Doing business in Angola

An Expert's View about Business Environment in Angola

Last updated: 23 Feb 2012

The main objective of this Doing Business Guide is to provide you with basic knowledge about Angola; an overview of its economy, business culture, and potential opportunities.

UK Trade & Investment Doing business in Angola Doing business in Angola Are you a member of a UK company wishing to export overseas? Interested in entering or expanding your activity in the Angolan market? Then this guide is for you! The main objective of this Doing Business Guide is to provide you with basic knowledge about Angola; an overview of its economy, business culture, potential opportunities and an introduction to other relevant issues. Novice exporters, in particular will find it a useful starting point. Further assistance is available from the UKTI team in Angola. Full contact details are available at the end of this guide. Important Information - Sanctions and Embargoes Some countries maybe subject to export restriction on them by the UN or EU. Exporting companies are can be exported and that they are using the correc Further information is available on the Businesslin The purpose of the Doing Business guides, prepared by UK Trade recipients form their own judgments about making business deci country. The Report’s contents were believed (at the time that th representations or warranties, express or implied, are made or g Commonwealth Office (FCO) and the Department for Business, In Report, its completeness or its suitability for any purpose. In par construed as advice or solicitation to purchase or sell securities, c No liability is accepted by UKTI, the FCO or BIS for any loss or da arise out of or in connection with the Report. UK Trade & Investment Doing business in Angolas due to sanctions and embargoes placed responsible for checking that their goods t licences. k site & Investment (UKTI) is to provide information to help sions as to whether to invest or operate in a particular e Report was prepared) to be reliable, but no iven by UKTI or its parent Departments (the Foreign and novation and Skills (BIS)) as to the accuracy of the ticular, none of the Report’s contents should be ommodities or any other form of financial instrument. mage (whether consequential or otherwise) which may Content Introduction 4 Preparing to export to Angola 8 How to do business in Angola 9 Business etiquette, language and culture 12 What are the challenges? 13 Contacts 14 Resources/Useful Links 15 UK Trade & Investment Doing business in Angola Introduction Angola is the third biggest market in Sub-Saharan Africa, and one of its fastest growing economies. Situated on the south-western coast of the continent, Angola vies with Nigeria to be sub-Saharan Africa’s leading oil producer with production figures of close to 2 million barrels per day. The UK is the second largest investor in Angola with annual investments of over US$3 billion and this figure is likely to grow. The profit:investment ratio is good and Angola is a market with significant opportunities for UK companies across a range of sectors. However, Angola presents unique investment challenges for new investors such as high entry costs; bureaucracy; lack of capacity and poor infrastructure. As a result, it is absolutely essential for investors to familiarise themselves with these challenges, and work with the local UKTI team based at the British Embassy in Luanda to gain credible information about the range of market entry issues. Strengths of the market The Angolan government is keen to diversify the economy and is offering attractive incentives to encourage private investment in the non Oil & Gas sector. After years of neglect, the government is making significant efforts to rebuild the country’s infrastructure and drive forward development. As such, 30% of the 2010 budget was earmarked for priority social sectors: education, health and housing. Both the government and Angolan companies are keen to do business with British companies and hold them in high regard. Opportunities in Angola Angola is a nation emerging from the effects of more than three decades of civil war that completely destroyed the country. Lack of infrastructure, lack of capacity and most importantly lack of human resources, combine to present formidable challenges for the government. However they also constitute staggering opportunities for new and existing investors. The country is rich in terms of natural resources, which allows the government to finance huge projects. There are significant opportunities for British companies, as the UK is renowned for its high tech capabilities. UKTI Angola has identified the following sectors as offering the best opportunities for British companies: Energy- Oil & Gas, Power Financial Services Education & Training Construction Agriculture The government has declared its intention to minimise imports, in order to enable the economy to be self-sufficient, by offering greater investment incentives within agriculture and the development of the industrial sector. The construction of roads, airports, ports, hospitals, schools and most importantly affordable housing tops the government’s agenda; there is a pressing requirement to bring about significant reductions in the huge housing deficit the country currently experiences. The oil and gas sector is highly competitive and developed. However there is still a huge