THE NATIONAL AGENCY FOR FOREIGN INVESTMENT
Objectives and main activities:
Law No. 15/94, of 23 and September 1994, changed the regulating legislation of foreign investment, brought a greater importance to the promotional activity of the foreign investment policy, without disregarding, however, the licensing flow of the present economic situation of Angola.
In this context, the Government considered establishing a personalized public service, to be the privileged intermediary of the foreign investor, to mediate with other departments and public services, and to strengthen the negotiating capacity of the nation.
In keeping with institutional policies included in the social and economic programme, the Government decided to change the denomination of the then Foreign Investment Office to the of the Foreign Investment Institute.
Role of the National Agency for Foreign Investment:
- To promote the Government's policy of foreign investment, and agreements for technology imports, and to perform any activities that are assigned of them by the Government in this matter
- To coordinate, guide and supervise foreign investment in Angola
- To support the execution of contracts or agreements of technology imports
- To promote the participation of the country in international organizations at meetings about foreign investment and technology transfer issues
- To undertake, either in Angola or abroad, promotional actions to attract foreign investments that are most beneficial to the country's economy
- To analyse foreign investment proposals and/or technology import agreements, and to grant the necessary legal authorizations
- To intervene in evaluating, negotiating and following up phases of the foreign investment agreements
- To advise and guide investors in the installation phase, particularly when in contact with other local entities
- To keep a register of national companies with foreign capital, foreign investment operations, and of the capital operations of foreigners in national companies
- To organize, and keep updated, all statistic data and other relevant information about foreign investment and technology agreements
- To give ideas on the adoption of legislative measures, both economic and administrative, or about international agreements in which Angola takes part, and those that are necessary or convenient to the active promotions and the selective attraction of foreign investments in Angola
- To perform all other activities law or Government orientation includes those.
Legal framework for foreign investment
The Government established a legal regime for foreign investment in Law No. 15/94 of 23 September 1994, which has since been improved. It reflects the recognition of foreign investment as a factor in achieving political-economic development objectives and above all, is intended to make Angola a centre for investment in the competitive market within the southern African region. Broadening the framework for incentives, simplifying, speeding up and de-bureaucratising the administrative process for authorization will achieve it.
The Law permits the realization of investments on the part of suitably recognized foreign entities with a technical and financial capacity without discrimination of any kind, as long as the project is compatible with the pursuit of economic development for the country and all for the well being for the population.
Investment to be made, in activities related to petroleum research and exploration, diamonds, and financial institutions are subject to specific legislation which may be applicable to some of those activities on a basis subsidiary to the investment law.
Types of foreign investment
The following acts and contracts, among others, constitute foreign investment activities, even if not directly associated with capital importing operations:
- Establishing and expanding of branches or other forms of corporate representation of foreign firms, creating new companies belonging exclusively to the investor.
- Participation or acquisition of interest in the equity of companies or grouping of businesses (new or existing), whatever forms this may take.
- Signing or altering of contracts for consortiums or third party associations.
- Taking total or partial control of commercial or industrial establishments through the acquisition of shares or through concession contracts for operations.
- Acquisition of property located in Angola when such property is part of foreign investment project.
- Operation of building and tourist complexes.
Investment operation less than U$D 250,000 are not considered foreign investment operations and do not enjoy the status and protection of this regime. These operations are in effect subject to commercial and exchange legislation.
Ways of investing
Foreign investment in Angola can be undertaken singularly or cumulatively in the following ways:
- Transfer of funds outside Angola.
- Use of funds foreign currency Angolan bank accounts held by non-residents.
- Use of credits and other assets held by the investor, which are eligible for transfer to the exterior under the terms of exchange regulations.
- Importation of equipment, accessories, and materials.
- Incorporation of technology.
Procedure for investing
Foreign investment projects may be undertaken by adopting one of the following regimes:
Prior declaration regime: Investments between U$D 250,000 and U$D 5000,000 are subject to this regime. The foreign investment institute (FII), after evaluation by a consultative with responsibility for activities covering investment questions, will issue a statement-certifying acceptance of the proposal. The action permits the applicant to undertake the investment within the precise terms of the proposal submitted. FII has 45 days to approve the investment, after which date the project may be consider approved.
