Comoros: Investing

FDI in Figures

Current FDI inflows to Comoros remain marginal despite tax concessions and benefits offered by the government, which is resolutely trying to improve the business climate and institutional stability. According to UNCTAD’s World Investment Report 2022, FDI inflows amounted to only USD 4 million in 2021, in line with the trend recorded in recent years. The FDI stock remains low and was estimated at USD 142 million in 2021, just below 11% of the country’s GDP. Foreign investment in Comoros is limited and mainly concentrated in a few sectors, including tourism, fisheries, agriculture, and energy. In terms of countries investing in Comoros, France has historically been the largest investor, followed by China and India. In the last decade, the Chinese invested millions in the country, paving roads, and building new schools, mosques, markets, government buildings (including the parliament building), a new airport, a centre to facilitate tourism, and a sports stadium. Recent FDI projects in Comoros have been mainly in the tourism sector, with the government trying to promote the country as a tourist destination.

The Investment Code of Comoros does not provide an explicit definition of FDI, and the regulatory environment still imposes significant burdens on investors. However, the government is committed to reforming the investment code and establishing a single point of contact for setting up a company. Comoros has a range of natural resources, including fisheries, agriculture, and minerals, which can offer investment opportunities for foreign investors; moreover, the archipelago has a relatively low cost of labour compared to other countries. Comoros is a member of several regional trade agreements, which can provide foreign investors with access to markets in other countries in the region. Nevertheless, the poor quality of its infrastructure, the limited size of its domestic market, geographical isolation, frequent water and electricity shortages, limited natural resources and an unskilled workforce are all factors that also hinder FDI. Additionally, property rights are not well protected, and contracts are weakly enforced. The judicial system, based on both Sharia (Islamic) law and the French legal code, is weak and subject to political influence. Corruption is reported at all levels of government and is exacerbated by internal political disputes and competition for resources among the administrations of the three islands. Comoros ranks 128th out of 176 countries in the 2023 Index of Economic Freedom and 167th out of 180 in the latest Corruption Perception Index.

© eexpand, All Rights Reserved.
Latest Update: December 2023