By H.E. Mr. Brahim Romani Ambassador of Algeria to Pakistan
– Algeria, significant potentials and major projects:
Algeria, the largest area in Africa and the Arab and Mediterranean regions with 2,381,741 km2, contains 58 states, a strategic location, linking Africa to Europe via the Mediterranean, Balcony connects by sea with Asia through the Suez Canal, and by sea/west with America through the Strait of Gibraltar, and south with Africa through The Trans-Saharan road that brings together the Sahel countries and extends to Nigeria.
Algeria, with a coast of 1,600 km long, rich in beautiful beaches and marine resources, a climate with four seasons per day, a land rich in tremendous natural resources: oil and gas, iron mines (estimated reserves of 3,5 billion tones), phosphates (estimated reserves of around 2 billion tones), gold, zinc, marble, salt and Kaolin, and a vast desert rich in renewable energies (more than 3.000 hours of sunrise per year). A good fertile land full of various agricultural products, in the north / the coast and the central plateaus and the south / oases and desert.
Algeria, modern infrastructure, extensive network of highways and railways, dozens of ports and international airports. It offers excellent opportunities for investment and trade with good services and low energy prices.
-The new Algeria, Diversification of partnerships with the world:
The new Algeria, under the leadership of the President of the Republic, Mr. Abdelmadjid Tebboune, is working to achieve comprehensive and modernizing reforms of state structures, and sustainable development in various, developing the economy and activating production mechanisms, diversifying cooperation and partnerships with different countries and groups.
In this context, a new investment law providing the necessary concessions and guarantees, according to international standards, to national and foreign companies and businessmen,.
The Investment Law includes the creation of a “Algerian Agency for Investment Promotion” under the authority of the Prime Minister, which represents the single window for major and foreign investments, which communicates with diplomatic and consular representations, and accompanies investors in implementing all procedures related to their projects, by creating a digital platform for the investor, and reducing the deadlines for studying investors’ files to less than a month.
The foreigner is granted the right to invest in all sectors by 100%, with incentives to exempt from fees and taxes in priority sectors and areas that the state pays special attention to, which range from 3 to 5 and 10 years. Note that the fees imposed on companies and services are low. As well as expanding the guarantee of transferring the invested amounts and the proceeds resulting from them to non-resident investors.
To point out, Algeria is an energy country par excellence, energy prices are very low, beneficial in the cost of production and encourage investment, natural gas: 0.21 to 0.40 Euro/ term ; electricity: 0.1 to 0.4 Euro cent/ kw hours; Gasoline : 0.30 Euro / liter and gasoil :0.17 Euro / liter.
-Algeria and Pakistan, a rich history of solidarity and cooperation:
Algeria and Pakistan, both of which are major pivotal countries in their region, possess considerable wealth and potential, high competencies and expertise, diversified trade exchange opportunities and fruitful partnerships in various sectors such as: industry, agriculture, energy, mines and modern technologies.
Today, Algeria attaches the most importance to “economic diplomacy”, by diversifying and developing foreign partnerships, especially with the Asian region, in which Pakistan is a strategic country. In this context, the Embassy of Algeria in Islamabad is coordinating with all official and economic institutions in the two countries to activate bilateral exchange and cooperation relations, accompany companies and businessmen in their activities in both directions, and provide the necessary information, facilities and services, which would raise these relations to the level of the desired partnership, fruitful and beneficial to the two brotherly countries.
The new investment law in Algeria
Important privileges and guarantees with international standards
1- Objectives of the Investment Law:
The new investment law aims to improve the investment climate to liberalize the spirit of entrepreneurship and diversify the national economy within a comprehensive and stable vision that takes into account the following:
– Consecrating the principles of freedom of investment in line with the provisions of the Algerian constitution for the year 2020. Concentrating the tasks of the National Investment Council on proposing national policy in the investment field and coordinating and evaluating its implementation. Transforming (the National Agency for Investment Development) into the Algerian Agency for Investment Promotion by giving it the role of promoter and facilitator for investments through:
-Creating a single window with national jurisdiction for major projects and foreign investments. Creating single, decentralized windows for local investment and enhancing its powers, through qualifying representatives of its public authorities and administrations.
-Fighting bureaucracy, by digitizing the procedures related to the investment process by creating a digital platform for the investor, and the immediate delivery of the investment project registration certificate.
-Expand the scope of guaranteeing the transfer of invested amounts and the revenues resulting from them to non-resident investors.
-Introducing incentive systems for investment in priority sectors and areas that the state pays special attention to, in order to ensure better targeting of the benefits granted to investment.
-Strengthening the guarantees related to the consolidation of the principle of freedom of investment. Strengthening the legal system to protect investors from bureaucratic abuse through the creation of an independent, high-level mechanism, comprising judges and economic and financial experts, to be placed at the Presidency of the Republic and to adjudicate complaints and appeals submitted by investors.
– Placing the (Algerian Agency for Investment Promotion) under the authority of the Prime Minister.
– Attaching representatives of the various sectors appointed to the Single Window to the Algerian Agency for Investment Promotion, with the power to take all investment-related decisions.
