Angola: Commercial Law In Angola

Last Updated: 12 December 2018
Article by Adams & Adams

GENERAL INFORMATION

The People's Republic of Angola is located on the west coast of southern Africa, bordered in the north and north-east by the Democratic Republic of Congo, on the east by Zambia, on the south by Namibia, and on the west by the Atlantic Ocean. It also includes the enclave of Cabinda, which is physically separate from Angola proper and is surrounded on its landward side by the People's Republic of the Congo (Brazzaville) and the Democratic Republic of the Congo.

Area: 1 246 700 km2

Population: 13 million

Capital: Luanda

Currency: New Kwanza (NKz)

GDP: USD 114.1 billion (2010)

Internet domain: .ao

Languages: Portuguese (official language), Kimbundu, Kikongo, Chokwe, Umbundu

Working week: Monday - Friday

Exports: Crude oil; diamonds; refined petroleum products; coffee; timber; cotton

Imports: Machinery and electrical equipment; vehicles and spare parts; medicines; food; textiles and clothing; military supplies

COMPANY LAW

Business vehicles

There are two forms of companies commonly used by foreign investors:

  • Sociedades por quotas (SpQs), which are similar to private limited companies. SpQs are companies in which the share capital is divided into quotas and the shareholders are jointly and severally liable for their capital investment. SpQs must have at least two shareholders.
  • Sociedades anónimas de responsabilidade limitada (SARLs), which resemble joint stock companies. SARLs are companies in which the capital is held by its shareholders and divided into shares, with each shareholder owning a number of shares proportionate to their investment. The liability of each shareholder is limited to the amount of their capital share. SARLs must have at least five shareholders.

Incorporation

The following steps should be taken in order to incorporate a company:

  • Approval of the new company name by the Companies Registry.
  • Execution of a public deed of incorporation before a public notary (provided that

the company's initial share capital has been deposited in a national bank account).

  • Publication of the new company's by-laws in the Official National Gazette.
  • Registration of the new company before the Ministry of Public Administration,

Employment and Social Security.

  • Registration of the new company before the tax authorities (and payment of the applicable taxes).

This process takes roughly three working days. Following the incorporation of the company, the proper commercial operations certificate (Alvará Comercial) must be obtained from the Ministry of Commerce. In some cases, it may be required to obtain an additional certificate from the Ministry responsible for the activity carried out by the company. The approval time for this second certificate depends on the specific requirements involved, such as whether or not any additional facilities' inspections are required.

Regulatory Reporting

Both SpQs and SARLs must have Annual General Meetings that must take place within the first three months of each calendar year and, once the annual accounts have been approved, they must be submitted to the commercial registry.

Share capital

For SpQs, the minimum share capital is USD 20 000. At least 30% of the share capital must be paid at the moment of incorporation. Each share must be equivalent to USD 5.

For SARLs, the minimum share capital is USD 1 000. A minimum of USD 1 000 of the share capital must be paid at the moment of incorporation and must constitute at least 50% of the share capital. It is sufficient for 2 shareholders to incorporate such companies. Each share must be equivalent to USD 10.

Management

SpQs must be managed by at least one director (Gerentes). There is no maximum number of directors, whereas SARLs are generally managed by a board of directors (Conselho de administração) with a minimum of three directors.

There must be an odd number of directors but there is no maximum number. SARLs may have a sole director (administrador único), provided the company's share capital does not exceed USD 50 000 and the company's by-laws provide for this. There are no nationality restrictions from a director's point of view.

Are local shareholders required?

Whilst 100% foreign ownership is permitted, this will greatly extend the time it will take to incorporate the company. There are also certain sectors including the oil and gas sector, mining sector and certain parts of the transport sector that require a certain percentage of local ownership.

Branch Company

It is possible to establish a branch in Angola. A branch's holding company will, however, retain full liability and the branch is treated purely as an extension of the parent company.

As an alternative, Angola allows for a foreign company to establish a representative office which can be a natural person or a company in order to promote the foreign

company's business in Angola. Representative offices are commercially limited as business vehicles. There are limitations in respect of a representative office's capacity to enter in to contracts and the number of people who may be employed.

COMPETITION LAW

Legislation

Angola currently has no national competition law or policy in place. However, in certain instances specific sector or industry legislation makes provision for competition related aspects.

Mergers

Further to the paragraph above, competition law is not regulated in Angola and there are, accordingly, no specific merger controls in place.

Restrictive Practices

Although competition in general is not regulated in Angola, certain types of cartel conduct may fall foul of industry or sector specific legislation.

Abuse of Dominance

Single firm conduct is not regulated in Angola. There is, accordingly, no abuse of dominance provisions to contend with.

Sanctions

As Angola has no competition legislation and/or policy in place, there are no specific sanctions in regard to competition law.

CONSUMER PROTECTION

Consumer protection is regulated by Angola's Consumer Protection Act Law no. 15/03, in conjunction with certain provisions of Angola's Constitution.

Some of the key provisions relating to consumer protection are as follows:

  • A consumer who purchases real estate is entitled to a minimum guarantee of five years in respect of such property.
  • All goods and services must comply with and meet the legitimate expectations of consumers.
  • A supplier of mobile non-consumable goods must ensure that such good will perform the functions for which it was purchased for a period of not less than one year.
  • Should a supplier become aware that its goods pose any threats to the well-being of consumers, such supplier must immediately notify the competent authorities of the osed by the goods. The supplier is also obligated to notify the consumers through notices in the media.

