Doing Business in Angola

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Doing Business in Angola
Angolan National Private investment Agency
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Angola National Private Investment Agency

• is the only government entity responsible for
  the execution of the national policy on private
  investment, its promotion, coordination,
  evaluation, approval and supervision.

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Angola

• Angola lays on the west coast of Southern Africa
  and it is
  bathed by the Atlantic Ocean
• It covers an area of 481,354 square miles
  (1,246,700 Km²)
• 1,025 miles (1650km) of coastline
• Borders with Congo Brazzaville,
  
  Democratic Republic of Congo,
  Zambia and Namibia
• 20,9 million inhabitants (est.)
• Portuguese is the main language
• The main religions are Catholic and Protestant
• The highest geographical point is Mount Moco
  with 2,620 meters in height in the province of
  Huambo.

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Advantages of Investing in Angola?

• It boasts 12 of Africas Water resources ,
  Angola owns one of the greatest hydrographical
  network in all of Africa and its main rivers are
  Kwanza, Zaire, Cunene and Cubango.
• Rich in flora and fauna
• Diverse mineral ores diamonds, iron, gold,
  phosphates, manganese, copper, lead, zinc, tin,
  wolfram, tungsten/vanadium, titanium, chrome,
  beryllium, kaolin, quartz, gypsum, marble,
  granite and uranium.
• One of the worlds fastest growing economies
• 7.4 million hectares of arable land and
  pastures, from which less than 3 are
  cultivated
• Microclimates
• Political and economic stability since 2002
• Angola lays on the west coast of Southern
  Africa and it is bathed by the Atlantic Ocean

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Why to Invest in Angola?

• To improve existing telecommunications network
• To develop hospitality tourism industry
• To construct and revamp transportation
  infrastructure, services and equipment
• To create more new jobs with the implementation
  of new industries even though the National
  Industry growth in 2010 had been of 19
• The Program of Public Investments (PIP)
  2011/2012 worth USD 16 billions (2,000 projects
  to promote the rural development and reduce
  poverty)

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2012 Macroeconomics Indicators
Annual Oil Production (million barrels) 662,7
Oil price per barrel USD 77
   
GDP growth () 12,8
- Non-oil GVA growth rate 12,5
- Petroleum GVA growth rate 13,4
   
Inflation Rate () 10
Revenues (OGE)  
Expenditures  
Public Deficit  
Source http//www.minfin.gv.ao/docs/dspOrcaCorren
.htm
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Macroeconomics Indicators
  2007 2008 2009 2010 2011 2012
Premises of the Economic Policy          
Annual oil production (million/bbl.) 619.8 695.5 694 696 620.5 662,7
Oil Price (USD/bbl.) 70.8 93.6 60.9 77.9 95.37 77
Goals of the Situation            
General rate of growth of GDP 23.3 13.8 2.41 3.4 1.7 12,8
Non- Petroleum GVA growth rate 20.4 15.0 8.3 7.8 8.1 12,5
Petroleum GVA growth rate 25.7 12.3 -5,1 -3 -8.8 13,4
Annual inflation rate 11.8 13.2 13.99 15,3 12.00 10
Fiscal (Percentage of GDP)            
Revenue 40.8 40.8 34.6 43.7 42.2  
Expenditure 35.7 35.7 39.5 36.5 33.4  
Public deficit 8.3 7.8 9.1 2.90 1.4  
Source http//www.minfin.gv.ao/docs/dspOrcaCorren
.htm
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How to Invest in Angola
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Requirements and Process
Exception It is not considered (or applied) the
private investment regime when Private Companies
have shares in Public Companies where the State
owns 50 or more of the share capital (stock
capital).
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Required Documentation

1. Presentation of Proposal Form (description of
   investment, inventory of equipment )
2. Draft Articles of Incorporation for Creation of
   Company
3. Certificate authorizing company name
4. Annual Financial reports for the last 3 years
5. Power of Attorney (if necessary )

