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Selling U.S. Products and Services

Using an Agent or Distributor

There are no laws requiring the retention of a local agent or distributor for a foreign company exporting to Côte d’Ivoire. However, it is recommended that a company attempting to enter the market retain a person or persons resident in Côte d’Ivoire. The exporter should be aware that in many sectors of the economy there are one or two large distributors, manufacturers or agents who supply a majority of the market, while several smaller agents vie for niche markets. An exporter should assess the sales potential of all prospective partners in the market segment before settling on one.

An agent or distributor should possess a thorough understanding of the economy and be fluent in French. Both parties should agree on sales support (if any) to be provided as well as sales expectations. If the exported product requires servicing, qualified personnel and a reasonable inventory of spare parts must be considered. Exporters should be aware that agents and distributors commonly represent several product lines. There are no legal regulations requiring that agreements be exclusive. The exporter should provide appropriate literature and documentation in French for better communication with potential customers. European competitors inevitably market their geographic proximity as a competitive advantage. For example, they are often able to provide a technician or a part on short notice. Failure to adequately address the issue of after-sales support has limited U.S. marketing success in Côte d’Ivoire.

A common problem for U.S. exporters is the failure to clarify terms and conditions for agents and distributors selling U.S. products. Written agreements clearly noting geographic regions to be covered, type of relationship (distributor or agent), exclusivity, payment terms for products or commissions, currency of payments, actions taken to address currency fluctuations, renewals of the agreement including specific parameters for performance and promotional activity, provisions for termination of the relationship, licensing or reserving of intellectual property rights, and provisions for dispute settlement are some of the key factors which should be addressed in a written agreement.

Before committing to a long-term relationship, exporters should consider visiting Côte d’Ivoire to gain first-hand knowledge of the country. (Note: The U.S. Department of State currently has a Travel Warning for Cote d'Ivoire, recommending that U.S. citizens defer non-essential travel to the country.) The U.S. Commercial Service can help exporters locate agents and distributors through its International Partner Search (IPS), International Company Profile (ICP) and Gold Key programs. All these programs include a regional (i.e. West and Central Africa) approach, which helps companies market their products and services in the sub-region. Information regarding these programs is available through the U.S. Commercial Service Export Assistance Centers located in cities throughout the United States.

Establishing an Office

The Ivoirian investment promotion center (Centre de Promotion des Investissements en Côte d’Ivoire, or CEPICI) is active in promoting joint-venture operations and investment in Côte d’Ivoire. Acting as a one-stop shop, CEPICI can provide guidance to foreign investors and reduce the amount of time required for local business registration and administrative paperwork. CEPICI’s activities include assistance with the necessary formalities of registering, incorporating, modifying or dissolving a local company. CEPICI helps facilitate the registration process by acting as an intermediary and "de facto” notary free of charge. However, after incorporation, companies must directly pay the notary used by CEPICI. CEPICI has also played a role in assisting the Ivoirian government in monitoring the state company privatization program.

Prior to establishing a business entity in Côte d’Ivoire, it is advisable to consult a local attorney. There are four common business forms adopted in Côte d’Ivoire. In any of these forms, the non-Ivoirian may hold 51 percent or more of the company’s assets. Exceptions to this rule occur on an ad hoc basis and are usually mandated by government decree. The most common forms adopted by businesses are:

Joint Venture (Association et Participation): Joint ventures are allowed in Côte d’Ivoire.

Branch of a Foreign Company (Succursale): Branches of foreign companies may not be established until they are registered with the Tribunal de Premiere Instance. Once registered, the branch is regarded as an Ivoirian judicial entity and is legally independent of the parent company.

Limited Liability Company (Société à Responsabilité Limitée - SARL): All SARLs must have a minimum capital of CFAF 1,000,000 (approximately USD 2,000) and at least one shareholder. No share certificates are issued.

Stock Corporations (Société Anonyme - SA): Stock corporations are required to have at least one shareholder. Each share must have a nominal value of at least CFAF 10,000 (approximately USD 20) and there is a minimum capital requirement of CFAF 10,000,000 (approximately USD 20,000) for closely-held SAs, and CFAF 100,000,000 for publicly traded companies. Directors’ meetings are required on a regular basis. If a corporation has share capital below CFAF 2.5 billion (approximately USD 5 million), there is a stock registration tax of six-tenths of one percent of the value of the stock for the company. For corporations with capital valued above CFAF 2.5 billion, the registration tax rate is reduced.

Other business forms include regional offices, sole proprietorships, local agency or distributorship arrangements, various entities that are similar to limited and general partnerships, and state-owned or partially government-owned companies.

