Discover Algeria | About us | Press area | Contact |
To this end, a new investment code was promulgated in 2022 to consolidate and improve this attractiveness. This new investment code offers several tax advantages and new measures to facilitate investment in Algeria. A summary of the main features is presented below:
- Tax benefits:
Under the new investment code, there are three (3) regimes offering a range of
tax benefits and financial incentives, including exemptions during the
construction and operating phases (reductions in corporate income tax, property
tax, VAT, customs duties, etc.), depending on the sector of activity, the
investment zone and certain key investments.
Investments in mining and quarrying, agriculture and fishing, industry
(agri-food, pharmaceuticals and petrochemicals), renewable energies, tourism,
services and technologies benefit from tax incentives linked to the business
sector regime.
Investments in :
-localities in the High Plateaux, South and Deep South,
-localities requiring special support from the State,
-localities with natural resources to develop.
Under the structural investment scheme, tax incentives are available for
investments with high job and wealth creation potential, or which are likely to
increase the attractiveness of the localities where the investments are made
and create a knock-on effect for economic activity.
- Simplification and facilitation of administrative procedures:
Following the provisions of the Investment Code, a one-stop shop has been set
up to simplify administrative procedures for investors. The one-stop shop acts
as a single point of contact for investors, providing them with the support
they need to bring their investment project to fruition, thus facilitating
their entry into the Algerian market.
In addition, to ensure greater transparency in the awarding of contracts
and markets, mechanisms have been set up to boost investor confidence and
guarantee fair competition. These mechanisms can be summarized as follows:
-To ensure wide
dissemination and visibility for investors, principals are required to publish
all invitations to tender on accessible media,
-For greater clarity, principals must establish clear and transparent
evaluation criteria for the evaluation and selection of bids,
-To avoid any risk of favouritism, bid evaluation and selection committees must
be set up,
- For all complaints relating to the selection and award of contracts and
markets, appeals are provided for.
-Reports on the progress of investment projects and the awarding of contracts
are published regularly.
- Investor
protection:
To help create a climate of confidence and reassure investors that their assets
will last, the new investment code offers guarantees to protect foreign and
domestic investments against any form of expropriation or nationalization,
except in cases set out by law in return for compensation. The code also
provides for
-The free transfer abroad of profits, dividends and proceeds from the sale of
assets, in compliance with foreign exchange regulations.
-Legal certainty by guaranteeing the stability of the rules applicable to
investments for the period specified in the contract, to protect investors
against any change in the legal and regulatory framework governing investments,
particularly in tax matters.
-Protection of foreign investors against all forms of discrimination,
specifying that they enjoy the same investment rights as domestic investors.
-The possibility for investors to have recourse to various dispute settlement
mechanisms, including international arbitration (foreign investors).
-Protection of intellectual property rights (trademarks, patents, copyrights)
to guarantee investors, particularly foreign investors, protection of their
innovations.
- Encouraging innovation:
Aiming to encourage local innovation, the new investment code includes incentives for research and development (R&D).
As a result of these measures, and given the country's ever-growing economy, Algeria offers attractive investment opportunities, particularly in the energy and mining (hydrocarbons), agriculture, tourism, industry and technology sectors. However, investment opportunities linked to hydrocarbon activities will not be addressed, as these activities are governed by a specific law (Hydrocarbon Activities Act).
-
Investment opportunities:
As part of its policy to diversify its economy, Algeria offers real investment
opportunities in several fields other than the hydrocarbon sector, particularly
with the advent of the new investment code, have to be promulgated in 2022. The
following is an overview of the investment opportunities available to investors
interested in the Algerian market, particularly in key sectors such as
agriculture and agri-food, infrastructure and construction, manufacturing,
tourism, information and communication technologies (ICT) and banking.
Agriculture and agri-food industry:
To ensure food security and reduce food import dependence, Algeria encourages
investment in these areas through tax incentives, low-interest bank loans, etc.
The following investment opportunities have been identified:
-Developing agricultural projects to produce cereals, olive oil, fruit
and vegetables in various country's regions.
-Invest in agri-food industry projects for the production of olive oil and
dairy products in particular.
Infrastructure and construction BTP:
Given that the infrastructure and construction sector is an important area of
Algeria's development plan to modernize its infrastructure, several large-scale
projects are included in the construction program:
-housing, renovation of urban districts and modernization of urban infrastructure,
-transport
infrastructure (roads, freeways, railroads, ports and airports) and logistics
(industrial zones, dry ports).
Many investment opportunities exist in public infrastructure, housing
construction and the supply of materials and equipment.
Industry:
Industry is a privileged field of activity in Algeria, insofar as it is listed
as one of the important objectives to be achieved as part of its economic
diversification policy. Opportunities include
- the mechanical engineering industry: This field of activity, to
which the State attaches great importance, represents an excellent opportunity
for foreign investors in the production and assembly of vehicles, components
and spare parts, as well as in manufacturing technology,
-other industrial activities involving the production of components and parts
for products and equipment used in the textile, metallurgy, electronics,
household appliances and new and renewable energy industries.
Tourism and hotel infrastructures:
Endowed with a diverse tourist heritage (unique tourist sites in the Sahara,
archaeological sites, Mediterranean beaches and enchanting landscapes), Algeria
presents excellent opportunities for investors in this largely under-exploited
field of activity. It should be noted that the tourism sector, to which the State
attaches particular importance, benefits from various facilitations and
incentives enabling interested investors to build hotels and tourist complexes
in various regions of the country (particularly in the South and along the
coast).
Information and communication technologies (ICT):
The development of information and communication technologies (ICT) is also an
area of activity favoured by the State, as it is central to the country's
economic and social development policy, and as such benefits from various tax
incentives and advantages. Algeria has made substantial progress in ICT
development and has been ranked by the International Telecommunications Union
(ITU) as the third most dynamic country in the world in this field.
As the ICT sector is growing rapidly, improving Internet connectivity and
making it more widespread for the benefit of the population and economic
players is a priority for the public authorities, who will continue to take the
necessary steps to achieve the objectives set. There are many opportunities in
this area, which can be summarized as follows:
-Investment in the digital economy (creation of digital platforms, development
of mobile applications, fintech solutions, telemedicine, database security
systems, etc.),
-Provision of infrastructure (e.g. antennas and satellites) and digital
technology services (e.g. e-administration),
-Investment in e-learning to train and develop local ICT skills.
Banking
and finance:
Algeria has taken some steps to modernize its banking and financial sector,
aiming to align with the new regulatory framework governing investment in
Algeria and thus attracting foreign investment.
Within this framework, investment in banking and financial services, fintech
solutions and online banking services represent real growth opportunities for
interested investors.
If you would like a detailed analysis of the investment environment in
Algeria for a specific sector, and the challenges you may face as a local or
foreign investor, please contact us.