{"id":9759,"date":"2021-02-20T07:42:04","date_gmt":"2021-02-20T12:42:04","guid":{"rendered":"https:\/\/jazairhope.org\/?p=9759"},"modified":"2021-02-20T07:42:04","modified_gmt":"2021-02-20T12:42:04","slug":"algeria-foreign-investment","status":"publish","type":"post","link":"https:\/\/jazairhope.org\/en\/algeria-foreign-investment\/","title":{"rendered":"ALGERIA: FOREIGN INVESTMENT"},"content":{"rendered":"
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Source : https:\/\/santandertrade.com\/en\/portal\/establish-overseas\/algeria\/foreign-investment<\/h6>\n

FDI in Figures<\/h2>\n

Rich in natural resources and economically stable, Algeria attracted a decent FDI flows between 2006 and 2011. However, recently, there has been a sharp decline in European investment and greater interest from Gulf investors. According to the data published by UNCTAD in the\u00a0World Investment Report 2020<\/a>, FDI inflows decreased slightly in 2019, reaching USD 1,38 billion, just below 1,46 billion in 2018. This drop is mainly due to disinvestments in the oil and gas sector. On the other hand, the stock of FDI increased, reaching USD 31,9 billion in 2019 (a rise of more than USD 10 billion compared to 2010). Over the last few years, it can be seen a reorientation of FDI towards the domestic market, thanks to the proliferation of development projects in transportation and infrastructure. China and Turkey have been investing heavily in Algeria, taking over France’s historical position as the largest investor in the country. This shift has been further highlighted by Turkish President Recep Tayyip Erdogan’s visit to Algeria and the Turkish-Algerian Business Forum, which took place in February 2018. One of the biggest investors is BAIC International (China), with an investment of more than $100 million in a manufacturing plant. Among the other big investors, there are Hyundai and Ford. On a country level, China, Singapore, Spain and Turkey are the leading investors; whereas industry, tourism, construction and agriculture are the sectors who receive most FDIs.<\/p>\n

The protectionist measures, as well as corruption, bureaucracy, a weak financial sector and legal insecurity in terms of intellectual property rights are serious obstacles to investment. Until 2019, the participation of a foreign investor in an Algerian company was limited to 49% and foreign contractors are forced to find local partners for public tenders. However, the government of President Abdelmadjid Tebboune eliminated the so-called “51\/49” restriction that required Algerian majority ownership of all new companies. The requirement will be maintained for “strategic sectors”, identified as hydrocarbons, mining, defence and pharmaceutical production.\u00a0 The government has also approved a new hydrocarbons law, improving fiscal conditions and contract flexibility in order to attract new international investors. As a result of the promulgation of this law, major international oil companies signed memoranda of understanding with the national hydrocarbon company Sonatrach. Algeria was ranked 157th out of 190 countries in the\u00a0Doing Business 2020<\/a>\u00a0report published by the World Bank, same place as the year before. For the time being, there are no official estimates on the impact of the Covid-19 crisis on foreign investment in Algeria, although a negative effect is expected.<\/p>\n

<\/div>\n
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\n\n\n\n\n\n\n\n\n
Foreign Direct Investment<\/th>\n2017<\/th>\n2018<\/th>\n2019<\/th>\n<\/tr>\n<\/thead>\n
FDI Inward Flow\u00a0(million USD)<\/span><\/th>\n1,232<\/td>\n1,466<\/td>\n1,382<\/td>\n<\/tr>\n
FDI Stock\u00a0(million USD)<\/span><\/th>\n29,108<\/td>\n30,574<\/td>\n31,956<\/td>\n<\/tr>\n
Number of Greenfield Investments*<\/th>\n22<\/td>\n18<\/td>\n24<\/td>\n<\/tr>\n
Value of Greenfield Investments (million USD)<\/td>\n1,338<\/td>\n9,259<\/td>\n2,316<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Source: UNCTAD, Latest available data.<\/p>\n

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.<\/p>\n<\/div>\n<\/div>\n

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FDI INFLOWS BY COUNTRY AND INDUSTRY<\/h3>\n
\n\n\n\n\n\n\n\n\n\n\n\n
Main Investing Countries<\/th>\n2018, in %<\/th>\n<\/tr>\n<\/thead>\n
China<\/td>\n24.8<\/td>\n<\/tr>\n
Singapore<\/td>\n22.0<\/td>\n<\/tr>\n
Spain<\/td>\n17.9<\/td>\n<\/tr>\n
Turkey<\/td>\n16.2<\/td>\n<\/tr>\n
Germany<\/td>\n2.7<\/td>\n<\/tr>\n
South Africa<\/td>\n2.4<\/td>\n<\/tr>\n
France<\/td>\n2.3<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n
Main Invested Sectors<\/th>\n2018, in %<\/th>\n<\/tr>\n<\/thead>\n
Industry<\/td>\n62.0<\/td>\n<\/tr>\n
Tourism<\/td>\n18.5<\/td>\n<\/tr>\n
Construction and public works<\/td>\n7.2<\/td>\n<\/tr>\n
Agriculture<\/td>\n4.9<\/td>\n<\/tr>\n
Services<\/td>\n3.9<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

Source:\u00a0National Agency for Investment Development (Investment appraisal for the year 2018)<\/a>\u00a0– Latest available data.<\/p>\n

<\/div>\n
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Form of Company Preferred By Foreign Investors<\/dt>\n
Limited liability company, SARL<\/dd>\n
Form of Establishment Preferred By Foreign Investors<\/dt>\n
Subsidiary company<\/dd>\n
Main Foreign Companies<\/dt>\n
For further information, see the investment observatory on the Atlas D\u00e9veloppement website.<\/a><\/dd>\n
Sources of Statistics<\/dt>\n
National Office of Statistics<\/a><\/dd>\n<\/dl>\n<\/div>\n<\/div>\n<\/div>\n
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What to consider if you invest in Algeria<\/h2>\n
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Strong Points<\/dt>\n
Algeria’s strong points for FDI include:<\/p>\n