Investing in Angola Fernando Barros, Country Leader PricewaterhouseCoopers, Angola

Transcription

1 Investing in Angola Fernando Barros, Country Leader, Angola Slide 1

2 Agenda Introduction 1 - Corporate, personal and indirect taxes 2 - Auditing requirements 3 - Optimising an exit strategy 4 - Guidelines on litigation, arbitration and dispute resolution 5 - Conclusions Final thought

3 Agenda Introduction 1 - Corporate, personal and indirect taxes 2 - Auditing requirements 3 - Optimising an exit strategy 4 - Guidelines on litigation, arbitration and dispute resolution 5 - Conclusions Final thought

4 Introduction We cover only a few CSFs Other CSFs should be considered eg - Market analysis - Partners - Management - Labour & immigration We aim to enhance awareness of potential private investors by discussing Angolan taxes ForEx and Audit regulations Protect investment and desinvestment Slide 4

5 Agenda Introduction 1 - Corporate, personal and indirect taxes 2 - Auditing requirements 3 - Optimising an exit strategy 4 - Guidelines on litigation, arbitration and dispute resolution 5 - Conclusions Final thought

6 1 - Corporate, personal and indirect taxes How does the Angolan tax system work? International tax considerations What are the critical taxes to consider? How should taxes be managed? Slide 6

7 1 - Corporate, personal and indirect taxes (cont) How does the Angolan tax system work? Key role imposed to taxpayers - self assessment & withholding taxes Difficult communication with Tax Authorities Hard approach from tax inspectors - disproportionately heavy penalty system In practice, no appeal system available to taxpayers No tax consolidation mechanisms in place No capital gains tax Tax incentives provided to investors Slide 7

8 1 - Corporate, personal and indirect taxes (cont) International tax considerations No DTTs in force Domestic tax legislation treats equally all investments and source No TP regulations - for the time being No Thin Capitalisation rules - for the time being No CFC regulations in Angola - for the time being Slide 8

9 1 - Corporate, personal and indirect taxes (cont) What are the critical taxes to consider? Corporate - Business income tax - Imp Industrial withholding tax on services - Lei 7/97 - Investment income tax - Imp sobre a Aplicação de Capitais - Real estate income tax - Imp Predial Urbano - Stamp duty on receipt - Imp do Selo de Recibo - Training tax - Contribuição para a Formação (Oil&Gas) - Social security Slide 9

10 1 - Corporate, personal and indirect taxes (cont) What are the critical taxes to consider? (cont) Individuals - Employment and self employment income tax - IRT - Business income tax - Investment income tax - Real estate income tax - Social security Slide 10

11 1 - Corporate, personal and indirect taxes (cont) What are the critical taxes to consider? (cont) Indirect taxes - Real estate transfer tax - Sisa - Stamp duty - Import duties - Consumption tax Slide 11

12 1 - Corporate, personal and indirect taxes (cont) What are the critical taxes to consider? (cont) Tax incentives available to investors - Business income tax 8 to 15 years - Dividend tax 5 to 12 years - Real estate transfer tax - Import related taxes on investment Import duties Consumption tax Slide 12

13 1 - Corporate, personal and indirect taxes (cont) What are the critical taxes to consider? (cont) Main conclusions - High corporate income tax rate... but significant tax incentives available for investors - Taxation of employment income is favourable - Careful consideration re indirect taxes - Tax reform ongoing - Taxes must be managed well to avoid heavy penalties Slide 13

14 Agenda Introduction 1 - Corporate, personal and indirect taxes 2 - Auditing requirements 3 - Optimising an exit strategy 4 - Guidelines on litigation, arbitration and dispute resolution 5 - Conclusions Final thought

15 2 - Auditing requirements Legal regime Practice Required developments Slide 15

16 2 - Auditing requirements (cont) Legal regime Laws 38/00, 3/01, BNA Aviso 4/2003 Accros Industries Law 13/05 and BNA Aviso 14/07 Financial sector Law 12/05 Stock Exchange Practice Financial institutions Private foreign investments Slide 16

17 2 - Auditing requirements (cont) Required developments Institute of Auditors - Ordem de Contabilistas e Peritos - In progress Slide 17

18 Agenda Introduction 1 - Corporate, personal and indirect taxes 2 - Auditing requirements 3 - Optimising an exit strategy 4 - Guidelines on litigation, arbitration and dispute resolution 5 - Conclusions Final thought

19 3 - Optimising an exit strategy Legal aspects Contractual aspects Slide 19

20 3 - Optimising an exit strategy (cont) Legal aspects Repatriation of proceeds of sale - Investment contract - Investment regulations - Meeting Tax and ForEx obligations fully Slide 20

21 3 - Optimising an exit strategy (cont) Contractual aspects Provisions for non-delivery - Dispute resolution mechanisms Internal Committee? Third party/ies? Slide 21

22 3 - Optimising an exit strategy (cont) Contractual aspects (cont) Provisions for non-delivery - Should the disputes continue, consider including provisions re Management re-structure Changing dividends policy Buy out - One party offering, the other preferring or selling - Buy out (eg NBV, NPV, multiple EBITDA) Slide 22

23 Agenda Introduction 1 - Corporate, personal and indirect taxes 2 - Auditing requirements 3 - Optimising an exit strategy 4 - Guidelines on litigation, arbitration and dispute resolution 5 - Conclusions Final thought

24 4 - Guidelines on litigation, arbitration and dispute resolution Dealing with litigation Arbitration and dispute resolution Slide 24

25 4 - Guidelines on litigation, arbitration and dispute resolution (cont) Dealing with litigation Accept that litigation is (or maybe) a reality Identify the areas that would impact the business (eg Strategy, Management, Investments, Risk & Quality) Provide for in JV and other contracts how to resolve litigation - Internal mechanisms (eg both parties boards?) - External mechanisms - Arbitration and dispute resolution Slide 25

26 4 - Guidelines on litigation, arbitration and dispute resolution (cont) Arbitration and dispute resolution Law 16/03 Any disputes re available rights (direitos disponíveis) may be resolved through arbitration or dispute resolutions The dispute resolutions may be resolved in accordance with law or practice International arbitration is acceptable - location of court, language and substantive law Arbitration award is registered with the Angolan court and is enforceable to the party against whom the award was decided upon. Slide 26

27 Agenda Introduction 1 - Corporate, personal and indirect taxes 2 - Auditing requirements 3 - Optimising an exit strategy 4 - Guidelines on litigation, arbitration and dispute resolution 5 - Conclusions Final thought

28 5 - Conclusions Negotiate first. Then formalise. Appropriate upfront market analysis is key to deliver success Understand how to avoid unneccesary high costs, including taxes & penalties Make sure profits and proceeds of sale are remittable overseas Accept that conflicts arise, more so with success Defend the Angolan investment and its stakeholders of the interests of the parties - plan ahead how to resolve issues Slide 28

29 Agenda Introduction 1 - Corporate, personal and indirect taxes 2 - Auditing requirements 3 - Optimising an exit strategy 4 - Guidelines on litigation, arbitration and dispute resolution 5 - Conclusions Final thought

30 Final thought Angola welcomes quality, long term investments and investors. Play your part: know the rules, plan ahead and deliver. Good luck! All rights reserved. "" refere-se à rede de firmas que são membros da International Limited, sendo cada uma das quais uma entidade legal autónoma e independente Slide 30