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4.1. Domestic PE of a Foreign Entity

The definition of permanent establishment was amended by the Finance Law 2018. Under the new definition, a non-resident person is deemed to have a permanent establishment in DRC if such person:

  • has in DRC a material installation, including a head office, branch, plant or other manufacturing facility, agency, shop, offices, laboratory, sales or purchase office, warehouse, real estate (to the extent it rents it out), mine, oil or gas well, quarry or any other place of extraction of natural resources, or any other fixed and permanent installation with a productive nature;
  • does not have such a material installation but directly exercises under its own name a professional activity in DRC for a period of 6 months or more;
  • performs services, including consulting services, through employees or other personnel engaged for those purposes, but only if activities of this nature continue for a period or periods aggregating more than 6 months in any 12-month period;
  • engages in business through an agent, other than an agent of independent status, provided the agent either (a) has and habitually exercises the power to conclude contracts in the name of the foreign enterprise, or (b) failing such authority, maintains a stock of goods for the enterprise and habitually delivers such goods to customers; or
  • being an insurance company, collects premiums or insures risks in DRC, except in the case of reinsurance, through an agent other than an agent of independent status.

A non-resident person is not deemed to have a permanent establishment in DRC for the mere reason of conducting business therein through an agent of independent status, such as a general commission agent, provided the agent acts in the ordinary course of his business. However, an agent is not considered to be of independent status if the agent acts exclusively or almost exclusively for the account of the non-resident principal, and the conditions agreed or imposed in the financial and commercial relations between the agent and the principal differ from the conditions which would have been agreed between two independent enterprises.