Financial sector reform is incremental at best, and the world financial crisis resulted in the indefinite suspension of the privatization of the state-owned bank Credit Populaire d’Algerie (CPA). In fact, privatization in general has stalled across all sectors.
Openness to Foreign Investment
The tax law has been amended to require companies to re-invest within four years the equivalent value of any tax benefits they obtain as incentives to locate in Algeria.
Three agencies have mandates to encourage and manage investment in Algeria. The National Agency for Investment Development (ANDI) (www.andi.dz) is responsible for facilitating investments and granting tax exemptions. The National Investment Council (CNI) was created to define investment strategies and priorities, and approve special investment incentives by sector. The Ministry for Industry and Investment Promotion (www.mipi.dz) maintains an office for investment policy and one for promotion of privatization.
Conversion and Transfer Policies
Algerian exporters outside of the hydrocarbon sector must repatriate their receipts and can convert only 50 percent into hard currency, receiving the other half in local currency. Hydrocarbon export remuneration, by law, is remitted 100 percent in Algerian dinars to local accounts.
Foreign investors are allowed to repatriate their profits, even if revenues exceed the original amount invested. Foreign investors can repatriate dividends, profits and real net income out of their assets transfer or through liquidation.
Performance Requirements and Incentives
The investment code provides a number of incentives for investment in Algeria, primarily related to VAT and other tax exemptions for periods of time that are dependent on the type of investment made and the nature of the package agreed two between the investor and the National Agency for Investment Development (ANDI).
Right to Private Ownership and Establishment
Protection of Property Rights
Transparency of Regulatory System
Bilateral Investment Agreements
Algeria signed bilateral investment agreements for the protection and promotion of investments with the following countries in the indicated years: Belgium/Luxembourg (1991), Italy (1991), France (1993), Romania (1994), Spain (1994), China (1996), Germany (1996), Jordan (1996), Mali (1996), Vietnam (1996), Egypt (1997), Bulgaria (1998), Mozambique (1998), Niger (1998), Turkey (1998), Denmark (1999), Yemen (1999), Czech Republic (2000), Greece (2000), and Malaysia (2000).
Algeria has also signed bilateral treaties to prevent double taxation with the following nations: United Kingdom (1981), France (1982), Tunisia (1985), Libyan Arab Jamahirya (1988), Morocco (1990), Belgium (1991), Italy (1991), Romania (1994), Turkey (1994), Syrian Arab Republic (1997), Bulgaria (1998), Canada (1999), Mali (1999), Vietnam (1999), Bahrain (2000), Oman (2000), Poland (2000), Ethiopia (2002), Lebanon (2002),Spain (2002), and Yemen (2002).
In 1990, Algeria signed both investment protection and double taxation agreements with the Arab Maghreb Union (UMA) countries (Libya, Morocco, Mauritania and Tunisia). Furthermore, Algeria joined the Arab Free Trade Area at the beginning of 2010.