Investing In Angola: Between Extremes

Keywords: Angola, Private Investment Law, oil, ANIP,

Angola is a land of extremes. While many Angolans live in deepest poverty, the Angolan economy is the third largest in Sub-Saharan Africa, with annual GDP growth regularly topping 10 percent over recent years. In a country which spent nearly 30 years in a state of civil war, peace has now firmly taken hold. While Angola ranks 172nd out of 183 for ease of doing business (IFC "Doing Business" Report 2012), record foreign investment is flowing into the country.

At the heart of the story is Angola's wealth of natural resources. Angola is the second largest oil producer in Sub-Saharan Africa, and it holds substantial and varied mineral reserves, including diamonds, iron ore, phosphates and gold. Its agricultural and fishing potential are also considerable. Public and private investment are at record levels with no signs of abatement. Much of the investment is being directed toward infrastructure development, which, with housing, is an urgent priority following the devastation of the decades of civil war.

Foreign construction companies wishing to do business in Angola must meet a series of legal and economic requirements. Angola's position in the "ease of doing business" rankings warns us that clearing these hurdles will not be easy and can be time-consuming and bureaucratic. However, the significant business opportunities may well justify the time and effort involved.

Private Investment Framework

In 2011, Angola passed a Private Investment Law requiring foreign investors that wish to establish a company or branch office in Angola to have their venture approved as a "Private Investment Project" by the Angolan Private Investment Agency (Agencia Nacional de Investimento Privado or ANIP). To qualify under the Private Investment Law, ventures must comply with the following legal and financial requirements:

Foreign investment projects require a minimum investment of US$1 million (in goods and/or cash). The company or branch registered in Angola must agree to an invest¬ment contract with ANIP. This confers a right to repatriate profits (subject to the control of the BNA, the Angolan central bank). An investor cannot simply repatriate profits as it wishes. Repatriation is instead governed by conditions negotiated with ANIP on a case-by-case basis and incorporated into the investment contract. The extent of repatriation permitted (and its timing) depends on a number of factors, including the amount and...