Algeria: Investing

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.

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 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 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.

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

Economic Developments and Prospects in Algeria - African Economic Outlook

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