-Abandoning the aspects of authoritarianism in dealing with investor files, and reducing the deadlines for studying them to less than a month, while adopting international standards in attracting investments, and focusing on speed, efficiency and sustainability. As well as supporting investments those depend on local raw materials.
-Imposing the most severe penalties on anyone who obstructs investment operations, regardless of their status, nature and responsibility.
2- Tasks of the Algerian Agency for Investment Promotion:
1- In the field of media:
Ensuring reception and information service for the benefit of investors in all areas necessary for investment. Gathering the necessary documents that allow better identification of the legislation and regulations related to investment, and their processing, production and dissemination by every appropriate means. Setting up information systems that allow investors to obtain all the necessary data to prepare their projects. Establishing data banks related to business opportunities, resources and potentials at the local level. Develop a database, in coordination with the concerned departments and authorities, on the availability of real estate for investment.
2- In the field of facilitation:
Setting up and managing the digital platform for the investor, assessing the investment climate and proposing measures that would improve it, providing all the necessary information, especially about investment opportunities in Algeria, real estate offer, incentives and benefits related to investment, as well as related procedures.
3- In the field of investment promotion:
Initiating every activity with public and private bodies in Algeria and abroad, with the aim of promoting investment in Algeria. Preparing and proposing a plan to promote investment at the national and local levels, and designing and implementing the necessary capital mobilization operations. Ensuring the service of establishing business relationships, facilitating communications between investors, and enhancing business and partnership opportunities. Establishing and developing cooperation relations with similar foreign bodies.
4- In the field of accompanying the investor:
Organizing a department to guide and take care of investors. Set up a consulting service with resorting to external expertise when needed, accompanying investors to other departments.
5- In the field of privileges management:
Preparing investment registration certificates and amending them, when necessary. Determining the structured projects based on the criteria and rules specified in the applicable regulation. Verifying the ability to benefit from the benefits for registered investments. Marking the lists of goods and services that can benefit from the benefits offered by the investor, and issuing decisions to withdraw the benefits. Editing the minutes of inspection of entry into the exploitation phase and determining the duration of the exploitation benefits granted to the investment. Carrying out, in accordance with the applicable regulation, the assignment and/or transfer of goods and services that have benefited from the advantages. Preparing certificates of exemption from the value-added taxes.
6- In the field of follow-up:
Ensuring, in communication with the concerned departments and bodies, that the commitments made by investors are respected. Handling investor petitions and complaints. Develop a monitoring, listening and follow-up service for the benefit of registered investments.
The single windows are created as follows:
The single window for major projects and foreign investments. Decentralized single windows. The single window for major projects and foreign investments has national jurisdiction. Decentralized single windows have local jurisdiction over investments other than those that fall under the jurisdiction of the single window for major projects and foreign investments.
Single windows undertake the task of sole dialogue with the investor, and in this capacity are assigned, in this particular capacity, with the following: receiving the investor, registering investments, managing and following up on investment files, accompanying the investors to the concerned departments and bodies.
The Single window gathers, in one place, in addition to the agency’s agents, representatives of: Tax Administration, Customs Administration, The National Center for the Commercial Registry, construction departments, bodies in charge of real estate directed to investment, environmental interests, bodies in charge of work and employment, social security funds for wage and non-paid workers. It shall gather, when needed, representatives of other departments and bodies related to investment and charged with implementing the procedures related to the following:
Realization of investment projects. Issuing decisions, licenses and every document related to the practice of the activity related to the investment project, obtaining real estate destined for investment, and following up on the obligations undertaken by the investor.
Digital Investor Platform:
The digital investor platform is the electronic tool to guide, accompany and follow up on investments since their registration and during the period of their exploitation. It guarantees the dematerialization of all procedures and the completion of all procedures related to investment via the Internet and allows adapting the procedures to be followed according to the type of investment and the type of requests. It is interconnected with the information systems of the bodies and departments related to the act of investment.
The digital platform aims to:
Ensuring the process of establishing companies and investments, simplifying and facilitating them, improving communication between investors and the economic management. Ensuring transparency of the procedures to be carried out and the modalities of examining and processing investor files. Expediting the processing of investor files and studying them by the concerned departments. Allowing investors to follow the progress of their files from a distance. Improving public service In terms of deadlines, staff efficiency, and quality of service provided. Improving the performance of public utilities and making them more available and easier for investors to access. Organizing effective cooperation between the departments concerned with the investment action, allowing direct and immediate exchange between the agents of the concerned departments and authorities.
Algeria :Privileges and the Advantages of the Investment
Incentive systems and conditions eligible to benefit from the advantages:
Article 24: The investments within the meaning of Article 4 of this law, upon the request of the investor, may benefit from one of the incentive systems mentioned below:
-The incentive system for priority sectors, and it is called “Sectors System”.
-The incentive system for the regions that the state attaches special importance to, and it is called “Regions System”.
– The incentive system for investments of a structured character, and it is called the “Structured Investments System”.
Article 25: Investments, before their realization, must be subject to registration at the competent single windows mentioned in Article 18 of this law, in order to benefit from the advantages stipulated in the provisions of this law. Which authorizes the investor to benefit from the privileges that he has the right to claim with the concerned departments and authorities.
