Finding out how to start a business in Algeria is a relevant question for investors and the wealthy.
As the largest country in Africa, the 10th largest country in the world and a member of the United Nations, Algeria is a high-value country. The World Bank classifies this nation as an upper-middle-income nation.
Algeria is a member of the Arab League, the African Union and OPEC. With such a strong network, having a business in such a nation is an advantage.
Although Algeria depends on energy exports in natural gas and oil, it is a place of investment and of interest to investors and business people.
How to start a business in Algeria-Introduction
The process of starting a company in Algeria can be pretty tedious and so you could opt to do it yourself or find a credible agency that already knows the ins and outs of registering a company in Algeria to help you out with the process.
One of the loopholes you would need to pass through is the understanding of the tax laws. Algeria has a legal entity called LLC
How to register a company in Algeria-The laws
The two laws you must understand are Article 564 and the Articles of the Commercial Code. They control the process of setting up your business in Algeria. It is mandatory for foreign investors to abide by the articles. The only way to obey a law is to know it.
How to register a company in Algeria-What Algeria demands
Two or more partners can set up an LLC in Algeria. They will only be liable for losses in proportion to their contribution. Usually, a Limited Liability Company (LLC) in Algeria is 100 per cent domestically owned.
It is possible for foreign investors to own permanent businesses as branches of already existing companies. To do this, you must register with the Trade Registry. Then your branch is considered a resident Algerian entity. Kindly note that your company does not achieve a legal personality.
A Limited Liability Company formed in Algeria licenses foreign investors to own one hundred per cent of the company. The share capital of 100,000 DZD for the company is required. You are expected to have at least two shareholders and one managing director. You get access to Algeria’s double tax treaties.
How to start a company in Algeria-Timeline
The incorporation of a Limited Liability Company in Nigeria usually takes about six weeks. While the process of opening a corporate bank account takes one week flat.
The timeline is workable. You will save time if you learn how to start a business in Algeria before actually beginning the process.
How to start a company in Algeria- Tax Systems
You may be asking, what is the legal corporate system in Algeria? In Algeria, any profits earned by a foreign investor from their company with legal status are subject to an annual tax on corporate profits.
Value-added tax (VAT) is mandatory for all the sales in the country. The VAT rates are between 7 and 17%. If you earn a limit of 120,000 DZD, your income tax rate is 0%. Your corporation tax rate is 30%. All investors who have a turnover of 5-10 million DZD have a 25% rate tax applied on their income.
How to start a company in Algeria -Legal tips
Algeria applied mixed laws. They apply civil law and sharia law. Some agencies can help you structure your company. You can also use e-signatures. You need a minimum of 24 to 30 days to handle your paperwork and file an LLC (SARL) in DZ. DZD is the currency used for the legal setup and any legal tender is accepted. Investors cannot change the jurisdiction during the incorporation process.
How to start a company in Algeria- The process
It is compulsory to have one shareholder in order to set up an LLC in Algerian currency. An investor can present a legal entity as a shareholder. You are permitted to present to shareholders. Foreign ownership is permitted. Foreign investors can own as much as 51% of the ownership of the legal entity.
During the set-up of your LLC, you need one designated director. The appointment of the director must be disclosed to the necessary authorities. By Algerian law, companies are required to hold annual meetings for the shareholders.
This process is complicated. Foreign investors may need to hire credible agents who are registered. You will need to hire an office. You will need to pay yearly fees. All legal correspondence will be accepted on your behalf. There is also the need for a corporate secretary.
How to start a company in Algeria-requirement for registration
What are the requirements for having a company in Algeria? If you are an investor with a corporate firm, all your activities must agree with the activity code listed in the Economic Activity List of the nation. You may make a request and present to the authorities on the National Trade Registry. The body responsible then creates an activity code and the registration procedures will then commence.
How to start a company in Algeria-what to look for in an agency
Any qualified agent will help you carry out due diligence to protect your investments in Algeria. They are credible, qualified and they know the economic terrain better than you do if you have chosen a good one.
An agency will help with the preparation of your business plan and your financial modelling. They should have experience in the business space. They can help you with your company registration and smooth out the kinks for you.
If you need to rent an office space for building the credibility of your business, an agency will help you spy out the land and find a suitable and relevant space in an upmarket location. They can also help in hiring staff who are citizens in Algeria to help manage your office on the ground.
Marketing and HR are very important for building the necessary staff to help in processing all the business opportunities that your company will attract in Algeria. Finding out the answer to how to start a business in Algeria will make your process easier.