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18 September 2019
Client Alert | Algeria | M&A / Corporate
Official communications by the Algerian government on the draft finance law for 2020 have confirmed intentions to boost foreign investments in Algeria by reviewing the 49% limitation imposed on foreign investors in Algerian companies.
Indeed, since 2009 Algeria has been imposing on foreign investors an obligation to have Algerian shareholders owning at least 51% of the share capital in all newly created Algerian companies.
In its draft finance law for 2020, the Algerian government is willing to limit the application of this 49/51 rule to strategic sectors. No information has yet been provided on the scope of such “strategic sectors”, but they are expected to include at least energy, infrastructure, banking, insurance, natural resources, utilities and defence.
As a result of this change, sectors considered as non-strategic would no longer be subject to the 49/51 rule.
Being particularly aware of the need to improve the general legal framework applicable to corporations and to foreign investments, the Algerian government has also announced that it is preparing further measures to facilitate investments.
The definitive finance law for 2020 is expected to be adopted by the end of December 2019.