scope of opportunities to be explored in the supply chain, such as: onshore and offshore medical care; catering; health and safety provision; specific training courses etc. Trade between UK and Angola The value of the UK’s bilateral trade in goods with Angola has increased year on year and in 2009 stood at over £600 million. UK Trade & Investment Doing business in Angola Traditionally, the UK’s involvement in Angola has been within the Oil & Gas Sector. However, in the last 2 – 3 years, we have begun to see more British companies participating in many other sectors. In the Financial Sector, Standard Chartered Bank recently opened a representative office and Diageo, and Astra Zeneca have launched their products within the Angolan market. Other British companies operating in Angola include BP, Crown Agents, British Airways, De La Rue, PWC, Lonhro, Standard Chartered, Aggreko and Amec. Bilateral trade in goods and services: (£ million) Jan-Aug Jan-Aug UK Exports 2005 2006 2007 2008 2009 2009 2010 Goods 158 206 273 288 333 229 376 Services 348 346 484 522 512 n/a n/a 506 552 757 810 845 Percentage Change 9% 37% 7% 4% 64% UK Imports Goods 15 16 155 580 279 121 69 Services 154 226 154 123 291 n/a n/a 169 242 309 703 570 Percentage Change 43% 28% 128% -19% -43% Bilateral Trade 675 794 1066 1513 1415 Trade Balance 337 310 448 107 275 Source: ONS UK Balance of Payments and HMRC Top exports from the UK to Angola 2009: Specialised industrial machinery £76m General industrial machinery and equipment £48m Iron & steel £44m Manufactures of metals £36m Professional, scientific and control instruments £22m Economic Overview Angola is a mineral resource rich country, rich in oil, gas, diamonds, coffee, sisal, marble, iron and natural resources. However after nearly three decades of conflict, the country has just started rebuilding its infrastructure which was neglected during the war. Likewise institutions and human capital are weak and rebuilding is bringing tremendous challenges for the government. Angola’s economy is almost totally dependent on revenues from the oil industry which adds up to nearly 86% of the total GDP. Realising the scale of challenges, inherited through 30 years of war, the government has decided to embrace a market economy backed by a program of economic diversification in order to minimise the country dependence on oil revenue. A new Ministry of Economy has been created with the sole purpose to find modern mechanisms of self-sustainability through the concept of diversification, enhancing private investment in the primary, secondary and tertiary sectors. The ministry is also looking to privatise a number of industries, and recently introduced a programme of Public Private Partnership initiatives. Population Angola has a population of nearly 16 million people divided into three main ethnical groups, ‘Ovinbumdo, Kinbumdo, Kikongo. It is estimated that 6 million people live in Luanda, the capital city, a city that was initially built for less than half a million people. The social challenges caused by the war are enormous and have a direct impact on the lives of ordinary Angolans, with 80% of the population totally illiterate and 5% functionally illiterate Angola faces a huge deficit of human resources. 9.2 million are of school age. UK Trade & Investment Doing business in Angola Political overview For five centuries the Portuguese ruled Angola, considering it a province of Portugal. The beginning of the armed struggle on 4 February 1961 culminated with a declaration of independence on 11 November 1975. Thirty years of devastating conflict between the three political movements followed, involving an armed struggle against the Portuguese. The conflict ended in 2002 with the death of the opposition leader Jonas Savimbi, and Angolans embraced the road of peace and reconciliation. Eight years after, the country held its second general elections giving a historical victory to the ruling MPLA party that formed the government. One of the main priorities following last year’s election was the approval of a new constitution which was completed this year. General elections will be held again in 2012 involving the three historical parties and some other new parties. Expectations are quite high, with increasing speculation that there could be a change in the leadership of two of the main parties. Getting here and advice about your stay FCO Travel Advice The FCO website has travel advice to help you prepare for your visits overseas and to stay safe and secure while you are there. For advice please visit the FCO Travel section Getting here Visas/Passports Getting to Luanda is not as difficult as it used to be in the past. Visitors should request a visa from the Angolan embassy in their countries, in order to be allowed entry to the country. All visitors to Angola are required to carry valid visas and Yellow Fever Certificates. By air There are two weekly direct flights (BA) from London to Luanda, for those travelling directly from UK and there are other options via Johannesburg, Lisbon, Paris, Frankfurt and Dubai. SAA flies daily from Johannesburg. However, flights to Luanda are frequently full and good advance travel arrangements are recommended. It is also worth bearing in mind that travel costs to Luanda are relatively high in comparison to other regional locations. At the airport It is recommended that first time travellers to Angola be met by a local