Transcript Doing Business in Angola

1
Doing Business in Angola
Angolan National Private investment Agency
2
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.
3
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.
4
Advantages of Investing in Angola?
 It boasts 12% of Africa’s 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 world’s 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
5
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)
6
2012 Macroeconomics Indicators
Annual Oil Production (million barrels)
Oil price per barrel – USD
662,7
77
GDP growth (%)
- Non-oil GVA growth rate
- Petroleum GVA growth rate
12,8
12,5
13,4
Inflation Rate (%)
Revenues (OGE)
Expenditures
Public Deficit
Source: http://www.minfin.gv.ao/docs/dspOrcaCorren.htm
10
7
Macroeconomics Indicators
Premises of the Economic Policy:
° Annual oil production (million/bbl.)
° Oil Price (USD/bbl.)
Goals of the Situation:
° General rate of growth of GDP %
° Non- Petroleum GVA growth rate %
° Petroleum GVA growth rate %
° Annual inflation rate %
Fiscal (Percentage of GDP):
° Revenue
° Expenditure
° Public deficit
2007 2008 2009 2010
2011
2012
619.8 695.5
70.8 93.6
694
696
620.5
662,7
60.9
77.9
95.37
77
12,8
12,5
13,4
10
23.3
20.4
25.7
11.8
13.8
15.0
12.3
13.2
2.41
8.3
-5,1
13.99
3.4
7.8
-3
15,3
1.7
8.1
-8.8
12.00
40.8
35.7
8.3
40.8
35.7
7.8
34.6
39.5
9.1
43.7
36.5
2.90
42.2
33.4
1.4
Source: http://www.minfin.gv.ao/docs/dspOrcaCorren.htm
8
How to Invest in Angola
9
Requirements and Process
≥ From 1
million
ANIP’s
Application
Form
USD 250
APPROVAL
CONTRACTUAL
SCHEME
(ANIP)
Up to USD 10
million (65 days
maximum)
APPROVAL
CONTRACTUAL
SCHEME
(Cabinet Council)
Over USD 10
million = 65 days
(maximum )
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).
10
Required Documentation
1.1. Bylaws
If investor is
shareholder of an
already existing
company
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
11
After Approval
ANIP
Issues CRIP
and sends it to:
BNA
Authorizes
foreign capital
transactions,
Custom
Authorities
For customs
incentives;
Regulatory
Ministeries
To monitor
taxes.
12
Final Step
Investor
should:
Register
company
Publish
bylaws in
State
Gazette
(Diário da
República);
Obtain
business
activity
license
(Ministry of
Commerce)
Register with
tax
authorities
(Ministry of
Finance).
13
Incentives are given to Priority Areas
Infrastructures
Industry
Transportation;
Agriculture and cattle
breeding;
Energy and water;
Telecommunications;
Fishery
Industrial hubs and
free zones;
14
Reserved for the
Government
Government must be
major shareholder
- Production and distribution
of war material;
- Basic Telecommunications
System
- BNA (central bank) and
currency
- Postal Services
- Ports and airports
- Basic infrastructure for
telecommunication networks
15
Capital gain tax benefits
Development Zones
From USD 1 million up to USD 10
million, transfer of dividends at the 3rd year;
Zone A:
From USD 10 million up to 50 million,
Luanda, principal municipalities of
transfer of dividends at the 2nd year;
Benguela, Lobito, Huila and Cabinda
The rates of the
dividends to be
From USD 50 million, transfer of
transferred
are
dividends at the first year.
negotiated on a
From Usd 5 million dividends transfer at case by case base
Zone B:
and must be part of
remaining municipalities of Benguela, the 1st year;
the
investment
Cabinda, Huíla, Kwanza Norte, Kwanza
articles
of
From USD 1 million to 5 million
Sul, Bengo, Uíge, Lunda Norte and
incorporation.
dividend transfer at the 2nd year;
Lunda Sul
Zone C:
Huambo, Bié, Moxico, Kuando Kubango,
Cunene, Namibe, Malange and Zaire
To be Negotiated
16
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%.
17
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 country’s 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;
- Volume of goods or services to be produced;
- Creation of production lines.
18
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.
19
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 country’s 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
20
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)
b)
c)
d)
e)
f)
g)
h)
Investment value;
tax reduction or tax exemption concession period;
customs incentives and benefits;
investment period;
profits effectively realized;
socio-economic impact of investment;
influence on the reduction of regional asymmetries;
impact of the repatriation of dividends on the balance of payments.
21
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).
22
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.
23
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 company’s Deed of Incorporation
24
Reciprocal Protection of Investment
Agreements
Africa
Cape Vert
Guinea Bissau
Namibia
Europe
France
Germany
Great Britain
Italy
Portugal
The Netherlands
Spain
Switzerland
Russia
Latin America
Cuba
25
Business Opportunities
26
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.
27
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 Angola’s rail network;
Corridors
- Malange, Lobito and Namibe;
- It is the government’s 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.
28
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
maritime transportation in
liberalized activities;
international
Angola are
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;
29
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;
30
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.
Challenges
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;
31
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;
32
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);
33
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;
34
The Power Sector
Energy Production
• The sector is going
from its current
installed capacity of
1.000 MW to reach
5.500 MW within 5
years;
• The government
plans to hand over
to private operators,
by means of public
tenders, for
construction and
operation based on
the BOT system;
Public-Private
Participation
Angolan Generation
System
• A review of the
general Law on
Electricity is
currently underway
to make it possible
for private entities
to engage in
electricity sectorrelated activities.
• Those include the
production and
distribution of
energy by private
entities under
Government
concessions;
• The North system
covers Luanda and
provinces of Bengo,
Malange, Kwanza
Norte and Kwanza
Sul;
• The centre system
covers the provinces
of Benguela and
Huambo;
• The south system
covers the provinces
of Huila and
Namibe;
35
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;
- It’s worth to see the cities
infrastructure, stretching grids,
water treatment ,supplies and the
sewage system.
36
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
37
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
38
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