Startup law, fundraising and venture investment
A startup in Cameroon is built on the same OHADA company law as any other business, with one difference: its investors expect instruments designed in Delaware. Most of them can be made to work here, but not by copying the American template.
The vehicle
The SAS, introduced by the 2014 revision of the Uniform Act on Commercial Companies, is the usual form for a venture-backed company. It has no minimum capital, its governance is set by the articles rather than by statute, and it can issue preference shares and compound securities such as convertible notes and share warrants. An SARL cannot, which is why a startup that began as an SARL usually converts before its first priced round.
SAFEs, convertible notes and term sheets
A SAFE is an American instrument: an investor pays now for the right to receive shares at a later priced round, at a discount or subject to a valuation cap. OHADA law does not know it by name, and three of its rules get in the way of a literal copy. Shares cannot be issued below their nominal value. A capital increase requires a shareholder decision and, for an SA, a notarized record. Existing shareholders hold a preferential subscription right that must be waived for the investor.
The firm structures the same economics in a form the registry will accept: as a shareholder current-account advance with a conversion undertaking, as convertible notes issued by an SAS or SA, or as a subscription agreement with deferred pricing. The term sheet, the shareholders' agreement and the articles are then drafted together, so that liquidation preferences, anti-dilution protection, vesting, drag-along and tag-along rights and board composition are enforceable under the Uniform Act rather than merely written down.
Foreign investors and exchange control
Cameroon is part of the CEMAC monetary zone. Under Regulation No. 02/18/CEMAC/UMAC/CM of 21 December 2018, foreign direct investment must be declared to the Ministry of Finance, and inbound funds and outbound dividends, interest and sale proceeds pass through the banking system under exchange-control rules. A round that ignores the declaration is difficult to repatriate later. Approval of the Minister of Trade is required where foreign ownership becomes a majority.
Intellectual property
A startup's value is usually its trademark, its software and its name. Trademarks, patents and designs are registered through OAPI in Yaounde, with one filing covering seventeen States. Software is protected by copyright without registration, but the code written by founders and contractors belongs to them, not to the company, until it is assigned in writing. Investors check for that assignment before they check anything else.
The tax regime for innovative startups
Article 124 ter of the General Tax Code, introduced by the 2021 Finance Law, created a dedicated regime for innovative startups in information and communication technology that are attached to an approved management center (centre de gestion agréé) set up for startups.
| Phase | Duration | Treatment |
|---|---|---|
| Incubation | Up to five years | Exemption from all taxes, duties and fees, except social security contributions |
| Post-incubation | Five years | Exemption from the business license tax and from registration duties on capital increases; corporate income tax at 15%; 50% reduction of the advance payment and minimum tax; 30% tax credit on research and innovation spending, capped at 100 million FCFA; tax on dividends and interest at 5%; tax on the gain from a sale of the startup at 10% |
| Afterward | Ordinary regime |
Two later texts matter alongside it. The 2023 Finance Law, Law No. 2022/020 of 27 December 2022, reduced the corporate income tax rate to 25% for companies with revenue below 1 billion FCFA, which covers most startups that fall outside Article 124 ter. The 2026 Finance Law, Law No. 2025/012 of 17 December 2025, exempts equipment imported for startup development from customs duties and taxes, and introduced a 20% tax credit for the training and hiring of young graduates. Startups in every sector can also apply under the general investment incentives regime, Law No. 2013/004 of 18 April 2013 as amended by Ordinance No. 2025/002 of 18 July 2025.
Our work includes
- Founder agreements, vesting and the division of equity before incorporation
- SAS formation, articles designed for future rounds, and conversion of an SARL into an SAS
- SAFEs, convertible notes and bridge financing structured under the Uniform Act
- Term sheets, subscription agreements and shareholders' agreements for seed and Series A rounds
- Preference shares, share warrants and employee equity plans
- Foreign investment declarations and exchange-control compliance under CEMAC rules
- Assignment of intellectual property from founders and contractors to the company, and OAPI filings
- Application for the Article 124 ter regime, and the tax structuring of a round or an exit
- Data protection compliance under Law No. 2024/017, terms of service and privacy policies
- Sale of the company, and the tax and exchange-control treatment of the proceeds
Before the first investor
Three things decide whether a round closes on time: the founders' equity and vesting being written down, the code and the brand being assigned to the company, and the SAS articles being drafted for the round rather than copied from a template. All three can be settled before the first term sheet arrives.
Related practice areas
Speak with an attorney
Enonchong Chambers meets with clients at its offices at 305 rue Alfred Saker in Akwa, Douala. Correspondence in English or French is answered in the language it was written in.