contact at the airport. Although it is not essential, it is a ‘nice’ touch for first time travellers not familiar with the procedures. Security is improving so more and more business people are making their own business travel arrangements in country. Be aware that there are no taxis from the Airport. Getting around Accommodation is Luanda can be expensive and it is difficult to find rooms available at short notice. It is quite important to book a room at least four weeks before the date of travel in order UK Trade & Investment Doing business in Angola to ensure accommodation is secured. Not only are prices quite high for the standard of services offered but often payment must be made in advance in order to secure the accommodation. It is also important to emphasise that Luanda has recently been rated one of the most expensive cities in the world. Average restaurant meal cost around US$70 – US$100 per head and in country transportation costs can be quite expensive. For example a car hired with a driver for one day can cost up to US$500 per day. Public transport is not a viable option and although security is improving visitors are advised not to walk alone, especially at night. The FCO travel advice is regularly updated and visitors are advised to consult it before travel. UK Trade & Investment Doing business in Angola Preparing to export to Angola Doing business in Angola is not straightforward. The complexity and bureaucratic nature of the business environment requires careful guidance for first time business visitors and companies wishing to do business here. As a result, engaging the services of credible organisations or local contacts who have sound reliable market knowledge, experience and exposure to access accurate up to date information is essential for those who are serious about ‘Doing Business in Angola’. This type of approach can have substantial benefits and can significantly reduce market entry challenges imparting valuable insight about on the ground requirements and business operations. If UK companies wish to explore the approach outlined above then UKTI Angola is aware of a number of emerging (credible and reliable) sources who are able to assist organisations with targeted market entry information, guidance and other related services. UKTI Angola can provide further details upon request. UKTI’s team in Angola can provide a range of services to British-based companies wishing to grow their business in the Angolan market. Our services include the provision of market information, validated lists of agents/potential partners, key market players or potential customers; establishing the interest of such contacts in working with the company, and arranging appointments. In addition, they can also organise events for you to meet contacts or promote a company and its products/services. You can commission these services under which are chargeable and operated by UK Trade & Investment (UKTI) to assist British-based companies wishing to enter or expand their business in overseas markets. Under this service, the Embassy's Trade & Investment Advisers, who have wide local experience and knowledge, can identify business partners and provide the support and advice most relevant to your company's specific needs in the market. To find out more about commissioning work, please contact your local UKTI office. See UK Trade & Investment Doing business in Angola How to do business in Angola What companies should consider when doing business Angola is one of the fastest growing economies in Africa, the market offers excellent business opportunities across the board for existing and future investors, however the business environment surrounding the market can be quite challenging. Companies who intend to invest in Angola will have to consider several aspects such as high costs, lack of capacity, complex bureaucracy, ineffective communication network, language barriers and cultural norms and customs. Identifying key stakeholders early on and establishing strong relationships with good and reliable partners will be a substantial part of any effective market entry strategy, and will enable the company to develop their understanding of the market, particularly with regulations that are specific to Angola. We suggest the following tips: • Perform due diligence using a reputable local law firm specialised in doing business in Angola • Visit regularly and develop face to face relationships with local contacts • Forming a Joint Venture with a local company can facilitate the process of establishing in Angola • Finding a local partner who is well known • Be prepared that market entry can take longer and cost more than in other countries Businesses which can provide follow up service such as maintenance/ service and or training in conjunction with their products often have an advantage in the market. Market entry and start up Considerations • All investments above US$100,000 require government approval • The registration and licensing process is bureaucratic and time consuming • The government must approve any project involving concessions. • Companies must submit an Environmental Impact Study for approval prior to consideration of any project that could impact the environment. • The government and its organisations, such as Sonangol are not considered relatively easy to deal with • Local content requirements demand that companies purchase some of their services