Modifies the law on the participation of nationals in the capital of foreign companies

On 20 April 2018, Equatorial Guinea adopted Decree No. 72, dated 18 April 2018, which modifies Decree No. 127/2004 concerning the participation of nationals of Equatorial Guinea in the capital of foreign companies in the country. Prior to this decree, foreign companies were required to have the participation of nationals of Equatorial Guinea in the share capital of their companies. Under the new decree, local participation is only required for the oil and gas sector. The decree provides that:

• The participation of Equatorial Guinean shareholders in foreign companies in the oil and gas sector shall not be lower than 35 per cent of the share capital.
• National participation shall not involve fewer than three local partners.
• The Board of Directors shall be composed of a minimum of one-third nationals (this should only concern public limited companies, as private limited companies do not have a board of directors).
• 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 per cent and 10 per cent of the net benefits.

• Type:

  • Entry and establishment (Ownership and control)

• Industry:

  • Primary (Mining and quarrying)

• Sources:

  • E&Y, Equatorial Guinea modifies and clarifies law on admission of EG nationals in the capital of foreign companies, https://globaltaxnews.ey.com/news/2018-5655-equatorial-guinea-modifies-and-clarifies-law-on-admission-of-eg-nationals-in-the-capital-of-foreign-companies, 15 May 2018