The
Investment (Encouragement) Act, 1999
Be
it hereby passed, in accordance with the provisions of the Constitution of the
Republic of Sudan 1998, by the national Assembly with the assent of the
president of the Republic, the following Act.
Preliminary
Provisions
Title and Commencement
1.
This Act may be cited as “the Investment (Encouragement) Act, 1999,
and shall come into force as from the date of signature. (
[1]*)
Repeal
and saving
2.
The investment (Encouragement) Act 1996, shall be repealed, provided that
all the regulations and orders made and measures taken, thereunder, shall remain
in force as if they have been made or taken under the provisions of this Act,
until repealed, or amended in accordance with the provisions thereof.
Prevalence of the provisions of this Act
3.
The
Provisions of this Act shall, in case of any inconsistency with the provisions
of any other law, prevail to the extent of removing the inconsistency between them.
Application
4.
(1) The provisions of this Act
shall apply to such extent as may achieve its objects, provided that the same
shall not prejudice the privileges and facilities prescribed to the existing
projects at the time of commencement hereof.
(2) Not withstanding the provisions of subsection (1) all privileges
pertaining to imports granted to investment projects are to be repealed
and the provisions of section 11 of the amended act shall apply thereto:
(3)
Subsection (2) shall not apply to existing projects licensed under
special agreement with the Government of Sudan.
Interpretation
5.
In this Act, unless the context otherwise requires, :-
“Rehabilitation“
means the rehabilitation or the modernization or expansion of an existing
project.
“The
Invested fund “ means:
(a)
The local
exchange, paid by the investor, and used in the
establishment, operation, modernization, rehabilitation or expansion of
the project;
(b)
The free
foreign exchange, through one of the banks,
registered with the Bank of Sudan, which is used in the establishment,
operation, modernization or expansion of the project;
(c)
The
local exchange by which discharge is made, upon the
approval of the competent bodies, to meet such obligations, of the
investor, as may be due for performance in foreign exchange, where the same is
used for establishment, operation, modernization, rehabilitation or expansion of
the project;
(d)
The capital in kind, and any other
proprietary rights such as mortgages and debt guarantees and all other
similar rights, and dividends shares
and other
documents concerning
companies and any sort of other partnership and the machinery
equipment apparatuses,
material and other requisites and means for transport from abroad or local ones,
for the establishment operation,modernization,rehabilitation or expansion of the
project.
(e)
The
intangible, and intellectual
property, including the rights of publication and trade marks and patent and
industrial designs which may be used in the project, provided that such rights
shall be registered, in accordance with the provisions of the law pertaining to
each, and owend by the investor, or he is licensed the same, or the part of the
proprietor thereof.
(f)
Profits
achieved by the project, where the
capital of the project has been complemented or increased thereby or invested in
any other project.
“Investor” means the person who invests his funds, in accordance with
the provisions of this act, in any project whether he is a Sudanese or
non-Sudanese.
“Project”, means any economic activity,
whatever its legal form
may be, which is included in to any of the
investment fields, set out in this Act,
and such project which may be prescribed by the Council of Ministers in
accordance with the objects of encouragement of investmen provided for by virtue
of section 6, and the approval of such project shall take place in accordance
with the provisions of this act.
“ The ministry “ means the Ministry of National
Industry and Investment .
“Minster” means the Minister of National Industry and Investment .
“The Minister Concerned” means any of the Federal Ministers.
“The State Minister”means the State Minster to be determined by
Council of Minister of the State to be Concerned with the investment.
Encouragement of Investment
Objects of Encouragement of Investment
6.
This
Act aims at encouraging investment in such projects as may achieve the
development plans objects and investment initiatives by the Sudanese and non-sudanese
private sector, co-operative , joint and public sector: and without prejudice to
the generality of the foregoing, it aims at the encouragement of investment in
the projects of any of the fields setout in section 7, and the rehabilitations
projects.
