原創 Ahcène BOUKHELFA 中國投資參考
Algeria is the largest country in Africa and the Arab world.With its important potentialities, Algeria offers various investment opportunities for Chinese economic operators that this contribution intends to briefly present.
Chinese companies have been present in Algeria for decades. They participated in recent years Algerian development programs, especially in the field of infrastructure (highway and housing construction), and other sectors, as they were granted different public development projects for more than 70 billion US Dollars in the last 20 years.
With the ongoing shift of the Algerian economy,the country is more than ever engaged in diversifying its economy and reducing its dependence on oil and gas revenues,which could provide new opportunities for lasting and win-win business activities.
Why to invest in Algeria?
The reasons to invest in Algeria are numerous and diverse.
The very long friendship and strategic relations between Algeria and China are important ones. Algeria – China bilateral good ties constitutes the starting point for any economic partnership that business operators should bear in mind.
Algeria and China enjoy traditional friendship for more than 60 years. The two countries agreed to elevate their cooperation to a global strategic partnership since February 2014.
Bilateral legal framework of cooperation has been enriched by the signing of many agreements in various fields such those on :
-reciprocal encouragement and protection of investments, signed on October 1996 (ratified on November 2002);
-Non-double taxation and prevention against tax evasion signed on 06 November 2006 (ratified on June 2007);
-Cooperation on production capacity, signed on October 2016 and entered in force on September 2017,
-Cooperation in plant protection and plant quarantine signed on 2017 and cooperation in the areas of animal health and quarantine signed on 2017.
Furthermore, Algeria joined the "The Belt and Road" initiative on September 2018. The entrance in force of the related Memorandum of Understanding (MoU) on August 2019,opens tremendous opportunities of cooperation within the initiative.
They said agreements as well as "the Belt and Road " initiative and its related mechanisms (BRITACOM, Energy..) will offer ways to enhance and further deepen the bilateral relations by investing mutually in strategic infrastructure projects that will benefit the two friendly people.
Taking into account this particular relationship between Algeria and China, , it is then obvious that when seeking investment opportunities in Algeria, Chinese companies will not only enjoys a very friendly environment but also a strong support from the authorities of the two countries.
In another hand, Algeria’s great potentialities are factors of importance for profitable investment.
1.With more than two million and three hundred thousand square kilometer (2,300,000 km2), Algeria is blessed with tremendous natural resources, among them oil and gas (international producer and exporter), Phosphate (150 listed deposits and estimated reserves of around 2 billion tones), Iron (estimated reserves of 3,5 billion tones), Zinc, marble, salt and Kaolin. It enjoys more than 3.000 hours of sunrise per year.
2.Algeria has a population of more than 40 million people, whom average age is under 30 years old that constitutes a young and high skilled labor force.
3.Algeria, also, enjoys a strategic geographic location, signed different regional trade agreements that offers proximity and access to large regional market :
-the European union market (of more than 400 million people), located at just two (02) hours-flights and 24 hours by sea from Algiers.
Goods manufactured in Algeria will freely access the European market according to the association agreement that was signed in April 2002 and entered into force in September 2005. This agreement set out a framework for the EU-Algeria relationship in all areas including trade.
According to Art 08 of the Agreement, 「Products originating in Algeria shall be imported into the Community free of customs duties and charges having equivalent effect」.
-Seven bordering markets (Tunisia, Libya, Niger, Mali, Mauritania, Western Sahara and Morocco) of around 130 million people,
-Arab countries market of more 300 million people since Algeria in member of the Arab free trade zone ;
-Africa continent market that will be freely accessible after the entry in force of the agreed African Trade economic zone within the framework of African Union.
4.Algeria offers also completive factors of production :
-Its young labor force is not costly and the minimum gross wage in Algeria is around 200 USD.
-As for household needs, power supply for industry is subsidized. Productions plants enjoy one of the cheapest power supply costs in the world.
⬆ Algerian architecture and cultural,Historical heritage(Photos provided by Algerian Embassy in China)
What is the legal framework for investment in Algeria?
Concerning the investment legal framework, the "Freedom to invest""non-discrimination" "investment protection" and "intangibility of benefits" are the main principles governing investments in Algeria.
It allows any natural person or legal entity, national or foreigner, to invest in economic activities pertaining to the production of goods and services, as well as investments made within the framework of awarding concessions and/or licenses for specific sectors.
In addition, new measures have been implemented recently in June 2020 in order to ease foreign investment framework in Algeria by lifting some restriction introduced since 2009. In this regard, it is worth to mention that:
-All sectors of activity are now open to foreign companies and the rule limiting foreign shareholding to 49% is adjusted in a large extent.
Except a very short list of sectors considered as strategic and/or hole sale activity (purchase and resale of goods on the same condition), for which foreign shareholding of 49% is maintained, foreign companies may freely invest and hold 100% shares of a large number of activities.
-Repeal of the obligation to finance foreign investment by resorting to local financing.
-suppression of the State's pre-emption right when foreign companies holding shares in locally incorporated entity want to transfer its shares to others foreign companies, and its replacement by a prior Government's authorization.
The Government prior authorization concerns only shares hold on entities carrying on one of the strategic activities, as defined in Article 50 of the complementary Finance Act for 2020.
What sectors are given priority and more incentives for investment in Algeria?
Furthermore, Algerian legislation guarantees to foreign investors the transfer of the invested capital and the related generated incomes, while Algeria signed around 40 bilateral Agreement on reciprocal encouragement and protection of investments.
