General Information

Doing business in Algeria requires investing time to learn about the regulatory environment and to follow the evolution of each new finance law and amendments.

Regarding establishment, the 49/51 rule was repealed in 2020 for resident commercial companies operating in a sector considered to be non-strategic. It is indispensable to make use of a local office for the formalities entailed in forming a company.

Regulations on imports are complex and have seen several successive modifications over the past few years. This reflects the will of the government to limit imports in the context of foreign exchange budgetary restrictions, exacerbated last years by a drop in oil prices.

Although Algeria offers numerous opportunities, and should continue as oil and gas prices rise, you should not forget that there is competition and that the quality of personal relationships is an important factor.
 

Means of Payment & Banking Specificities

From a regulatory point of view, payments for imports can be carried out by documentary credit, documentary remittance or via a transfer. A deposit is authorised up to the amount of 15% against the issue of an advance payment guarantee.

It should be noted that whatever the payment method, any importation of goods or services must be the object of a direct debit placed by an approved institution and a bank. A certificate of free movement is required for any request for a direct debit.

As a reminder, since 05/2017, the regulation of imports of goods intended for resale in the state is stricter with the obligation for the importer to make a financial provision of 120% with the domiciliary bank at least 30 days before the date of shipment.

Goods and products that were subject to the provisional import suspension in 2018 are now free to import with the payment of a provisional additional safeguard duty (DAPS). The DAPS applies in addition to customs duties, the rate varies between 30% and 200% depending on the category of products.

A regulatory provision forces economic operators to insure importations with policies from approved insurance companies in Algeria. Morever, FOB incoterm has been strongly recommended since January 1st 2020 and its use is now largely majority in imports.

Independently of the regulatory aspect, it is strongly advised to stick to secure payments via confirmed documentary credit.

In the case that a client, nevertheless, uses documentary remittance and it remains unpaid, it is absolutely necessary to provide the number of the agency concerned when dealing with the sponsoring Algerian bank.