Country investment factsheet · National framework (non-OHADA)
Legal & tax framework for investment — June 2026 edition
Series: UGGC Africa MENA factsheets — a country-by-country overview of investment across North Africa and the Gulf.
Africa’s largest country by area and a major energy player, Algeria draws its economy from hydrocarbons (gas and oil, operated by Sonatrach) and is pursuing a diversification policy. Algeria is not an OHADA member: company law, accounting and arbitration follow a national framework. The country overhauled its investment framework in 2022 and relaxed the local-ownership rule, while maintaining strict exchange controls. This factsheet summarises the macroeconomic, tax and legal data relevant to an entry decision, with particular focus on the legal securing of the investment.
Algeria at a glance
A national business-law framework
- National law (non-OHADA). Algeria does not apply the OHADA Uniform Acts: company law is governed by the Commercial Code, and security interests, contracts and insolvency by Algerian law.
- Arbitration. International commercial arbitration is governed by the Code of Civil and Administrative Procedure (Law 08-09); the CACI/CCMA (chamber of commerce) administers mediation and arbitration. Algeria is a party to the 1958 New York Convention.
- Accounting. National framework — Financial Accounting System (SCF), in force since 2010 and IFRS-based.
- Algeria is a member of the African Union and the AfCFTA, and a WTO observer.
Common company forms
| Form | Minimum capital | Typical use |
|---|---|---|
| SPA (joint stock co.) | DZD 1,000,000 (5M if public offering) · 7 shareholders min. | Larger projects, share-based governance |
| SARL (LLC) | Set freely by the by-laws | Most common form for a subsidiary |
| EURL | Set freely | Single-member LLC |
| Branch / liaison office | Attached to the foreign company | Representation, prospecting |
Investment one-stop shop: AAPI (Algerian Investment Promotion Agency, formerly ANDI).
Tax regime — key points
| Tax | Rate | Details |
|---|---|---|
| Corporate income tax (IBS) | 19 / 23 / 26% | By sector: 19% goods production · 23% construction, tourism · 26% others (trade, services). Reduced 10% on reinvested profits. |
| VAT | 19% / 9% | Standard 19%, reduced 9%. Threshold depends on the regime (actual or IFU), to be confirmed with the DGI. |
| Withholding (non-residents) | 30% (royalties / services) | Dividends: 15%. Interest: 10%. The 30% withholding on services and royalties is final (“3 taxes in 1”). Reduced by tax treaty. |
| Tax treaties | France and network | France–Algeria treaty signed 17/10/1999 (in force 2002). Source: DGI Algeria. |
Tax source: PwC Worldwide Tax Summaries — Algeria, updated 14/07/2025. 2025-2026 Finance Acts.
Attractive sectors
- Hydrocarbons & energy — gas and oil (Sonatrach); Algeria is a major gas supplier to Europe (Medgaz, Transmed). Oilfield services and petrochemicals.
- Renewables — a large-scale solar programme under development.
- Mining — iron, phosphates, zinc; structuring projects (Gara Djebilet, Bled El Hadba).
- Agriculture & agri-food — import-substitution policy, processing.
- Industry & automotive — assembly, subcontracting, within diversification.
Investment incentives
- Investment Law 22-18 of 24 July 2022 — incentive regimes (general, zones, strategic sectors), guarantees and stability.
- AAPI (formerly ANDI) — investment one-stop shop and granting of advantages.
- Zone regimes — enhanced incentives in the South and the High Plateaus.
- 51/49 relaxation — foreign ownership up to 100% outside strategic sectors.
Work permits for expatriates
- Employment of foreign staff requires a work permit; legal priority is given to local labour.
- Transfer of expatriates’ pay is governed by the foreign-exchange rules.
Foreign-exchange regulation
- Strict control. The Algerian dinar is not convertible. Operations with abroad are controlled by the Bank of Algeria; capital movements, imports and transfers are tightly regulated and subject to authorisation.