Investments in individual name 4.1. Certificate
of financial capacity 4.2. Certified criminal
record
1.1. Bylaws If investor is shareholder of an
already existing company
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After Approval
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Final Step
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Incentives are given to Priority Areas
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(No Transcript)
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Capital gain tax benefits
Development Zones Development Zones Development Zones
Zone A Luanda, principal municipalities of Benguela, Lobito, Huila and Cabinda From USD 1 million up to USD 10 million, transfer of dividends at the 3rd year From USD 10 million up to 50 million, transfer of dividends at the 2nd year From USD 50 million, transfer of dividends at the first year. The rates of the dividends to be transferred are negotiated on a case by case base and must be part of the investment articles of incorporation.
Zone B remaining municipalities of Benguela, Cabinda, Huíla, Kwanza Norte, Kwanza Sul, Bengo, Uíge, Lunda Norte and Lunda Sul From Usd 5 million dividends transfer at the 1st year From USD 1 million to 5 million dividend transfer at the 2nd year The rates of the dividends to be transferred are negotiated on a case by case base and must be part of the investment articles of incorporation.
Zone C Huambo, Bié, Moxico, Kuando Kubango, Cunene, Namibe, Malange and Zaire To be Negotiated The rates of the dividends to be transferred are negotiated on a case by case base and must be part of the investment articles of incorporation.
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Industrial tax incentives

• Profits resulting from private investment may be
  eligible for tax exemption or reduction of
  industrial tax, when implemented in
• - Zone A, for a period ranging from 1 year to 3
  years.
• - Zone B, for a period ranging from 1 year to
  6 years.
• - Zone C, for a period ranging from 1 year to
  9 years.
• In Zone C the subcontracts could also be
  eligible for tax exemption and reduction.
• The tax incentive is granted after the
  implementation of the project and at least 90 of
  the estimated work force being in place.
• The reduction in the percentage of the
  rate of tax may not exceed 50.

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Tax Incentives

• Tax incentives and benefits do not constitute a
  rule
• They are not automatically granted, nor for an
  indeterminate period of time.
• - When considering the proportion and scaling of
  tax and customs incentives and benefits to be
  granted, the criteria must take in account
• - The type and value of investment
• - The investment insertion into the countrys
  economic development strategy
• - Perception of direct and indirect capital
  gains
• - Complexity of investment
• - Estimated time required for a return on
  capital
• - Type of technology to be utilized
• - Commitment to reinvestment of profits

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Tax Incentives

• - Tax incentives or tax reduction are granted
  after a negotiation case by case.
• - An extraordinary tax incentive could be granted
  to
• - Investments declared highly relevant for
  strategic development
• - Investments capable of creating at least 500
  jobs
• - Investment capable of contributing to a major
  boost in technological innovation and scientific
  research
• - Annual export that could exceed USD 50 million
• - Investment projects evaluated at above USD 50
  million.

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Incentives are given as well to

• Incentive the growth of the economy
• Promote the economic, social and cultural
  well-being of the people
• Enhance the capacity of the national productivity
• Encourage the partnership between national and
  foreign investors
• Transfer technology and improve productivity
• Promote job creation
• Increase the countrys Exports- Decrease Imports
  to improve foreign currency reserves
• Help supply the Internal Market with goods and
  services under competitive conditions.
• Promote technological development and local
  product quality
• Promote incorporation of national raw materials
  and add value to national products
• Rehabilitation, expansion and modernization of
  basic infrastructure

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Transfer of Dividends

• The dividends or profits can be transferred
  after the payment of taxes
• Corporate Tax Rate 35 and a reduced rate of
  20 for rural areas
• Sales Tax / VAT Rate 10 and,
• Property Transfer Tax Rate (Sisa) 2 to 10 .
• The repatriation of dividends is proportional to
  the
• a) Investment value
• b) tax reduction or tax exemption concession
  period
• c) customs incentives and benefits
• d) investment period
• e) profits effectively realized
• f) socio-economic impact of investment
• g) influence on the reduction of regional
  asymmetries
• h) impact of the repatriation of dividends
  on the balance of payments.

