Foreign Direct Investment in Algeria

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FDI in Figures

Rich in natural resources and enjoying economic stability, Algeria has been attracting record levels of FDI in the recent years, reaching 17.3 billion USD in 2009. These extremely encouraging figures nevertheless hide two opposing trends: a net decrease in European investments and a revival of interest from the Gulf investors.

The series of protectionist measures taken by the Algerian government, including a new regulation concerning the FDIs and imposing an Algerian majority stake of 51%, can also be seen as a discouraging factor in terms of the FDIs. Likewise, corruption and heavy bureaucracy, as well as the weak financial system and legal insecurity in terms of intellectual property rights, constitute an impediment to investment. Officially, the government remains committed to economic liberalization and continues to seek foreign investment in sectors such as the infrastructures, telecommunications, energy and water supply. There has also been a noticeable reorientation of the FDI toward the domestic market, through an efflorescence of developmental projects in transport and infrastructure.

The sectors attracting most FDI are the energy sector, followed by the telecommunications and tourism.


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.

Foreign Direct Investment 2007 2008 2009
FDI Inward Flow (million USD) 1,662 2,646 2,847
FDI Stock (million USD) 11,852 14,498 17,344
Performance Index*, Ranking on 141 Economies 127 113 77
Potential Index**, Ranking on 141 Economies 69 70 -
Number of Greenfield Investments*** 33 72 32
FDI Inwards (in % of GFCF****) 4.7 5.6 1.3
FDI Stock (in % of GDP) 8.8 8.5 12.3

Source: UNCTAD

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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Why You Should Choose to Invest in Algeria

Strong Points
- The low cost of energy constituents (gas, fuel and electricity): industrial gas is 22 times cheaper than the European average, electricity is 6 times cheaper. See the summary of factors costs on the ANDI website.


- The workforce is skilled and cheap; it is 10 times cheaper than in France.

 - Algeria's proximity to Europe. This motivates the relocation of industrial activities which consume energy.

- A country in the middle of an economic metamorphosis.

Weak Points
- Slow administrative procedures are often pointed out;


- The legislation is very complex, especially tax law.

- It is difficult to acquire industrial property.

Government Measures to Motivate or Restrict FDI
To attract and encourage foreign investment, the government has set up various attractive measures. You can consult these mesures on the ANDI website.

At the same time, on the 22nd December 2008, the Algerian prime minister published a directive which leans towards restricting foreign FDIs. In effect, it has been provided that all new investment projects in Algeria have to have local majority (51%) shareholding.  This directive further provides that foreign investors should only revert to local financing.  Finally, FDI projects will no longer come under ANDI (National Agency for Investment Develompment) but under CNI (National Investment Council), something which would engender delays in the handling of files.  More information on these new mesures is available.

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.

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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.
Find Investment Service Providers in Algeria on

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Investment Opportunities

Investment Aid Agency
National Agency for Development and Investmentt
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Algeria
DgMarket, Tenders Worldwide
Other Useful Resources
Algerian Chamber of Commerce and Industry

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