17 Jun 2017 Five things to know about doing business in Angola
I. New Private Investment Law in Angola
In 2015 the Private Investment regime of Angola was slightly changed, with view to create more investment opportunities and ease the access to the Angolan market for foreign companies. The key points to be retained are:
• No minimum amount of investment required. Investment amount shall be approved on a case by case basis, depending on the project;
• Each project shall be approved by a separate Ministry, depending on the area of activity of the project and in case of projects above 10M $, it shall be always approved by the Presidency special bodies;
• Investors may receive tax reductions, depending on the amount and area of implementation of their investment;
Ⅱ. Formal requirement to issue a Capital Importation License removed
With the enactment of BNA (National Bank of Angola) Order (Aviso) n.º 14/14, which started being implemented only after enactment of the new Private Investment Law, the procedure to issue a Capital Importation License was drastically changed. With the Capital Importation License, investors were able to import cash into Angola under their Investment project. With the removal of this formal requirement, Investors can now import the cash only with the certificate approving their Investment projects (CRIP). The commercial banks are thereafter obliged to register the transaction before BNA in a 72-hour period. This new procedure will save valuable time to the investors, permitting them to shorten the pre-implementation period. Only amounts duly transferred to Angola, under its regulatory regimes may be later transferred abroad, as dividends/profit.
Ⅲ. Angola ratifies the New York Convention 1958
On 6 March 2017, Angola deposited its instrument of accession to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, making it its 157th contracting State. The Convention will enter into force on 4 June 2017. This important step shows that Angola is arbitration and investment friendly. Angola also enacted in 2003 its Law on Voluntary Arbitration, enabling both institutional and “ad hoc” arbitration, making thus important progress towards stable and investment friendly environment.
Ⅳ. Angola Foreign Exchange Regulatory Regime
It is widely known, that Angola has a very strict foreign exchange policy. Transferring money from Angola abroad is only permitted if specific requirements are met. One of them, is to transfer the profit (dividends) of a private investment project. A few other regimes are the capital transactions, payment for goods, payment for services and foreign technical and management assistance.
(1). Capital Transactions 资本交易
All payments abroad related to: public debt payments, corporate obligations/bonds, loans, incorporation of branches and companies abroad, opening of bank accounts, property acquisition, shares acquisition and all other transactions similar to these or that are not subject to a different and specific regulation, have to receive a previous approval from BNA, which shall issue a specific license for that effect.
This regime regulates the payments abroad of all goods that are imported to or exported from Angola. No previous BNA approval is required If the payment abroad is realized within 360 days from the date if discharge of the goods on Angolan soil. After the 360 days, BNA has to approve such payments abroad. Within the legal time limit, all transactions are concluded directly with the commercial bank, by delivering all relevant documents.
(2). Payment for Services 服务条款
Payment for services abroad, such as salaries, royalties, freight, medical bills, education fees and other related to the latter are specifically regulated from 2013 and do not require a previous BNA approval if within Kz. 100 million Kwanzas annual limit. Services payments, related to the Oil & Gas industry have a higher annual limit. All services payments have to be concluded within 360 days, being subject to a BNA approval after such time limit.
(3). Foreign Technical and Management Assistance 外国技术和管理援助
Angolan companies may conclude contracts with foreign companies, in order to receive technical or management assistance, e.g. benefit from “know-how” they cannot receive in Angola. It is required that a specific contract is concluded, with specific clauses. Contracts within the annual limits of Kz. 300 million Kwanzas do not need a prior approval, which in this case is given by the Ministry of Economy. Such contracts have to be submitted to the Ministry of Economy for statistical purposes only. Companies under Private Investment regime cannot conclude such contracts with their foreign shareholders. The maximum duration of these contracts is 36 months, which can only be extended after prior approval from the Ministry of Economy.
Ⅴ. The REI requirement – Custom Delcaration
The REI is the mandatory registration for all companies that are involved in import/export of goods to and from Angola and without such a registration, any import/export of goods will not be permitted. REI registration has to be done before the Ministry of Commerce. Apart from the above, there is an existent quota introduced by the Ministry of Commerce for the importation of certain goods.
INVESTMENT OPPORTUNITES FOR CHINESE COMPAINES:
Project 1: A construction project of USD 250 million in Nigeria with over 145,000 sq.m of hotel, offices, premium retail and residential spaces on a land area of 25,000 sq.m. Looking for reliable large construction companies with a good track record in Africa.
Project 2: Spring water production project in the French Alps mountains with a production potential of 200 to 400 million necks per year. Looking for investors.
Project 3: An intent to acquire a company based in China and specialised in the distribution of brown spirits (Cognac, Brandy, Rum etc.) and Vodka.
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We coordinate an independent Pan-African network for business law firms from 45 African jurisdictions.