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Legislation

• - National Constitution of 2011
• - Basic Private Investment Law (LBIP - Law 20/11,
  of May 20,2011)
• - Commercial Companies Law (Law 1/04, of February
  13, 2004)
• Investors Protection
• - Access to courts and right to defense
• - Monetary restitution in event of expropriation
• - Private investments are not nationalized if
  this occur, the Government ensures all investor
  rights
• - The law guarantees professionalism, privacy and
  confidentiality
• - Reciprocal Protection of Investment Agreements
  (based on Bilateral Cooperation Agreements).

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Corporate Structure

• Branch
• Unlimited Company
• General Partnership
• Limited Partnership
• Private Limited Company
• Foreign investors are allowed to create 100
  private companies except in the diamond and oil
  industries
• Note Representation Office only before the
  approval of the proposal.

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Procedures

• - Necessary registrations
• Taxpayer identification Number,
• Commercial
• License as importer or exporter
• Social Security (for employees)
• Commercial and/or industrial operating license
• - Bank account must be opened
• - Deposit funds required for capitalization
• - Proof of deposit must be presented to Notary
  Public when drawing up companys Deed of
  Incorporation

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Reciprocal Protection of Investment Agreements
Africa Europe Latin America
Cape Vert France Cuba
Guinea Bissau Germany  
Namibia Great Britain  
  Italy  
  Portugal  
  The Netherlands  
  Spain  
  Switzerland  
  Russia  
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Business Opportunities
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The Transportation Sector

• Strategy
• -Introduction of a role for privatization, so
  that resources managed by the state can be
  transferred to the private sector
• -Integration of Angolan transportation network
  into the SADC network
• - Creation of authorities on an institutional
  level for the planning of the road network
• Creation of public institutes as regulatory
  bodies for different transportation subsectors
• - Develop the 3 main corridors originating from
  ports by regenerating rail companies
• - Revamp the shipping sector, bringing in private
  enterprise and an adequate administration to
  re-establish the competitiveness of national
  companies
• - Revamp and modernize ports
• - Institutional reorganization and strengthening.

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Areas of Investment

• Road Transportation
• - Urban public transportation
• - Inter-provincial and inter-municipal passenger
  transportation
• - Medium and long haul transportation of goods
• The implementation of incentives for investments
  in a personalized taxi system is being studied
• Railways
• - State ownership and operation, through the CFL,
  CFB and CFM
• - Open to private investment in the concession
  process, arranging of funds, technical assistance
  and repairs, and supply of rolling stock,
  communications, etc
• The government has approved a preliminary study
  called Ango Ferro, to refurbish, upgrade,
  construct and extend the whole of Angolas rail
  network
• Corridors
• - Malange, Lobito and Namibe
• - It is the governments view that the 3
  corridors warrant the same degree of priority and
  constitute an open area in which both public and
  private investment can operate, since they act as
  a support for the development of the national
  economic, access to the sea for land-locked
  countries, and stimulate regional development.

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Areas of Investment

• Ports
• - Open to private investment in the concession
  process, arranging of funds, , technical
  assistance, supply of equipment, communications,
  etc.
• - Leasing port Luanda
• Operating port Lobito, Namibe, Cabinda, Soyo and
  Porto Amboim
• Shipping
• Both coastal shipping and international maritime
  transportation in Angola are liberalized
  activities
• Aviation
• - Liberalized activity for domestic aviation
• - International air transportation is an activity
  conditioned by the exercise of traffic rights to
  be negotiated with the national flag-carrier
• - Private investment is possible in the
  infrastructure-refurbishment process and
  provision of service

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The Transportation Sector

• Projects
• Increase road-transportation capacity
• Refurbishment of Luanda Railway (CFL), Benguela
  Railway (CFB) and Mocamedes Railway (CFM)
• Implementation of the SITLOB project
• Refurbishment of the Port of Lobito, of Namibe,
  Amboim and Soyo
• Construction of Viana Dry Dock
• Acquisition of Marine Navigational Aid equipment
• Regeneration of aeronautical infrastructure
• Acquisition of Aviation Navigational Aid
  equipment
• Profession Training

