Benefits and Incentives
- Subject to the provisions of Section 40 of this Act, an enterprise shall be entitled to such benefits and incentives as are applicable to such enterprise as provided in the Second Schedule and this Act and any other law for the time being in forced in Southern Sudan.
- Notwithstanding the provision of subsection (I) above, for the purpose of promoting identified strategic or transformational investments, the technical team of the Authority may upon direction of the Board and in consultation with such appropriate Government agencies as the Board may determine, recommend to the Board to grant specific incentive packages including concessions, privileges and preferential treatment in addition to the incentives provided under this Act, tax and other laws for such a period as the Board may specify.
- The Authority shall publish criteria for what shall constitute strategic and transformational investments before the award of any special incentives in terms of this section.
- Any incentives awarded under subsection (2) above, shall be determined on the basis of eligibility criteria for such incentives approved by the Council of Ministers and published by the Authority.
- The criteria referred to in subsection (3) and (4) above, shall be reviewed every two years or as the case may be in consultation with appropriate stakeholders.
Investment Guarantees: Prohibition of Discrimination
- Subject to such strategic list as may be published by the Board with the approval of the Council of Ministers from time to time, foreign investors may own, or control business organizations in any sector of the economy of Southern Sudan as domestic business organizations.
- The Board may, in consultation with the appropriate Ministers, classify or declassify an activity as an activity reserved for nationals.
- Amendment to the list of activities reserved for nationals made in accordance with the provision of this section shall be promulgated by way of a legislative instrument within ten (10) days of their adoption, and shall be published in the Government Gazette.
- Without prejudice to the provisions of subsection (2) and (3) above, foreign investors, employees and workers, shall enjoy the same rights and be subject to the same duties and obligations applicable to nationals.
- No official, agency, law or other legal authority shall discriminate against investors from a particular country or give special treatment to prospective foreign investors based upon their country of origin or nationality.
- Foreign investors shall be subject to the same laws that apply to domestic business organizations, in particular –
- Any licenses or other permits for conducting specific business activities that are required of domestic business organizations shall be similarly required of foreign investments;
- Foreign investments shall maintain business books and records in accordance with the same accounting standards that apply to similar domestic business organizations;
- Foreign investments are subject to the same insurance requirements that apply to similar domestic business organizations; and
- Foreign investments shall be taxed in the same manner as similar domestic business organizations.
- Without prejudice to the provisions of this section, section 42 and the Third Schedule herein, the Board shall facilitate, promote, encourage and protect the indigenous business and investments.
Guarantee against Expropriation
- Subject to the provisions of subsections (2) and (3) below –
(a) No enterprise shall be nationalized or expropriated by the Government; and
(b) No person who owns, whether wholly or in part, the capital of any enterprise shall be compelled by law to cede his or her interest in the capital to any other person.
- There shall be no expropriation of any enterprise, to which this Act applies, by the Government unless the expropriation is in the national interest for a public purpose, which is the least burdensome means available to satisfy that overriding public purpose, is made on a non-discriminatory basis, in accordance with due process of law, and is under a law which makes provisions for –
- Payment of fair and adequate compensation; and
- A right of access to the courts for the determination of the investor’s interest or
right and the amount compensation tot which he or she is entitled.
- Any compensation payable under this section shall be paid without undue delay and authorization shall be given for its repatriation in freely convertible currency, where applicable.
- The Government and the person whose property has been expropriated may determine fair market value of the expropriated property by other agreed means.
Protection of Intellectual Property Rights
The Government shall protect the intellectual property rights of all persons and investors in Southern Sudan and shall enforce rights to trademarks, copyrights, patents and other intellectual property rights in accordance with any related international conventions to which the Republic of the Sudan is a signatory.
Access to Public Information
Investors shall have direct and open access to all laws and decisions of courts or other adjudicative bodies and to any public information, which has a national relationship to their investment interests.
Repatriation of Capital, Profits and Dividends
- Investors shall have an unrestricted right to use their investments and any incomes lawfully received there from for any lawful purpose and all proceeds of the operations of an enterprise may, subject to tax and other lawful obligations, be retained by the business organization, or disposed of in any lawful manner.