from companies that are wholly or partially Angolan owned • The government is in the process of ‘Angolanising’ the workforce, requiring companies to hire Angolan nationals, unless there are no qualified nationals available. Customs and Regulations The Angolan government has been taking several steps towards a fair and effective regulatory system that will govern customs. The UK’s Crown Agents are presently involved in assisting the Angolan government with the modernisation of Angola’s Custom and Excise Service. Although the Customs part of importing has been transformed, the end-to-end process is still long and bureaucratic, with consignments taking on average 59 days. For further information, please contact UKTI Angola. Getting your goods to market UK Trade & Investment Doing business in Angola Getting goods to the market can be a difficult and complex exercise in Angola. For this reason we advise companies to seek help and conduct market research in order to identify, examine, and understand the operational distribution network. There are a few main product distributors in Angola. A possible solution during the early stages could involve establishing a partnership and then perhaps finding ways of identifying new effective distribution methods and start operating through these. Legislation and Local Regulations The legal system in Angola is weak and fragmented and based on the Portuguese and Customary Law system. Courts operate in only a fraction of 164 municipalities and the Supreme Court serves as the final appellate tribunal. Understanding the system is difficult for the layman or novice and professional advice should always be sought. Although, these factors tend to inhibit the pace of investment, the Angolan government is making efforts to improve the situation. The following summary has been provided by PriceWaterhouseCoopers (Angola), but further information is available from the Embassy. Registration Process The incorporation/registration of a company/branch starts with the application for recognition of the foreign investor status, if there are foreign investors (the foreign company in the case of branch registration and the shareholders if incorporating an Angolan company) at the National Private Investment Agency (ANIP). ANIP is the entity responsible for approval and recognition of the status of foreign investors, through the issue of the investment certificate. For the approval of the investment project, investors should provide ANIP with a set of documents and information that indicates the purposes of setting up the operation in Angola. When the investment Project is approved by ANIP several procedures must be followed such as: issuance of License to Import Capital (LIC), opening bank account, importation of funds, deposit of the articles of association / public deed of incorporation, commercial, tax and statistical registrations and licensing of activity. Foreign Investment The Angolan investment legislation establishes a regime for private investment in Angola, carried out by nationals or foreigners, including the requirements to benefit from incentives and other opportunities conceded by the Government. Considering that the “company”, a foreign entity, intends to register an Angolan business vehicle and that such operation qualifies, under the investment legislation, as an investment operation, it will be required to get an approval from ANIP. The minimum amount for foreign investments is USD 100,000. However, the likely entitlement to tax incentives requires a minimum investment of USD 250,000. Although the minimum amount for foreign investments recognition is USD 100,000, ANIP is no longer approving such investments, arguing that this amount is not enough for the purpose of establishing an operation in Angola. On the other hand, and for projects which investment values exceeds USD 5 million, the process to get the approval requires the celebration of an investment contract with the Angolan Government, which is ultimately approved by the Angolan Council of Ministers. Documentation Angola prides itself on their administrative procedures. Documentation is required for every process and many procedures require the intervention of a number of government agencies. For this reason, UKTI advises companies to consult local recognised law firms in order to seek assistance when dealing with the bureaucratic maze that is the Angolan regulatory framework. Labelling and Packaging Regulations INADEC is a government institution created with the purpose to protect the consumer. One of their main objectives is to ensure that products are labelled with the right information that the consumer must be aware of and packed in accordance with international health and safety law. For more detailed information companies are advised to contact INADEC in order to find out what they consider material facts and therefore should be outlined to consumers in a form of labelling. UK Trade & Investment Doing business in Angola Responding to Tenders Companies are usually advised to respond to tenders directly. The local UKTI team is always available to clarify, provide advice or information about the way companies should respond to tenders. In their response it is important for companies to clearly outline their existence in the market, because it enhances their credibility and provides their local contacts. Recruiting and Retaining Staffing Under the local