Prior approval regime: This regime encompasses investments between U$D 5-50 million. After evaluation of the proposal by the FII, and obtaining an opinion from the Evaluation Commission (consultative body) the proposal will be submitted to the Prime Minister for a decision. The Prime Minister may authorize projects up to U$D 15 million. The Council of Ministers must approve all others.
Contractual regime: Investments subject to this regime include those equal to or greater than U$D 50 million. Also included are those investments, regardless of value, that involve areas of economic activity whose operation and management can only be carried out legally via concession or are considered to be of special interest to the national economy, either because of structural purposes or because of the contribution to the development and internationalisation of the Angolan economy. This procedural regime is complemented by the Sectorial Delimitation Law No. 13/94 of September 1994.
Public sector areas
Areas reserved for the public sector
- Production, distribution, and commercialisation of war material
- Banking activities involving central bank and issuing bank functions
- Administration of ports and airports.
Telecommunications infrastructure related to the basic national network and fundamental services.
Advantage of investing in Angola
Angola offers several benefits to the investor:
- A multiparty system.
- A strong compromise in the application of economic and political reforms, with the tendency for a market economy.
- Respect for private property, and constitutional guarantees to the investor.
- Economic legislation that is increasingly flexible.
- Abundance of cheap workforce and skilled young people.
- Baking and financial institutions, and independent institutes that support business activity.
- Availability of raw materials and energy resources, traditional and alternative, such as natural gas.
- Several business associations.
- Strategic placement of external markets, particularly in the Austral region.
- A population that is young, dynamic, endeavouring and knowledge seeking.
Incentives for investment
The government has been seeking to adjust incentives, in force since the colonial period, as well as creating other incentives to make Angola a more competitive country.
- Tax exemption from profits, within a 5 to 10 years period, to new investments directed to the interior of the country and areas declared as development centres
- Tax exemption from dividends, within a 5 to 10 years period, for new investments directed to the interior of the country and areas declared as attractive centres or of priority for any other reason
- Industrial contribution or tax exemption owed to the State, for the acquisition of land destined to industry
- Industrial contribution exemption within a period of up to 2 years, for those investments that use national input of no less than 60%
- Exemption or reduction, of up to 50%, of taxes owed to the importing of equipment goods and to raw materials within a regime of automatic lists
- Total exemption of products in the automatic lists, as long as the investments go to the priority centre zones of development, or for a period 3 years for the interior zones of the country
- Exemption from custom taxes for certain exported products, within a regime of automatic
- Reduction in the industrial contribution, calculated according to the share in the profit applicable to the exploiting activity for companies exporting more than 59% of their production, valued or factor costs
Guarantees to investors
Businesses constituted under the foreign investment regime have, for legal purposes, the standing of businesses under Angolan Law. Therefore, common national laws are applicable to them.
Transfer of dividends: After finalizing the capital transaction, the State guarantees the annual transfer abroad of dividends and profits, in accordance with the generally accepted accounting criteria contained in the business plan. This may take place after deducting legal reserves and withholdings and payment of taxes owed, bearing in mind the magnitude of the investment of the non-resident entities and any relevant existing contractual limitations.
The annual repatriation of dividends and profits may, in exceptional cases, be rescheduled under regulating conditions set by the Ministry of Finance if the quantity might be capable of significantly aggravating difficulties related to the balance of payments.
Indemnifications right: The right of fair, rapid, and effective indemnification is foreseen in the case of expropriation or nationalization of assets of the foreign investments undertaken for reasons of great public interest. The sum would be determined in accordance with common rules and practices of international law.
Internal and external credit: The foreign promoter has the right to seek internal and external credit for the financing of his investments. The conditions for recourse to external credit, however, depend upon licensing and authorization of the Ministry of Finance and the Central Bank. Concerning internal credit, the above authorization is dispensed with requiring only the fulfilment of relevant regulation in effect. Additional benefits are awarded to investors who develop relevant activities of a social character or promote training programmes for local labour.