DATA PROTECTION

Data protection is regulated by the Lei de Protecção de Dados pessoais (Personal Data Protection Law) of 2011 (PDA). The PDA regulates how the collection, transfer and use of a data subject's personal data must be performed, so as to avoid any violation of the data subject's rights to, among other things, privacy.

Some of the key principles of the PDA:

  • The Angolan Data Protection Agency (ADP) (yet to be created) must be notified of the use and processing of a data subject's personal data.
  • Personal data may only be transmitted to a foreign country if such foreign country has, and provides, an unimpeachable level of data protection.
  • Non-compliance with the PDA is an offence which, if convicted, is punishable by sanctions (i.e. civil and/or criminal liability) and fines, up to USD 150 000, or both.

DISPUTE RESOLUTION

Court structure

Although the Constitution provides for the creation of a Constitutional Court, it has yet to be officially created and thus the Supreme Court is the highest court and the temporary guardian of the Constitution. The Supreme Court (known locally as Tribunal Supremo) has constitutional jurisdiction, appellate jurisdiction over lower courts as well as original jurisdiction. The lower courts are made up of both provincial courts and municipal courts and specialist courts exist in respect of the military and financial regulations.

Legal Practitioners

The Angolan Bar Association is the professional roll for legal professionals in Angola.

Alternative dispute resolution

Arbitration is a recognised form of dispute resolution and the primary authority is the Voluntary Arbitration Law (VAL), 2003 which governs both domestic and international arbitration. The VAL is not based on the UNCITRAL Model Law. Angola is not a signatory of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

EMPLOYMENT LAW

Governing legislation

General Employment Law, approved by Law 2/00 of 11 February 2000.

Particulars of employment

Written employment agreements are only required for temporary employment agreements and employment agreements entered into with foreign employees.

Forms of contracts

  • Permanent contracts may include a 60-day probation period which the parties by written agreement can either waive or reduce. It may be extended to a maximum of four months for highly skilled employees who perform complex work and to a maximum of six months for employees who perform work of a highly technical complexity or who have management functions for which a high level of academic degree is required.
  • Fixed term contracts for a specific period to fulfil temporary needs of the employer must be in writing, foresee the specific reasons which it was granted and its duration may vary between 6-36 months. Probation shall only exist if established in writing, the duration cannot exceed fifteen days for non-qualified employees or thirty days for qualified employees and either party may terminate the employment contract without prior notice, indemnification or justification.

Termination / Dismissal

  • Employers can only terminate an employment agreement for reasons related to just cause, collective dismissal, or redundancy due to abolition of work position.
  • Must be followed by a hearing, followed by a dismissal with, or without, notice or compensation.

Dispute resolution mechanisms and remedies

  • The Labour Chamber of the Provincial Courts has jurisdiction over individual labour disputes. Preliminary mandatory conciliation for individual labour disputes is required by the Provincial Conciliation Body.
  • No mandatory conciliation when the dispute relates to nullity of the individual disciplinary dismissal where the allegation is that the employer failed to observe the procedural requirements of such dismissal or it is based on prohibited grounds; or relates to unlawful collective dismissal because the employer failed to prove the existence of the economic, technological or structural reasons or the employer did not follow proper procedure; or the absence of authorisation required for an individual dismissal based on objective grounds – file a law suit with the labour section of the appropriate Court.
  • Unfair dismissal – either reinstatement or compensation.

EXCHANGE CONTROL

All foreign exchange transactions are subject to compliance with the exchange control regulations imposed by the Angolan National Bank (BNA). Under such regulations there are limitations on the amount of currency that can be transferred out of Angola.

While there are no restrictions on the amount of foreign currency that may be brought into the country, transferring the Angolan Kwanza out of the country is restricted.

All import, export and re-export of money may only be undert nancial institutions duly authorised to exercise foreign exchange by the BNA.

The repatriation of dividends to a foreign country is only allowed if the amount of investment in the Angolan company exceeds USD 250 000. Capital may also be repatriated but only with prior approval from the BNA. Dividends are annually transferable after approval by the BNA.

TAX LAW

Income tax

Liability for income tax in Angola is determined by the source of the income. Employment income tax is due on any income resulting from personal services rendered in Angola, by employed or self-employed individuals, who are directly or indirectly paid by an Angolan based entity and is subject to a monthly withholding tax, to be made by the employer and paid to the tax authorities on a monthly basis.

Types of taxable income

Types of income that are subject to tax include employment income, business and professional income, investment income and capital gains (although some exemptions may apply on interest and capital gains).

Tax rates

Resident companies are taxed on their worldwide income at a rate of 35%. The branch of a non-resident company is taxed only on its Angolan revenues at a rate of 35%. Employees are subject to personal income tax at a progressive rate up to a maximum rate of 17%. Independent professionals are subject to tax at a flat rate of 15% on 70% of total income received or at a flat rate of 20% if accounting records are in order.

Double taxation treaties

At the date of publication, Angola has not concluded any double tax agreements.

Published in April 2015

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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