content umbrella the Angolan government expects foreign and national companies to prioritise local labour, which essentially means they have to exhaust all the recruitment methods for a certain period of time, before recruiting externally. However the Angolan government recognises the fact that there is a huge deficit of skilled technical and professional personnel, a reason why several companies are forced to recruit expatriate staff reasonably skilled to match their needs. This is an area of primary concern for the Angolan authorities and the government favours companies that embrace the local content guidelines, which also assists in the transfer of skills and knowledge to Angolans. Retaining staff in Angola can be challenging for several reasons, but salary is a key consideration. The market is extremely competitive for reliable skilled labour and therefore companies tend to recruit and retain their staff especially after investing in them with training programs, but due to the level of demand within the market, those paying better salaries and offering better conditions are more likely to retain their staff and attract others. Legislation on Employment of Expatriates. Foreign workers are not protected under the Labour Law but do receive legal protection if they work under contract. Otherwise they receive protection only against criminal acts. Work permits are granted by Angolan consular authorities with the authorisation of the Angolan Immigration Authorities (SME) and the Ministry of Labour. This type of visa is valid for multiple entries and enables a person to stay in the country for one year, renewable for similar periods, for the term of the contract. The Government has established a 41.5 hour working week. All employees must be registered for Social Security. They must contribute 3% of salary; the employer contributes 8%. However, a foreign worker has the option of not contributing towards Social Security Scheme if they can produce evidence that they already contribute towards a foreign scheme and/or have life insurance. Women are entitled to 90 days maternity leave at full pay. UK Trade & Investment Doing business in Angola Business etiquette, language and culture • The business environment in Angola is essentially western in nature • Although Portuguese is the official language, English is spoken in business circles Currency: The unit of currency is the Kwanza (Kwz). Kwanzas may not be taken out of the country, and it is not convertible on international exchange markets. The US dollar is widely accepted. Credit cards are not generally used outside of the major hotels. Cash machines will only dispense cash held in local bank accounts. International Time: Angola is one hour ahead of Greenwich Mean Time (GMT). There is no daylight saving. Units of measurement: Angola uses the metric system. Dress: Smart business dress is appreciated although because of the climate men often dispense with jackets and often do not wear ties. Businesswomen typically dress modestly with longer jackets and tops teamed with longer skirts or trousers. The more formal the meeting, the more formal the attire. Meeting etiquette An appointment is expected to be made for a visit although it can be difficult to do this too far in advance. Appointments are often not confirmed until hours before the appointment time, the appointment can change at short notice and you may not be seen promptly. As a result, be prepared for this and build in a degree of flexibility into your plans. Hierarchy is important and your comments should be addressed to the most senior manager present. Negotiations and Decision-making In general Angolans are fairly open in their decisions and opinions. They prefer to take their time over decisions and solicit others opinions. Angolans often put their cards on the table at an early stage. In order to ensure contracts are secured it will be necessary to visit Angola on a constant basis, at least every 3 months. Hours of business Business hours are based on the western week although most government offices close a couple of hours early on Fridays. Language Portuguese is the main language of business, but nearly all senior managers in the Oil and Gas sector speak some English. Very few receptionists, secretaries, drivers or support staff speak English. UK Trade & Investment Doing business in Angola What are the challenges? The Economy: Due to financial instability within the market, the Angolan authorities have taken a number of measures designed to contract the effects of foreign currency on the government monetary policy. For several years, the government has been trying to develop mechanisms to stop the intrinsic relation between the US Dollar and the Kwanza, Angolan national currency, but this has proved to be quite difficult for many reasons and one of them is the number of payments made in foreign currency which increases the demand for foreign currency. Getting paid can sometimes take some time due to the new procedures in place. Banks are now closely supervised to ensure they comply with these new measures and companies selling or buying must present all the necessary documentation to the bank before the transaction takes place, especially when it requires transfer of funds to foreign countries. Companies must work together effectively, in order to produce the necessary documentation to the bank. Corruption Along with many other African states, Angola suffers from allegations of corruption throughout all levels of society. In December 2009 President Dos Santos announced a Zero Tolerance plan, reinforced by commissioning a transparency audit (to be conducted by Ernst & Young). 