Financial Preparation

• Determine your total investment budget (property + transaction costs + reserves)
• Establish a currency exchange strategy (XOF is pegged to the Euro)
• Research historical USD/EUR to XOF exchange rates to identify favorable timing
• Set up international wire transfer capabilities with your home bank
• Consider opening a bank account in Burkina Faso or a regional financial center
• Evaluate tax implications in both Burkina Faso and your home country
• Prepare for primarily cash-based transactions, as financing options are limited

Market Research

• Identify target cities based on investment goals (capital growth vs. rental yield)
• Research neighborhood-specific price trends and rental demand
• Connect with expatriate communities for insights on rental markets
• Analyze infrastructure projects and urban development plans
• Research tenant demographics and rental preferences in target areas
• Plan a preliminary market visit to evaluate areas firsthand
• Review security considerations for different regions and neighborhoods

Professional Network Development

• Connect with attorneys specializing in real estate transactions for foreign clients
• Identify reputable real estate agents with experience in your target areas
• Research property management companies in your target market
• Establish contact with currency exchange specialists familiar with West Africa
• Find a local tax accountant familiar with international investor concerns
• Connect with building contractors for property inspections and renovations
• Develop relationships with other foreign investors with experience in the market

Expert Tip: Burkina Faso’s real estate market is still developing, with limited online resources and market data compared to North American standards. Personal visits and connections with local professionals are especially important for gathering accurate information. Consider spending at least 2-3 weeks in your target city to understand neighborhoods, prices, and market dynamics before making investment decisions.

Recent Development: The Burkina Faso government has been working to streamline business registration processes, with recent improvements reducing the time required to establish a company. The Centre de Formalités des Entreprises (CEFORE) now serves as a one-stop shop for business registration, though foreign investors may still face additional requirements and verification steps compared to domestic entities.

Banking Setup

• Local Bank Account Options:
  • Local Burkinabe banks: Coris Bank, Bank of Africa, Ecobank
  • Regional banks with local presence: Societe Generale, BCEAO, Atlantic Bank
  • Documentation typically required: Passport, proof of address, business documentation if applicable
  • Note: Opening a bank account as a non-resident can be challenging and time-consuming
• Alternative Approaches:
  • Using attorney trust accounts for transactions
  • Establishing accounts in neighboring countries with better banking infrastructure
  • Utilizing international money transfer services for payments
  • Working with property management companies that can handle local financial matters
• Currency Considerations:
  • The West African CFA Franc (XOF) is pegged to the Euro
  • Currency regulations may limit large transfers without documentation
  • Foreign currency accounts may be available at some banks

Financing Options

Financing options in Burkina Faso are significantly more limited than in North American markets:

1. Local Mortgage Options:
   • Availability: Very limited for foreign investors without local income or extensive history
   • Interest Rates: Typically high, often 10-15% for real estate loans
   • Term Length: Shorter than North American standards, often 5-15 years
   • Down Payment: Substantial, typically 30-50% of property value
2. Developer Financing:
   • Some larger developers may offer payment plans
   • Terms vary widely and typically involve higher effective costs
   • More common for new developments and pre-construction purchases
3. Home Country Financing:
   • Refinancing existing properties in North America
   • Home equity lines of credit (HELOCs)
   • Unsecured loans for smaller investments
   • Generally more favorable terms than local financing

Most foreign investors utilize cash purchases, either from liquid assets or secured against properties in their home countries. The limited availability of local financing makes Burkina Faso primarily a market for investors with available capital rather than those seeking leveraged investments.

Currency Management

Effective currency management is crucial for investments in Burkina Faso:

• Exchange Rate Considerations:
  • Monitor EUR/USD trends to identify favorable windows for converting to XOF
  • Consider working with currency specialists offering competitive rates
  • Plan for currency transfer timing to optimize exchange rates
• Transfer Methods:
  • International wire transfers through established banks
  • Specialized currency exchange services for better rates
  • Documented transfers to satisfy both origin and destination countries’ regulations
• Repatriation Planning:
  • Understand regulations for moving funds out of Burkina Faso
  • Maintain documentation to demonstrate the legitimate source of funds
  • Consider timing of transfers to optimize exchange rates

The banking system in Burkina Faso is less developed than North American standards, with limited electronic banking options and potential bureaucratic challenges. However, the West African Economic and Monetary Union (WAEMU) provides a relatively stable currency framework pegged to the Euro, which offers some protection against extreme currency volatility.