Fields of investment
7.
This
Act encourages investment in the fields of agriculture, animal, Industry energy,
mining, transport,communication, tourism, environment, storage, housing,
contracting, basic infrastructure, economic services, administrative,
consultative and information technology services , education, health, water,
cultural and information services and any other fields as may be specified by
the Council of Ministers
Discrimination
between projects prohibited
8.
(1)
For the purposes of this Act, no discrimination shall be made between the
invested fund, by reason of the same being local or foreign , or by reason of
its being a public, private, co-operative or joint sector.
(2) No discrimination shall be made between similar projects, with
respect to granting privileges facilities or guarantees.
Privileges,
Facilities and Guarantees.
Branch
I
Strategic
projects
9.
(1) There
shall be deemed to be strategic investment, which falls within the following
fields namely:-
(a)
Relating to the infrastructure, roads ports, electricity, dams,Communication and
telecomunication energy,
trnsportation,contracting
administrative and consultative services , education, health, tourism services,
information technology services and water projects.
(b)
Relating to the exploitation of subsoil and marine resource.
(c)
Agricultural, Animal and Industrial production.
(d
Across the border of more than one State.
(e)
Any other fields as may be specified by the Council of Ministers.
(2)
Regulations shall specify the strategic projects provided for under
paragraph(1).
Branch II
Privileges
Exemption
of projects from taxes and fees
10.
(1) Subject to the provision of section 19,
the strategic project specified
by the Regulations, after its registration in accordance with the laws
organizing the same, shall enjoy the following privileges:
Exemption from business
profits taxes for a period not less than ten years which commences, as from the
date of the commercial production or practicing the activity, and the Minister
may extend the period mentioned in this paragraph as he may deem fit
(2)
Exemption from the business profit taxes for non strategic projects, for a
period not exceeding five years which commences as from the date of
commercial producing or the practicing of activity, which may be expanded by the
Minister.
Exemption
of Investment Projects from Fees
11.
(1) Subject
to the provisions of section 19, strategic and nonstrategic projects, specified
by the regulations, shall enjoy customs duties privileges as provided for in the
tables annexed to this Act.
(2) Not withstanding the provisions of subsection(1),
customs duties’ privileges for vehicles, saloon cars, pickups and station
wagons are to be granted with provisions as specified by the regulations.
(3) With recomendation from the Minister,
the Council of Ministers may amend the tables annexed to this Act.
Granting
the project the privilege of allotment
of land and
Calculation of deprecation
12.
The Minister may grant the strategic and non- strategic
projects, as may be specified in the Regulations:
(a) Allotment
of lands necessary for the strategic projects free,
and at encouraging price for the
non- strategic price, in co-
ordination with the concerned bodies of the lands which have
been planned by the competent bodies.
(b)
The privilege of calculating the depreciation of its assests, in
accordance with the renewal value, to be prescribed by the
Regulations, and according to the operational sessions.
(c)
The considering of any loss which may occur during the period
of exemption mentioned in sections (10 and 11) as if it occurred at the last year of such period.
Granting of privilege to state projects
13.
The state Minister may grant the state project as may be prescribed by
the Regulations, the following privileges:
(a) Total
or partial exemption of taxes and fees which may be
levied by a state law or local
order, for a period not exceeding five
years, provided that he may subject to the approval of the
State Council of Ministers expand the same exemption for
other similar period.
(b)
Any taxes or state fees to be levied on the project later on.
(c)
Allotment of the necessary land for the
project, at an encouraging price, in
co-ordination with the concerned
bodies,of the lands appropriate by the competent bodies.
Granting of federal privileges on the state projects
14.
(1)
The Minister may on the recommendation of the State Minister,
grant
the state’s project,
the privileges
provided for
under section 11.
(2)
The State Minister as may be delegated by the Minister , may grant the
state project the privileges provided for under section
11 accrording to the conditions and
limits deemed to be fit by the Minister.