- Repatriation of dividends and capital. Transfer of profits and dividends to foreign investors is guaranteed for investments financed by a foreign-currency contribution that is duly registered — hence the importance of tracing the initial contribution.
- Export proceeds. Mandatory repatriation of export proceeds within the timelines set by the regulation.
Regulation subject to change — terms to be verified with the Bank of Algeria and an approved bank.
Securing the investment — the UGGC angle
In Algeria, the central issue is aligning the overhauled investment framework (Law 22-18, 51/49 relaxation) with some of the strictest exchange controls in the region.
- Exchange & repatriation — fund the investment with a registered foreign-currency contribution: it is the condition for later dividend repatriation.
- Ownership & strategic sectors — check eligibility for 100% foreign ownership and, failing that, structure the required local partnership.
- Arbitration & litigation — a well-drafted arbitration clause; New York Convention applicable to enforcing awards.
- Tax & structuring — sectoral IBS, 30% final withholding, tax treaties, AAPI regimes.
Our teams support these transactions in mergers & acquisitions, tax law and litigation & arbitration.
Our reading — the practitioner’s view
The figures don’t tell the whole story. Here is what we flag to clients before any entry into Algeria.
Which structure to choose?
The SARL/EURL is the most common form for a subsidiary; the SPA suits larger projects or share-based governance. The threshold question remains eligibility for 100% foreign ownership: outside strategic sectors, a local partner is no longer mandatory, but a sector check is essential before any structuring.
Three pitfalls investors underestimate
- Exchange controls. This is point #1. Without a registered foreign-currency contribution, dividend repatriation becomes very difficult. Tracing the initial contribution drives the entire liquidity of the project.
- The 30% final withholding. On services and royalties paid to non-residents, it weighs heavily on technical-assistance contracts; the tax treaty must be invoked and documented.
- Strategic sectors. The 51/49 relaxation is not general: some sectors still require local participation. The list evolves and must be checked case by case.
From text to practice
AAPI is the entry point for incorporation and incentives. For hydrocarbons and mining, the sector framework and specific authorisations shape the schedule. But the common thread of an Algerian file remains exchange management and registration of the foreign-currency contribution.
Frequently asked questions
What is the minimum capital to set up an SPA in Algeria?
A joint stock company (SPA) requires DZD 1,000,000 (DZD 5,000,000 for a public offering), with at least 7 shareholders; the SARL capital is set freely by the by-laws. As Algeria is not an OHADA member, company law is national.
What is the corporate income tax rate in Algeria?
IBS varies by sector: 19% (goods production), 23% (construction, tourism), 26% (others: trade, services). Reduced 10% on reinvested profits.
What is the VAT rate in Algeria?
VAT is 19% (standard) and 9% (reduced). The registration threshold depends on the regime (actual or IFU) and should be confirmed with the DGI.
How can an investment be secured in Algeria?
Recourse to arbitration (CACI/CCMA, Code of Civil and Administrative Procedure; New York Convention applicable), national accounting (SCF), and the benefit of Law 22-18 and the AAPI. Exchange controls are strict.
Does the 51/49 rule still apply in Algeria?
It was relaxed from 2020-2022: foreign ownership may reach 100% in most sectors, except strategic sectors where local participation is still required. The list should be checked case by case.
Considering an entry into Algeria?
Contact the UGGC Africa team · Download the country factsheet (PDF)
Disclaimer. This factsheet is provided for general information, as of June 2026; it does not constitute legal or tax advice and cannot bind UGGC Africa. The figures come from public sources and are subject to change (finance acts, exchange regulation, strategic-sectors list). Any investment decision should be the subject of a tailored analysis.
Sources: IMF (World Economic Outlook 2025-2026) · World Bank · Worldometer (population) · PwC Worldwide Tax Summaries — Algeria (14/07/2025) · DGI (mfdgi.gov.dz) · AAPI (aapi.dz) · Bank of Algeria (bank-of-algeria.dz) · uggcafrica.com.