Property Search Resources

• Online Property Platforms:
  • Limited online listings compared to developed markets
  • Some regional websites with properties in Burkina Faso
  • Social media groups and expatriate forums
  • Note: Online listings may not represent the full market
• Real Estate Agents:
  • Local agencies in major cities, particularly Ouagadougou and Bobo-Dioulasso
  • Limited professional licensing or regulation compared to North America
  • Varying levels of experience with international clients
  • Often work on a more informal basis than North American counterparts
• Direct Networking:
  • Expatriate communities and business associations
  • Local chambers of commerce
  • Embassy and consulate connections
  • University and business networks
• Property Developers:
  • Direct contact with developers for new projects
  • Growing number of formal development companies in urban areas
  • Option for pre-construction purchases in some developments

Property Viewing Trip Planning

A property viewing trip to Burkina Faso requires careful preparation:

1. Pre-Trip Research:
   • Gather as much information as possible before arrival
   • Make contacts with agents and property sources
   • Schedule meetings with professional advisors (attorney, accountant)
   • Research visa requirements and security considerations
2. Trip Logistics:
   • Plan for at least 10-14 days in country
   • Arrange reliable local transportation
   • Consider hiring a local guide/translator if needed
   • Book accommodations in neighborhoods you’re considering
3. During Viewings:
   • Document properties thoroughly with photos and notes
   • Check utilities and infrastructure in the area
   • Visit at different times of day to assess neighborhood
   • Speak with neighbors and local businesses if possible
   • Check proximity to essential services and amenities
4. Local Assistance:
   • Consider hiring a local property advisor
   • Engage a reputable attorney early in the process
   • Seek introductions to reliable contractors for renovation estimates
   • Meet with potential property managers

Property Evaluation Criteria

Assess potential investments using these key criteria:

• Location Factors:
  • Proximity to major roads and transport infrastructure
  • Walking distance to markets, shops, and essential services
  • Accessibility during rainy season (flooding considerations)
  • Security of the neighborhood and surrounding areas
  • Proximity to employment centers, embassies, or institutions
• Property Quality:
  • Construction quality and materials used
  • Age and condition of the building
  • Water supply reliability and quality
  • Electrical systems and backup power
  • Security features (walls, gates, guards)
  • Potential maintenance or renovation requirements
• Rental Potential:
  • Current rental rates for similar properties
  • Target tenant demographic (expatriates, locals, students)
  • Typical rental terms and payment practices
  • Seasonal variations in demand
  • Furnished vs. unfurnished rental options
• Financial Considerations:
  • Price relative to comparable properties
  • Potential for value appreciation
  • Ongoing maintenance costs
  • Tax implications
  • Exit strategy feasibility

Expert Tip: Security considerations are particularly important in Burkina Faso. Research neighborhoods carefully, as conditions can vary significantly even within cities. Properties in established areas with good security infrastructure (walls, gates, guards) tend to command premium rental rates, especially among expatriate tenants who often have specific security requirements from their employers or organizations.

Legal Due Diligence

• ✓
  Title Verification: Confirm legitimate ownership and absence of competing claims
• ✓
  Land Registry Search: Verify registered boundaries and status at local land registry
• ✓
  Tax Status Verification: Confirm all property taxes and fees are current
• ✓
  Development Permissions: Verify building permits and compliance with zoning
• ✓
  Encumbrance Check: Confirm absence of liens, mortgages, or other claims
• ✓
  Utility Connections: Verify legal connections to electricity, water, and sewage
• ✓
  Environmental Assessment: Check for flooding risks or environmental issues
• ✓
  Seller Verification: Confirm seller’s identity and authority to sell

Physical Due Diligence

• ✓
  Property Inspection: Hire qualified local builder/engineer to inspect the property
• ✓
  Structural Assessment: Evaluate foundation, walls, roof for defects
• ✓
  Electrical Systems: Test electrical installations and capacity
• ✓
  Water Systems: Check water supply, pressure, storage, and quality
• ✓
  Boundary Verification: Physically verify property boundaries match documentation
• ✓
  Environmental Factors: Check drainage, soil condition, and potential hazards
• ✓
  Security Features: Assess walls, gates, windows, doors for security adequacy
• ✓
  Renovation Assessment: Get detailed quotes if improvements are needed

