Invest in Algeria
Through its network, the National Agency for Investment Development (ANDI) supports foreign operators in their search for partners and projects in Algeria at a central and local level.
The agency currently has a network of 27 one-stop services across the country which help investors to complete the formalities involved in setting up businesses and implementing investment projects and facilitate their access to technical and regulatory information, as well as monitoring projects. The agency is the ideal intermediary for all investment opportunities in Algeria.
In this regard and in order to encourage and facilitate foreign investment in Algeria and enable Algerian operators to find foreign partners and vice versa, the National Agency for Investment Development (ANDI) has setup a partnership clearing-house, to be used as a tool for liaison between Algerian operators and foreigners. It comprises a database which enables the two parties to find business contacts and implement partnership activities, in conformity with the 51-49% requirement.
Thus, foreign investors interested in investing in Algeria will have the opportunity to research the projects submitted to the partnership clearing-house, which will give them an idea of the investment proposals from local operators. In addition, through this mechanism, Algerian operators will be able to find foreign business partners more easily to whom they have previously submitted their project ideas.
2. Reasons to invest in Algeria :Economic stability;
Attractive investment opportunities:
5 billion dollars of imports in 2015 (during the first 9 months of the year);262 billion of public investment for the period 2015-2019;
Promising sectors with matured projects.Particular assets:
Availability of important natural resources:
18th largest oil producer ;
12th largest oil exporter ;
15th place in world oil proven reserves;
3rd producer and 5th exporter of gas;
3rd supplier of natural gas in the European Union;
7th place in the world in terms of proven gas resources;
4th total energy supplier to the European Union;
4th economic power in the Arab world as the Arab Organization for Investment Guarantee;
2nd largest holder of foreign exchange reserves after Saudi Arabia;
3rd largest holder of gold reserves in the MENA region after Saudi Arabia and Lebanon;
The less indebted of the 20 countries in the MENA region;
Solar potential: – 3000 hours of sunshine per year;
Other mineral resources: phosphate, zinc, iron, gold, uranium, tungsten, kaolin, silicon … etc.Ambitious policies of development and sectorial strategies:
The new industrial revival policy highlighting 12 strategic sectors, namely the steel and metal working, hydraulic binders, electrical and household appliances, industrial chemistry, mechanics and automotive, pharmaceutical production, aerospace, construction and ship repair, advanced technology, food processing, textiles and clothing, leather and timber products, wood and furniture industry as well as outsourcing ;
The Master Plan for Tourism Development ;
Agricultural and Rural Renewal Programme ;
A Renewable Energy Program (solar, thermal and wind) for the production of 22 000Mw by 2030;
Development Plan of the Fishing and Aquaculture Activities by 2025.Access to regional markets :
Geostrategic position allowing proximity to the European, African and Arab markets ;
7 border markets (Tunisia – Libya – Niger – Mali – Morocco – Western Sahara – Mauritania);
Membership in the agreement of the Arab Free Trade Area ;
Signature in perspective of the Association Agreement with the European Union ;
Membership in perspective in the World Trade Organization.Functional and modern infrastructure in conformity with international standards:
Roads: 112039 km of roads and highways (40th network World, 3rd in Africa) including 29 573 km of national roads ;
Airports: 36 airports, including 16 international ;
Railways: 3973 km of km of railways of which a tiny part is electrified. In 2016/2017 horizon, the length of the rail network will be 6000 km ;
Ports: 45 maritime infrastructure including 11 commercial ports, two oil ports, 31 fishing ports, one (01) marina and 2,200 maritime traffic lights;
Transportation:
One (01) Metro in Algiers with a length of 9.5 km with three extensions with a total length of 9.4 Km in progress;
3 tramways (Algiers, Oran and Constantine), and 04 underway of realization (Ouargla, Sidi Bel Abbes, Sétif).A qualified, young and competitive labour force:
5% of GDP for education;
24% of the state operating budget for higher education;
86% literacy rate;
6% of the Algerian population training age annually;
96% of school enrolment;
5 million Students, including 35,000 registered in doctoral training and 90000 in technical areas;
2 500 000 graduates since 1962, from 97 universities, 10 university centres, 20 national schools, 7normal schools, 12 preparatory schools;
Almost 643,700 enrolled in vocational education which 200,000 (average) graduates from 1213 establishments (institutes and centres).Competitive production factors costs:
– Energy:
Natural gas: 0.21 to 0.40 Euros / therm;
Electricity: 1 to 4 euro cents / kWh on average.– Salary: 180-900 Euros (the minimum wage is set at 180 Euros);
– Gasoline super 0.26 Euros / L Gas Oil 0.16 Euros / L.
Incentives for investment:Important tax incentives up to 10 years of exemption, depending on the location and size of the project.
