Equatorial Guinea is already a Target Country for many stakeholders but is becoming more and more a well-known investment hub among a diversified group of investors whilst it preserves its place as one of the Sub-Saharan African oil & gas sector main players.

Not many countries enjoy a sense of political stability as Equatorial Guinea does. Headed by President Obiang, Africa’s longest-serving president, Equatorial Guinea has been more and more welcoming diversified foreign entrepreneurship, having increased its interest in developing several sectors, particularly those that showed great promise before the first oil & gas discoveries in the late XXth century.

Cocoa and other agricultural products are nowadays regarded as one of the Country’s opportunities to turn what certainly showed great promise once - and that now requires time, work and expertize -, into a worthy event. The fields are underdeveloped but natural resources flow.

At the same time, many projects in the tourism sector that progressed slowly for many years picked up some steam some time ago; regardless, investments in the tourism sector are typically welcomed and there are always ways to improve what is currently available.
As in many other African countries, an investment in infrastructures is likewise always a well-regarded investment. Around a decade ago Equatorial Guinea launched the Horizon 2020, a plan favouring investments in the construction sector aimed at bringing economic and social development to the Country. Several works were initially identified as having great importance to the Country and many others became a necessity over the past years. As such, many opportunities can be found in Equatorial Guinea.

At the same time, the Country’s financial and banking systems are under constant development, which creates a path for investments in these fields.
Studies also reveal great promise in the Equatorial Guinea mining sector by pointing out the possible existence of gold, diamonds and other minerals. The mining sector is one of the Country’s sectors that welcomes expertize and investment.

The above notwithstanding, for sure the investments in the oil & gas sector are the most visible in Equatorial Guinea, either when made by oil companies or by their contractors and subcontractors, some of the industry main players being known for making sound investments in Equatorial Guinea for the past decades. Equatorial Guinea has been ranked for many years as the third largest oil & gas producer in Sub-Saharan Africa and has recently joined the OPEC - Organization of Petroleum Exporting Countries. All this despite being a small country.

In fact, Equatorial Guinea is also the sole Spanish-speaking African country and is moreover entrenched between French-speaking African countries. Yet, as part of Equatorial Guinea’s desire to overcome loneliness and create and/or strengthen its relationships with its neighbouring countries, Equatorial Guinea has adopted the French and more recently the Portuguese as its official languages side-by-side with the Spanish and local dialects, which has allowed it to form true and solid relationships with those neighbouring countries by forming with them or joining them in several organizations, such as the OHADA - Organization for the Harmonization of Business Law in Africa (as one of its founding members), the CEMAC - Economic and Monetary Community of Central African States (as one of its most important and active members) and the CPLP - Portuguese Speaking-countries Community (as its most recent member). As a member of some of those organizations, Equatorial Guinea immediately benefitted from a set of updated and sophisticated legislation common to the OHADA and CEMAC members, mainly on business (companies, commercial and insolvency laws), banking & finance, foreign exchange, customs-related matters, and covering some tax issues as well. Consequently, Equatorial Guinea has been sharing a set of legal principles and rules that ensures that some of the region’s politics and visions are truly harmonized. Also, as a result of being a member of the CEMAC, Equatorial Guinea has been enjoying exchange rate stability between its official currency, the CFA Franc (or XAF, in short), and the Euro, the XAF exchange rate being pegged to the Euro at the rate of € 0.001524 euro for 1 CFA Franc.

Also, Equatorial Guinea has one single tax code, which makes the assessment of any applicable charges simpler.

At the same time, only few activities are reserved to nationals of Equatorial Guinea, making foreign investment attractive and potentially diversified. This said, depending on many factors, the establishment of a legal presence will most always be a requirement to carry out activities in the Country and in the case of companies local ownership rules (either general ones or others more specific) need to be taken into account. In general, a foreign investor incorporating a company in the Country needs to partner up with at least three nationals of Equatorial Guinea holding at least 35% of the share capital of the company and effective management powers. The national oil and gas companies have a right of first refusal to be a national shareholder and in certain cases the sole national shareholder of companies carrying out activities in the relevant sectors. Additionally, different ownership and/or other local content requirements may apply depending on the company’s activities.

Although somewhat cumbersome and time consuming on the side of formalities and process length (mostly because of the number of authorities and steps involved) establishing an investment vehicle in Equatorial Guinea is a relatively straightforward process. Also, the Government is making this process easier since 2015, when it put in motion a plan to simplifying it further by announcing that all formalities should be processed through a sole balcony. Not many days ago the Government announced the beginning of the sole balcony’s operations, but it is still too soon to conclude on the impact it will have in the process.

The above having been said, according to many investors, after overcoming the (increasingly few) difficulties and delays, the reward of investing in Equatorial Guinea is not a mere promise, but a worthwhile reward not to be missed.