Investments

Republik von Angola
República de Angola

Honorarkonsulat für die Bundesländer
Nordrhein-Westfalen, Hessen, Rheinland-Pfalz

ANIP E-News Bulletin
Special Edition

What Every Potential Investor Should Know about Investing in Angola

Simplifying and encouraging private investment is a major strategic policy goal for the Angolan gov ernment and one of the key functions of ANIP. With so ma ny new reforms underway in Angola, we at ANIP thought it would be useful to issue a special bulletin that concisely outlines foreign investment procedures and incentives, and provides some market intelligence for those new to Angola.

For more information, please visit our web site at www.investinangola.com or email us at info@investinangola.org. For US-based investors, ANIP is happy to announce that it recently opened a Washington, DC office. See below for information on
ANIP's US office.

Two Investment Procedures: Prior Declaration and Contractual Regime

Prior Declaration Procedures (Declaraçao Previa) are used for:

Fo reign investments (defined as capital coming from outside of Angola) of at least $100,000 and no greater than $5 million, and
Domestic investments (defined as capital within Angola) of at least $50,000 and no greater than $5 million.

Step One for Domestic Investment Projects under Prior Declaration Procedures:

A domestic investor must submit an investment proposal by filing a Prior Declaration of Foreign Investment form with ANIP. The following is a complete list of the supporting documentation that must be submitted in duplicate to file a complete form with ANIP:

· Draft by-laws of the company to be incorporated;
· Certificate of corporate denominati on issued by the Ministry of Trade;
· Certified copy of the by-laws and commercial registration of the investor, duly authenticated in the case of corporations, or a copy of the Resident Card in the case of individuals;
· If shares of an existing corporation are acquired, aside from the by-laws of the corporation, prospective investors must submit certified copies of the minutes of board meetings reflecting approval of the acquisition of those shares (Minutes of the General Assembly);
· Fiscal certification, proving no moneys are owed to the fiscal authorities (for existing Angolan corporations only);
· Social Security Certificate proving no moneys are owed to Social Security (for existing Angolan corporations only).

Step One for Foreign Investment Projects under the Prior Declaration Procedures:

A foreign investor must submit an investment proposal by filing an Advance Declaration of Foreign Investment form with ANIP. The following is a complete list of the supporting documentation that must be submitted in duplicate to file a complete form with ANIP:

· Draft by-laws of the company to be incorporated;
· Certificate of corporate denomination issued by the Ministry of Trade;
· Certified copy of the by-laws and commercial registration of the proponents duly authenticated by the Consular Section of the Angolan embassy in the country of origin or in the country where authorization to enter Angola was obtained in the case of corporations, or a copy of the passport in the case of individuals;
· If shares of an existing corp oration are acquired, aside from the by-laws of the co rporation, potential investors must submit certified copies of the minutes of board meetings reflecting approval of the acquisition of those shares (Minutes of the General Assembly);
· Police records for non resident individuals (foreign investors), issued by the authorities in the country of origin or residence.

Step Two:

ANIP will review documentation and evaluate the proposal of a prior declaration investment within 15 days of receipt of a completed Prior Declaration of Investment package.

In reviewing the package ANIP determines if the proposal complies with Angolan and international law and will evaluate the shareholder structure, as well as negotiate incentives with the investor. ANIP also performs financial evaluations, including profit and loss
analysis, return on investment analysis, and capital requirements.

Step Three:

If ANIP's evaluation is a positive one, then the project is approved and ANIP issues a Certificado de Registo do Investimento Privado (CRIP). ANIP will also send copies of the CRIP to the customs office, the national bank and appropriate ministries. This certificate allows the investor to begin operations in Angola.

Contractual Regime Procedures

The Contractual Regime applies to any investment, either foreign or domestic, that:

· Exceeds $5 million, or
· Is in a sector which, according to Angolan law, may only be carried out by means of a concession agreement, or
· May only be undertaken with the participation of public companies.

Step One for Contractual Regime Investments:< BR>

As with a prior declaration investment, a potential investor must submit a completed investment proposal package to ANIP containing all the documentation required of a prior declaration application except all investment proposals, domestic or foreign, must also include:

· All documentation submitted in triplicate;
· Financial, economic and technical feasibility studies;
· Draft investment contract.

Step Two:

ANIP will review documentation and make a decision on a contractual regime investment within 30 days of receipt of a completed investment proposal package. ANIP's review would consist of the same evaluations as for a prior declaration investment.

Step Three:

If ANIP's evaluation is a positive one, then the proje ct is sent to the Council of Ministers for approval.

Step Four:

If the Council of Ministers approves the investment proposal, then the project is approved and ANIP issues a Certificado de Registo do Investimento Privado (CRIP). ANIP will also send copies of the CRIP to the customs office, the national bank and appropriate ministries. This certificate allows the investor to begin operations in Angola.

Incentives Available

Investment incentives are available to foreign investments of $100,000 or more, or domestic investments of $50,000 or more. Tax and custom incentives are based on three factors (1) sector (2) development zone and (3) special economic areas as defined by the government on a project need basis.

Sectoral factors: The government will consider tax and customs incentives for investments in the following sectors:

· Farming and animal husbandry
· Processing industry
· Fishing and derivative industries
· Civil construction
· Health and education
· Road, rail, port, airport, telecommunications, energy and water infrastructure
· Heavy cargo and passenger equipment.

Development zone factors: The Government will also provide tax and customs incentives based on the location of the investment, based on the following development zones.

