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Algeria reforms regulatory framework to encourage investments

Thursday, 06 May 2010 14:44

Algeria encourages investments and favours development of the private sector.

To achieve that, Algeria has reformed the legal and regulatory framework to secure full protection and freedom for investors.

The new legal and regulatory framework allow any individual or legal entity, whether this be Algerian or foreign, to invest in economic activities concerning the production of goods and services, as well as the investments made as part of the awarding of concessions and/or licences.

By modifying the old legislation, edict 06-08 traced the major revision axes for the legal framework governing investment promotion in order to make it develop into the best international practices.

Based on this new legislative text, an application system is currently being implemented gradually. It particularly involves the institutional framework, the eligibility system, the process for granting benefits and the type of benefits granted to investors.

The investment competencies have incidentally been redefined, specified and organised into three levels:

A strategic level represented by the National Investment Council (CNI).

The activities of the CNI are carried out namely regarding strategic decisions relating to the investment and the examination of the portfolios posing an interest for the national economy.

A political level represented by the Ministry for Industry and Investment Promotion (MIPI).

To promote and mobilise investments, the MIPI is responsible, among other things, for creating the national investment policy and for ensuring its application. In this area, the MIPI carries out its tasks through the General Investment Administration (DGI).

An executional level namely represented by two agencies which perform their tasks under the control and orientation of the MIPI:

* National Agency for Investment Development (ANDI)
* National Agency for Intermediation and Property Regulation (ANIREF)

Right to recourse – The protection of investor rights has been reinforced by the new legislation. The right to recourse, previously restricted to certain ANDI activities, is from now on open to all activities related to implanting the benefit grant decision made by all organisations concerned.

See executive decree n°06-357 of 9 October 2006 regarding formation, organisation and function of the recourse commission responsible for investments.

The guarantees granted to investors – The Algerian legislation regarding investments grants essential guarantees to investors, namely:

* Non-discrimination in relation to Algerian individuals or legal entities.
* Legal security / Intangibility of the law: Unless expressly requested by the investor, the future revisions or repeals of the legislation on investment do not apply to the projects carried out within the current legislation on the day of the investment.
* Settlement of disputes: Any dispute between foreign investors and the Algerian state, resulting from the investor's actions or a measure taken by the Algerian state against this, will be subjected to the competent jurisdictions, except for multilateral agreements concluded by the Algerian state regarding reconciliation and arbitration or a specific agreement stipulating a compromising clause or allowing the parties to agree on an ad hoc arbitration compromise.

Direct foreign investments (DFI) – Financial attraction measures already implemented in Algeria are gradually being accompanied by activities which are significant to the final decision of foreign investors and which namely concern the improvement of the business environment and the minimising of delays and set-up costs and the start-up of businesses.

As part of the implementation of the industrial strategy, measures will be taken to focus the DFIs on the financing of activities with a high capitalistic intensity, the distribution of new technologies, the improvement of managerial capacities, a better access to the global market and a greater diversification of national exports.

Eligibility system – A new benefits eligibility system has been put in place with the promulgation of decree 07-08 of 11 January 2007 establishing the list of goods and services excluded from the benefits. It introduces the general rules uniformly applicable to all investors.

Processes for granting benefits – The process for granting benefits has also been simplified. The handling of investment portfolios is from now on codified by two executive decrees (currently being published) regarding the forms and methods for the investment declaration, the request to grant benefits and the decision to grant benefits.

Noticeable progress towards the declarative process has been recorded in this area. The prior compliance check previously conducted by the ANDI has been replaced by a simple verification of the admissibility of the portfolio presented by the investor.

Global Arab Network

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