Financial Due Diligence

• ✓
  Comparable Market Analysis: Compare with similar property prices in the area
• ✓
  Rental Market Research: Verify realistic rental income expectations
• ✓
  Tax Calculation: Estimate all applicable taxes and ongoing costs
• ✓
  Cash Flow Analysis: Create detailed income and expense projections
• ✓
  Insurance Costs: Get quotes for property insurance coverage
• ✓
  Utility Costs: Estimate typical utility expenses based on local rates
• ✓
  Management Costs: Get quotes from property management companies
• ✓
  Transaction Costs: Calculate all purchase and eventual sale costs

Expert Tip: The land titling system in Burkina Faso has been modernizing but still presents challenges. Many properties, especially in rural areas, may have customary rights rather than formal titles. In urban areas, ensure the property has a proper title deed (titre foncier) registered with the Ministry of Housing and Urban Planning. Properties with clear, documented title history command significant premium but offer much greater security for foreign investors.

Offer and Negotiation

1. Initial Offer: Typically verbal or through simple written document
2. Negotiation: Often more flexible and extended than in North American markets
3. Preliminary Agreement: May involve a basic written agreement
4. Deposit: Small initial deposit may be made to show commitment

Unlike North American markets, initial agreements in Burkina Faso may be less formalized. Verbal commitments and handshake agreements are still common in some contexts, though formal written agreements are becoming standard practice, especially in urban areas and for higher-value properties. Having a local attorney involved from the beginning of negotiations is highly advisable for foreign buyers.

Legal Process

1. Engage Attorney: Hire a local real estate attorney to handle documentation
2. Documentation Review:
   • Title verification
   • Boundary confirmation
   • Tax clearance checks
3. Sale Agreement Preparation:
   • Formal written contract detailing all terms
   • May require notarization
   • Should include all contingencies and conditions
4. Payment Process:
   • Usually involves substantial deposit at agreement signing
   • Final payment at transfer of title
   • Payments often made through attorney trust accounts
5. Title Transfer:
   • Registration with land registry
   • Payment of applicable taxes and fees
   • Issuance of new title certificate
6. Final Documentation:
   • Receipt of all ownership documents
   • Utility transfer documentation
   • Tax payment receipts

The timeframe from offer acceptance to completion typically ranges from 2-6 months, depending on property details, location, and complexity. The process can be slower in rural areas or for properties with less clear documentation. Foreign buyers should anticipate additional verification steps compared to local purchasers.

Transaction Costs

Budget for these typical transaction expenses:

• Registration Fees: Approximately 8% of property value
• Notary Fees: 1-2% of property value
• Legal Fees: 1-3% of property value for attorney services
• Property Transfer Tax: Around 8% of property value
• Stamp Duty: Minor fixed fee on documents
• Agent Commission: 3-5% if using a real estate agent
• Currency Exchange Costs: Varies by provider (1-3% spread)

Total transaction costs for foreign investors typically range from 12-18% of the purchase price, with taxes and registration fees representing the largest components. These costs should be factored into your overall investment calculations. Cash transactions remain common, though wire transfers through banking institutions are increasingly used for larger transactions, especially with foreign buyers.

Expert Tip: Consider establishing a Power of Attorney for a trusted local representative if you cannot be present for all steps of the transaction process. This should be properly notarized in your home country and may require legalization by the Burkina Faso embassy. Having a local representative who can act on your behalf can significantly streamline the process, especially given that some administrative procedures may require in-person appearances and documentation that’s only available locally.

Administrative Tasks

• ✓
  Property Registration: Ensure the transfer is properly registered with local authorities
• ✓
  Tax Registration: Register with tax authorities for property tax purposes
• ✓
  Utility Transfers: Transfer utilities to your name or management company
• ✓
  Insurance: Arrange property insurance coverage
• ✓
  Neighborhood Registration: In some areas, inform local neighborhood authorities
• ✓
  Security Arrangements: Set up security systems or guard services if needed
• ✓
  Management Setup: Establish property management arrangements

Property Improvements

Consider these common improvement needs for newly acquired properties:

