Supplementary Finance Act for 2009

In accordance with the new rules relating to foreign investment, the two most commonly used types of companies are:

- Joint stock Company (société par actions - SPA);

- Limited liability Company (société à responsabilité limitée - SARL).

Except when specifically required for defined activities (for example, banking, insurance and financial activities, some transportation activities, professional training, etc.) there is no need for specific agreements or a license to operate.

In fact, the Supplementary Finance Act for 2009 "The Law" published at the end of July 2009 (Ordinance 09-01 of 22 July 2009 pertaining to Supplementary Finance Act for 2009) raised different measures relating to foreign investments.

In particular, the law provides that, from now on, any foreign investment (in an activity of producing goods or services) must be done only in partnership with Algerian shareholders who should hold as a minimum 51% of the company's share capital. The term resident national shareholder may imply more than one partner.

It is provided also that any proposed foreign direct or indirect investment in partnership with foreign capital must be subject to a declaration of investment with the National Agency for Investment Development (ANDI) prior to their implementation, and should be reviewed by the National Board of Investment (CNI). Thus, all foreign investments eligible or not for tax benefits must first be declared before ANDI and reviewed by the CNI. Even if in practice the CNRC (Trade Registry) might accept to register new companies without the prior opinion of the CNI, as soon as the 51%/49% rule is complied with, we strongly recommend waiting CNI's opinion before proceeding to the registration with the CNRC. Indeed, nothing in the law explains what happens if a company is created and then the CNI gives a non favourable opinion to the project.

Foreign investment made in partnership with the economic public companies (EPEs) must meet the new provision. These provisions are also applicable in case where their capital in opened to foreign ownership.

Other provisions are set out in the Decree no 09-181 of 12th May 2009, adopted by the provisions of the Supplementary Finance Act for 2009 (Art 58), regarding activities of imports of raw materials, products and goods purchased for resale, which must be done in partnership with Algerian shareholders for which at least 30% of their share capital should be held by resident individuals of Algerian nationality or legal entities which all partners or shareholders are of Algerian nationality. These requirements would apply only to newly established companies. Actually, the above Decree no 09-181 of 12th May 2009 had been modified by the Decree no 09-296 of 6th September 2009. According to the mentioned