Algeria Real estate, textile and automotive components

Priority sectors:

There are five priority sectors for investments: industry, tourism, agriculture, renewable energy and Information and Communication Technology. However, industry includes 15 strategic sectors being iron and steel, hydraulic plastics, electric and electronic appliances, chemicals, medicines, mechanics and automotive components, aerospace, ships building and repairing, advanced technology, food industries, textile, clothing and leather, timber and furniture and mines.

 

New investment facilities:

By the end of 2016, Algeria introduced new amendments to the investment law that included new facilities granted to foreign investments and joint ventures between the private and the public sectors. These amendments were on removing the obligations for foreign investors to submit the hard currency excess statement, and to be subjected to the national majority rule for foreign investments (49/51 percent) made before 2009 in case the commercial registry changes, and other restrictions.

 

Investment advantages:

Investment projects can benefit from tax exemptions and reductions, depending on the location of the investment activity and its impact on the socio-economic development.

The National Agency for Investment Development sets three levels of privileges in general:

-     Common privileges for investment projects: Privileges are granted according to investment zones and projects phases. In the Northern areas, the projects under implementation are exempted from customs fees on imported goods, from the Value added tax on goods and services and from the fees on ownership transfer and registration, in addition to a 90% reduction on annual rents of public property and a 10 years exemption from the real estate property fees. As for projects that create up to 100 job opportunities, they are exempted for 3 years from the profits tax, the professional activity fees and they benefit from a 50% reduction on annual rents of public property. Investments in the Southern areas and in high plateaus are also granted additional privileges in terms of the exemptions scope and duration.

-     Additional privileges for exceptional investment activities that create job opportunities: they are granted to activities in the tourism, industrial and agricultural sectors. Projects that create more than 100 permanent job opportunities, and that are implemented in regions in need of development are also granted tax exemptions for five years during the period following their completion.

-     Exceptional privileges to investments of particular importance to the national economy: They grant all common benefits related to the completion period in addition to exemptions from other tax withholdings. However, the duration of these advantages is extended during the exploitation phase which benefits from the added value fee applied to industrial activities for a maximum period of 5 years.

 

 

Source: Fdi markets

 

Major countries investing in Algeria, 2012-2016

Ibid

 

Areas for future development

The following table shows Algeria’s ranking according to the World Bank Doing Business index, from which the areas needing improvement emerge. The major areas by proportional order appear to be cross-border trade procedures, establishment of policies and mechanisms for financing facilities, drafting legislations that protect small investors, procedures for property registration and tax payment, procedures for starting a business especially for start-ups and providing electricity services for new projects, and other.

 

Algeria’s ranking in the World Bank indicators for ease of doing business for 2017 among 190 countries

 

Source: World Bank Doing Business 2017