Prohibition of the levy of taxes or fees on the federal project
15..
No state or local council may levy any tax , fees , state or local rates
upon any investment project federally licensed, throughout the period
of the tax exemption provided for in sections 10 and 11 save in
consideration of service of public nature rendered by the state or the
local council.
Preferential privileges
16.
The Minister , may grant preferential privileges to such projects as may
satisfy the following aspects:-
(a)
Direct investment towards the less development areas.
(b)
Assist in the development of export capabilities of the country.
(c)
Strive to achieve the integral rural development.
(d)
To create wide range of jobs.
(e)
Strive to encourage charitable legacy..
(f)
Strive to develop scientific and technical research.
(g) To
reinvest the profits thereof.
(2)
For the purposes of subsection (1) the privileges mean any of the
privileges provided for in section 10 and 11 hereof, in relation to their
size extent and
duration, as may be prescribed by the Regulations.
Branch IV
Guarantees
Investment
Guarantees
17.
(1)
The investor shall enjoy the following guarantees:-
(a)
Non-nationalization
or forfeiture of his project and
no- acquisition of the real property whether totally or partially, or his
investments for public interest in accordance with the law and for a just
compensation.
(b)
Non-seizure,
expropriation, blocking, forfeiture, custody of the property of the project or
imposing sequestration thereon, save by a judicial order.
(c)
Re-Transmission
of the invested fund, in case of non-execution of the project initially,
liquidation or disposal of the same in any of the ways totally or partially, in
the currency in which it has been imported, on condition of satisfaction of all
the obligations legally due therefrom. In case of the non-execution of the
project initially, the machinery, equipment, apparatues, means of transport and
other requisites which have been imported for the project may be re-exported,
when all the obligations herein before mentioned are satisfied.
(d)
Transmission of the profits and the fund in foregin capital or loans,in
the same currency in which the capital or loan have been imported at the time
when they became due,when all the obligations legally due from the project are
satisfied.
(e)
Import the raw material needed by the project and export of the products
thereof immediately after registration of the investment project in the records
of the importers and exporters.
(2)
For the purposes of paragraph (c) of subsection (1), the invested fund of
the foreign currency shall be determined in the project, and its elements shall
be evaluated by the Minister and registered in the bank of Sudan.
Protection
of the privileges and
guarantees
of the projects
18.
Not with standing the provisions of any other law, no administrative
body, shall refrain from the implementation of the privileges and guarantees
granted by virtue of the provisions of this Act.
Chapter IV
Investment
Safeguards
Investor licensed to establish the project
19.
(1)
Subject to the provisions of section 4, no person shall establish
any project in the Sudan, save after obtaining a licence therefor, from
the minister or the state minister as the case may be, in accordance with the
provisions of this Act.
(2)
Subject to the provisions of
subsection (1), no license shall be granted to foreign or joint investments by
the state save by the assent of the Minister.
Feasibility study of the project to be produced
20.
No licence
shall be granted to any project, nor shall any privileges, facilities or
guarantees, as may set out in this Act, be granted thereto, save after
production of a technical and economic feasibility study of
the project.
Form of license and privileges
21.
An
application for granting the license to any project, and granting any of the
privileges or facilities, provided for in this act, shall be submitted on such
prescribed form, as follows:-
(a)
The strategic and non-strategic projects to Federal Ministry.
(b)
The state projects, whether strategic or non -strategic, to the State
Ministry.
Granting
of license
22.
(1)
The Ministry or the state Ministry on
receipt of the
satisfied application
for granting
license shall refer the same
to the
competent Federal or State Minister, as the case may be within one week
for the initial approval of the establishment of the
project.
(2)
The concerned Federal or State Minister, as the case may shall decide on
the initial approval and submit the same to Ministry
or the State Ministry as the case may be within seven days of the date of
receipt of such application.
