Luanda, Angola, 19 Sept – The new law on private investment in Angola has made the process of investing in the country more demanding and prioritises projects that contribute more to the development of the Angolan economy, especially outside Luanda, according to legal specialists.
“This new law aims only to attract investment that is seen as qualified, and does not cover investment with no relevance, particularly from the point of view of reducing imbalances, increasing local production and training of Angolan staff,” said lawyer Paulo Trindade Costa.
“The changes to the private investment law have made investment in Angola more demanding and select, but not more attractive,” said the lawyer from Lisbon-based law firm Miranda Correia Amendoeira & Associados.
The changes to the law ,which were approved before the summer and which have been presented to investors over the last few months, affect the way each project is assessed and alters the incentives offered based on the merits of each project.
The level of financial and economic information that investors have to provide along with their projects is significantly more, investment projects are now covered by a single system which requires investors and the State to negotiate, and tax breaks are no longer automatic, said Trindade Costa.
In terms of how incentives are provided, particularly tax breaks and the right to send profits and dividends back to countries of origin, these will be based on the location of the investment, its amount, how the investment is made and its impact on the Angolan economy.
Aguinaldo Jaime, coordinator of the National Agency for Private Investment (ANIP) recently noted at a conference held by Miranda Correia Amendoeira & Associados that “a new law always raises expectations, anxiety and disquiet amongst investors,” and that approval of this law, “took a long time, led to heated discussions and it had 14 preliminary versions.”
Cited by Angolan magazine, Exame, Jaime said that the law restated, “the need to attract foreign savings, structural investments and good partnerships,” that the government planned to “direct” taking into account the priorities of expanding the country’s export base, generating employment and reducing regional imbalances.
The new law does not differentiate private investment based on the nationality of the investor and the minimum value for investment has risen from US$100,000 (for foreigners) and US$50,000 (for Angolans) to a single value of US$1 million (per investor and not per project).
“After a phase of mass investment, the government wants to focus on structural investments, this that can have more impact on the national economy, and thus a system of incentives that is too open could benefit just the investor and not the country,” said Jaime.
Teresa Boino, an Angolan lawyer from law firm BPO, said that the law, “has a clear intention of protecting national businesspeople, leaving larger investments in the infrastructure sectors of the economy to foreigners.”
The law, she said, “demands a more professional investor, that is better prepared and more organised,” and, “right from the instructional phase, for example, a number of technical documents are required such as a feasibility study, a timetable for execution of the project and an environmental impact study.”
Based on the area of the country where the investment is made, with a focus on the interior and on the jobs created, tax breaks are offered that include exemption, or reduction, of industrial tax, capital gains tax and corporate tax, for a minimum of one and a maximum of ten years.
Maria Antónia Torres, tax partner at PricewaterhouseCoopers noted that the law is more demanding and whilst previously incentives “were almost automatic, now they are contractual,” which “offers more guarantees to both parties.”
“One of the aims was to make the law more practical, avoiding dispersions such as an excessive number of meetings. ANIP’s focus on large projects also makes reducing bureaucracy easier,” he said. (macauhub)