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BRITISH-ANGOLAN SEMINAR
How to Invest in AngolaHow to Invest in Angola(London, 22 September 2004)(London, 22 September 2004)
Alberto Galhardo SimõesSusana Fernandes Ramos
m SUMMARY
1. INTRODUCTION
2. INVESTMENT VEHICLES
3. PRIVATE INVESTMENT LAW
4. LAW ON FISCAL AND CUSTOMS INCENTIVES FOR
PRIVATE INVESTMENT
5. LOCAL CONTENT
m 1. INTRODUCTION
NEW FOREIGN INVESTMENT LEGAL FRAMEWORK
Fundamental incentive to investment
The Angolan Government has designed a legislation package that includes:
m 1. INTRODUCTION (cont’d)
Company Law, Law 1/04, of 13 FebruaryConsolidates the rules governing the incorporation of commercial
companies in Angola, formerly spread troughout several laws
Shareholders agreements
Groups of companies
Types of commercial companies allowed:
General Partnership
Limited Partnership
Limited Partnership with share capital
Joint Stock Company – “SA”
Limited Liability Company by Quotas – “LDA”
Business Cooperation Law, Law 19/03, of 12 AugustRegulates the so called Unincorporated Joint Ventures
m 1. INTRODUCTION (cont’d)
Voluntary Arbitration Law, Law 16/03, of 25 JulyA modern statute
Sets forth a private extra-judicial mechanism of resolving
disputes over patrimonial rights
Arbitration Agreement
Constitution and Composition of the Arbitral tribunal
Ratification of the 1958 New York Convention on the
Recognition and Enforcement of Arbitral Awards
Arbitrations under private investments contracts shall take
place in Angola and the contract shall be governed by
Angolan laws
m 1. INTRODUCTION (cont’d)
Private Investment Law, Law 11/03, of 13 May
Law on Fiscal and Customs Incentives, Law 17/03, of25 July
m 2. INVESTMENT VEHICLES
Representative Office
Branch
Local CompaniesJoint Stock CompaniesLimited Liability Companies by Quotas
m 2. INVESTMENT VEHICLES (cont’d)
Unincorporated Joint Ventures – Law 19/03
Associations (“Conta em Participação”) – association of one party with economic activity of another party
Consortiums – joint activity between two or more parties to attain objective
Internal ConsortiumExternal Consortium
Grouping of Companies – joint activity between two or more parties to improve conditions of economic activities
m 3. PRIVATE INVESTMENT LAW
Law 11/03, of 13 May
Applies to all areas of activity, except:Oil & GasDiamondsBanking
Concept of foreign investment
m 3. PRIVATE INVESTMENT LAW (cont’d)
QUALIFYING INVESTMENTS
Setting up and expansion of branch officesIncorporation of new companiesAcquisition of existing companies or groups of companies/ Purchase of equity in said companiesConclusion of consortium agreements and joint venturesTotal or partial takeover of commercial or industrial establishmentsProvision of supplementary capital contributions and shareholders advancesAcquisition of immoveable propertyTransfer/ Acquisition of technology & know-howTransfer/ Acquisition of equipment
m 3. PRIVATE INVESTMENT LAW (cont’d)
INVESTMENT PROCESSES
Government Agency – “Agência de InvestimentoPrivado” – ANIP
Minimum Investment USD 50,000 - Angolan InvestorsUSD 100,000 - Foreign Investors
Investments less than USD 100,000 - not subject to Private Investment Law; no right to dividend repatriation
m 3. PRIVATE INVESTMENT LAW (cont’d)
Investment Regimes
Pre-Investment declaration– Investments USD 50,000 - Angolan Investors
USD 100,000 - Foreign InvestorsMaximum amount of USD 5,000,000 for both
– Approved by ANIP (15-day period )
Contract– Investments > 5,000,000– Concessions (regardless of $)– Obligatory participation of state-owned companies– Reviewed by ANIP – Approved by Council of Ministers (60-day period)
“CRIP” – Private Investment Registration Certificate - issued byANIP
