Senegal provides a number of incentives for investment in certain industries and specified free zones. The following outlines the main incentive regimes:

Investment Code

Senegal adopted Circular No. 025/MFB, which replaces Circular No. 153/MEF of 11 May 2004 on the regulation of the investment code. The new investment code is effective 2 July 2024. Under the new code, applicants must prove the availability of the funds necessary for the investment, with foreign funding required to be repatriated to Senegal. The approval for the incentives is subject to creating a certain number of jobs.

The main incentives under the new investment code include:

An exemption from customs duties on imports of equipment and materials intended for the investment phase of approved projects :- The customs duty exemption does not apply to materials produced in Senegal, materials eligible for specific regimes and activities under the Mining Code, the Petroleum Code, and the Free Export Company and Special Economic Zone regulations. Further, the customs duty exemption does not cover the statistical levy, VAT, the Senegalese Shippers' Council levy (COSEC), the West African Economic and Monetary Union (WAEMU) and Economic Community of West African States (ECOWAS) community levies, and other specific taxes;

The suspension of VAT on goods, services and works necessary to complete the investment phase of approved projects :- The VAT suspension applies to local purchases and imports but does not apply to activities eligible for specific codes or goods eligible for specific regimes. The VAT suspension is a deferral of the payment of VAT during the investment phase (and not an exemption or a debt waiver). Suspended VAT must be paid within 12 months. The first payment report is due within a month after the end of the investment phase and the beneficiaries are required to contact the competent authority to make the payment; and

A corporate income tax credit for a portion of investments made in approved projects.

Under Senegal's erstwhile investment code which applied until 2 July 2024, incentives were provided for investments based on the size and type of activity. The main incentives under the code included:

Import duty exemption for goods not locally produced for up to 3 years;
VAT exemption for up to 3 years;
Taxable income reduced by up to 50% for new investments and up to 25% for expansion investments for up to 5 years, with the total reduction limited to 40% of the investment;
Payroll tax exemption for a period of 5 to 12 years if established in less industrialized regions of Senegal; and
Exemption from business license tax if using local inputs for at least 65% of total input in a year.

In general, the eligibility requirements for the incentives are:

New investments of at least XOF 15 million or XOF 100 million depending on the sector; and
Expansion investments of at least XOF 100 million for activities that increase productive capacity by 25% or more.

Eligible sectors requiring at least XOF 15 million investment include:

Agriculture and agro-processing;
Fishing;
Animal-rearing and related industries;
Healthcare;
Education and training;
Assembly;
Maintenance of industrial equipment; and
Tele-services.

Eligible sectors requiring at least XOF 100 million investment include:

Manufacturing;
Tourism;
Mineral exploration and mining; and
Banking.

Companies engaged exclusively in the trade of products purchased outside of the country will not qualify for the incentives.

Mining and Oil Incentives

Senegal provides a number of incentives through for mining and oil companies, including:

Corporate tax exemption;
VAT exemption for goods and services supplied to the company;
Fuel tax exemption; and
Tax exemption on dividends and income from deposits and loans.

Free Zones

Companies operating in Senegal's free zones and exporting their products are eligible for reduced corporate income tax at a rate of 15%, as well as several exemptions including the following:

Dividends tax;
Payroll tax;
Stamp duty;
VAT on goods and services supplied to the company;
Business license fees; and
Real estate tax.

Powerful Tax Solutions

Tax Rules Engine

Collaboration Tools

Latest Tax News