DR Congo is admittedly a challenging business environment, but Jarl Heijstee, head of XSML, which operates the Central Africa SME fund , says “we see opportunities all around.” XSML has thus far invested in a call center and health center in Kinshasa.
Heijstee says that businesses in DR Congo work on relatively high margins, some exceeding 100%. XSML looks at businesses from start-ups to those having existed over 10 years. Heijstee indicates that there are many successful Congolese, as well as foreign, businesspeople in the DR Congo with which to partner or invest. XSML’s decisions are based on the ability of the leadership to execute and proving to be trustworthy, as well as the business opportunity itself.
Heijstee indicates that the opportunities in DR Congo are vast as it is at a low level of development. In a country that has some of the best agricultural land in the world, they import much of their food. There are also opportunities in transport, manufacturing, education, and health. As an investor, the key is to decide what you will focus on.
As any other country, there are also incentives for establishing businesses there. Heijstee points out that the government gives a five-year tax break on new investments/businesses.
One suggestion Heijstee makes is that, as a foreigner, if it is your first venture in the country, Kinshasa or Lubumbashi are likely the best places to start your operations. Kinshasa is the capital city and Lubumbashi, due to mining, is the economic capital.
Another suggestion is that you must have local representation you can trust – either you move there, hire staff, or partner with others who have local operations. In XSML’s case, Dutch and Belgian companies are partnering with company because of their local presence in DR Congo.
As you navigate the business and investment environment in DR Congo, realize the country does not have the tools or institutions to do due diligence like in Western economies. Heijstee recommends you start your due diligence with banks and the chambers of commerce in the country.
About investing in DR Congo, Heijstee concludes that he has found that “those who have come to the Congo end up loving it and wanting to invest.”
Listen to the full radio episode.
Featured image is a main street in downtown Kinshasa. Source is Wikimedia – Moyogo.
