Expanding into Francophone West Africa: an OHADA structuring guide

Expanding into francophone West Africa is not a variation on the anglophone African playbook. Company law, security interests, insolvency and accounting all sit inside a different legal family, and the operational habits that work in Johannesburg or Nairobi do not transfer cleanly. The good news for a South African group is that this legal family is uniform: one body of business law applies across seventeen states, so a structure validated once can be replicated. This guide covers what has to be settled before incorporation.

One legal system, seventeen countries

Francophone West Africa applies OHADA law — a uniform business law framework shared by seventeen member states, built on civil law foundations rather than common law. Three consequences matter immediately for an incoming group.

• Company forms are standardised. The uniform act on commercial companies defines the available vehicles, their governance rules and their capital requirements. A subsidiary incorporated in Senegal follows the same core rules as one in Côte d’Ivoire.
• Security interests are codified and publicly registered. Pledges, mortgages and receivables security sit in a dedicated uniform act with a public registry. This is a genuine advantage for lenders — provided the enforcement timeline is assessed country by country, since judicial practice varies even where the text does not.
• Insolvency is codified. The downside scenario can be modelled in advance rather than discovered.

For group counsel, uniformity has a compounding value: due diligence, template statutes and security packages built for the first country of entry retain most of their relevance for the second and third. The variable is application — court practice and registry speed differ by country, and that is where local verification earns its fee.

Note that OHADA membership and regional economic membership are not the same thing. Cabo Verde, for instance, belongs to ECOWAS but is neither an OHADA member state nor part of the CFA franc zone — a structure designed for Dakar does not transpose there.

Currency: a fixed peg, and what it actually means

The eight UEMOA states share the CFA franc, pegged to the euro at a fixed parity. For a rand-based group, this shifts the currency question in a specific way: the exposure is rand-to-euro, not rand-to-local-currency. Hedging strategy, transfer pricing policy and dividend planning should all be rebuilt on that basis rather than inherited from an existing African subsidiary operating in a floating-currency market.

The second currency point is procedural and is where most incoming groups lose time. Repatriating dividends and repaying shareholder loans go through the zone’s exchange control framework, and both depend on the inbound investment having been properly declared and documented at the outset. The working rule: what is not documented on the way in is difficult to move on the way out. An untraced intragroup advance or an informal management fee creates a receivable that the local bank cannot settle later.

Choosing the vehicle

Three structures cover most cases, and the trade-off is control against market access.

1. Wholly-owned subsidiary. Full control, simple governance, and the right answer where the value added is proprietary know-how. The cost is that you carry market access, distribution and public procurement risk alone.
2. Joint venture with a local partner. Opens commercial doors, but concentrates every future dispute into the shareholders’ agreement. Qualified majorities, related-party contracts, exit rights and valuation method decide whether the partnership survives its first disagreement — not the equity split.
3. Project company. Ring-fences a single operation and allows security to be granted over a defined perimeter without exposing the wider group. This is the expected structure as soon as external financing joins the table.

Before choosing among these, settle a preliminary question: whether to incorporate locally at all, or to operate through a branch of the South African entity. Under the uniform act the branch is conceived as a transitional presence, expected to be converted into a local company or closed after a limited period — a sequencing tool, not a destination. The comparison in outline:

Where a joint venture is retained, partner selection deserves the same discipline as the legal structuring. Verify the prospective partner’s trade register standing and litigation history, take references from bankers and suppliers rather than from the partner’s own network, and agree in writing what operating role each side plays — negotiating the exit mechanics while relations are good.

Accounting: SYSCOHADA, not IFRS-by-default

Statutory accounts in the zone are prepared under SYSCOHADA. A group used to IFRS reporting will need a mapping between the two from day one — not at the first audit. This matters beyond compliance: local lenders and regional development finance institutions instruct files in the local reference framework, and a projection built on a foreign chart of accounts forces a restatement. Files that require restatement move to the bottom of the queue.

Language is a legal question, not a convenience

Statutes, filings, employment contracts and court proceedings operate in French. The practical consequence is that the authoritative version of every agreement must be identified explicitly, and that a translated shareholders’ agreement without a governing-language clause is an unresolved dispute waiting to happen. Budget for legal translation as a line item, and settle which version prevails before signature.

A workable sequence

Market entry study first — addressable segment, distribution structure, installed competition. Then vehicle choice and shareholders’ agreement, before incorporation rather than after, because negotiating a pact once the company exists means negotiating without leverage. Then incorporation and trade register filing, local bank accounts, and declaration of the inbound investment. Then financing in conditioned tranches, with security already documented. Finally, a reporting framework that satisfies both the local lender and head office.

Treat this sequence as a dependency chain rather than a checklist. The market entry study and partner due diligence can run in parallel; the shareholders’ agreement cannot be finalised until both have landed. Bank account opening and the inbound investment declaration sit on the critical path, because every later flow — capital, equipment, fees — depends on them. Recruitment waits for the vehicle: hiring before incorporation creates employment liabilities with no employer of record.

Once live, the structure needs a governance cadence that survives distance. In practice this means a named local delivery lead, steering reviews at fixed intervals between head office and the local team, milestone-based release of budgets, and a single shared dashboard so that Johannesburg and the field read the same numbers. A written decision log matters more than meeting frequency.

Our market study methodology and our West Africa fundraising guide cover the first and fourth steps in detail.

Why Cabinet Carrée

Cabinet Carrée is a West African advisory firm working on project management, digital transformation, market intelligence and investment file structuring. For an incoming South African group, our contribution sits exactly where these projects usually stall: converting a sound commercial plan into the legal, accounting and banking codes that actually apply on the ground — and staying on to run delivery once the structure is live, as described in our project management guide.

Frequently asked questions

Do we need to operate in French?

Internal management can run in English, but statutes, regulatory filings, employment contracts and court proceedings are in French. Identify the governing language of every agreement before signature, budget for professional legal translation, and make sure at least one senior local hire works comfortably in both languages.

How different is OHADA law from the common law we know?

OHADA is codified civil law: company forms, security interests and insolvency sit in uniform acts shared by seventeen member states, rather than in case law. Outcomes are predictable on paper, but drafting and registration formalities carry more weight than common-law practitioners expect. Local counsel review before signature is not optional.

Can we repatriate dividends and shareholder loan repayments?

Yes, through the zone’s exchange control framework, provided the inbound investment was declared and documented at entry. The CFA franc (XOF) shared by the eight UEMOA states is pegged to the euro, so a rand-based group’s exposure is rand-to-euro. Undocumented intragroup flows are the main practical obstacle.

How do we govern a West African project from Johannesburg?

Through a cadence agreed before launch: a named local delivery lead, steering reviews at fixed intervals with head office, milestone-based budget releases and one shared dashboard. Cabinet Carrée typically acts as the on-the-ground project office that feeds this cadence and escalates early.

Assessing an entry into francophone West Africa? Write to contact@ccarree.com or reach us on WhatsApp for an initial scoping discussion.