Investment Law1 grants wide range of incentives to eligible investments which magnitude depends on the importance of investment and the contemplated activities:
Three (03) schemes are to be considered in this regard:
• Ordinary regime (common incentives) which applies to any eligible investment and which includes various incentives, nature and length of which depends on the nature of the investment;
• Additional incentives regime which applies to investments in the prioritized sector (tourism, industry and agriculture) or employment generating investments (more than 100 employment);
• Investment agreement regime: Exceptional incentives can be granted to investments of special interest in Algeria. These incentives are granted through an investment agreement between the investor and the National Agency for the Development of Investment (Agence Nationale de Développement de l』Investissement).
For each schemes, a first set of incentives are granted during the setup phase (up to 05 years), such as : exemptions on VAT, on customs duties, on transfer duty on real estate acquisition as well as the possibility for total or partial assumption by the State of expenses related to the facility work necessary to carry out the investment.
Complementary incentives are also granted during the execution phase of the investment (from 03 up to 05 or up to 10 years), that include exemptions from the Tax on Company Profit, Professional Activity Tax as well as Land Tax.
Additional benefits or facilities apart from those indicted above, may be granted for investments related to prioritized sectors considered of great interests for the national economy.
Meanwhile, it is important to mention that the related tax rates in Algeria are among the lowest in the Maghreb region:
• Tax on company profit - TCP (IBS) is fixed at 25%. The rate may be reduced to 12.5% if the profits are reinvested.
• Professional activity tax - PAT (TAP): is fixed at 2% and is deductible on the taxable profit. It is paid annually and affects the sales turnover achieved, excluding VAT.
• Value added tax - VAT (TVA): There are currently two VAT rates - a normal rate of 17% and a reduced rate of 7%
• Land tax - LT (TF): Its taxable base comprises the rental fiscal value of the taxable property. The rate for the land tax on the built property is 3%. While it is fixed at 5% for inbuilt properties located in a non-urbanized area, In urbanized areas, it varies between 5% and 10% according to the surface area.
Although,economic and commercial activities have been affected in Algeria as everywhere else in the world by the COVID-19 pandemic.The Algerian Government has decided different actions to contain the outbreak within Algeria’s territory and allocated from January to June 2020, around 500 million US dollars to the national response plan, of which around 2 million US dollars were dedicated to Algeria’s contribution to the Covid-19 Intervention Fund for Africa.
The Government’s response to curb and stop the spread of the virus resulted on an important and expected economic impact which the authorities are tackling by an oriented policy and a number of measures dedicated particularly to small business and small and medium enterprises (Monetary, Tax, Customs, Economic and social measures).
More measures and a comprehensive action plan is expected to be launched in the nearest future as the Government is working with economic and social partners within the dedicated safeguard national commission to better assess the impact caused by COVID-19 pandemic.
Editor | Zhang Mei
Design | Demi
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《中國投資》雜誌創辦自1985年，由國家發改委主管，國家發改委投資研究所、中國國際工程諮詢有限公司主辦，是我國投資領域唯一的中央級刊物，業界最早專注於投資領域趨勢報導的核心期刊。創刊三十多年以來，雜誌以全球視角看中國投資，涵蓋宏觀經濟、行業分析和企業投資案例，同時以全球市場為坐標，聚焦特定國家、地區和重大國際趨勢，目前已經成為世界各國政府官員、各類投資機構、專家學者、企業家以及記者媒體的專業對話平臺。
《中國投資》雜誌每期覆蓋包括上市公司在內的200多家央企國企和10000多家中國民營企業、1000多家中央與地方政府決策部門和機構、1000多家行業協會和商會、300多家主要金融機構等，是了解宏觀經濟環境、行業趨勢前景和企業投資案例的重要參考。
自2016年始，在中聯部等相關機構的共同支持下，《中國投資》非洲版面世，為非洲各國與中國持久的大規模合作，提供一個專業而強大的對話平臺。
2017年，《中國投資》絲路版誕生，為一帶一路框架下各國各方與中國的合作互鑑，提供前瞻包容的思想引領，分享各行各業的創新創舉，在探索人類命運共同體的道路上共創未來。
China Investment, founded in 1985, is a monthly under the supervision of National Development and Reform Commission (NDRC) China’s macro-economic management agency, It’s jointly operated by Investment Research Institute under NDRC, China International Engineering Consulting Corporation. Enjoying an exclusive position under the central government, China Investment is the core journal which started the earliest among similar magazines to focus on the investment trend. Over the past 30-plus years, China Investment has been in line with theglobal market as its fundamental coordinate with a strategic focus on specific countries and regional markets and those major international propensities. China Investment is a key dialogue platform for officials from different countries, investment agencies, experts and scholars, business people and journalists.
China Investment has been a key source of references for the better understanding of macro-economic environment, sectoral and industrial outlook, and cases of investments, thanks to the fact that each of its new issue touches upon activities of more than 200 Chinese SOEs, listed or non-public, 10,000 private enterprises, 1000 decision-making bodies at the central and local governments, 1000 trade associations and chambers, and 300 strong major financial institutions.
Starting from May 2016 and under the auspices of the Ministry of Foreign Affairs and International Department of the Central Committee of Communist Party of China, China Investment African Edition came into being, providing a professional and powerful platform of dialogue for the ever-growing and sustainable cooperation between China and the African countries throughout the continent.
Inspired by Belt and Road Initiative, China Investment Belts & Roads Edition was born in May 2017, which provides forward thinking for the cooperation and mutual learning between China and related countries. It also aims to share the innovative ideas in various trades and industries and explore a shared future in building a common community formankind.
原標題：《Investment Framework And Opportunities in Algeria》
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