Development Zone A includes:

· Luanda province
· The capital-municipalities of Benguela, Huila, Cabinda provinces, and
· The municipality of Lobito

Investm ent operations in Zone A are exempt from all duties and fees for 3 years. All profits are exempt from industrial taxes for 8 years. Companies that promote capital investments in Zone A are exempt from capital gains taxes for 5 years.

Development Zone B includes:

· The remaining municipalities of Benguela, Cabinda and Huila provinces not included in Zone A
· Kwanza Norte, Bengo, Uige, Kwanza Sul, Lunda Norte and Lunda Sul provinces

Investment operations in Zone B are exempt from all duties and fees for 4 years. All profits are exempt from industrial taxes for 12 years. Companies that promote capital investments in Zone B are exempt from capital gains taxes for 10 years.

Development Zone C includes:

· Huambo, Bie Moxico, Cuando Cuba ngo, Cunene, Namibe, Malange and Zaire provinces

Investment operations in Zone C are exempt from all duties and fees for 6 years. All profits are exempt from industrial taxes for 15 years. Companies that promote capital investments in Zone C are exempt from capital gains taxes for 15 years.

Other tax incentives:

Industrial tax exemptions are available for:

· Investments in new undertakings and in the rehabilitation of destroyed or paralyzed undertakings in Zone C
· Investments creating 50 or more full-time jobs for Angolan nationals

Up to 100 percent of the following expenses can be assessed as costs for tax purposes:

· Expenses incurred in the construction and repair of road, rail, telecommunications, water supply and social infrastructure for the workers, their familie s and local inhabitants.
· Expenses incurred in vocational training in all fields of social and productive activity.
· Expenses incurred in investments in the cultural sector and/or the purchase of works of Angola art, provided that when classified as such, the same art remains in Angola and is not sold for a period of 10 years.

Market Intelligence

Market Size at a Glance

Population: 14 million (2002 estimate)
Projected population: 16 million (2010 estimate)
Population by key markets:
Luanda: 3 million
Benguela: 1.6 million
Huambo: 1.5 million
Huila: 1.2 million
Bie: 1 million
Labor Force: 5 million

Business Operating Costs at a Glance

Tax rates:
Corporate: 20-25 percent
Capital Gains: 15 percent
Customs import duties: 1-35 percent

Operational costs:

Building costs:
Office leasing: $25-30 per square meter
Office purchase: $2,500 per square meter

Apartment leasing: $35-60 per square meter;
Apartment purchase: $3,000 per square meter

Warehouse leasing: $3-5 per square meter
Warehouse purchase: $400-700 per square meter

Capital costs:
Interest rate for loans in Kwanzas: 20 percent
Interest rate for loans in US dollars: 12 percent

Land costs:
Industrial park in Viana: $1 per square meter per year
Industrial park in Catumbela: $1 per square meter per year

Key Economic Data:

GDP: $11.2 billio n (2002)
GDP growth rate: 15.3 percent
Total expor ts: $8.5 billion
Consisting largely of petroleum, diamonds, fishing and derivatives, timber, and coffee
Exporting largely to the US, China, France, Belgium and Spain
Total imports: $3 billion
Consisting largely of machinery, electrical equipment, vehicles and spare parts, medicines, food and textiles
Importing largely from Portugal, South Africa, the US, France and Brazil

Private investment profile by sector
First half of 2004:

Services

24 percent

Light industry

21 percent

Construction

21 percent

Commerce

13 percent

Petroleum

7 percent

Mining

5 percent

Fishing

4 percent

Hotels/Tourism

3 percent

Agriculture

2 percent

For more detailed and sector-specific market analysis contact ANIP to learn about our consulting services.

< B>Expanding Private Investment Promotion: ANIP Opens US Office

In order to promote Angola's full potential, attract much needed investment to renovate existing infrastructure, rehabilitate existing industrial capacity, and generate new business, ANIP has chosen to open its first representation office in the United States. The office is located at 1925 K Street, NW, Suite 225, Washington, DC 2006 and is registered at the Department of State as the Angola Trade Representative in the US. The office was formerly the IIE, an adjunct agency to the Angolan Embassy in the US.

ANIP's Washington office is headed by Maria Luisa Abrantes, and its mission is to disseminate Angolan legislation relevant to private investment promotion, with the objective of increasing and strengthening partnerships between US and Angolan investors. ANIP's representation in the US promotes Angola's natural and human resources and Angolan businesses through direct contacts, conferences and online resources. At a company's request, it will also promote US businesses among Angolan entrepreneurs.

ANIP Washington DC contact information:
Tel: 1 202 331 7604
Fax: 1 202 331 7605
Email: milinvest@starpower.net
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For more information, visit our web site www.investinangola.com

This material is circulated by C/R International, L.L.C., Washington, D.C.
which is registered under 22 U.S.C. 612 with the Department of Justice,
where its registration and this material are available for public inspection.
Registration does not indicate approval of this material by the United States Government.

Konsul:

Prof Klaus D. Nielen MBA
Am Bonneshof 30
D – 40474 Düsseldorf
Tel: 0049 (0) 211 45 23 93
Fax: 0049 (0) 211 451539

KONSULAT DER REPUBLIK ANGOLA für die Bundesländer Nordrhein-Westfalen, Hessen und Rheinland-Pfalz Prof. Klaus Nielen MBA Am Bonneshof 30 Orionhaus D-40474 Düsseldorf Tel.: 0211-452393 Fax: 0211-451539 Email: konsulat@nielen.de mail@nielen.de	Rua Cerqueira Lukoki No 25 Edificio do Ministerio da Industria 9 Andar Luanda, Angola Tel/Fax: 244 2 332956 info@investinangola.org http://www.investinangola.com
Volume 1 Issue 8	December 3, 2004

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