Article 26: The investments made in the following fields of activities are eligible to benefit from the Sectors System: mining and quarrying, agriculture, aquaculture and fishing, industry, food industry, pharmaceutical and petrochemical industries, services and tourism, new energies and renewable energies, knowledge economy and information and communication technologies.
Article 27: In addition to the fiscal, quasi-fiscal and customs incentives provided for in the public law, investments that can benefit from the sectors system shall benefit from the following advantages:
- Entitled Completion Phase:
1) Exemption from customs rights in respect of imported goods directly involved in the realization of the investment,
2) Exemption from value-added tax in respect of imported or locally acquired goods and services that directly enter into the realization of the investment,
3) Exemption from paying the right of transfer of ownership in return and the fees on real estate advertising from all real estate acquisitions made within the framework of the relevant investment,
4) Exemption from registration rights imposed in connection with the incorporation contracts of companies and capital increases,
5) Exemption from registration rights and fees on real estate advertising and the amounts of national properties that include the right of lien on the built and non-built real estates destined for the implementation of investment projects,
6) Exemption from real estate fees on real estate properties that fall within the framework of investment for a period of ten (10) years, starting from the date of acquisition.
- Entitled Exploitation Phase: from a period ranging from three (3) to five (5) years, starting from the date of commencing the exploitation:
1) Exemption from tax on corporate profits.
2) Exemption from tax for professional activity.
Article 28: Considerable to benefit from the Regions System, the investments made in:
The sites dependent on the high plateaus, the south and the great south, the sites whose development requires special support from the state, the sites that possess potentials of valuable natural resources.
Article 29: In addition to the fiscal, quasi-fiscal and customs incentives stipulated in the general law, investments that can benefit from the advantages of the “Regions System” and in which the activities carried out are not excluded from the advantages specified in this article, may benefit from the following advantages:
- Entitled Completion Phase: One of the advantages specified in Article 27 of this law.
- Entitled exploitation Phase: for a period ranging from five (5) to ten (10) years starting from the date of commencing the exploitation: 1/ Exemption from tax on corporate profits. 2/ Exemption from professional activity tax .
Article 30: The investments shall have a high capacity to create wealth and create jobs, which would increase the attractiveness of the region and be a driving force for economic activity for sustainable development that can benefit from the “structured investments system”.
Article 31: In addition to the fiscal, quasi-fiscal and customs incentives stipulated in the general law, the investments that can benefit from the structured investment system may benefit from:
– Entitled the completion phase: from the advantages stipulated in Article 27 of this law.
The advantages of the completion phase stipulated in this Article may be transferred to the parties contracting with the beneficiary investor, who are entrusted with the realization of the investment for the latter’s account.
– Entitled the exploitation phase: starting from the date of commencing the exploitation, the period ranges from five (5) to ten (10) years, from:
1/ Exemption from tax on corporate profits, 2/ Exemption from professional activity tax.
Structured investments may benefit from the state’s accompaniment by assuring partially or completely the preparation works and basic installations necessary for their realization, on the basis of an agreement prepared between the investor and the agency acting in the name of the state, and the agreement is concluded after the approval of the government.
Article 32: Subject to the period of exemption from real estate tax on real estate properties that fall within the framework of investment, the investments mentioned in Article 4 of this law must be completed within a period not exceeding three (3) years, and this period may be increased to five (5) years. With regard to investments included in the “Regions System” and “Structured Investments System”.
The time limit for the completion of the investment shall apply from the date of registration of the investment with the agency or from the date of delivery of the building permit in cases where such a permit is required.
The completion period may be extended for a period of twelve (12) months, exceptionally renewable once for the same period, when the completion of the investment exceeds a certain progress rate.
Article 33: The period for benefiting from the advantages, titled the exploitation phase, is determined on the basis of the prepared evaluation networks, taking into consideration the objectives set forth in Article 2 above, as well as the criteria established for each incentive system. Percentage, the expanding or rehabilitation investments benefit of the advantages given in the entitled exploitation phase counting the percentage of new investments compared to total completed investments.
Various provisions
Article 34: In the case of practicing a mixed activity or several activities, only those eligible to benefit from the advantages specified in this law. The beneficiary of advantages, in this regard, holds an accounting that allows determining the turnovers and results related to the activities eligible for benefiting from the advantages.
Article 35: The existence of several advantages of the same nature established under the applicable legislation with the advantages provided for under this Law, shall not lead to the combination of the respective advantages, and the investment shall benefit from the better incentive.
Article 36: The departments and bodies concerned with implementing the provisions of this law, under the title of follow-up, in accordance with their powers and throughout the acceptable period of possession of goods acquired within the framework of the advantages, are charged with ensuring that investors respect their obligations underwritten when registering for investment. In the event of non-respect of the obligations resulting from the application of the provisions of this law or the undertakings made by the investor, these advantages can be withdrawn, partially or completely, without prejudice to the penalties stipulated in the applicable legislation, in accordance with the provisions stipulated in the legislation in force.
