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BUSINESS OPPORTUNITIES IN ALGERIA - Keys to KEYS TO PROSPECTING THE ALGERIAN MARKET
Changes in the legal framework for foreign investors - Securing flows and best practices - The needs of Algerian industry - ALGEST salon international de la sous-traitance
At the 1st workshop on March 10, our experts demonstrated that the evolution of the legal framework strongly favors the establishment of foreign companies in Algeria; now is the FAVORABLE TIME TO SET UP IN THIS MARKET.
-> The measures taken by the Algerian Ministry of the Economy to open up to foreign investors have clear objectives:
- Implement a rational import policy
- Create the conditions to increase the share of industry in Algeria's GDP, which now stands at just 6%, i.e. strengthen the integration of value chains into the economic fabric through the participation of foreign groups, companies and investors.
-> As a reminder, a clear distinction must be made between
- regulations still in force (specific procedure with prior agreement) concerning the import of finished products "as is" into Algeria
- of all the easing measures concerning the import of production goods, semi-finished products, components or other raw materials essential to local industry - and which are not produced, or not sufficiently produced, in Algeria at present. As a logical consequence, it will be easier for companies in these sectors to enter the Algerian market.
The May 23 webinar focused on export best practices and securing flows and payments.
-> What risks should you consider before exporting?
Country risk - Regulatory risk - Credit risk - Foreign exchange risk
-> The so-called "country", economic and political risk concerning Algeria is considered moderate by banks and rating agencies: macroeconomic stability; steady GDP growth; positive trade balance; central bank foreign exchange reserves equivalent to 2 years of imports.
However, high inflation, high unemployment and cumbersome regulations remain negative points.
-> Credit risk :
Even if the rate of unpaid invoices in Algeria is marginal, according to experts and banks, it's important to be aware of the following
- secure your commercial contract by finding out about the country's specific features and including them in your commercial negotiations as early as possible. Choose the right Incoterm.
Banks play a vital role in this process, and we strongly recommend that you consult your bank before signing the commercial contract.
- clearly negotiate the terms of payment and protect against the risk of non-payment. We strongly advise you to use Documentary Credits for your first exchanges with a new business partner.
- ask a credit insurer.
-> Taxation - Bilateral agreement between France and Algeria - Exchange control - Dividend remittance for foreign-owned companies
- End of 49/51, except in sensitive sectors; 100% foreign-owned projects now admissible
- How to set up a subsidiary in Algeria?
In addition to the classic legal forms (close to French law), there is a particularly simple and effective solution for testing the market: the creation of a temporary structure, limited for the time of a specific project.
- Transferability of dividends ensured by the legislative framework, as well as the eventual return of invested capital to a local structure.
- The bilateral agreement between France and Algeria confers tax benefits on French-owned companies.
-> the need for partnerships and subcontracting is enormous in all sectors of the economy. The Algerian Ministry of the Economy has identified the automotive sector as a strategic one. The aim is to develop a genuine automotive industry with a minimum integration rate of 40% by the end of the 5th year of operation.
This strategy can represent an investment opportunity for our equipment manufacturers in the so-called "subcontracting" sectors such as electricity, electronics, rubber, injected plastics, batteries, paints and solvents, glazing, etc.
Other sectors have strong development potential, notably services such as transport and logistics, services to industry (NDT and other trades in the extractive and hydrocarbon industries, packaging, agri-food and health/pharmaceutical industries), waste collection and treatment, and the circular economy.
Last but not least, alternative and low-carbon energies are undeniably a huge area of development, driven not only by the need to protect the planet, but first and foremost by the country's "Gas" strategy. Renewable energies will be strongly favored for domestic consumption .Hydrogen is also a priority R&D topic in Algeria, favoured by the availability of water and energy resources at a very competitive cost.
Taking part in ALGEST, the international subcontracting trade show in Algiers, is an excellent opportunity to gauge the Algerian market's needs for its own products, and to test the appetite of economic players.
-> This industrial subcontracting trade show is a business networking tool that serves thenational strategy of boosting the industrial sector's contribution to national economic performance. The aim is to attract the industrial skills and investors needed for this rise.
-> WTC Algiers is co-organizer of ALGEST with BASTP under the patronage of the Algerian Ministry of Economy.
The next edition will take place in Algiers from October 16 to 19, 2023.
-> WTC MS is organizing a trade mission to ALGEST in partnership with WTC Algiers. Details of the visitor package will be published shortly and will include a preferential booking code for the flight + entrance to the show + BtB meetings + hotel + airport-hotel-show travel, personalized support from WTC MS and Algiers.
The WTC is offering a shared stand to companies interested in exhibiting at ALGEST.
Registration form available on request.
We would like to thank all the speakers for sharing their expertise at both events:
Ahmed TIBAOUI, CEO of WTC ALGIERS, Kamla IDIR, Event Manager at WTC Algiers, Kemal AGSOUS, Chairman of the Board of BASTP and Azziz LAIB, Director of BASTP, Lydie DEPAIX, Chargée d' affaires International at Banque CIC Est, Fazil BOUCHEIKH , Head of the CIC Algeria Office, Ramzy OUALI, Director of KPMG Algiers.
Followed by Evelyne Pellé
tel: +33 635 52 83 01