CONGO BRAZZAVILLE Law and Practice Contributed by: Louis-Raymond Gomes and Prince Kyssama Dikoulou, Cabinet Gomes
Labour and social security compliance This includes review of employment contracts, collec - tive bargaining agreements, the legal status of expatri - ate workers, and the target’s compliance with national labour laws and social security contributions. Particu - lar attention is paid to Caisse nationale de sécurité sociale (CNSS) obligations. Intellectual property This includes review of registered trade marks, pat - ents, copyrights, domain names and licensing agree - ments to confirm ownership and protectability. Litigation and disputes This includes analysis of current and past litigation, arbitration proceedings or administrative investiga - tions that may expose the company to liability or reputational risk. Environmental compliance (if applicable) For projects in the extractive, industrial or infrastruc - ture sectors, environmental due diligence includes verification of compliance with environmental laws, licences and any obligations related to environmental
Auction sales and tender offers are rare in the Congo - lese market. The legal and regulatory infrastructure for competitive bid processes is limited, and such mech - anisms are generally not favoured in practice. Typically, no major distinction is made in the legal framework that governs the terms of acquisition between privately negotiated deals and hypothetical auction scenarios. 5.2 Structure of the Buyer Private equity-backed buyers can be directly involved in acquisitions or act through a special purpose vehi - cle (SPV). Both options are possible and frequent in Congo-Brazzaville. Whether the buyer will be involved directly or use an SPV is usually deal-specific. 5.3 Funding Structure of Private Equity Transactions Private equity deals are normally financed directly by the buyer or an SPV through either a debt leverage portion or direct cash injection into the target. To provide contractual certainty of the purchase price, a letter of comfort is generally used for proof of funds, or the party can provide for security (surety or autono - mous guarantee). There has not yet been any legal or practical evolution regarding funding of private equity operations. 5.4 Multiple Investors Despite the fact that there is no legal provision pro - hibiting such a scheme, consortium or private equity sponsors are not common in the Republic of the Con - go, nor is co-investment alongside the lead private equity fund. This is because the private equity deals that take place in Congo-Brazzaville are usually of a size small enough for a single actor to handle. A consortium is usually seen in operations involving the transport, logistics or energy sector. 6. Terms of Acquisition Documentation 6.1 Types of Consideration Mechanism The main mechanisms are cash and completion accounts. Earn-outs and deferred consideration with
and social impact assessments. 4.2 Vendor Due Diligence
Vendor due diligence is a common practice, and the elements described in 4.1 General Information usu- ally apply to it. While it can be considered reliable depending on the sophistication of the vendor, the buyer usually conducts its own due diligence as well.
5. Structure of Transactions 5.1 Structure of the Acquisition
In the Republic of the Congo, private equity acqui - sitions are mainly made through private treaty sale and purchase agreement or merger transactions governed by the Uniform Act Relating to Commer - cial Companies and Economic Interest Groups (the “OHADA law”). The transaction is typically formalised via a notarial deed where there is a share transfer, and, where necessary, filings are made with the Commer - cial Registry and tax authorities.
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