All business entities must register with the Commercial Registry within 30 days of commencement of activity. If the SARL or SA is the chosen form, the following must be filed with the Commercial Registry: a copy of the company by-laws, the minutes authorizing the establishment of the company (SA form only), and the name of the manager (SARL) or director (SA). Companies must submit an annual balance sheet and profit and loss accounts to the Ministry of Economy and Finance.

Business entities must file a Declaration of Commencement of Business with the Tax Department of the Ministry of Finance and the Economy, the Labor Department and the National Social Security Fund. If the entity contemplates the importation or exportation of goods or materials, it must register as an importer or exporter with the Department of External Trade of the Ministry of Commerce and Industry.

Cote d’Ivoire Investment Code (in English and French).

Franchising

There is no official regulation on franchising in Cote d’Ivoire. Parties interested in franchising will need to conduct discussions with the government directly.

Direct Marketing

Door-to-door selling is not common in Cote d'Ivoire, especially after 2002. People are concerned about safety and are wary of opening their doors to strangers. There are some local unemployed people who try to sell housewares (e.g. napkins, knives) door-to-door, as well as on the streets to automobile drivers and passengers.

A handful of companies are trying to use direct marketing tactics. For example in cosmetics, instead of going door-to-door, some companies direct market to a larger group, such as a church group. If a company is interested in direct marketing, it is recommended that a local representative be hired that has connections with groups such as churches. However, because of the socio-political situation, it is not advisable to use direct marketing as a first strategy.

Joint Ventures/Licensing

Joint ventures are allowed in Côte d’Ivoire. Please refer to the section "Establishing an Office" above.

Selling to the Government

The Ivoirian Government periodically issues procurement tenders that are published in local newspapers and sometimes in international magazines and newspapers. The implementing agency is usually the responsible ministry making the request. The Bureau National d’Etudes Techniques et de Developpement (BNETD) usually acts as an executing agency representing the ministry involved for World Bank and African Development Bank (AfDB) financed projects. Procurement is typically financed by a multilateral lending institution such as the World Bank or the AfDB (Currently, Cote d'Ivoire is in non-accrual status with the World Bank, and the AfDB is not considering private sector projects in Cote d"Ivoire). There is a charge to purchase the bid documents, which are normally in French. Payment by the government is now centralized through a one stop paying agency, the Caisse Autonome d’Amortissement (CAA), a government agency, which acts as the government’s bank.

Distribution and Sales Channels

The principal methods of selling are via: wholesale and/or retail outlets (either in the local market or an established chain), a direct sales force, an agent or distributor, selling through established wholesalers or dealers, and selling direct to the government, cooperatives, and other indigenous organizations. Exporters should consider the requirements of the product and its potential market when choosing a distribution channel.

Most wholesale establishments and modern retail outlets are concentrated in Abidjan. These include company headquarters, regional offices, banking branches, insurance operations, brand-name supermarkets, car dealerships and specialty stores. Most owners of small shops and retailers are sole-proprietorships with limited management capability. Overall, the Lebanese community is strongly represented in retail operations and is well connected to the country-wide wholesale network.

Selling Factors/Techniques

The Ivoirian attitude toward conducting business with U.S. firms is positive but is made more difficult due to language and cultural barriers. It is critical, therefore, that U.S. companies establish and maintain a high level of personal contact within Côte d’Ivoire. It difficult to mount a successful enterprise via telephone or fax contact alone. Yet despite a differing business style, Ivoirians appreciate the role the U.S. plays in world affairs, welcome U.S. products and encourage U.S. investment in Côte d’Ivoire. There is a clear desire for business to be conducted with Ivoirian partners, as there is still residual suspicion of large foreign businesses.

Côte d’Ivoire maintains historical, cultural and economic links with France and Europe. However, increasingly, young Ivoirians are now considering a U.S. university education versus a European one. Younger generations are exposed to American culture (sports, films, technology, general consumer goods, and business). Exposure of the future workforce to U.S. culture, business and English will help to further U.S. business interests in the country.

Ivoirians are extremely polite; it is customary to greet everyone you meet. Even a long-term partner or business contact is usually greeted with an exchange of pleasantries, followed by a handshake and inquiries about one's health, family and relatives. While coming to the point directly is admired in American culture, Ivoirians tend to be more laid-back and patient and in fact may find the aggressive "American style" disturbing. Ivoirians prefer regular, face-to-face contact; in fact, personal visits are warmly welcomed. While visits may not be the most efficient or inexpensive method, it is generally regarded as the most effective method of handling new trade initiatives. For Ivoirians, trust in a business relationship is paramount and cannot be achieved sight unseen. The cornerstone of a successful business relationship is to adapt to a pace of business and life that is more moderate than in the United States

The Lebanese community plays an important role in business in Côte d'Ivoire. We estimate that Lebanese owned firms account for approximately 40 percent of the business done in Côte d’Ivoire. As a group, they are very receptive to U.S. products and U.S. company representatives and are generally more conversant in English. However, French is still their preferred language for business transactions.