• Security Enhancements:
  • Perimeter walls and secure gates
  • Security lighting systems
  • Window grilles and reinforced doors
  • Security alarm systems (where available)
• Utility Upgrades:
  • Water storage systems and pumps
  • Backup power generation (critical in areas with inconsistent power)
  • Solar power installation for stable electricity
  • Air conditioning and climate control systems
• Rental Preparation:
  • Furnishings (if targeting expatriate market)
  • Kitchen appliances and fixtures
  • Internet and telecommunications setup
  • General decoration and finishing

Renovations and improvements should be carefully managed, ideally with oversight from a trusted local contractor or property manager. Material costs can be high for imported items, but local labor costs are generally lower than in North America. Quality control is essential, particularly for infrastructure elements like electrical and plumbing systems.

Record Keeping

Maintain comprehensive records for tax and legal purposes:

• Property Documents:
  • Purchase contracts and transfer documents
  • Title certificate and registration documents
  • Property surveys and boundary documentation
  • Building permits and approvals
  • Insurance policies
• Financial Records:
  • All property-related expenses with receipts
  • Tax payment receipts
  • Utility bills and payment records
  • Renovation and improvement costs
  • Rental income records
  • Currency exchange documentation
• Tenant Information:
  • Rental agreements and lease documents
  • Tenant identification and contact information
  • Property condition reports
  • Maintenance requests and resolutions

Keep duplicate copies of all important documents in both your home country and with your local representative or property manager in Burkina Faso. Digital copies are also recommended for additional backup. Proper record-keeping is especially important for foreign investors who may need to demonstrate compliance with both Burkina Faso and home country regulations.

Expert Tip: Consider installing backup systems for essential utilities. Reliable water supply and electricity can be inconsistent in some areas, particularly during the rainy season. Investment in water storage tanks, backup generators, or solar power systems can significantly enhance property value and rental appeal, especially for expatriate tenants who often require these amenities. These improvements typically offer good return on investment through higher rental rates and reduced vacancy periods.

Burkina Faso Tax Obligations

• Property Transfer Tax:
  • Approximately 8% of property value
  • Due at time of property transfer
  • Typically paid by the buyer
• Property Tax:
  • Annual tax based on property value
  • Typically around 0.1% of taxable amount
  • Due annually to local tax authorities
• Rental Income Tax:
  • Income tax on rental profits at progressive rates
  • Rates range from 2-30% based on income level
  • Filed annually with tax authorities
• Capital Gains Tax:
  • Tax on property sale profits
  • Rate of approximately 10% on real property gains
  • Due after property sale
• Value Added Tax (VAT):
  • Standard rate of 18%
  • May apply to certain property-related services

Home Country Tax Obligations

The complexity of international taxation requires professional guidance. Consult with tax advisors familiar with both your home country’s tax system and Burkina Faso’s requirements to ensure compliance and optimize your tax position. Note that while France and Burkina Faso have a double taxation agreement, no such comprehensive agreements exist with the U.S. or Canada, which may create additional complexity.

Tax Planning Strategies

• Entity Structure: Consider whether personal ownership, company structure, or other arrangements optimize your tax position
• Expense Documentation: Maintain meticulous records of all allowable expenses to maximize deductions
• Capital Improvements: Document all capital expenditures which may reduce future capital gains tax
• Timing of Transactions: Consider tax year timing for property purchases and sales
• Repatriation Planning: Develop strategies for tax-efficient repatriation of rental income and eventual sale proceeds
• Local Tax Representation: Engage a local tax professional to handle Burkina Faso filings
• Currency Exchange Timing: Consider tax implications of currency exchange gains and losses

Tax rules can change frequently in both Burkina Faso and your home country. Regular consultations with tax professionals are essential to ensure continued compliance and optimal tax efficiency. Transparent reporting in all jurisdictions is crucial to avoid penalties and complications with tax authorities.

Expert Tip: The tax system in Burkina Faso can present administrative challenges for foreign investors, particularly with language barriers and documentation requirements. Consider engaging a local tax professional who can act as your representative with tax authorities. This can significantly reduce compliance risks and ensure that all filing obligations are met correctly and on time, while potentially identifying local tax optimization opportunities that might not be apparent to foreign investors.

