WORLD TRADE G/SCM/N/3/SEN/Suppl.1
G/SCM/N/16//SEN/Suppl.1
ORGANIZATION G/SCM/N/25/SEN
21November 1997
(97-5122)
Original: French Committee onSubsidies andCountervailing Measures
SUBSIDIES
Notifications Pursuant toArticle XVI:1 oftheGATT 1994 andArticle 25ofthe
Agreement onSubsidies andCountervailing Measures
SENEGAL
Thefollowing communication, dated 22October 1997, hasbeenreceived fromthePermanent
Mission ofSenegal.
_______________
NOTIFICATIONS OFSUBSIDIES
Pursuant toArticle XVI:1 ofGATT 1994 andArticle 25oftheAgreement onSubsidies and
CountervailingMeasures,Senegalwishestoconfirmthat,asstatedinitsnotificationof20January1997,
ithasabolished direct export subsidies since 1994.
Nevertheless, itstillgrants subsidies under thefollowing regimes:
- Regime forfreezoneexport enterprises;
- Regime forindustrial freezones andfreepoints;
- Regime forenterprises engaging intechnological innovation;
- Regime fordecentralized enterprises;
- Regime forsmall- andmedium-sized enterprises (SMEs);
- Regime forenterprises making useoflocalresources.
Thisnotification provides details onthese various regimes.
Itisunderstood that,pursuant toArticle 25.7oftheAgreement onSubsidies andCountervailing
Measures, thisnotification doesnotprejudge either theconformity ofthese measures, theirnature,
theirlegalstatus, northeireffects inregard toGATT 1994 ortheAgreement mentioned above.
Furthermore, Senegal intends toavailitself oftheprovisions ofArticle 27andAnnex VIIof
theAgreement onSubsidies andCountervailing Measures.G/SCM/N/3/SEN/Suppl.1
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1. Titleofprogramme
Regime forfreezoneexport enterprises.
2. Period covered bythenotification
Thisisafullnotification fortheyear1995 andanupdate fortheyears 1996 and1997.
3. Policy objective and/or purpose
Liketheindustrial freezoneandfreepoint regime thatitistoreplace, theregime offreezone
export enterprises aimstoencourage investment intheexport sector.
Thelegal treatment ofexport enterprises hasbeenunified intheregime governing export
companies, while theapproval procedures havebeeneased.
4. Background andauthority
Thetreatment offreezoneexport enterprises isgoverned by:
- LawNo.95-34of29December1995establishingtheregimegoverningfreezoneexport
enterprises;
- Decree No.96-869 of15October 1996implementing LawNo.95-34 of29December.
5. Form ofthesubsidies
Thisregime offers taxincentives toapproved enterprises.
6. Towhom isassistance provided
Thestatus offreezoneexport enterprise isgranted upon submission ofadossier:
- Toindustrial oragricultural enterprises atleast80percentofwhose turnover is
accounted forbyexports.
Enterprises considered asindustrial enterprises arethose thatprocess products: aproduct is
deemed tohavebeenprocessed when, afterbeing worked, therawmaterial isclassified under anew
customs tariff heading.
Agricultural enterprises arethoseactive inagriculture inthebroad sense, including horticulture,
forestry, livestock raising, fisheries andcultivation.
7. Amount ofthesubsidy
Enterprises admitted totheregime forfreezoneexport enterprises enjoy thefollowing tax
incentives:
- Exemption from thetaxonincome from securities deducted bytheenterprise from
dividends paidout;G/SCM/N/3/SEN/Suppl.1
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- exemption from alltaxes onsalaries paidbytheenterprises and,inparticular, from
theflat-rate employer contribution;
- exemption fromallregistration feesandstamp duties, inparticular, those payable upon
incorporation ofenterprises oramendment oftheirarticles ofassociation;
- exemption from thetrading licence fee,built-up property tax,landtax,andlicence
fees;
- reduction ofcompany taxfrom 35percentto15percent;
- waiver ofallcustoms duties andtaxes anddomestic charges onlocalpurchases;
- waiver ofcustoms taxes andduties andstamp duties oncapital goods, materials, raw
materials andsemi-finished products imported bythefreezoneexport enterprise.
