Posted by: Martin | August 10, 2010

Investing Across Borders

On a more positive note compared to the previous two posts, I found a study by the World Bank on foreign direct investment  regulation . It turns out that the Ivory Coast is – on paper at least – one of the most open countries in the world to foreign ownership of companies, scoring the maximum 100 points for all sectors.

It’s ahead of for instance the United States and the United Kingdom which have restrictions on air transport (both), light manufacturing (UK) and media (US). Maybe a more relevant comparison would be to a developing world country such as Thailand which is a very popular place for westerners to set up small businesses like my own. Thailand scores abysmally on foreign ownership due to a near blanket rule on sectors and business activities in which foreign capital is limited to a less-than-50% stake.

I have heard of foreigners in Thailand using shell owners and all kind of tricks to get around this rule. So that’s one thing less to worry about in the Ivory Coast. I’d speculate the reason for the openness is linked to the significant French business presence and the relatively smooth and non-antagonistic decolonisation under Felix-Houphouet Boigny.

The comment on foreign ownership across sectors from the study:

Côte d’Ivoire is one of the most open countries to foreign equity ownership, as measured by the Investing Across Sectors indicators. All of its business sectors covered by the indicators are fully open to foreign investment. With the exception of electricity transmission, there are no other sectors with monopolistic or oligopolistic market structures nor are there any perceived difficulties in obtaining any required operating licenses.

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Responses

  1. I think you over-estimate the French interest in promoting external investment, and foreign ownership … if anything, they resist any one coming in, almost to ~”fighting to the last man”.

    I personally believe that it is the substantial Lebanese influence in the country, many are third generation, if not fourth.

    The other factor in encouraging inward ownership is that it is a vast source of “under the table” income for many people !!

  2. My thinking was that the regulations were set this way in the 60s to suit French interests (or rather not to harm them) and haven’t changed much since.


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