Submission of proposals
Investment proposal (prepared on a form for the purpose) should be submitted to the Foreign Investment Institute in duplicate in cases of investments subject to prior approval or contractual regime. They must be accompanied by the following documentation:
- A power of attorney signature conveying authority for the submission of a proposal when the signatory is not the actual applicant.
- Authenticated copies of legal indentation and residency documents for the applicant, in the case of individual persons.
- Documentation proving the legal existence of applicants, in the case of collective parties.
In the case of corporations
- Draft statues of the future company.
- Certification of corporate category issued by a competent body within the last 30 days.
- Draft contract or association contract.
In the case of acquisition of interest in an existing company
- Authenticated copies of the statutes and the commercial registry of the company involved, minutes of the company's corporate body approving the participation and the last audit recognized by the Ministry of Finance.
In the case of supplementary loans of capital, advances and member loans
- A copy of the draft contract may also be request when the activity involves the signing or altering of contracts of a consortium or a corporation, the acquisition of shares or the signing of operating concessions, lease contracts or any agreement implying the exercise of ownership and operation on the part of the investor, or the acquisition of property. In the last situation a certificate of building registration issued within the last 30 days is necessary.
When participation by national investors is involved, the proposal should be accompanied by authenticated copies of legal identification and residency documents, in the case of individual persons, or authenticated copies of legal documents pertaining to the formation and commercial registry, in the case of collective parties.
Registration of the investment
Upon settlement of capital transactions and if applicable, upon award of deeds and corresponding commercial registrations (establishment or alteration of corporation), the investment must be registered with the Foreign Investment Institute and the National Institute of Statistics within a period of 120 days.
Types of partnership
The Angolan legislation includes the following types of associations and partnerships:
Sociedades comerciais (commercial associations): The Commercial Act of 1888 establishes commercial associations (in collective name, anonymous, coma dative or cooperative).
The law of partnership by quota from 11 April 1901 creates the association by quota, and Law No. 9/91 of April 20 changes the number of partners to the constitution of an anonymous partnership.
All social agreement must be include the names of firms and the addresses of partner; the firm, headquarters, establishments and branches of the partnership; the object of the partnership.
Sociedades em nome colectivo (group partnerships): In this kind of social, the responsibility of the partners is of a joint and unlimited character. Apart from the issue common to all partnerships, the constitutive title must contain: the amount of capital of each partner in cash, credit or other assets; the proportion at which wins and losses must be shared.
Sociedades anónimas (anonymous partnerships) The capital of anonymous partnerships is collected in cash or in assets that are represented and shared in actions. Subscription can be public or private. The main prerequisites are: a minimum of five partners, or in case the number is reduced to two; integral subscription of the social capital; the subscribers must pay 10% of the capital subscribed by them, in cash; to adopt a social denomination that is not identical to that of any other. These partnerships have a General Assembly, an administrative Council and a Supervising Counsel, organs through which it performs its activities.
Sociedades em comandita (partnerships in "comandita"): These are partnerships of mixed responsibility: joint and unlimited as to the joint partners, and limited and non-cooperative for the "comandita" partners. They can exist in two frameworks, either in comandita in the form of shares, or in simple comandita, depending on the way that the capital is represented.
Sociedade por quotas (partnerships through quota): The minimum number of partners is two, and its social capital is divided in quotas. For its constitution, each partner must pay 50% of the profits to be made either in cash or other assets. The titles must contain, apart from the other requisites, the quota of capital of each partner in cash, credit or other assets, as well as the payment periods.
This type of partnerships also includes a General Assembly, an Administration Council and a Fiscal Council.
Sociedade cooperativas (cooperative partnerships): These partnerships can adopts any of the previous forms, with the responsibility of partners changing according to the adopted type. Depending on the pursued means, the activities of such partnerships can be about consuming goods, construction, production and credit. Their main attribute is the variability of the social capital, and the unlimited number of partners, although a minimum of ten members is required.
Dissolução das sociedades (dissolving partnerships) the common causes for dissolving partnerships can be, among others: the extinction by surrender of the partnership object; bankruptcy of the partnership; by the agreement of the parties; the fusion with other partnerships.