Algeria is one of the largest states in the African region. This jurisdiction is open to foreign investments and provides limitless opportunities for doing business at comparatively low costs. Currently, the mining, agricultural, and manufacturing sectors prevail in the national economy. In general, company formation in Algeria may bring these benefits to your international business structure.
Why Register a Company in Algeria?
Your preliminary decision to open a company in Algeria is potentially associated with the next core benefits:
- strategic geographical location in the African region;
- natural resources in abundance (among others, Algeria is a leader in natural gas export);
- openness to technological innovations;
- low-cost opportunities for manpower involvement;
- free tax zones.
Legal and Organizational Forms in Algeria
If you wish to create/buy a company in Algeria or establish your official presence in an alternative way, these legal and organizational forms are available:
- Limited liability company - a business form that is associated with the limited monetary and legal obligations of promoters. They will not be in charge of any potential losses of this entity in excess of the funds contributed. At least 2 shareholders and 2 directors are needed to start a business in this form.
- Branch - a non-resident company may pass a simplified registration process to establish its business presence in Algeria before entering the market with a higher amount of investments.
Contact Prifinance attorneys if you wish to find out more about the options for doing business in Algeria.
How to Set up a Company in Algeria?
Starting a company in Algeria is possible after passing these pre- and post-registration stages:
- Listing the scope of commercial activities that will be handled through a future entity.
- Arranging office premises as a legal address for an upcoming company.
- Gathering and formalizing all the must-have documents and particulars for a future entity, including the final beneficiaries and a mother company (if present).
- Preparing drafts and executing all application and statutory documents for a new Algerian company.
- Passing the package of required information and documents to a registrar. Entering the information about a newly-formed company in the Commercial Register of Algeria in the case of positive feedback.
- Company registration for the purposes of paying taxes and social security contributions.
- Opening corporate bank accounts.
- Applying for licenses and special permits that may be needed for specific types of regulated activities.
Legislative and Regulatory Aspects
The legal regulation of a business in Algeria is protectionist in nature and a bit bureaucratized. Foreign businessmen are allowed to own up to 49% of a local company so it could preserve the Algerian tax residency. A local partner should own 51%+ of a company under any conditions.
However, the local government takes steps to make starting a business easier. Namely, the government has abolished compulsory statutory requirements for a company’s share capital. Still, practically, it should be at least USD 1,000. At the same time, many registration nuances are not on the surface. Prifinance attorneys will help you tackle these bureaucratic difficulties.
Taxation in Algeria
Any starting considerations about company incorporation in Algeria should be assessed along with the next aspects of taxation:
- Profit tax (for business forms) - 19%/23%/26% (depends on the type of activity);
- Income tax (for individuals) - 35%
- Value-added tax - 19%
- Withholding tax (for non-residents) - (1) dividends - 15% (2) interests - 10% (3) royalties - 30% (another rate may be envisaged by a double-tax treaty)
- Capital gains tax - (1) for business forms - see profit tax (2) for individuals (non-residents) - 20%.
How Prifinance Attorneys Can Assist You
If you are interested further in buying ready-made or forming a company in Algeria, Prifinance attorneys are prepared to foster the easiest realization of your business goals. Experts have gained vast expertise in registering a business worldwide (11,000+ projects) and are ready to apply this experience for your business purposes.