Electronic Commerce

E-Commerce is at its early stages. Cote d’Ivoire’s good telecommunications infrastructure and growing internet market have laid the grounds for further development of E-Commerce. Over the last two years, the number of computers connected to the internet has substantially increased, and this increase is expected to continue at a fast pace. During the same period, the number of local Internet Service Providers has increased, resulting in an increase of internet users, improvement of quality service, and lower fees for users. Internet access is gained mostly through cyber cafes as internet access in homes is still not very common. The relative absence of an electronic payment system will obstruct swift E-commerce growth in the short term, as credit cards are not widely used in Cote d’Ivoire.

Trade Promotion and Advertising

Since Côte d’Ivoire is a major commercial hub in Sub-Sahara Africa, many advertising agencies and companies have positioned themselves in the Ivoirian market place, offering a variety of services, including publicity and sales promotion. Major advertising agencies include McCann Erickson, Panascom Young and Rubicam, Ocean Olgivy, Vaudoo Communications, and DC Productions. Some advertising agencies also offer marketing research and video production services as well.

Over the last four years, advertising sales revenues have slowed because of the political uncertainty. However, during the same time period, new and more sophisticated advertising activities, support and materials have entered the market. Many new products and services are directed toward internet users. Over the next few years, this new segment of the advertising market is expected to reach its maturity with substantial amounts of money earned by a few internet providers.

There are three regulatory bodies governing the media and advertising sectors. The first is the Conseil National pour la Communication Audiovisuelle (CNCA), the National Audiovisual Communication Council, which supervises all issues pertaining to ethics in audio-visuals, particularly advertising and content issues. The second, the Conseil National pour la Presse (CNP), the National Press Council, is responsible for issues related to all types of media and press, but has not been very active in recent years. The third, the Conseil Superieur de la Publicite (CSP), the national council for advertising, focuses on advertising issues from all media including newspapers and audio-visuals. The CSP registers new advertising and mass communication companies.

Advertising activity has become more sophisticated in recent years with the emergence of a variety of advertising products and services including large billboards, moving message signs, films, and video productions. In addition to local advertising, many international TV channels (satellite broadcasters such as Canal + Horizons, and TV5; as well as TVRO antenna-broadcast programs (CNN, CFI, and others)) provide advertising in the market. Also, in 1998 the Ivoirian government authorized new licenses for private radio stations. These developments will most likely favor an increase in advertising. The market for radio advertising is slowly growing. Ivoirian radio listeners have come to expect radio commercials with more sophistication and professionalism.

While the number of newspapers and weeklies has increased in recent years, sales revenues from print advertising have not grown as quickly as sales revenues from radio and TV commercials. Currently, more than twenty regular daily and weekly news publications circulate in Côte d’Ivoire. The most widely-read publications include the daily “Fraternite Matin,” a paper controlled by the Ivoirian government, and weeklies “Gbitch,” a social satiric weekly magazine, and “Top Visage”, a weekly specializing in show business and women issues. Other international magazines published in French include “Jeune Afrique l’Intelligent,” and for female readers, “Amina.” There is only a small readership for English-language international magazines or weeklies, despite a few newspapers and magazines sold in the marketplace.

Ivoirians own more than 3 million television sets and 7 million radios. They are accustomed to consumer-oriented commercials and advertising and public service announcements. Contact information for Ivoirian media (print, radio, and TV) is listed in Chapter 9. Suppliers of imported products are expected to provide advertising and promotional support, particularly for new products or brands. Radio and TV commercials are commonly used, as are posters, point of sales displays, coupons and billboards. Before showing a film, many local cinemas run promotional short films, typically promoting automobiles and tobacco products. Most, but not all, TV commercials are produced locally.

Small exhibitions are very often held in small convention centers in Abidjan or in major cities throughout the country. Companies participating in these trade events have the opportunity to promote their products and services to the public.

Packaging is important to the Ivoirian middle and upper class consumer. Colorful designs, blister packs and small, reusable containers appeal to the consumer. Extended shelf life in a humid climate is also an important requirement. However, cheaper products with minimal labeling are accepted here by more price-conscious consumers as can be seen with several locally-made products which are packaged in reconditioned bottles with minimal labeling.

Useful links:
Feature U.S. Exporters: http://www.buyusa.gov/westafrica/en/119.html
Local Business Service Providers: http://www.buyusa.gov/westafrica/en/87.html

Pricing

U.S. exporters will find that pricing in CFA Francs (CFAF), especially repeat sales for deliveries over a six to 12 month period, will provide a substantial commercial advantage over quoting prices in U.S. dollars. (Major U.S. banks can provide foreign exchange services allowing the exporter to purchase forward options in order to effectively remove foreign exchange risk from the transaction). CIF quotations to an Ivoirian port are more useful to Ivoirian buyers than factory door quotations. When calculating selling prices, U.S. businesses should compare their prices to competitors, and build into their cost structure an allowance for additional costs that often arise when selling into a developing market.