(3)
In case of having the initial approval not submitted within the
period provided for in subsection (2) , the Minister or State
Minister shall decide on the application by the expiry of such period.
(4)
In all cases the Minister or the State Minister, as the case
may,shall decide on the application for license within a period
not exceeding thirty days of the date of receipt of the satisfactory application
(5)
The applicant
for license
shall be entitled to
submit his
grievance, against the act of not
deciding on his application
in accordance with the
provisions of subsection (1) , to the
Federal Council of
Ministers,or State Council of Ministers
as the case
may be,
to determine
his grievance within
one month of the
date of receipt of the fulfilled grievance.
Land allotted to the project delivered
23.
The Federal or State competent body, shall deliver the land allotted to
the project within a maximum period of one month of the date of
granting the license.
Conditions
for continuous enjoyment of license
and
privileges
24.
(1) No
investor shall take any of the
following measures, within the
period of validity of the license or privileges granted under the provisions of
this act, without obtaining a written approval from the Minister or the State
Minister as the case may be , such measure are namely:-
(a)
Make any amendment, or change in the size of the project, or the object for
which the license has been granted, or transfer
the project from its place, prescribed in the licence;
(b)
Use any such equipment,machinery, apparatuses Raw Materials or spare
parts as in respect of which privilege has been granted, for any other
purposes,other than purpose for which license has been granted.
(c)
Change the purpose of use of the land allotted to the project, sell,
mortgage or lease the same totally or partially.
(2)
Not with standing the provisions of subsection (1), the investor may
dispose of the existing project without amending the licensed object totally or
partially whether by sale, donation, mortgage, lease or partnership according to
the provisions of law in force.
Duties
of the investor
25.
The Investor shall:
(a) Commence
executing the project within a maximum
period of Twelve months, as from the date
of receiving the land, unless
such period has been extended, on
the part of the Minister or the State
Minister for such period,as he may deem appropriate.
(b)
Submit to the Minister, the concerned Minister or the State Minister, periodical
reports, every six months, during the period of validity of the privileges, on
the progress of operation of the execution of the project up to the time of
commencement of production or pracitce of the activity.
(c)
Keep proper accounts, and keep such records as where on may be entered
such assets of the project as may be exempted from customs duties, and such
materials as may be imported and so exempted.
(d)
Submit to the Minister or the Minister
concerned or the State Minister annually, during the period of validity
of the privileges, a copy of annual accounts of the project, authenticated by
a chartered auditor.
Contravention
by the investor to
the
provisions of this Act
26.
(1) The investor shall be deemed to have committed a contravention of the
provisions of this act where he:
(a) Contravenes
the provisions of section 19,24 and 25.
(b) Delivers
false, or misleading information, or uses such
unlawful means, as may results in obtaining any
benefit,in accordance with the provisions of this act, for himself or any
other person.
(c)
Suspends the project,without a reasonable cause.
(d) Contravenes
the laws of the country, in such a way as
may threaten the security and safety thereof.
(2) Without
prejudice to any penalty, which may be provided for in any other law, the Minister or the State Minister, as the case
may be, in case of commission, by the investor, of any of the contravention
provided for in subsection(1), may impose any of the following sanctions as to
the size of contravention and circumstances of committing the same, and the
extent of such injury, as may affect the national economy:
(a) Warning
him to remove the causes of the contravention where there is some justification
therefor, within such period as he may specify.
(b) Decrease
the period of any privileges as may be granted to the project or the size
thereof.
(c)
Not granting him any of the privileges and gurantees provided for in this
act.
(d) Revoking
the privileges totally or partially, and the same shall result in binding the
investor to refund the value of such
material benefit, as he may have reaped from obtaining any previous privileges
where earning the benefit has been the result of occurrence of the ground which
lead to the issue of the revocation
decision.
(e) Revoking
the license, from the same, the acquision of
the land allotted to him under the provisions of this Act.
