Investment Climate

Algeria’s population of 36 million, its energy wealth, and growing demand for modern infrastructure and consumer products have generated broad interest in this market from companies around the world.

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
While Algerian officials are quick to seek technology and know-how transfer, they have been pursuing efforts to secure greater returns for Algerian interests since the 2006 amendments to the hydrocarbons law required majority state partnership in all oil and gas projects and imposed a heavy windfall profits tax on oil profits when prices are above $30 per barrel.

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) ( 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 ( maintains an office for investment policy and one for promotion of privatization.

Conversion and Transfer Policies
The Algerian dinar is considered fully convertible for all commercial transactions. The Bank of Algeria (Banque d’Algérie, the nation's central bank) manages Algeria’s foreign reserves, controls foreign exchange, and delegates most of these controls to the banks themselves. Legally registered economic operators may have access to foreign currency to make payments, subject to bank domiciliation, without any pre-authorization. The same transfer procedures apply to both goods and services, including insurance, transportation, maintenance, technical assistance, and even training contracts related to imported or exported goods.

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.

Dispute Settlement
Algeria is a signatory to the convention of the Paris-based International Center for the Settlement of Investment Disputes ( Algeria ratified its accession ( to the New York Convention on Arbitration and is a member of the Multilateral Investment Guarantee Agency ( The code of civil procedure allows both private and public sector companies full recourse to international arbitration. Algeria permits the inclusion of international arbitration clauses in contracts.

Performance Requirements and Incentives
Algeria does not impose general performance requirements on foreign investments. However, the national energy company Sonatrach must be a majority shareholder in any venture in the hydrocarbons sector. Furthermore, statements made by the president and prime minister in mid-2008 suggest that future foreign investments in Algeria in any sector will require Algerian majority partnership.

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
Foreign entities have largely equal rights to establish and own business enterprises in Algeria, and engage in most forms of remunerative activity within the framework of the requirements for Sonatrach participation in hydrocarbons ventures. Private enterprises have equal status with public enterprises and compete on an equal basis with respect to access to markets, credit, and business operations.

Protection of Property Rights
Secured interests in property are generally recognized and enforceable. As part of Algeria's negotiations for WTO accession, the government adopted new laws in July 2003 on copyright and related rights, trademarks, patent and integrated circuits.

Transparency of Regulatory System
Algeria’s regulatory system is largely transparent. Each ministry defines the rules for doing business in the sectors it manages, and regulatory bodies are established to administer them.

Bilateral Investment Agreements
Algeria executed a European Union association agreement in 2005. The agreement provides for the gradual removal of import duties on EU industrial products over twelve years, and removed duties immediately on 2,000 other products.

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.