8. Duration ofthesubsidy
Theregime forfreezoneexport enterprises hasbeenestablished forarenewable period of
25years asfrom thedateofimplementation ofthelawinquestion.
9. Statistical data
Notavailable.
1. TitleofProgramme
Industrial freezoneandfreepoint regime.
2. Period covered bythenotification
Thisisafullnotification fortheyear1995 andanupdate fortheyears 1996 and1997.
3. Overall objective and/or purpose oftheregime
Theobjective pursued through theestablishment ofindustrial freezones andfreepoints isto
encourage theestablishment oflabour-intensive export companies.
Thecreation offreepoints isalsopartofthepolicy ofindustrial decentralization.
4. Background andauthority
Theindustrial freezoneregime wascreated byLawNo.74-06 of22April 1974establishing
theDakar industrial freezone, asamended byLawNo.79-21 of24January 1979.
Freepoints were created byLawNo.91-30 of13April 1991.G/SCM/N/3/SEN/Suppl.1
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5. Form oftheSubsidy
Theindustrial freezoneandfreepoint regime offers taxandcustoms benefits toapproved
enterprises.
6. Towhom isthesubsidy granted
Enterprises meeting thefollowing conditions areeligible fortheindustrial freezoneregime:
6.1 They engage inindustrial activities;
6.2 theyexport thebulkoftheiroutput: (atleast60percent);
6.3 service enterprises whose activities complement orfacilitate those ofindustrial
enterprises may, however, beadmitted;
6.4 theymake aninvestment ofatleastCFA100million andemploy atleast100persons.
7. Amount ofthesubsidy
Admission totheindustrial freezoneregime gives risetothefollowing benefits:
- Fulltaxexemption, withtheexception oftaxes andcharges onwages;
- fullexemption from duties andtaxes payable upon importation ofcapital goods,
materials, rawmaterials andfinished orsemi-finished products intended forproduction;
- retention byenterprises ofthetaxdeducted atsource from employee salaries inthe
zone.
8. Duration ofthesubsidy
Theindustrial freezoneregime hasbeenestablished forarenewable period of25years.
9. Statistical data
Notcurrently available.
1. Titleofprogramme
Regime forenterprises engaging intechnological innovation.
2. Notification period
Thisisafullnotification fortheyear1995 andanupdate fortheyears 1996 and1997.
3. Policy objective and/or purpose
ThisregimewasconceivedwithintheframeworkoftheInvestmentCodeandhastwoobjectives:G/SCM/N/3/SEN/Suppl.1
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- Topromote research within Senegal soastoadapt technological progress toourcultural
specificities;
- tofoment theuseoftheresults ofthatresearch bycreating modern production units.
4. Background andauthority
Thisregime wasinstituted byLawNo.87-25 of18August 1987 ontheInvestment Codes,
asamended byLawNo.89-31 of12October 1989.
5. Form ofthesubsidy
Thisregime offers taxincentives totheenterprises admitted toit.
6. Towhom istheassistance granted
Unlike previous arrangements, admission under thepresent Investment Code andhence tothe
regime forenterprises engaging intechnological innovation isautomatic.
Allthatisrequired isthattheapplicant enterprise should beneither atrading company nor
eligible under anyofthespecific codes andthatitmeets thefollowing conditions:
6.1 Itmust beanatural orlegal person, regardless ofnationality, dulyestablished and
operating inSenegal orowning ashare inthecapital ofaSenegalese company.
6.2 Thenatural orlegalperson mustbeengaged inactivities inoneofthefollowing sectors:
(a) Agriculture,fisheriesandlivestockbreeding,activitiesrelatedtotheprocessing,
storage andpackaging ofproducts ofvegetable oranimal origin orfrom
fisheries;
(b) manufacturing, whether production orprocessing;
(c) mineral oreprospecting, mining orprocessing;
(d) tourism: tourist planning andindustries andother hotel activities;
(e) cultural activities carried onbysmall- ormedium-sized enterprises (SMEs);
(f) provision ofservices byanSME inthesubsectors ofhealth, education, and
assembly ormaintenance ofindustrial equipment.
