DOING BUSINESS IN ALGERIA
Since 2003, Healy Consultants has assisted our Clients with doing business in Algeria. Our services include i) Algeria business registration ii) assistance to find an Algerian joint venture partner iii) corporate bank account opening services in Algeria iv) employee recruitment v) visa strategies and vi) office rental solutions.
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Advantages and disadvantages
Advantages of Algeria company registration
- Forming an Algeria company only requires foreigners to i) appoint one director ii) one shareholder and pay up a minimum share capital of US$1,000 (DZD100,000). Our Clients do not have to travel to complete the Algerian company formation procedures and corporate bank account opening and our Firm can also assist to find a professional passive local shareholder;
- Registering a business in Algeria should become easier over the coming months as the Algerian Government plans to remove the minimum capital requirement to form a local business;
- Algeria can be an attractive country to form a company providing services to the oil and gas industry. Algeria is indeed i) the largest producer of gas in Africa and ii) may have the 3rd largest shale gas reserves in the world. However, restrictions to foreign investments have contributed to limit the productivity of this industry so Algeria and its State-owned company Sonatrach are in great need of technology transfers, qualified engineers and foreign know-how.
Disadvantages of Algeria company registration
- Registering a foreign-owned company in Algeria constitutes a complex engagement, because:
- Foreigners are not allowed to fully own Algerian companies and are required to find a local 51% joint venture partner. Our Firm can assist our Clients to comply with this requirement, which applies to all industries, while minimizing the impact over the company’s control and management;
- Foreigners willing to create a business in Algeria are required to open a capital account, to be used to inject the paid-up capital before Algeria company incorporation. Our Firm can complete this requirement without our Client travelling;
- Before registering a company in Algeria, it is necessary to sign a lease agreement for physical office space. Our Firm can assist our Clients to find office space in Algeria without them travelling;
- Algeria’s official language is Arabic. All corporate documents must be translated in either French or Arabic, resulting in higher translations costs. Our English-speaking Clients should also hire local staff as few Algerian speak fluently English;
- Foreign corporations are not allowed to register a branch in Algeria. Only representative offices are allowed.
- Algeria is a difficult market: the local administration is corrupt and inefficient. Local regulations and Courts tend to favor nationals over foreigners and the country is not open to international trade, although its membership application with the World Trade Organization is in advanced negotiation phase;
- Corporate income tax is high in Algeria: 19% for manufacturing activities and 26% for most other activities. Dividends are subject to withholding tax at a 15% rate, with only twenty nine double taxation avoidance treaties to reduce such tax payments, mainly signed with other African countries.
- Time to incorporate: Twelve weeks
- Cost to set up: US$12,450
- Minimum capital: US$1,000
- Physical office required: Yes
- Shareholders: 1
- Directors: 1
- Company secretary: No
- Resident director: Yes
- Corporate tax rate: 26%
- Corporate tax base: Territorial
- Shelf companies: Unavailable
- Main company type: SARL
Useful links for Algeria
Government and public authority websites:
- Guide to Investing in Algeria
- Interntional Trade and Investment in Algeria
- Algeria Infrastructure Investment
- IMF – Algeria Selected Issues 2014
- Algeria’s Bilateral Trade Relations