Investment Opportunities in Algeria
Protection of Foreign Investment
- Bilateral Investment Conventions Signed By Algeria
- Algeria has signed bilateral conventions with more than thirty countries. See the complete summary on the ANDI website. They define the framework for the protection of foreign investment in Algeria for each of the signatories. For European Union countries, the association agreement signed between the EU and Algeria governs this issue.
- International Controversies Registered By UNCTAD
- Organizations Offering Their Assistance in Case of Disagreement
ICCWBO , International court of arbitration, International chamber of commerce
CACI , Algerian Chamber of Commerce and Industry
- Member of the Multilateral Investment Guarantee Agency
Country Comparison For the Protection of Investors
|Algeria||Middle East & North Africa||United States||Germany|
|Index of Transaction Transparency*||6.0||6.3||7.0||5.0|
|Index of Manager’s Responsibility**||6.0||4.6||9.0||5.0|
|Index of Shareholders’ Power***||4.0||3.4||9.0||5.0|
|Index of Investor Protection****||5.3||4.8||8.3||5.0|
Source: Doing Business
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
Procedures Relative to Foreign Investment
- Freedom of Establishment
According to the edict n°01/03 of 20 August 2001, any legal entitiy or natural person, public or private, can invest in economic activities concerning production of goods and services as well as in investments carried out in the framework of granting concessions and/or licenses. It is possible to enjoy certain advantages according to one's projects and their location (Edict n° 01-03).
- Acquisition of Holdings
- Acquiring a majority interest in a local company is authorized in Algeria.
- Obligation to Declare
- An investment declaration is necessary; it must be made to the National Agency for development and investment (ANDI) which depends on the Ministry of participation and promotion of investment (MPPI). Consult the websites of these organizations to find out further details.
- Competent Organization For the Declaration
National Agency for Development and Investment
- Requests For Specific Authorizations
- Many products are subject to procedures to obtain prior authorization. See the list of controlled activities on the Register of Commerce website.
Office Real Estate and Land Ownership
- Possible Temporary Solutions
- There are several temporary solutions: domiciliation of the company at the private address of the director, domiciliation in a business center, and renting professional premises.
- The Possibility of Buying Land and Industrial and Commercial Buildings
You can buy industrial and commercial property. There are several possibilities: either buying land from a private owner (the most expensive solution), or making an application to the Government, through the CALPI (Local Assistance and Promotion of Investment Committee), which allows you to acquire land at affordable prices. However, you must have an eligible and reliable project. The CALPI office can be found in the one stop shop of the ANDI (National Agency for Develpment and Investment). To see the list of one stop shops and their location, click here. (in French)
- Risk of Expropriation
- According to Algerian law, foreign investors are entitled to compensation if they are victims of expropriation. The Constitution of 8 December 1996 provides legally-binding guarantees against expropriation and confers the right to equitable compensation.
- Forms of Aid
There are several types of advantages for setting up a foreign company in Algeria. You can consult the Investor's guide published by the National Agency for Development and Investment.
The various measures take the form of tax advantages, especially tax exemptions from 3 to 10 years. They are organized by the ANDI. Companies must make their application when they make their investment declaration. Investors also benefit from the State taking over certain expenses (duty on transfers against payment for all purchases of real estate intended for investment, fixed duty as regards reduced rate registration for charters and increase of capital, etc.)
- Privileged Geographical Zones
- Areas of economic expansion have been established, located on the high plateaux and in areas in the south. They allow investors taking part in regional industrial development, to enjoy exemption, for 5 to 10 years, from property tax on real estate purchases intended for economic activity and a reduction of 50% of the reduced rate applicable to reinvested profits.
- Free Zones
- Repealed on 1 January 2006
- Organizations Which Finance
- The FGAR, credit guarantee fund for SMEs/SMIs
- The Key Sectors of the National Economy
- Hydrocarbons, the food industry, real estate, chemicals and retailing.
- High Potential Sectors
In terms of needs, Algeria suffers from a housing deficit and has extensive needs in the healthcare sector. The Algerians spend 140 billion DZD a year on healthcare (2 billion Euros).
About thirty kilometers from Algiers, the planned new urban area at Sidi Abdallah offers numerous investment opportunities in the sectors of IT, electronics, communication, pharmacy, research and development, health, international trade, telecommunications, tourism, NICTs and financial engineering.
Other fields of opportunity: the public buildings and works sector, development of infrastructures ( roads, trains, airports, ports, etc.), water treatment and management, hydrocarbons, the banking sector, the food industry sector, defense, automobiles, mass marketing.
- Privatization Programs
From now on all public economic companies are eligible for privatization. Privatization concerns 1 200 public economic companies (EPE) and is a way of opening up the Algerian economy to the free market economy, legally recognized by the promulgation of a new legislative framework (edict n° 01-04 of 20 August 2001, ratified by a law voted by Parliament). The directory of companies eligible for privatization is available on-line on the MPPI website.
Since March 2005, foreign companies have been able to have complete ownership of an oilfield. For this, two independent national agencies have been created: on the one hand,the hydrocarbons regulation authority which is in charge of controlling and regulation activities concerning hydrocarbons and, on the other hand, the ALNAFT, national agency for the development of hydrocarbon resources. The hydraulics sector is one of the State's priorities. On a wider scale, the whole of the energy sector is opening up more and more to competition.
Finally, in August 2005, a Bill on the reform of the water sector was introduced in Parliament; it provides for foreign companies to be able to sign contracts with the State for the management of the water network but for all that it does not allow these companies to fix prices.
- Tenders, Projects and Public Procurement
Tenders Info, Tenders in Algeria
DgMarket, Tenders Worldwide
Sectors Where Investment Opportunities Are Fewer
- Monopolistic Sectors
- In principle, there are no longer any monopolies in Algeria. However, some sectors of activity are difficult to get into, such as the tobacco and hydrocarbon sectors.
- Sectors in Decline
Finding Assistance For Further Information
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