6.3 Theproject mustbeatleast20percentfinanced byequity assets inthecaseofSMEs
and30percentforother enterprises.
Entities considered tobeSMEs arethose whose investment programmes range
between CFA 5and200million, andhaving three ormore permanent Senegalese
employees.G/SCM/N/3/SEN/Suppl.1
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6.4 Theenterprise mustinvest atleast1percentofitsturnover inresearch orinutilizing
theresults ofresearch conducted bySenegalese entities orresearchers.
7. Amount ofthesubsidy
Three types ofincentives aregranted under theregime forcompanies engaging intechnological
innovation:
7.1 Investment-related incentives, intheform of:
- Exemption from duties andtaxes onimports ofmaterials andrawmaterials
neither produced normanufactured inSenegal andintended specifically for
production oruseunder theapproved programme;
- exemption fromvalue added taxcharged bylocalsuppliers ofgoods, services
andlabour needed toimplement theapproved programme;
- exemption from import duties andtaxes (including VAT) onutility vehicles
coming under theapproved investment programme.
7.2 Operational incentives, intheform of:
- Thewaiver ofregistration feesforconveyances oflandandbuildings necessary
totheexecution oftheapproved programme;
- thewaiver offeesapplicable todeeds ofcompany incorporation andcapital
increases under theapproved programme;
- thewaiver ofregistration feesforthetransfer ofbusiness enterprises;
- exemption from theflat-rate employer contribution;
- permission toretain theequivalent value oftaxes andcharges deducted from
salaries asajob-creation subsidy.
7.3 Other specific advantages:
- Exemption from theminimum flat-rate tax;
- exemption from trade licence fees(Areas B,C,D).
8. Duration ofthesubsidy
8.1 Theinvestment-related benefits haveamaximum duration oftwoyears forSMEs and
three years forlarge enterprises.
8.2 Theduration ofoperational incentives varies withtheareainwhich theapproved project
isimplemented:
- Area A(cityofDakar andsurroundings): fiveyears;G/SCM/N/3/SEN/Suppl.1
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- AreaB(remainder oftheDakar region andtheentire region ofThiès): seven
years;
- Area C(theregions ofDiourbel, Louga andKaolack): tenyears;
- AreaD(regions ofSaint-Louis, Fatick, Tambacounda, Kolda andZiguinchor):
12years.
8.3 Other specific advantages:
Theduration ofthese advantages varies according totheareainwhich the
programme isimplemented:
- Area A:fiveyears;
- Area B:fouryears;
- Area C:tenyears;
- Area D:12years.
Furthermore, these exemptions aredegressive overthelastthree years: they
arereduced to75percentduring thethirdyearbefore theendoftheapproved period,
50percentduring thepenultimate year, and25percentforthelastyear.
9. Statistical data
Notcurrently available.
1. Titleofsubsidy regime
Regime fordecentralized enterprises.
2. Notification period
Thisisafullnotification fortheyear1995 andanupdate fortheyears 1996 and1997.
3. Policy objective and/or purpose
Thisregime wasestablished within theframework oftheInvestment Code andaimstodeploy
economic activity throughout thedifferent regions ofthecountry bysupporting integrated regional
development plans.
4. Background andauthority
Thisregime wasinstituted byLawNo.87-25 of19August 1987 ontheInvestment Code,
asamended byLawNo.89-31 of12October 1989.G/SCM/N/3/SEN/Suppl.1
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5. Form ofthesubsidy
Thisregime offers taxincentives toapproved enterprises.
6. Towhom isthesubsidy provided
Unlike previous arrangements, admission under thepresent Investment Code andhence tothe
regime fordecentralized companies isautomatic.
Allthatisrequired isthattheapplicant enterprise should beneither atrading company nor
eligible under anyofthespecific codes andthatitmeets thefollowing conditions:
6.1 Itmust beanatural orlegal person, regardless ofnationality, dulyestablished and
operating inSenegal orowning ashare inthecapital ofaSenegalese company.