(3)
The investor in respect of whom a decision has been issued under the
provisions of subsection (2), may submit his grievance to the Federal
Council of Ministers or State Council of Ministers as the case may be,
within one month of the date of issue of the decision. The decision in this
respect shall be final, provided that this provision shall not preclude the
investor from access to courts.
Chapter IV
Investment
Organs
Constitution
and function of authorized Person Committee constitution of authorized
person
committee
27.
The Minister
may consitute
a committee from
a chairman and a
number of members to represent the concerned bodies of investment
related nature, as of the Ministries and government units concerned,
provided that the degree of each shall not be less than the head of
the unit or his deputy, who shall be officially and exclusively
authorized from
the body which he represented, and it includes
representatives of the private sector.
Functions
of the Committee
28.
1) The Committee of the Authorized person shall have the
following
functions:-
(a)
To study the
conformity of the project to the investment priorities in the strategic fields.
(b)
To view the needs
of the strategic projects as of the infrastructure and the basic service needed
by the project and the availability or the possibility of availability thereof.
(c)
To view the need of the project as the manpower, of special
qualification, which may be contracted with from obroad in accordance with the
laws in force.
(d)
To realize the sectoral investment plans by the approved and proposed
investment projects.
(e)
To co-ordinate between the Ministry and the competent Ministries and the
states in relation to the investment project and especially in relation to the
map of the investment lands.
(2)
The Committee may invite any person or body of competence when discussing any subject within the jurisdication of such body in the
investment fields, and he shall not have `the
right to vote.
Functions
of the Federal Ministries
29.
Such Federal Ministries as may have connection with investment shall be
competent to exercise the following functions:-.
(a)
To specify priorities and lay down investment policies thereof.
(b)
Prepare such investment sectoral maps.
(c)
To assent initially to the establishment of the project on the
initial feasibility study
to the Ministry,provided that the final feasibility
study shall be submitted to the ministry.
(d)
To follow up the execution private projects with the Ministry
concerned, and submit periodical reports as the minister may request,
The state investment
30.
There shall
be made by a state Act an investment state Act to follow the formula of
the federal investment encouragement Act1999.
Chapter v I
Final
provisions
Investment
Maps
31.
The Ministry shall prepare the national investment map in accordance with
the polices and guidelines of the
National Council for Economic
Planning provided that the same shall provide
for percentage of
the national projects in the
state, and submit the same for approval by the
Council of
Ministers. Provided that the investment
map shall
include the sectoral investment maps which may be prepared by the
Federal Ministries and the state investment ministries.
Investment Dispute Settlement
32.
(1)
Save as such disputes, as may be governed by the provisions of
agreement set in subsection (2), Where a legal
dispute to
investment arises the same shall be referred to reconciliation or
arbitration.
(2)
The provision of the Investment of Arabic Capitals in Arab State Unified Agreement 1980, the Settlement Investment
disputes between the Arab State Host of Arab Investment
and between citizens of Arab
State Agreement 1974, the Settlement of
Investment disputes between the state and
the citizens of other states
Agreement 1965, the Economic, Technical and Commercial Co-operation between the
State parties to the Islamic conference organization Agreement 1977 and any
other agreement in this respect, as the Sudan may be a party thereto, shall
apply to any legal dispute as directly arise
from any of such agreements.
Power Make Regulations
33.
The Council of Ministers, upon the recommendation of the Minister, may
make such Regulations, as may be necessary for the implementation of this Act,
and without prejudice to the generality of the foregoing such Regulations may
include the following matters:-
(a)
Specification of the type and size of such projects which may be granted
preference privileges.
(b)
Laying down safeguards for prevention of overlapping between federal,
state and local investments.
(c)
Specification of the strategic and Non- strategic projects.
(d)
The procedure of application for granting the
license
privileges, and specifying the type and size thereof.
(e)
Specifying the service fees.
(f)
Safeguards and basis concerning control and follow- up of such projects
as may be licensed under the provisions of this Act.