- Subject to tax and other lawful obligations, an enterprise to which this Act applies shall be guaranteed unconditional transferability in and out of Southern Sudan through any authorized dealer bank in freely convertible currency of-
- (a) Capital for investment;
- (b) Payments in respect of loan servicing where foreign loans have been obtained; and
- (c) The remittance of proceeds, net of all taxes and other statutory obligations, in the event of sale or liquidation of the enterprise or any interest attributable to the investment.
Labour and Employment
- Employees of enterprises owned by foreign investors in Southern Sudan, regardless of nationality, shall be subject to the laws applicable in Southern Sudan and principles o f equal pay for equal job.
- Labour relations between enterprises owned by foreign investors and their employees may be regulated by their labour agreements, which agreements shall not establish standards lower than the mandatory requirements of the applicable law in Southern Sudan.
- Without prejudice to the provisions of labour laws applicable in Southern Sudan, investors shall have the right to employ managers of any nationality in order to conduct their investment and business activities.
- Investors shall have the right to employ non-managerial staff of any nationality, provided that Southern Sudanese citizens of similar qualification and experience shall be given preferences in recruitment.
Dispute Resolution
- The courts of Southern Sudan shall have jurisdiction over the resolution of business disputes.
- Notwithstanding the provisions of subsections (1) above, parties to an investment dispute may specify any arbitration or other dispute resolution mechanisms upon which they may agree, within or outside the courts.
- Where a dispute rises between an investor and the Government in respect of an enterprise, all efforts shall be made to reach an amicable settlement.
- Any dispute between an investor and the Government in respect of an enterprise to which this Act applies but not amicably settled may be submitted at the option of the aggrieved party to arbitration as follows-
- In accordance with the rules and procedures for arbitration by the International
Centre for the Settlement of Investment Disputes; or
- In case of a foreign investor, within the frame work of any bilateral or
multilateral agreement on investment protection to which the Government and
the country of which the investors is a national, are parties; or
- In accordance with any other national or international machinery for the
settlement o f investment disputes, agreed to by the parties.
- Any arbitral award made in respect of arbitration proceeding conducted in terms of this section shall be final and bindings on the parties, without such a ward having to be made an order of the court and the parties shall give effect to such award forthwith.
- Notwithstanding the provisions of subsections (5) above, a party in whose favour an award has been made shall be entitled to apply to the High Court for an order to compel the other party to comply with that award, and the High Court shall have the jurisdiction to grant such as order.
Investment Priority Areas
Investment in the following fields shall be deemed a priority of the Government of Southern Sudan.
- Agriculture: food and cash crops, farm mechanization, seeds and agricultural tools industry, livestock and dairy development; fisheries and fish processing and preservations, and apiculture (bee-keeping).
- Agro-business, textiles, leather industries and food processing such as flour milling, oil pressing mills, sugar processing, fruits and vegetable canning, meat and fish processing, animal feeds and fertilizers, abattoirs and hides (value addition).
- Physical infrastructure such as roads and bridges, airports, sea/river ports, railways, manufactories, warehouses, wholesales and silos, sewer and water treatment plants, irrigation and drainage systems, real estate development industry, hydro-electric dams, reservoirs and water harvesting techniques.
- Social infrastructure such as schools, hospitals, water services etc.
- Mining, quarrying, energy, electricity, petroleum and gas industries.
- Research on and mapping of natural resources for economic use.
- Forestry, afforestation, reforestation and wood processing industry.
- Medium to heavy manufacturing industries such as cement, mining, construction materials (tiles, zinc, steel, paints etc.), electric and domestic appliances.
- Transport, telecommunications, print and electronic media, and information communications technology.
- Commercial banking, insurance, property management, and financial institutions.
- Pharmaceuticals, chemicals, and medicinal and surgical industries.
- Tourism attraction and hotel industry development.
In implementing priority areas identified in the First Schedule, the following types of projects favourable for priority areas shall be taken into consideration:
- Direct investment in the least developed areas of Southern Sudan.
- Import substitution and export promotions (surplus production).
- Integrated rural development.
- Employment creation to the citizens.
- Promotions of scientific and technological advancement.
- Joint venture/partnership enterprises where Southern Sudanese citizens have at least 30% stake.
- Re-investment of at least 20% of after -tax profits in Southern Sudan.