6.2 Thenatural orlegalperson mustbeengaged inactivities inoneofthefollowing sectors:
(a) Agriculture,fisheriesandlivestockbreeding,activitiesrelatedtotheprocessing,
storage andpackaging ofproducts ofvegetable oranimal origin orfrom
fisheries;
(b) manufacturing, whether production orprocessing;
(c) mineral oreprospecting, mining orprocessing;
(d) tourism: tourist planning andindustries andother hotel activities;
(e) cultural activities carried onbysmall- ormedium-sized enterprises (SMEs);
(f) health, education andassembly ormaintenance ofindustrial equipment.
6.3 Theproject mustbeleast20percentfinanced byequity assets inthecaseofSMEs
and30percentforother enterprises.
Entities considered tobeSMEs arethose whose investment programmes range
between CFA 5and200million, andhaving three ormore permanent Senegalese
employees.
6.4 Atleast90percentofthestaffoftheenterprise mustwork inlocalities outside Area A
(see8.2fordescription ofareas).
7. Amount ofthesubsidy
Twotypes ofincentives aregranted under theregime fordecentralized enterprises:
7.1 Investment-related incentives, intheform of:
- Exemption from duties andtaxes onimports ofmaterials andrawmaterials
neither produced normanufactured inSenegal andintended specifically for
production oruseunder theapproved programme;G/SCM/N/3/SEN/Suppl.1
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- exemption fromvalue added taxcharged bylocalsuppliers ofgoods, services
andlabour needed toimplement theapproved programme;
- exemption from import duties andtaxes (including VAT) onutility vehicles
coming under theapproved investment programme.
7.2 Operational incentives, intheform of:
- Thewaiver ofregistration feesforconveyances oflandandbuildings necessary
totheexecution oftheapproved programme;
- thewaiver offeesapplicable todeeds ofcompany incorporation andcapital
increases under theapproved programme;
- thewaiver ofregistration feesforthetransfer ofbusiness enterprises;
- exemption from theflat-rate employer contribution;
- permission toretain theequivalent value oftaxes andcharges deducted from
salaries asajob-creation subsidy.
8. Duration ofthesubsidy
8.1 Theduration ofinvestment-related benefits corresponds tothestart-up period, that
is,thetimebetween approval andthelaunch oftheactivity approved. Itmaynot,
however, exceed twoyears forSMEs andthree years forlarge enterprises.
8.2 Theduration ofoperational incentives varies withtheareainwhich theapproved project
isimplemented:
- Area A(cityofDakar andsurroundings): fiveyears;
- AreaB(remainder oftheDakar region andtheentire region ofThiès): seven
years;
- Area C(theregions ofDiourbel, Louga andKaolack): tenyears;
- AreaD(regions ofSaint-Louis, Fatick, Tambacounda, Kolda andZiguinchor):
12years.
9. Statistical data
Notcurrently available.
1. Titleofprogramme
Preferential regime forsmall- andmedium-sized enterprises (SMEs).G/SCM/N/3/SEN/Suppl.1
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2. Notification period
Thisisafullnotification fortheyear1995 andanupdate fortheyears 1996 and1997.
3. Policy objective and/or purpose
Thisregime wasconceived within theframework oftheInvestment Code inorder toattract
bothforeign andlocalinvestors, andfavours thecreation ofSMEs. Thetwomain strong points of
SMEs are:
- Their capacity tocreate more jobs;
- theirflexibility, which enables themtoadapt more easily tochanging business cycles
anddemand, aswellastoassimilate newtechnologies.
4. Background andauthority
This regime isoneofthefour preferential regimes instituted byLaw No.87-25 of
18August 1987 ontheInvestment Code, asamended byLawNo.89-31 of12October 1989.
5. Form ofthesubsidy
Taxincentives.
6. Towhom andhowassistance isprovided
Unlike previous arrangements, admission under thepresent Investment Code andhence tothe
regime forSMEs isautomatic.
Thefollowing conditions must besatisfied:
6.1 Theapplicant must beanatural orlegal person, regardless ofnationality, duly
established andoperating inSenegal orowning ashare inthecapital ofaSenegalese
company.
