In line with Algeria's recent efforts to become more attractive to foreign investors (see our previous e-bulletin "Algeria: Reopening Algeria to foreign investments"), a new law reforming the investment regime was published on 28 July 20221 (the "New Law").

This New Law replaces the previous Investment Promotion Law of 3 August 2016 (the "Old Law").

While this reform will certainly not be sufficient, on its own, to boost foreign investment in Algeria, it is nevertheless a step in the right direction by modernising and making the investment regime more flexible, following reforms in 2016.

The highlights of this reform are:

  1. The recasting of the incentive regimes into three incentive regimes: sector, zone and structuring investment regimes;
  2. The creation of one-stop shops to monitor investment projects which (i) facilitate access to the benefits of each of the incentive regimes and (ii) issue the authorisations and permits required for the development of projects as required by the various legislation;
  3. Simplifying the granting of benefits and the transfer of goods and services;
  4. The creation of an electronic platform to ensure a dematerialised follow-up of formalities and procedures related to the investments.

The previous improvements made by the Old Law (eg the possibility to use international arbitration, the guarantee of transfer of capital and income, and protection against expropriation) have been maintained in the New Law.

Eight implementing regulations have been published in the Official Journal No. 60 of 18 September 20222.

1. Three incentive regimes

The New Law repeals the general and derogatory regimes provided for in the Old Law and recasts them by introducing three incentive regimes.

  • The Sector Regime which applies to investments in the following areas of activity:
    • Mining and quarrying;
    • Agriculture, aquaculture and fisheries;
    • Industry, food industry, pharmaceutical industry and petrochemical industry;
    • Services and tourism;
    • New and renewable energies;
    • Knowledge economy and information and communication technologies.
  • The Zone Regime which applies to investments made in specific zones:
    • Highlands ("Hauts-Plateaux"), South ("Sud") and Deep South ("Grand Sud");
    • localities whose development requires special support from the State3; and
    • localities with natural resources potential to be developed4
  • The Structuring Investment Regime which applies to investments with a high potential for the creation of wealth and jobs, likely to increase the attractiveness of the area and create a knock-on effect on economic activity.
    Investments that meet the following criteria are eligible for the regime5:
    • creation of jobs: equal to or greater than five hundred (500) jobs;
    • investment amount: equal to or greater than ten (10) billion Algerian dinars (approximately EUR 74 million6).

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Footnotes

1. Law No. 22-18 of 24 July 2022 on investment.

2. List of published decrees in Appendix 1 (French versions accessible online).

3. See Executive Decree No. 22-301 of 8 September 2022 establishing the list of localities belonging to the zones to which the State grants a particular interest as regards investment.

4. See Executive Decree No. 22-301 of 8 September 2022

5. Executive Decree No. 22-302 of 8 September 2022 setting the qualification criteria for structuring investments, the modalities for benefiting from operating advantages and the evaluation grids.

6. Xe Converter

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