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May 11, 2021
2021-5536

Algeria issues list of strategic activities for foreign direct investment

Algeria’s Complementary Finance Act for 2020 and the Finance Act for 2021 have modified the legal provision that requires each foreign investor to have at least a 51% equity stake owned by an Algerian resident.

Accordingly, this rule, known as the 49/51 rule, is no longer a condition for the creation of a legal entity under Algerian law by a foreign investor, except for "strategic activities" and commercial companies carrying out an import and resale activity.

As background, “strategic activities” include:

  • Mines sector
  • Hydrocarbon sector
  • Military industry sector
  • Transportation sector
  • Pharmaceutical industry sector (except in special cases)

In consideration of this framework, Executive Decree n° 21-145, issued on 22 April 2021, specifies the list of strategic activities, appearing on the national nomenclature of the economic activities, which remain subject to a national majority shareholder obligation.

Strategic activities related to the military industry sector will be set forth in a separate regulation.

The activities concerned and their national nomenclature codes (as per the Trade Register list) are:

Pharmaceutical industry sector

Code

Description

104207

Manufacture of pharmaceutical products

104226

Manufacture of medical devices

308002

Wholesale of pharmaceutical products

308009

Wholesale distribution of medical devices

602120

Contract research organization (CRO)

602121

Pharmaceutical establishment for the exploitation of registration decisions for pharmaceutical products

602122

Pharmaceutical establishment for the exploitation of medical device licensing decisions

607016

Society for the promotion and medical and scientific information on pharmaceutical products

Hydrocarbon and Mines sectors

Code

Description

102202

Extraction of liquid and gaseous hydrocarbons

102205

Transport of liquid hydrocarbons and condensate by pipeline

103101

Mining and processing of iron ore

103102

Extraction and preparation of bauxite

103103

Mining and preparation of non-ferrous base metal ores

103104

Mining and preparation of ores for ferroalloys

103105

Mining and preparation of various metal ores

103106

Extraction and preparation of various metal ores

103107

Mining and preparation of uranium ores and radioactive ores

103108

Pyrite extraction and preparation, Sulphur production

103109

Extraction and preparation of various mineral products

103201

Coal mining

103202

Quarrying of dimension stone for construction and industry

103207

Extraction and preparation of various quarry products not intended for building materials

103208

Extraction and preparation of potassium salt

103209

Extraction and preparation of salts including salt marshes

103210

Extraction and preparation of phosphates

Transportation sector

Code

Description

604201

Passenger rail transport

604202

Rail freight transport

604301

Air passenger transport

604302

Air cargo transport

604303

Air transport service

604304

Air service for agriculture

604401

Maritime passenger transport

604402

Maritime transport of goods

604403

Maritime cabotage

604406

Urban marine transport

604602

Handling

604606

Management of land transport infrastructures

604607

Port services company

604608

Airport services

604633

Ship’s agent

604634

Consignee of the cargo

604635

Shipbroker

604637

Operation of a light aviation service

604641

Chartering and air freighting

_________________________________________

For additional information with respect to this Alert, please contact the following:

Ernst & Young Algérie, Algeria Tax, Legal and Transaction Practices Leader, Alger

EY Société d’Avocats, Africa Tax Desk Leader

Ernst & Young Algérie, Business Tax Advisory, Alger

 
 

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