And other additional benefits:
Partial or total reimbursement of expenses related to infrastructure works within the framework of derogatory scheme ;
Reduction in employers’ contribution to social security for the recruitment of young job seekers ;
The concession of land by mutual agreement, over periods of 33 years renewable and giving rise to the same property rights arising from sales ;
Discounts on the price of the rental fee on the land and property acquired within the framework of the realization of the investment ;
Tax exemptions throughout the life of the project for exporting projects ;
Temporary Exemption for 5 years, of companies benefits tax (IBS), Global Income tax(IRG) and Tax on the turnover and 3%bonus of the interest rate on bank loans granted to investments in certain activities within the steel and metal industrial sectors, the hydraulic binders and Electrical Appliances, Industrial chemistry, mechanics and automotive Pharmaceuticals, aerospace, shipbuilding and repair, advanced technology, food processing, textiles and clothing, leather and derivatives, wood and furniture industry ;
Exemption from VAT, customs duties, taxes having equivalent effect or any other charge for the equipment needed for investment by industrial companies in the field of research and development ;
Reduction by 50% of companies benefits tax (IBS) or Global Income tax (IRG) for individuals and legal entities, activating and fiscally domiciled in the wilayas of Illizi, Tindouf, Tamanrasset and Adrar, and this for a period of 05 years from the January 1, 2015 ;
Support by the Public Treasury Administration to bank interest for investments made by industrial companies for the acquisition of technology and mastery to enhance the industrial integration rate of their products and competitiveness ;Extension until 31 December 2019, of the application of reduced rate of customs duty on acquisitions of equipment and furnishings not produced locally by hotel standards and within the scope of modernization and upgrading under the “Quality Plan Tourism
Algeria” -The list of equipment and furnishings concerned is determined by the inter-ministerial order of March 2, 2014 ;
Reduction of charges of contribution to social security (recruitment of young jobseekers):North: 56%to 80%;
Highlands and South: 72% to 90%.Two incentive schemes are provided
Investment projects may benefit from fiscal exemption and reduction according to the location and the impact of the projects on the economic and social development.
General scheme:A. Realization period:
Exemption from customs duties on non excluded imported equipments, directly involved in the realization of the investment;
Exemption from VAT on non exclude goods and services, whether imported or purchased locally, and that are directly involved in the investment realization;
Exemption from property transfer tax in return for all property acquisitions, realized within the framework of the concerned investment.B. Exploitation period:
For duration of (3) years for project creating more 100 jobs at the start-up of the activity and after observation of commencement of activity, established by the tax authorities to the diligence of the investor:
Exemption from company profits tax;
Exemption from Professional activity tax.This period is extended to five (05) years for projects creating one hundred and one (101) jobs at the start-up of the activity, and / or for investment in strategic sectors the list of which is set by the National Council of Investment.
Derogatory scheme:Scheme for the zones to be developed:
A- Realization period:
exemption from transfer tax on real estate acquisitions realized within the framework of the investment ;
application of the registration fee at the reduced rate of two per thousand (2 ‰) for acts of companies and capital increases ;
partial or total taking in charge by the State, after the Agency’s assessment, of expenditures concerning infrastructure works necessary to the implementation of investment ;
VAT exemption for goods and services not excluded from the benefits entering directly in the realization of the investment, whether imported or purchased on the local market ;
Exemption from customs duties for imported goods not excluded from the benefits, entering directly in the realization of the investment ;
Exemption from registration fees, land advertisement fees and the domanial remuneration on built and non built property, granted for the realization of investment projects. This benefit is applicable for the minimum duration of the granted concession.Also benefit from these provisions concessions previously granted by decision of the Council of Ministers in favour of investment projects.
B. Exploitation period and for a duration of ten (10) years:
exemption from company profits tax ;
exemption from Professional activity tax ;
exemption from the acquisition date from the property tax on real property within the scope of investment ;
Additional benefits of nature to improve and / or facilitate investment, such as the deferral of deficits and depreciation periods.Investment of particular interest for the national economy (convention)
a. Realization period:
Exemption from duties, taxes, taxations and other tax deductions on all goods and services imported or locally purchased, that are necessary for the realization of the investment ;
Exemption from registration fees on transfers of real property allocated to the production as well as advertising law which they are subject ;
Exemption from registration fees on the constituent acts of companies and capital increases ;
Exemption from property tax on real estate allocated to the production ;
Exemption from registration fees, of land advertisement fees and the domanial remuneration on built and non built property, granted for the realization of investment projects. This benefit is applicable for the minimum duration of the granted concession.Also benefit from these provisions concessions previously granted by decision of the Council of Ministers in favour of investment projects.
b.Exploitation period:
For duration of ten (10) years from the observation of commencement of activity, established by the tax authorities to the diligence of the investor:
Exemption from Corporate profits tax ;
Exemption from Professional activity tax ;
Exemptions from or reductions of taxes, duties or taxes, including value added tax levied on the price of goods produced by the investment within the scope of emerging industrial activities upon decision of National Council of Investment ;
Other benefits upon decision of National Council of Investment such as the partial or total coverage by the State, after evaluation of the Agency of expenditure related to infrastructure works, required for the completion of the investment.Opportunities for financing through public banks
– Interest rate 3.5% ;
– Bonus of 2% which can range to 4.5% (in tourism projects in the South) ;
– A network of 29 banks and financial institutions, including:
14 private and 6 public and 9 financial institutions;
7 373 100 billion dinars of credit to the economy.– The existence of Leasing Companies;
– Availability of investment funds:
FNI shareholding to 34% in major projects;
05 Investment Funds covering the whole territory up to 49% participation in the capital of SMEs.– Possibilities for the use of financial institutions guarantees: Guarantees Fund Credits Investment “FGAR”.