Selecting a Property Manager

Evaluate potential property managers using these criteria:

• Experience with Foreign Investors:
  • Understanding of international client needs
  • Experience with cross-border financial transactions
  • Communication in languages you understand
• Local Market Knowledge:
  • Familiarity with your specific neighborhood
  • Understanding of local rental practices and rates
  • Established tenant network
• Client Communication:
  • Regular reporting systems
  • Responsiveness to owner inquiries
  • Transparent financial reporting
• Maintenance Network:
  • Established relationships with reliable contractors
  • Emergency response capabilities
  • Transparent pricing for repair work
• Tenant Management:
  • Thorough screening processes
  • Effective rent collection systems
  • Proper lease documentation

Management Agreement Essentials

Ensure your property management contract includes these key elements:

• Scope of Services: Detailed description of included services and responsibilities
• Fee Structure: Clear explanation of all management fees and additional charges
• Contract Term: Duration of agreement and renewal/termination conditions
• Reporting Requirements: Type and frequency of financial and property reports
• Maintenance Authority: Spending limits for repairs without prior approval
• Tenant Selection Criteria: Guidelines for approving potential tenants
• Rent Collection Procedures: Methods, timing, and handling of late payments
• Banking Arrangements: How rental funds will be held and transferred
• Insurance Requirements: Coverage expectations and liability boundaries
• Dispute Resolution: Process for addressing disagreements

The management agreement should be reviewed by your attorney to ensure it complies with local laws and adequately protects your interests. Given the distance and potential communication challenges, having clear written parameters for the management relationship is especially important for foreign investors.

Expert Tip: The property management industry in Burkina Faso is still developing, with varying degrees of professionalism and service standards. Personal recommendations and thorough vetting are crucial. Consider starting with a probationary period before committing to a long-term management contract, and establish very clear financial reporting requirements. Some foreign investors find success with a hybrid model, combining a local property caretaker for day-to-day oversight with a more formal management company handling tenant selection, lease agreements, and financial matters.

Exit Options

Sale Process

When selling your Burkina Faso property:

1. Pre-Sale Preparation:
   • Property repairs and improvements
   • Documentation organization
   • Tax planning for sale proceeds
   • Setting realistic price expectations
2. Marketing Approach:
   • Engage local real estate agents
   • Consider international marketing for premium properties
   • Target expatriate communities and organizations
   • Utilize both traditional and online marketing channels
3. Legal Preparation:
   • Update property documentation
   • Clear any outstanding taxes or fees
   • Engage attorney for transaction management
   • Prepare for tax compliance requirements
4. Transaction Management:
   • Negotiate terms and conditions
   • Structure sale to optimize tax position
   • Plan for currency conversion of proceeds
   • Comply with both local and home country requirements
5. Post-Sale Requirements:
   • Final tax filings in Burkina Faso
   • Reporting sale on home country tax returns
   • Currency repatriation documentation
   • Termination of local service contracts

The sales process in Burkina Faso can be less structured and potentially more time-consuming than in North American markets. Patient and thorough preparation, combined with realistic expectations about market liquidity, will help ensure a successful exit strategy.

Market Exit Timing Considerations

Several factors should influence your exit timing decision:

• Local Market Cycles: Emerging markets like Burkina Faso can experience pronounced cycles, making timing an important consideration
• Currency Exchange Rates: Monitor XOF/EUR relationship to USD/CAD to optimize repatriation value
• Political Stability: Political transitions can significantly impact market conditions and foreign investor sentiment
• Infrastructure Developments: Major infrastructure completions can substantially enhance property values
• Regional Economic Trends: West African economic integration and development can affect investment potential
• Home Country Tax Considerations: Timing sales relative to home country tax situations
• Personal Investment Horizon: Alignment with original investment objectives and timelines
• Alternative Investment Opportunities: Comparative returns available in other markets

While predicting market timing perfectly is challenging in any real estate market, it’s particularly difficult in emerging markets like Burkina Faso with more limited market data. Having clear investment objectives with defined triggers for exit decisions can help guide the process more objectively.

Expert Tip: The market for property sales to foreign buyers in Burkina Faso is relatively limited, making exit planning particularly important. Consider developing relationships with organizations that regularly need housing for expatriate employees, such as international NGOs, diplomatic missions, multinational companies in the mining sector, or educational institutions. These organizations can sometimes become direct buyers or reliable sources of tenant referrals, enhancing property liquidity when you eventually decide to exit the investment.