time to receive a work permit is around eight weeks but there is a special interim visa that allows a person to work in the DRC while they are waiting for their full permit. We can arrange one of these interim visas within 20 days.
Could you talk us through some of the taxes that are applicable to companies operating in DRC? How can BFG help its clients with their taxes?
Malkot Lukobeka (ML): In the DRC, there are various different taxes that can apply to a business depending on the sector in which they operate. The system is declarative, so it is the responsibility of all companies to calculate their own tax return. The most important tax in DRC is the revenue tax, but there is also a tax on salaries, VAT of 16%, and a mandatory contribution to social services, the INSS.
The mining industry has its own specific tax environment, stipulated within the Mining Code, which is far simpler. There is a flat rate of 35% on production and standardized royalty payments on all minerals. How-ever, there are some costs that are set higher for the miners. For a producing mine to purchase a work permit for an expatriate employee, the price is $2,800 but for a recruiter it costs just $700. This means we are in a position to offer considerable savings to mining clients.
How have you seen outside perceptions of the DRC evolve over the past few years?
TK: We have noticed a real change in attitudes towards the DRC over the past years. This is particularly true of Katanga, where there has been a climate of stability for several years. Many foreign investors have come to the province and demonstrated that it is possible to do business correctly and to international standards. More and more businesses are entering the formal sector here and carrying out their transactions through the banking system rather than in cash. Having seen these improvements, it is the role of companies like ours to help encourage potential investors by making their life as easy as possible and giving them the confidence to set up operations here.
Do you feel that there is any kind of division between Katanga and the rest of the country?
TK: There is no real division between Katanga and the rest of the country. We are from Kinshasa but we have chosen to set up our business here. We are all part of the same country and we must strive to harmonize relations between businesses across the nation.
ML: Katanga is the motor that drives the Congolese economy and obviously has better developed infrastructure than other regions. However, there is a real political will to improve living conditions in all the provinces and bring the whole country into the 21st century. We have seen the business environment improve dramatically in just a few short years; now it is much easier for young Congolese to set up their own companies and be successful.
BFG is a young company with huge potential; what is your vision for the future development of the company?
TK: Five years from now, we hope that BFG will be operational in many countries and able to compete on an international level. We aim to be the go-to partners for foreign investors looking to set up operations in the DRC. We have already entered into a partnership with the South African company Wax Engineering to take care of their logistical and immigration needs here.
This interview was part of research being conducted by GBR for its upcoming Mining in Africa Country Investment Guide (MACIG) 2016. To participate in this report, please contact Molly Concannon at email@example.com.
IMAGE: Tuzzi Kiaku, Managing Director