Burkina Faso belongs to the category of the world's poorest and least developed countries, and is largely dependent on foreign donors for its economic development. The country's economy has a large informal sector. According to the World Bank & IFC Doing Business 2012, Burkina Faso has implemented some reforms in 2011 making it easier to do business in the country. Areas of improvement include starting a business, dealing with construction permits has been made less costly and access to credit has improved through the OHADA Uniform Act on Secured Transactions. The government, which has traditionally been the largest economic actor, has for many years now been actively promoting foreign investment and privatisation of state-owned companies. Many state-owned companies have been privatised, but progress has reportedly been uneven and has slowed because of administrative delays. The UN Investment Policy Review 2009 reports that foreign direct investment flows in the mining sector in Burkina Faso have recently increased sharply, illustrating the potential for investment in the mining sector in the country. Nonetheless, foreign investment outside the two sectors of mining and telecommunications reportedly remains very limited.

According to REN-LAC 2006 (in French), 72% of the population perceives the private sector to be implicated in corruption. Burkina Faso's investment climate remains constrained by the overall level of corruption, which poses many challenges. According to the World Economic Forum Global Competitiveness Report 2011-2012, corruption is the second most problematic factor for companies operating in Burkina Faso, following access to financing. Business leaders surveyed in the report indicate that the diversion of public funds to companies, individuals or groups due to corruption is quite common. In a similar vein, the Heritage Foundation 2010 characterises corruption in Burkina Faso as pervasive. The World Bank & IFC Enterprise Surveys 2009 report that nearly 71% of companies identify corruption as a major constraint, and close to 9% of companies expecting to make informal payments in order to 'get things done'. According to Freedom House 2010, preferential treatment of companies connected to the ruling party is common in Burkina Faso, and this has largely weakened the equality of opportunity among companies in securing contracts.

The prospects for fighting corruption and bribery in public procurement processes and contracting are further complicated by collusion between political parties and the country's large state-owned and private companies. However, REN-LAC 2006 showed a marked improvement regarding corruption in public procurement. Corruption in the form of facilitation payments, bribery and preferential treatment in procurement deals is common in the private sector and companies are recommended to use a specialised public procurement due diligence tool in order to mitigate the corruption risks associated with public procurement. Furthermore, it is also important for companies to develop, implement and strengthen integrity systems and conduct extensive due diligence when planning to do or are already doing business in Burkina Faso.

In an attempt to attract investment in the private sector, Burkina Faso adopted pro-business reforms in 2006. The Investment Code guarantees equal treatment of foreign and domestic investors. Nevertheless, the bureaucracy in Burkina Faso remains cumbersome. This is reflected in data from the World Bank & IFC Enterprise Surveys 2009 which shows that senior managers spend 22.5% of their time on average dealing with government regulatory requirements compared to the regional average of 8.6%. Establishing a business in Burkina Faso can be difficult due to continuing corruption within the public administration. Business leaders surveyed in the World Economic Forum Global Competitiveness Report 2011-20121 give the burden of government regulation a score of 3.5 on a 7-point scale (1 being 'burdensome' and 7 being 'not burdensome').

According to the World Bank & IFC Doing Business 2012, starting a business has nonetheless been made easier in recent years, and now requires 3 procedures and takes 13 days at a cost of 47.7% of GNI per capita, all well below regional averages. In the same vein, Freedom House 2011 reports that efforts have been made to streamline the process of establishing a business. For instance, business registration centres provide one-stop service for registration. Furthermore, registration centres continue to improve their performance and measurement of the cost, formalities, and time to establish a new business has been declining. The government, in an attempt to reduce the burden of excessive bureaucracy and related opportunities for bribery and the use of facilitation payments, has set up Enterprise Registration Centres under the Maison de l'Entreprise du Burkina Faso, designed as one-stop shops for business registration. These newly developed centres have simplified registration formalities and eliminated obstacles relating to opening a business. According to the International Finance Corporation 2009, Burkina Faso's efforts to improve its business environment have been successful. The US Department of State 2011 assesses Burkina Faso's regulatory environment as transparent and consistent with international standards. The same source also notes that the government has made strides to incorporate the informal sector; informal sector companies and other small companies with an annual turnover of XOF 15 million or less pay a unique tax called the 'contribution du secteur informel' or CSI. The maximum CSI tax is XOF 100,000. Companies qualifying for CSI tax status are prohibited from bidding on state tenders.

The legal framework in Burkina Faso provides for the protection of property rights and facilitates their acquisition and disposition. However, these rights are enforced arbitrarily. In analysing the weaknesses of the country's legal framework, the Bertelsmann Foundation 2010 points to the weaknesses in the judicial system, involving outdated legislation, lack of courts, inadequate human and financial resources and the fact that traditional courts are often used in rural settings to resolve disputes. According to the UN Investment Policy Review 2009, Burkina Faso needs to reform its legal framework for investment, in order to promote the development of a more dynamic and flourishing private sector. With regards to commercial disputes that cannot be solved effectively, the Burkinabé Investment Code requires commercial disputes to be submitted to international arbitration. Burkina Faso is the member of the Organization for the Harmonization of Business Law (OHADA, in French) in Africa. Furthermore, Burkina Faso is party to the New York Convention of 1958 and Burkinabé courts accept international arbitration as a means for settling investment disputes between private parties. However, according to the US Department of State 2011, companies should note that the enforcement of contracts due to fees is burdensome, and that the number of required procedures and the amount of time needed to resolve disputes are very high. Burkina Faso is also a member of the International Centre for the Settlement of Investment Disputes (ICSID). According to the US Commercial Service 2009, longstanding disputes that remain unresolved after administrative jurisdictional hearings are required to be submitted to arbitration. In 2007, Burkina Faso opened the Arbitration and Commercial Dispute Resolution Centre (Centre d'Arbitrage et de Reglement des Litiges Commerciaux) under the auspices of the Chamber of Commerce and Industry. Access the Lexadin World Law Guide for a collection of laws in Burkina Faso.