Angola – New Private Investment Law: Foreign Investment Operations

The new Private Investment Law (Lei do Investimento Privado – LIP) sets the definition of foreign investment.

 

According to the new regime, foreign investors must establish partnerships with Angolan investors to invest in the following areas:

 

  • Electricity and water;
  • Hotel and tourism
  • Transportation and logistics,
  • Construction;
  • Telecommunications and Information technologies;
  • Mass media.

 

To this purpose, public capital companies or Angolan companies are considered Angolan investorsThese must hold at least 35% of the shares and effective participation in the management, reflected in the shareholders agreement.

 

During the execution of the investment project, this minimum limit must be observed, except if public interest is served, suitably authorized by the entity with competency to approve the investment. On the other hand, the change  over 35% needs no authorization from the relevant entity.

 

On the other hand, limits are set for shareholders’ contributions call-in and indirect investment in general.

 

Also, a surcharge on capital employed is created, concerning profits and dividends distribution of the fraction exceeding the project investor’s own funds.

 

Also allowed investments by foreign investors of amounts under USD 1,000,000 (one million US dollars), with right to profit, dividends and other gains repatriation, according to terms pending regulation.

 

 

External investment operations

 

Foreign investment operations are, among others, the following acts and contracts executed without resorting to the foreign exchange reserves of the Country:

  • introduction into the national territory of freely convertible currency;
  • introduction of technology and know-how, provided representing an added value for the undertaking and may be subjected to monetary valuation;
  • introduction of machines, equipment and other tangible fixed assets;
  • participation in societies and companies under th Angolan law, with headquarters within the national territory;
  • creation of new companies exclusively owned by  the foreign investor;
  • purchase of all or a part of existing companies or group of companies and participation or purchase of participation in the capital of companies or groups of companies, either new or existing, whichever the form;
  • closure and change of contracts of trusts, partnership association, joint ventures, third parties’ associations to parts or capital shares and any other forms of contract of association allowed in international commerce, yet to be laid down in the commercial legislation in force;
  • full or partial commercial establishments takeover, either through acquisition of assets or contracts for assignment and exploitation;
  • full or partial takeover of farming companies, through lease contract or any agreements comprehending possession and exploitation by the investor.
  • exploitation of real estate complexes, either touristic or not, regardless of its legal nature;
  • execution of additional capital instalments, advances to stockholders and, in general, loans associated to profits participation;
  • acquisition of real estate within the national territory, provided this acquisition is included in private investment projects.

 

 

Operations consisting of temporary freight of cars, boats, airships or other media susceptible of renting, leasing or any other form of t emporary use in the national territory against payment are not considered external investment.

 

Anyway, the said operations may be considered external investment operations provided the Executive expresses and decides the need to grand this statute on the grounds of its major economic relevance or strategic importance.

 

 

Realization of external investment

 

External investment acts can be executed, occasionally or cumulatively, through the following forms:

  • transfer of capital base from abroad;
  • transfer of funds in foreign currency, in bank accounts opened in Angola by  non-residents, reexportable, according to the terms of applicable exchange legislation;
  • application within the national territory, of funds under foreign reinvestment;
  • import of machines, equipment, fittings and other tangible fixed assets;
  • incorporation of technologies and know-how.

 

These last two forms of executing a foreign investment require always funds transfer from abroad, namely to fund building, installation and share capital execution expenses.

 

Shareholders or partners supply cannot exceed 30% of the investment made by the incorporated society, and can only be refunded following three years from the society’s account registration date.

 

 

References
Law nr. 14/15, of  August 11th
Law no. 20/11, of 20th May