Environment Friendly Investment
- IN GENERAL: Notwithstanding any other provision or rule, and subject to the provisions of this directive, any company investing in Southern Sudan shall observe and implement environment friendly corporate rules and regulations for the following purposes –
- Preservation of the top soil, surface and subterranean water, and river bank flora and fauna and ecosystem biodiversity;
- Redemption or repairing the land to the natural position after use or expiry of mining activities;
- Responsible solid waste management and disposal of trash, waste, toxic substances in land fills or recycling facilities, composing/decomposing sites;
- Responsible management of noise, clean air, clean water (ponds, rivers, streams and swamps/wetlands).
LIABILTY: Any investor who fails to design and implement environmentally friendly rules and regulations shall be guilty of an offense and liable of fines, payment of damages or remove or clean waste where applicable in accordance with the law.
- The Tax Exemptions and Concessions
- The priority investments areas listed in the First Schedule shall, after registrations, enjoy tax exemptions and concessions in machinery and equipment, capital and net profits for a period that shall be determined by the Authority, and by which an investor has realized sufficient return on investment.
- All agriculture imports (tools, equipment, machinery and tractors, pharmaceuticals, animal feeds, seeds etc.) for boosting food and cash crops production shall be exempt from any duty and taxes for a period that shall be determined by law.
- Investment with quicker rates of return shall have shorter period of enjoying tax concessions as shall be determined by law.
- Fiscal Incentives.
(a) Capital Allowances
| Type of Allowance | Rate | Condition |
| | | |
| Initial allowance granted in first year of production | 50% | Granted on cost base on plant and machinery for industries in relatively developed area |
| Initial allowance granted in the first year o f production | 75% | Granted on the cost base of plant and machinery for industries located in least developed areas |
| Start -up and development costs | 25% | Granted on actual cost over the first four years in four equal instalments for industries in relatively developed areas |
| Start -up and development costs | 40% | Granted on actual cost over the first four years in four equal instalments on least developed areas |
| Scientific Research capital expenditure | 100% | Granted on the first 3 years on actual cost of scientific research incurred during a year of income in the course of carrying on a business, the income of which is included in gross income must be undertaken in the development of the sector’s business and declines thereafter to 25% |
| Training and capacity building expenditure | 100% | Granted on actual cost incurred in mineral exploration. Expenditure of a capital nature incurred in searching for, discovering and testing, winning access to deposit of minerals in Southern Sudan |
Initial allowance granted in the first year of use of an industrial building | 20% | Granted on the cost base of an industrial building, (include tourism facilities like hotels and lodges and capital expenditure incurred on the extension of an existing industrial building but including commercial building) |
Repairs and minor capital equipment. | 100% | Granted on actual cost incurred in a year: i. expenditure on repair of property occupied or used for the business; ii. cost of minor capital equipment provided that the equipment was certified to have been newly acquired. |
| | | |
- Deductible Annual Allowances
| Class | Rate | Condition |
| | | |
| Class 1 | 25% | Computers and handling machinery and equipment |
| Class 2 | 20% | Light automobiles (buses with less than 30 seats or goods vehicles designed to carry or pull 7 or more tons); Construction and earth moving machinery and equipment |
| Class 3 | 20% | Productive equipment: heavy automobile (buses with 30 or more seats or goods, vehicles designed to carry or pull 7 or more tones); specialized trucks, trailers, tractors, plant and machinery used in farming, manufacturing, drilling and mining operations |
| Class 4 | 40% | All other depreciable assets (railroad cars, locomotives and equipment, vessels, tugs and similar water transportation equipment, air craft, specialized public utility plant, equipment and machinery, office furniture, fixtures and equipment, etc.). |
Farming costs | 30% | Farm works (E.g. labour quarters, irrigation bumps, fertilizers and animal feeds, chicken incubators, immovable building and other works necessary for the farm) |
| | | |
- Other Annual Depreciation Allowances
Industrial Building Allowance | 10% | Cost base net o f initial allowance deduction on a straight-line basis per annum on qualifying industrial building (includes approved commercial building, hotels and hospitals) |
Intangible Assets | Variable and not exceeding 8% | Granted on cost of asset in equal annual instalment over its useful life on condition that it has an ascertainable useful life and value e.g. leasehold, patents, royalties. |
Horticulture | 20% | Granted on actual cost in four equal instalments. Cost must be incurred on acquisition of agro-processing industries, horticultural plant and/or on construction of a green house |