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The Telecommunications Sector
Delimitation of sectors of law Law number 5/02 of
April 16th, 2002 Absolute Reserve of State
Basic telecommunications network Relative
Reserve of State Telecommunications services for
public use and Economic activities liable to be
engaged by entities not belonging to the public
sector, by way of a concession agreement. Challen
ges Increase competition in telephony
market Improve internet services offer and
universalize it Improve corporate segment
offer Develop National and international
backbone Regulate pay-tv duopoly
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The Telecommunications Sector

• Major Liberalized Market Operators
• Cellular Telephony Business UNITEL and MOVICEL
• Landline Service Licenses Mercury (Sonangol
  Subsidiary), Nexus, Wezacom and Mundo Startel
• Data communication licenses Multitel and ACS
• Ten authorized ISPs

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Regulatory Framework

• Basic telecommunication law (law number 8/01 of
  May 11th, 2001)
• Regulations governing access to business of
  providing telecommunications services for public
  use, initially (Decree n 18/97 of March 27th,
  1997 and updated by Decree n 44/02 of September
  6th, 2002)
• Regulations governing telecommunications services
  for public use (Decree n 45/02 of September 10th,
  2002)
• Regulations governing Prices of
  Telecommunications Services for public use
  (Decree n 03/04 of January 9th, 2004)
• General regulations governing interconnection
  (Decree n 13/04 of March 12th, 2004)
• National Numbering Plan
• National Frequencies Plan (Decree n 10/03 of
  March 7th, 2003)
• Constitution of INACOM (Decree n 115/08 of
  October 7th, 2008)
• Foreign individual persons or corporate entities
  cannot be majority shareholders in the capital of
  public service telecommunications operators
  (Article 18 of Law n 8/01 of May 11th, 2001)
• The direct or indirect stake of a
  telecommunications operator in the capital of
  another to provide the same service cannot exceed
  10 (Article 17, of the same law)

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The Power Sector

• Initiatives
• Upgrade, modernize and expand electricity
  production capacity
• Promote development of the national electricity
  grid, including the Northern/Central and
  Central/Southern systems
• Promote development of local sources, such as
  small hydroelectric power plants for
  electrification of rural zones
• Start to put in place the national
  Electrification Program which includes the
  development of new sources of energy
• Increase and diversify the production of
  electricity by using energy derived from water,
  solar, wind and biomass sources
• Institutional reorganization of the electricity
  sector, with the possibility of creating private
  companies for the production and distribution of
  electricity

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The Power Sector
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The Water Sector

• Angola is the second most endowed country in
  Africa in terms of water resources with intense
  rainfall in almost all the country
• 60 of Angola records an average annual rain of
  about 1000mm.
• Only 50 of the population has access to potable
  water, but only 16 has piped water
• - Its worth to see the cities infrastructure,
  stretching grids, water treatment ,supplies and
  the sewage system.

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Agriculture and livestock sector

• Advantages
• Internal market potential ,
• 3 million hectares of arable land,
• Favorable climatic conditions,
• Biodiversity
• Existence of abundant water,
• More irrigated areas, Bengo, Cabinda, Luanda, e
  Huila.
• Major Crops. Tubers, cereasls and fruits

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Agriculture and livestock sector

• Government programs
• Promotion of agro-business
• Agro-industries
• Sustainable exploration of forest resources
• Veterinary and health regulatons
• Constrution and rehabilitation of infrastructures
  in irrigated areas, warehouses and silos
• Research and development
• Training and Education
• Promotion of rural credit

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Invest in the future, Invest in Angola!
www.anip.co.ao www.anip-us-angola.com
PowerPoint by Ana Karina Silva, Processed by T.
Veiga Revised by Maria Luísa Abrantes,
Translation Lynn de Albuquerque