6.2 Thenatural orlegalperson mustbeengaged inactivities inoneofthefollowing sectors:
(a) Agriculture,fisheriesandlivestockbreeding,activitiesrelatedtotheprocessing,
storage andpackaging ofproducts ofvegetable oranimal origin orfrom
fisheries;
(b) manufacturing, whether production orprocessing;
(c) mineral oreprospecting, mining orprocessing;
(d) tourism: tourist planning andindustries andother hotel activities;
(e) cultural activities carried outbySMEs;
(f) health, education, orassembly ormaintenance ofindustrial equipment.G/SCM/N/3/SEN/Suppl.1
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Notrading enterprise (purchasing goods forresale inthesame state) norany
enterprise eligible forbenefits under aspecific codemaybegranted approval under
theCode ofInvestments.
6.3 Theenterprise must beanSME, thatis,anenterprise thatmeets allthefollowing
conditions:
(a) Itmusthaveaninvestment planworth between CFA 5million andCFA 200
million, excluding recoverable VAT.
(b) itmust havethree ormore permanent Senegalese employees.
6.4 Theproject must beatleast20percentfinanced byequity assets.
7. Amount ofthesubsidy
Three types ofincentives aregranted under theregime forSMEs:
7.1 Investment-related incentives, intheform of:
- Exemption from duties andtaxes onimports ofmaterials andrawmaterials
neither produced normanufactured inSenegal andintended specifically for
production oruseunder theapproved programme;
- exemption fromvalue added taxcharged bylocalsuppliers ofgoods, services
andlabour needed toimplement theapproved programme;
- exemption from import duties andtaxes (including VAT) onutility vehicles
coming under theapproved investment programme.
7.2 Operational incentives, intheform of:
- Thewaiver ofregistration feesforconveyances oflandandbuildings necessary
totheexecution oftheapproved programme;
- thewaiver offeesapplicable todeeds ofcompany incorporation andcapital
increases under theapproved programme;
- thewaiver ofregistration feesforthetransfer ofbusiness enterprises;
- exemption from theflat-rate employer contribution;
- permission toretain theequivalent value oftaxes andcharges deducted from
salaries asajob-creation subsidy.
7.3 Other specific advantages:
- Exemption from theminimum flat-rate tax;
- exemption from trade licence fees(Areas B,C,D).G/SCM/N/3/SEN/Suppl.1
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8. Duration ofthesubsidy
8.1 Theduration ofinvestment-related benefits corresponds tothestart-up period, that
is,thetimebetween approval andthelaunch oftheactivity approved. Itmayinno
case, however, exceed twoyears.
8.2 Theduration ofoperational incentives varies withtheareainwhich theapproved project
isimplemented.
- Area A(cityofDakar andsurroundings): fiveyears;
- AreaB(remainder oftheDakar region andtheentire region ofThiès): seven
years;
- Area C(theregions ofDiourbel, Louga andKaolack): tenyears;
- AreaD(regions ofSaint-Louis, Fatick, Tambacounda, Kolda andZiguinchor):
12years.
8.3 Other specific advantages.
Theduration ofthese advantages varies according totheareainwhich the
programme isimplemented:
- Area A:fiveyears;
- Area B:fouryears;
- Area C:tenyears;
- Area D:12years.
Furthermore, these exemptions aredegressive overthelastthree years: they
arereduced to75percentduring thethirdyearbefore theendoftheapproved period,
50percentduring thepenultimate yearandto25percentforthelastyear.
9. Statistical data
Notcurrently available.
1. Titleofprogramme
Regime forenterprises making useoflocalresources.
2. Notification period
Thisisafullnotification fortheyear1995 andanupdate fortheyears 1996 and1997.G/SCM/N/3/SEN/Suppl.1
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3. Policy objective and/or purpose
Thisregime wasconceived within theframework oftheInvestment Code andaimsnotonly
toattract investors byoffering them taxincentives, butalsotoencourage theprocessing oflocalraw
materials.
Such increased processing oflocalrawmaterials should raisethelevelandenhance themix
ofnational economic activity, andatthesame timestrengthen ourfinancial position inrelation tothe
outside world.
4. Background andauthority
Thisregime wasinstituted byLawNo.87-25 of19August 1987 ontheInvestment Code,
asamended byLawNo.89-31 of12October 1989.