m 3. PRIVATE INVESTMENT LAW (cont’d)
RIGHTS OF PRIVATE INVESTORS
No discrimination between foreign and Angolan investorsPayment (repatriation) of dividendsRecourse to Angolan courtsFair compensation in the event of expropriationNo nationalization (except in very limited cases)No cancellation of licenses without prior judicial or administrative proceedingsOwnership of landIntellectual property rightsNo government interference in company managementRight to seek external financeDirect import of goods from aboard and independent export of output of own companies
m 3. PRIVATE INVESTMENT LAW (cont’d)
OBLIGATIONS OF PRIVATE INVESTORS
Implement investment project within time period & terms agreedw/ ANIPEmploy/ train Angolan citizensComply w/ applicable HS&E regulationsApply Angolan Accounts PlanSubmit annual reports to ANIPRespect generally applicable Angolan lawCreate funds and reserves and make provisions in accordance withthe legislation in force Right of first refusal for domestic investor (transfer ofparticipating interest)
m 3. PRIVATE INVESTMENT LAW (cont’d)
DISRESPECT OF TERMS/CONDITIONS AGREED W/ ANIP
Fines – USD 1,000 - USD 100,000
Loss of incentives or other advantages granted
Loss of the investment authorization
m 4. LAW ON FISCAL AND CUSTOMS INCENTIVES
Law 17/03, of 25 July
Governs the procedures, types and forms of granting of fiscal and customs incentives under the Private Investment Law
Fiscal and customs incentives are granted depending on whether the investment:
Is within a priority economic sector; orContributes to the development of disadvantaged regions
m 4. LAW ON FISCAL INCENTIVES AND BENEFITS (cont’d)
PRIORITY ECONOMIC SECTORS
Agriculture and livestock farming;Manufacturing industry;Fisheries and derivatives;Civil construction;Health and education;Road, rail, port and airport, telecommunications, energy and water supply infrastructures;Large scale cargo and passenger equipment.
m 4. LAW ON FISCAL INCENTIVES AND BENEFITS (cont’d)
INVESTMENT ZONES
Zone A Zone B Zone C
Luanda Cuanza Sul HuamboBenguela Bengo BiéHuíla Uíge MoxicoCabinda Cuanza Norte Cuando-CubangoLobito Lunda Norte Cunene
Lunda Sul NamibeMalangeZaire
m 4. LAW ON FISCAL INCENTIVES AND BENEFITS (cont’d)
FISCAL AND CUSTOMS INCENTIVES
Customs Duties
Zone A – 3 yearsZone B – 4 yearsZone C – 6 years
Industrial Tax
Zone A – up to 8 yearsZone B – up to 12 yearsZone C – up to 15 years
m 4. LAW ON FISCAL INCENTIVES AND BENEFITS (cont’d)
FISCAL AND CUSTOMS INCENTIVES
Qualification as Losses
Capital Gains Tax
Zone A – up to 5 yearsZone B – up to 10 yearsZone C – up to 15 years
Conveyance Tax
m 5. LOCAL CONTENT
Promotion of Angolan Private Entrepreneurs – Law 14/03, 18 July
Right of first refusal
Preferential treatment in tendering for goods, services and public works contracts
m NEW LOCAL CONTENT REGULATION FOR THE OIL INDUSTRY
Order 127/03, of 25 November, issued by MNPET
Sets out requirements on the procurement of goods and hiring of services by oil companies operating in Angola
Competitive tender requirement
Services and goods reserved for local contractors
Preferencial treatment for Angolan companies
m NEW LOCAL CONTENT REGULATION FOR THE OIL INDUSTRY
(cont’d)
Regimes (relationship between Angolan/foreign oilservice companies):
Exclusivity regime for Angolan companiesnon-specialized know-howlower capital investment foreign companies’ participation only by initiative of Angolancompanies
Semi-competitive regimereasonable level of capital investment higher level of know-howjoint ventures between foreign companies and Angolancompanies.
m NEW LOCAL CONTENT REGULATION FOR THE OIL INDUSTRY
(cont’d)
Competitive regimehigh level of capital investment Specialized know-howFree participation of foreign companies
