INVESTING IN ANGOLA. INVESTING IN ANGOLA Private Investment Law PRIVATE INVESTMENT LAW

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1 INVESTING IN ANGOLA PRIVATE INVESTMENT LAW The new regime for private investment in Angola was approved by Law n. º 10/18, 26 June In the meantime, Presidential Decree n. º 250/18, 30 October, has been published, which approves the Regulation of Legal Investment Procedures for investments completed under the Private Investment Law. 1

2 Scope of application The Private Investment Law applies to investments of any amount made by internal investors or by external investors. PRIORITY SECTORS OF ACTIVITY Education, Technical and Professional Training, Higher Education, Scientific Research and Innovation Agriculture, Food and Agroindustry Specialized Health Units and Services Reforestation, Industrial Transformation of Forest Resources and Silviculture Textile, Clothing and Footwear Industry Hotel, Tourism and Leisure Construction, Public Works, Telecommunications and Information Technologies, Airport and Railway Infrastructures Production and Distribution of Electrical Energy Basic Sanitation, Collection and Treatment of Solid Waste FORMS OF INTERNAL INVESTMENT Allocation of own funds Application of existing funds in bank accounts constituted in the country, held by residents (for the Foreign Exchange Law purposes), even if resulting from financing obtained abroad Allocation of machinery, equipment, accessories and other tangible fixed assets Incorporation of credits and other assets of the investor Incorporation of technologies and know-how susceptible to monetary valuation Application of funds, in national territory, in the scope of reinvestment 2

3 FORMS OF EXTERNAL INVESTMENT Transfer of own funds from abroad Application of funds, in national and foreign currency, in bank accounts opened in Angola by non-residents (for the Foreign Exchange Law purposes), subject to repatriation, in accordance with applicable exchange legislation Application of funds, in Angola, in the scope of reinvestment Transfer of machinery, equipment, accessories and other tangible fixed assets Incorporation of technologies and know-how ACCESS TO CREDIT Private investors can access internal and external credit. External investors and companies majorityowned by them are only eligible for domestic credit after having fully implemented their investment projects. SHAREHOLDERS LOANS Shareholders loans made for external investment purposes may not exceed 30% of the investment value and are only refundable after 3 years from the date of registration in the company s accounts. INDIRECT INVESTMENT Whenever the internal or external investor intends to carry out operations classified as indirect investment, they shall not exceed 50% of the global investment value. INVESTMENT OPERATIONS In addition to the investment operations already foreseen in previous legislation (incorporation of commercial companies, acquisition of shareholdings, celebration of consortia, exploitation of real estate ventures, etc.), it is now contemplated the conversion of credits arising from the execution of supply agreements (machinery, equipment and goods). 3

4 EQUIPMENT REGISTRATION VALUE The registration of private investment in the form of imports of new or used machinery, equipment and components, is made by its FOB value in foreign currency and its countervalue in national currency at the reference exchange rate of the National Bank of Angola. VALUE OF MACHINES AND EQUIPMENT The value of the machines and equipment is subject to proof by means of a suitable document issued at the origin by a certified asset valuation entity. WORKFORCE The private investor must promote the employment of Angolan workers by providing them with the necessary professional training and salary and social conditions compatible with their qualification. The training plan and the plan for gradual replacement of foreign workforce by nationals should be part of the Investment Project documentation at the time of registration. EXTERNAL TRANSFERS Dividends Liquidation proceeds Compensations/Indemnities - Royalties or other incomes related to indirect investment, associated with the transfer of technology 4

5 INVESTMENT REGIMES The investor may freely opt for any of the regimes PRIOR DECLARATION REGIME This regime presupposes the simple presentation of the investment proposal to the competent body for registration and allocation of benefits. The companies must be previously incorporated and the presentation of the Private Investment Registration Certificate for incorporation procedures is now dismissed. SPECIAL REGIME It applies to private investments in priority sectors and in development areas. These investments are subject to registration with the competent body with a view to granting benefits and facilities. DEVELOPMENT ZONES Zone A: Province of Luanda, the capital-municipalities of the Provinces of Benguela, Huíla, Cabinda and the Municipality of Lobito; Zone B: Provinces of Bié, of Bengo, of Kwanza Norte, of Kwanza Sul, of Huambo, Namibe and remaining municipalities of the Provinces of Benguela and Huíla; Zone C: Provinces of Cuando of Cubango, Cunene, of Lunda-Norte, of Lunda-Sul, of Malanje, of Moxico, of Uíge and Zaire; Zone D: Province of Cabinda. A B C D 5

