Financial Data
Updated 21 Jul 2017


Angola

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Business opportunities and risks

Opportunities for you to do business in Angola

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The Angolan government actively seeks foreign direct investment (FDI) through its investment promotion and regulatory body, the National Agency for Private Investment (ANIP).

In 2011, the minimum amount required to qualify for investor status incentives was increased from USD100 000 to USD1 million, while investments of between USD10 million and USD50 million must be approved by the Council of Ministers. Investments above USD50 million require the approval of an ad hoc presidential committee.

Investors must enter into an investment contract with ANIP, which establishes the conditions for the investment as well as the eligible incentives. Incentives that are negotiated with ANIP and other local ministries on a case-by-case basis include the repatriation of funds for foreign investments, tax deductions, and exemption from certain taxes and duties.

When determining whether to grant incentives, consideration is given to the economic and social impact of your investment, according to the economic development strategy set by the Angolan executive.

Companies investing outside of the petroleum industry and in the country’s least-developed geographic areas are offered the most generous benefits.

It’s important for you to note that Angola’s private investment law prohibits private investment in the following areas: Defence, internal public order and state security, banking activities relating to the operations of the central bank and the treasury, the administration of ports and airports, and other areas where the law gives the state exclusive responsibility. However, it is common for Angolan companies to partially or completely subcontract an entire project to foreign companies.

Investment in the petroleum, diamond, and financial sectors is governed by sector-specific legislation, and Angola’s foreign exchange laws require all companies operating in Angola to make all payments through locally domiciled banks using the Angolan kwanza (AOA). This law aims to strengthen demand for the AOA, thereby building the capacity of Angola’s relatively underdeveloped financial sector.

The Angolan government intends to privatise selected state-owned enterprises (SOEs). It commenced with this process in 2013 with the privatisation of two textile factories. In addition, the Angolan government plans to open the entire electricity sector to both foreign and domestic private companies.

Business opportunities
  • Angola is working toward streamlining business registration processes through its National Agency for Private Investment (ANIP)
  • Depending on the sector you’re looking to invest in, the government provides a number of incentives and tax breaks. (The less saturated the sector you’re investing in, the greater the incentive or tax break).
  • Due to the country’s shortage of schools and teachers, opportunities exist in the education sector.
  • HIV/AIDS statistics indicate that Angolan citizens need access to affordable healthcare products and services.
  • The Angolan government seeks to privatise a number of state-owned enterprises, which opens the door to foreign investment. 
Operational risks to consider

While there are numerous opportunities for you to take advantage of when investing in Angola, these potential challenges must be factored into your business model:

  • Pervasive corruption among authorities and law enforcement, and risks associated with high rates of crime (including financial and cybercrime).
  • The absence of a strong transport system, poor transport infrastructure (especially in terms of the quality of road and rail transport), and insufficient ports and handling capacity, which escalates transportation and handling costs and incurs delays.
  • A scarcity of skilled and educated workers, which will require the importing of expensive foreign workers. Angolan government restrictions on hiring foreigners create difficulties for companies bringing in skilled labour.
  • A difficult, complicated and expensive set of trade procedures for importing and exporting goods limits the competitiveness of trade-reliant companies and places strain on the country’s attractiveness to investors.
  • Poor intellectual property rights protection.
  • According to the World Bank’s Doing Business Report 2016, Angola is ranked 181st (compared to a revised 183rd position in the previous survey) out of 189 countries in the world on the ease of doing business. This reflects the challenging operating environment facing business owners in the country. Critical areas requiring improvement in the country include enforcing contracts, getting credit, resolving insolvency, and trading across borders.
  • There is a concern of social unrest due to high unemployment, low job creation, and limited workers’ rights.
  • Ongoing power outages as a result of the poor performances of the state-owned enterprises – Empresa Nacional de Electricidade (ENE) and Empresa de Distribuião de Electricidade (EDEL) –dominate the country’s electricity industry. Since power outages increase the challenges of doing business in Angola, some private firms in the oil and mining industries have constructed their own power plants to ensure operations are not affected by electricity shortages. 
Business challenges
  • While the Angolan government is trying to improve its business environment, corruption among certain authorities and law enforcement entities can put your business at risk when it comes to financial and cyber crimes.
  • While primary school education is free, and the country’s literacy rate is commendable, there’s a shortage of skilled labour.
  • Intellectual Property (IP) rights remain difficult to enforce in the country.
  • Transport and logistics solutions remain a challenge, particularly access to quality roads and warehousing facilities.
  • Power outages can cause a drop in productivity, which means you’ll need to secure an uninterrupted power supply to mitigate the chances of downtime.
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