2010 has seen a number of high-profile prosecutions of senior officials, and a slew of dismissals from the Central Bank. HMG takes a very serious view on bribery and corruption, and any UK company considered to be involved in corrupt practices will feel the full weight of the law bear down upon them. The Department of Business, Innovation and Skills (BIS) has published a number of documents on their website ( to assist companies in this area. If you feel that you are in danger of becoming involved in bribery or corruption, please seek advice from UKTI in Luanda. Communications Landline telephones are reasonable in Angola but as with most countries, mobile phones have become the norm. The landline system is run by the state and calls to the UK are expensive, and most hotels charge higher rates. Dialling code for Angola is +244 followed by the city prefix which for Luanda is 222. There are two mobile networks, Unitel and Movicel. UK mobiles on the Vodafone and Orange networks can be used here. O2 and T-mobile have not been tested. Voicemail is unusual and most managers will take calls via personal assistants and secretaries. These support people are very important in that they often act as filters, allowing access or not to individuals. Almost everyone in business has a mobile phone, and having access to these numbers, especially of the key players is a useful bonus and once these are in your possession you will have considered to have been accepted into the inner circle. The Internet is very slow and unreliable. Most hotels provide a wireless service to guests. Mobile internet is available via a dongle, which is more reliable but, as with everything in Angola, provides an expensive solution. Blackberry devices tied to UK contract providers do not work on the data network, although we expect developments in this area very soon. Post is unreliable in Angola and few people use it. For sending business documents a courier firm is recommended. Fax is still the preferred method of communication for setting up appointments and confirming meetings, mainly because it adds to the bureaucracy and utilises the pool of secretarial skill available to managers. Email is becoming more widely used although not everyone has a personal email address within an organisation. This is particularly noticeable with state organisations where the email is often central and not personalised. Many individuals including senior officials in these organisations will often have a personal e-mail address (eg Hotmail or Yahoo). Email is generally slow and broadband and wireless connections are not universal. The business centres in most hotels offer the best method to avail of these services, especially if data transfer is required. Most managers have a personal email address but will not volunteer it unless specifically asked. UK Trade & Investment Doing business in Angola Contacts If you have a specific export enquiry about the Angolan market which is not answered by the information on this report, you may contact: UK Trade & Investment Enquiry Service Tel: +44 (0)20 7215 8000 Fax: +44 (0)141 228 3693 Email: Otherwise contact the team in Angola directly: UK Trade & Investment Angola British Embassy Trade & Investment Section Rua 17 de Setembro, 4 Caixa Postal 1244 Luanda Angola Tel: (00 244) 222 397 681 or 222 334 583 Office Hours (local time): Mon, Tue, Wed, Thu: 08.00 - 12.30 and 13.30 - 16.30 Fri: 08.00 - 13.00 Local time is 1 hour ahead of GMT (same time as BST) Karen Neal Head of Trade & Investment Tel: 00 244 222 397 681 Email: David Anca Deputy Head of Trade & Investment Tel: (00 244) 222 397 681 Email: Jose Paulo Tel: (00 244) 222 397 681 Email: UK Trade & Investment Doing business in Angola Resources/Useful Links Country Information: BBC Website FCO Country Profile country/country-profile/ Culture and communications CILT – National Centre for Languages - Regional Language Network in your area: Kwintessential culture guides: Customs & Regulations HM Revenue & Customs: Import controls and documentation (SITPRO): Economic Information: Economist Export Control Export Control Organisation: Export Finance and Insurance: ECGD Intellectual Property Intellectual Property Office: Market Access Market Access Database for Tariffs (for non-EU markets only): SOLVIT – Overcoming Trade Barriers (EU Markets only) Standard and Technical Regulations: British Standards Institution (BSI): National Physical Laboratory: Intellectual Property: UK Trade & Investment Doing business in Angola Trade Statistics National Statistics Information: UK Trade Info: Travel Advice FCO Travel: NHS: Travel health: Business Link: International Trade Business Link’s International Trade pages provide an overview of export basics including licensing, customs procedures, classifying and movement of goods, other regulatory information and export paperwork issues. It also introduces exporters to the UK Trade Tariff. Essential reading for exporters! Find out more at: 717544 Produced by the UKTI Team Angola Last Updated: October 2010 UK Trade & Investment Doing business in Angola
Posted: 18 February 2012, last updated 23 February 2012

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