6 BENEFITS AND FACILITIES FOR INVESTMENT IN ANGOLA Prior Declaration Regime Real Estate Transfer Tax: tax rate reduction by half (for acquisition of offices and investment establishments) Industrial Tax: reduction of the final settlement rate and the provisional settlement rate by 20% for a 2 years period Capital Gains Tax: reduction of the tax rate over profits and dividends by 25% for a 2 years period Stamp duty Tax: tax rate reduction by half for a 2 years period Special Regime Real Estate Transfer Tax (for the acquisition of offices and investment establishments) Zone A: rate reduction by half Zone B: rate reduction by 75% Zone C: rate reduction by 85% Zone D: half of the rate assigned to Zone C period of 4 (four) years; Increase in depreciation and reintegration rates by 50%, for a 4 years period Zone C: rate reduction by 80%, for an 8 years period 8 Zone D: the Industrial Tax rate corresponds to half the rate assigned to Zone C, for an 8 years period; Increase in depreciation and reintegration rates by 50%, for an 8 years period Capital Gains Tax (taxation of dividends and profits) Zone A: rate reduction by 25% for a 2 years period Zone B: rate reduction by 60% for a 4 years period Zone C: rate reduction by 80%, for an 8 years period 8 Zone D: The Capital Gains Tax rate corresponds to half the rate to Zone C, for an 8 years period Urban Property Tax Zone B: rate reduction by 50%, for the ownership of real estate aimed at offices and to the establishment of the investment, for a 4 years period Zone C: rate reduction by 75%, for the ownership of real estate aimed at offices and to the establishment of the investment, for an 8 years period Zone D: Urban Property Tax Rate corresponds to half the rate assigned to Zone C, for an 8 years period Industrial Tax Zone A: reduction of the final settlement rate and the provisional settlement rate by 20% for a 2 years period Zone B: : reduction of the final settlement rate and the provisional settlement rate by 60%, for a 6

7 OTHER BENEFITS AND FACILITIES The private investment company established under the Special Regime is exempt from payment of fees and charges due to public entities for any requested service, including customs, for a period not exceeding 5 (five) years. Tax benefits are automatically granted to CRIP holders without any additional administrative procedure PRIVATE LEGAL INVESTMENT PROCEDURES PRESIDENTIAL DECREE N. º 250/18 INVESTMENT AND EXPORT PROMOTION AGENCY AIPEX is the body in charge of the promotion, processing of legal registration, monitoring and inspection of investments. INTEGRATED PRIVATE INVESTMENT MANAGEMENT SYSTEM SIGIP is an online electronic platform from which the investor can submit the necessary documentation for the registration of the investment. DEADLINES Upon receipt of the application for registration of the investment project, AIPEX has 5 (five) business days to communicate a decision. PRIVATE INVESTMENT REGISTRATION CERTIFICATE The approval of the request consists of the delivery of CRIP by the AIPEX services. 7

8 ACCESS TO INTERNAL CREDIT External investors and mixed commercial companies with the first investment project in progress are not eligible for internal credit. Ineligibility is reported by the BNA in the BNA Information and Credit Risk Center, in conjunction with AIPEX. SUPPORT SERVICES It is foreseen the rendering of support services by AIPEX to projects registered under the special regime: legal, tax and social security records; registration of intellectual property and real estate; obtaining of activity licenses, building permits, environmental licenses and others; contracting of energy and water services; obtaining visas; other records. INSPECTION AND MONITORING The investment vehicle company prepares and sends to AIPEX, by electronic means, quarterly reports on the development of the implementation phase of the project. 8

9 For more information contact us: Bruno Esteves de Magalhães Rua Bernardo Lima, Lisboa Portugal Presidente Business Center, Sala 305, Largo 17 de Setembro, Luanda Angola RSA LP Portuguese speaking Law Services Network RSA LP was born from the determination of Raposo Subtil & Associates Law Firm, RL to join, through various partnerships, Lawyers of reference in countries that share the Portuguese language among themselves. Currently, RSA LP brand is represented through several offices in Portugal, Angola, Brazil, Cape Verde, Macau, Mozambique and São Tome e Principe. RSA LP provides a basis for collaboration, cooperation and harnessing of synergies stemming from the specialized expertise of its partners in different legal systems, with numerous advantages for clients. Thus, within the scope of RSA LP, clients can have access to a set of specialized and excellent legal services provided by competent and dedicated professionals who share the Portuguese Language in seven countries on three continents. This communication contains only general information and therefore does not constitute professional advice or the provision of services by RSA LP, its member firms or their related entities. Before any act or omission that may affect you, you should consult a qualified professional. No entity in the RSA LP network may be liable for any damages or losses incurred by the results arising from the decision-making based on this communication. 9