Country Trading Profiles Algeria

Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Types of companies and capital (max/min)	Number of partners/shareholders and liability
Limited liability company(SARL) 100 000 DZD in shares (1 000 DZD per share) minimum fully subscribed and paid up.	1 or several partners Liability is limited to the amount of capital contributed. .
Joint-stock company (SPA) 1 million DA	minimum 7 shareholders Their liability is limited to the amount of capital contributed.
General partnership (SNC). no minimum capital.	minimum 2 partners. Their liability is joint and indefinite..
Limited joint-stock partnership no minimum capital.	There are two sorts of partners, the active partners and the silent partners. The liability of the active partners is joint and indefinite. The liability of the silent partners is limited to the amount of capital contributed.

Business setup procedures

Setting up a company	Algeria	Middle East & North Africa
Procedures (number)	14.0	8.1
Time (days)	24.0	20.0

Source: Doing Business.

For further information: Consult Doing Business Website, to know about procedures to start a Business in Algeria.
Trade Register
The competent organization: National Center of the Register of Commerce.

FDI in figures

Foreign Direct Investment	2008	2009	2010
FDI inward flow (millions USD)	2,646	2,761	2,291
FDI stock (millions USD)	14,497.9	17,206.4	19,497.6
Performance Index*, ranking on 141 economies	113	77	-
Potential Index**, ranking on 141 economies	70	-	-
Number of Greenfield investments***	72	32	-
FDI inwards (in % of GFCF****)	5.6	1.3	-
FDI stock (in % of GDP)	8.5	12.3	-

Source:

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.

Why you should choose to invest 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 measures on the ANDI website.

At the same time, on the 22^nd 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 the CNI (National Investment Council), something which would engender delays in the handling of files. More information on these new measures are 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.

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 (in French).

Finding assistance for further information

Investment aid agency: National Agency for Development and Investmentt
Other useful resources: Economic Developments and Prospects in Algeria - African Economic Outlook

COUNTRY TRADING PROFILES