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June 25, 2024

TRENDING NOW: Bassirou Diomaye Faye Elected Fifth President of Senegal on March 24, 2024  🇸🇳

Sydney 29

Sole Proprietorship: To start a sole proprietorship in Senegal, entrepreneurs must visit the Business Creation Support Office (BCE). The required documents include two copies of an ID card or passport, a criminal record check, a certificate of residence, possibly a marriage certificate, and two tax stamps of 2,000 CFA each. The incorporation fees are 10,000 CFA without a commercial name and 20,000 CFA with a commercial name.

Economic Interest Grouping (GIE): For establishing a GIE, one must also approach the BCE. The process involves submitting statutes, internal regulations, minutes of the constitutive General Assembly, copies of members’ IDs, and a criminal record extract for the president or a sworn declaration12.

Société à Responsabilité LimitéeSARL (LLC): Creating a SARL requires a visit to the notary for drafting and signing the Articles of Association and depositing the capital. The notary fees are approximately 400,000 CFA for a capital of 1,000,000 CFA. Subsequently, the entrepreneur must register the company at the BCE, where additional documents and registration fees are required12.

Société Anonyme- SA (C-Corp): The formation of an SA involves similar steps to the SARL but with higher capital requirements and notary fees. The notary fees are around 700,000 CFA for a capital of 10,000,000 CFA. After notarization, the company must be registered at the BCE, with registration fees amounting to 1% of the capital if it exceeds 10,000,000 CFA12.

Critical Analysis: The current business formation process in Senegal is fraught with complexities and financial burdens, particularly the mandatory involvement of a notary. This requirement adds a significant cost to the already substantial expenses of starting a business. For young entrepreneurs, especially those with limited resources, these costs can be prohibitive, stifling innovation and economic growth.

The role of the notary, while designed to provide legal validation and assurance, often leads to bureaucratic inefficiencies and opens doors to potential corruption123. The requirement for dual payments – one to the notary for their services and another to the government for registration and capital – creates a financial strain that is felt most acutely by new entrants to the business world. This system can inadvertently discourage entrepreneurship, especially among the youth, who are the driving force behind economic dynamism and the introduction of fresh ideas.

Recommendations: To foster a more conducive environment for business creation, Senegal could take inspiration from the online business registration systems utilized in regions like Ohio4 and Belize5. Such systems have proven to streamline the registration process, reduce operational costs, and enhance transparency. By implementing an online registration system, Senegal could eliminate the need for notary involvement, thereby reducing the cost and complexity of starting a new business.

Moreover, the adoption of digital solutions would align Senegal with global best practices, making it easier for entrepreneurs to navigate the legalities of business formation. It would also signal a commitment to fostering a modern, efficient, and entrepreneur-friendly business environment. The removal of the notary requirement could simplify the process significantly, making business formation more accessible to the youth and promoting a more vibrant private sector.

While the efforts of the Senegalese government to facilitate business creation are noteworthy, there is a clear opportunity for reform. By embracing digital solutions and reconsidering the role of notaries in the business registration process, Senegal can create an ecosystem that is more welcoming to entrepreneurs. Such changes would not only encourage the establishment of new businesses but also contribute to broader economic development and job creation, ultimately benefiting the entire nation.

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