Payment via confirmed irrevocable letter or credit is preferred for U.S. exporters, particularly at the beginning of a commercial relationship. Insistence on L/C payment terms may limit market penetration of the U.S. firm and may not provide for aggressive market growth vis-à-vis the competition. European suppliers effectively use buyer financing in the Ivoirian market to accommodate customers and capture market share. Competitive credit terms are an important factor in purchasing decisions and may be part of an effective marketing strategy in the Côte d’Ivoire.

Foreign competition often grants credits of 60 to 90 days for consumer goods and 24 months for machinery and equipment. European banks often quote liberal terms and may discount paper for their exporters who are pursuing long-term credits.

U.S. exporters may offer competitive terms to buyers while effectively mitigating commercial and country risk by insuring foreign receivables. The Export Import Bank of the United States (EXIM Bank) will extend coverage for qualified buyers in the private sector of Côte d’Ivoire. Firms should contact the EXIM Bank or the nearest Export Assistance Center of the U.S. Department of Commerce to obtain information on the financing of short- and medium-term transactions. Finance costs, based on U.S. rates, can usually be folded into the sale price and passed on to the buyer. Financing at U.S. rates is attractive to buyers in Côte d’Ivoire who often have to pay much higher rates to obtain local commercial credit. Many private firms offer insurance policies for foreign receivables in addition to EXIM Bank.

The U.S. Commercial Service can help exporters formulate sound credit policies applicable to local markets and credit information on individual Ivoirian firms through the International Company Profile (ICP) program. Information regarding this program is available through the U.S. Commercial Service Export Assistance Centers. The cost of one report is USD 200. Each report includes credit information on the foreign buyer and the recommendations of the U.S. Commercial Service concerning the suitability of the firm for sound business relationships.

Sales Service/Customer Support

Lack of after-sales support and services has been a principal reason for limited U.S. marketing success in Côte d’Ivoire. Support is especially critical for high-tech or heavy industrial equipment such as computer hardware and software, telecommunications equipment, photocopiers, automobiles, and air conditioning/refrigeration units. For example, central service telephone numbers and radio-dispatched technicians are commonly used by local firms. French-language service manuals, frequent personnel training and a reasonable inventory of spare parts are also crucial.

Protecting Your Intellectual Property

The Ivoirian Civil Code protects the acquisition and disposition of intellectual property rights. Legal protection for intellectual property may fall short of TRIPS standards. Cote d'Ivoire is a party to the Paris Convention, its 1958 revision, and the 1977 Bangui Agreement covering 16 Francophone African countries in the African Intellectual Property Organization (OAPI). Effective February 2002, changes were made to the Bangui Accords in an effort to bring them into conformity with TRIPS. Under OAPI, rights registered in one member country are valid for other member states. Patents are valid for ten years, with the possibility of two five-year extensions. Trademarks are valid for ten years and are renewable indefinitely. Copyrights are valid for 50 years.

In 2001, Ivoirian experts drafted a new law in an effort to bring Cote d’Ivoire into conformity with TRIPS. The new law adds specific protection for computer programs, databases, and authors’ rights with regard to rented films and videos. The National Assembly has not yet approved this legislation.

The government’s Office of Industrial Property is charged with ensuring the protection of patents, trademarks, industrial designs, and commercial names. The office faces an array of challenges, including resource allocation, political will, and the distraction of the ongoing political crisis. As a result, enforcement of IPR is largely ineffective. Foreign companies, especially from East and South Asia, flood the Ivoirian market with all types of counterfeit goods. GOCI efforts to combat piracy are modest. Counterfeit clothing, textiles, footwear, watches, computer software and audio and videotapes are readily found, particularly among street vendors.

The Ivoirian Office of Author’s Rights (BURIDA), put into effect a new sticker system in January 2004 to protect phonograph, video, literary and artistic property rights in music and computer programs. BURIDA’s operations remain hampered by a long-running dispute over policy and who should direct the agency, but the agency does help to promote IPR enforcement with lawyers and magistrates.

Due Diligence

The U.S. Commercial Service in Cote d’Ivoire completes due diligence, in any sector, based on information provided by the U.S. companies. This service includes phone calls to local companies, an appointment with the local buyer, and a possible site visit to the company to establish its legitimacy. After a short investigation, U.S. clients receive a report on the actions taken and their outcomes by email or fax. Fees for U.S. Commercial Service services vary depending on the service provided.

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