Catarina Neto Fernandes offers a guide on investment routes for foreign companies
Angola offers a wealth of investment opportunities, particularly in the country’s underdeveloped transport and infrastructure sectors, but also in the financial and business service fields.
Foreign investors keen to do business in Angola must obtain approval from the Angolan Agency for Private Investment (ANIP). Additionally, they must be able to invest a minimum of US$1 million. Investments can be made in cash or in the form of equipment.
Investors can launch a business venture by registering a branch office or incorporating a local company.
A branch is not a separate legal entity from its parent, but has full legal capacity to enter into business contracts. A branch has no formal capital, although in order to register a branch, a foreign parent company must allocate US$1 million to the branch for capitalization purposes. Aside from differences in relation to structure and organization, a branch essentially operates like a local company.
A local company may be set up as a limited liability company by quotas (sociedade por quotas or Lda) or a joint stock company (sociedade anónina or SA). In both cases, the liability of the owners is limited to their investment in the company.
An limited liability company must have a minimum of two partners and a minimum capital of US$1,000. Shareholders may defer payment of 50% of the capital, provided that the minimum capital has been fully paid up by the time the company has been incorporated.
An limited liability company also must have a manager, who is responsible for calling shareholder meetings. Details of the meeting must be conveyed in writing and be published in the most widely read newspaper in the area in which the company’s registered office is located. The manager must inform the partners at least 30 days in advance about a meeting, indicating the agenda, date, time and place of the meeting.
A joint stock company must have a minimum of five shareholders, unless one of the shareholders is a state entity, in which case a minimum of two shareholders is required. The minimum capital required is US$20,000, of which no less than 30% must be fully paid up at the time of incorporation. A joint stock company must have three corporate bodies: a general assembly, a board of directors and an auditing committee.
To register a branch or incorporate a company, investors must have the following documents: by-laws of the parent company or the shareholder of the local company; commercial registration certificate; shareholders’ resolution resolving to register a branch or constitute a company, as the case may be; a technical, economic and financial feasibility study of the investment project; an environmental impact study; and a power of attorney.
Individual shareholders will need to submit a copy of their passport, a record showing whether they have any criminal convictions, and an address certificate.
All documents must be translated into Portuguese and certified by the Angolan Consulate in the investor’s home country.
Benefits and incentives
Angola provides foreign businesses with various investment incentives. These include tax deductions; accelerated amortization and depreciation; tax credits; reduction or exemption of taxes, contribution and duties; and an extension on tax payment deadlines.
Tax and customs incentives may depend on the activity of the company; the area of the country where the business will be based; the value of the investment; and the economic and social impact of the investment.
Incentives may be granted for investments in particular sectors, such as agriculture and cattle breeding; packaging production; textiles; building materials; roads, railways, ports and airport infrastructure; fishing boats and nets; energy and water; telecommunications; social housing; health; education; and tourism.
Foreign investors can export and repatriate dividends and other profit distributions; liquidation proceeds; indebtedness; indemnities resulting from expropriation; and royalties.
The repatriation should comply with the applicable foreign exchange laws and should follow payment of taxes due in Angola. The investment law provides that the repatriation of dividends needs to be effected gradually and proportionally, taking into account the size of the investment and other criteria. The permitted levels of profit and dividend distribution are to be agreed as part of the investment contract between ANIP and the investor.
The investor must retain a minimum investment of US$1 million after the distribution of profits. A further restriction relates to the timing of repatriation of profits. Depending on the value of the investment and the regional zone in which the investment is made, profits may not be repatriated earlier than two or three years after completion of a project.
Companies investing in Angola must do so within the terms set out in their investment contract and the Private Investment Certificate Register. The terms can be extended in exceptional circumstances.
ANIP will monitor the implementation and development of an investment project on a regular basis. Companies established to implement the project are obliged to employ Angolan nationals and ensure that they have proper employment conditions. Qualified foreign nationals can be employed, but there must be a formation and capacity-building programme for Angolan nationals so that they may eventually replace the foreign nationals.
After gaining approval for an investment, a foreign investor seeking to register a branch or constitute a company must carry out the procedures required for the following: tax, commercial and statistical registration; a trade licence/industrial permit, if needed; registration as an importer or exporter, if needed; social security registration; petroleum registration (for companies providing services to the oil industry); a notary public deed of incorporation and publication of the incorporation in the official gazette.
Before executing a deed of incorporation, a company must open a bank account and deposit the amount corresponding to the shareholders’ cash contributions to the capital. Companies must then submit evidence of this deposit to the public notary when the notary deed is being executed.
Catarina Neto Fernandes is a lawyer at FBL in Angola. FBL has specialized experience in providing legal services to foreign investors in Angola.