5. Form ofthesubsidy
Thisregime offers taxincentives totheapproved enterprises.
6. Towhom istheassistance provided
Unlikepreviousarrangements,approvalunderthepresentInvestmentCodeandhenceadmission
totheregime forenterprises making useoflocalresources isautomatic. Theapplicant enterprise must
notbeatrading company, noreligible under anyofthespecific codes, andmustmeetthefollowing
conditions:
6.1 Itmust beanatural orlegal person, regardless ofnationality, dulyestablished and
operating inSenegal orowning ashare inthecapital ofaSenegalese company.
6.2 Thenatural orlegalperson mustbeengaged inactivities inoneofthefollowing sectors:
(a) Agriculture,fisheriesandlivestockbreeding,activitiesrelatedtotheprocessing,
storage andpackaging ofproducts ofvegetable oranimal origin orfrom
fisheries;
(b) manufacturing, whether production orprocessing;
(c) mineral oreprospecting, mining orprocessing;
(d) tourism: tourist planning andindustries andother hotel activities;
(e) cultural activities carried outbyanSME;
(f) health, education, orassembly ormaintenance ofindustrial equipment.
6.3 Theproject mustbeleast20percentfinanced byequity assets inthecaseofSMEs
and30percentforother enterprises.
Entities considered asSMEs arethose withinvestment programmes ranging
betweenCFA5and200million,andhavingthreeormorepermanentSenegaleseemployees.G/SCM/N/3/SEN/Suppl.1
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6.4 Sixty-five percentofthevalue ofintermediate inputs mustbeofSenegalese origin,
orthecostofimported inputs must notexceed 35percentofthetotalcostofthe
product obtained afterprocessing.
7. Amount ofthesubsidy
Three types ofincentives aregranted under theregime forenterprises making useoflocal
resources:
7.1 Investment-related incentives, intheform of:
- Exemption from duties andtaxes onimports ofmaterials andrawmaterials
neither produced normanufactured inSenegal andintended specifically for
production oruseunder theapproved programme;
- exemption fromvalue added taxcharged bylocalsuppliers ofgoods, services
andlabour needed toimplement theapproved programme;
- exemption from import duties andtaxes (including VAT) onutility vehicles
coming under theapproved investment programme.
7.2 Operational incentives, intheform of:
- Thewaiver ofregistration feesforconveyances oflandandbuildings necessary
totheexecution oftheapproved programme;
- thewaiver offeesapplicable todeeds ofcompany incorporation andcapital
increases under theapproved programme;
- thewaiver ofregistration feesforthetransfer ofbusiness enterprises;
- exemption from theflat-rate employer contribution;
- permission toretain theequivalent value oftaxes andduesdeducted from
salaries asajob-creation subsidy.
7.3 Other specific advantages:
- Exemption from theminimum flat-rate tax;
- exemption from trade licence fees(Areas B,C,D).
8. Duration ofthesubsidy
8.1 Theduration ofinvestment-related benefits corresponds tothestart-up period, that
is,thetimebetween approval andthelaunch oftheactivity approved. Itmaynot,
however, exceed twoyears forSMEs andthree years forlarge enterprises.
8.2 Theduration ofoperational incentives varies withtheareainwhich theapproved project
isimplemented:G/SCM/N/3/SEN/Suppl.1
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- Area A(thecityofDakar andsurroundings): fiveyears;
- AreaB(remainder oftheDakar region andtheentire region ofThiès): seven
years;
- Area C(theregions ofDiourbel, Louga andKaolack): tenyears;
- AreaD(regions ofSaint-Louis, Fatick, Tambacounda, Kolda andZiguinchor):
12years.
8.3 Other specific advantages.
Theduration ofthese advantages varies according totheareainwhich the
programme isimplemented:
- Area A:fiveyears;
- Area B:fouryears;
- Area C:tenyears;
- Area D:12years.
Furthermore, these exemptions aredegressive overthelastthree years: they
arereduced to75percentduring thethirdyearbefore theendoftheapproved period,
50percentduring thepenultimate yearandto25percentforthelastyear.
9. Statistical data
Noenterprise hasbeenapproved under thisregime.