Algerian Investment Law
On July 24, 2022, the Algerian government passed a new investment law to stimulate the development of Algeria’s natural resources, technology transfer, job creation, and Algeria’s export capacity. This law, Number 22-18 (e.g., “Law 22-18”), sets out the rules governing investments and defines the rights and obligations of investors and the incentives applicable to investments in economic activities of production of goods and services.
While related regulations published in September 2022 stipulate the size of investments (e.g., a minimum of $70 million) eligible for new incentives, exporters considering a localization strategy to reap the law’s benefits should note the law does not provide unified local integration thresholds for tax and customs exemptions. Exporters should refer to local integration rates published in previous laws, regulations, and decrees for specific sectors.
For example, according to Algeria’s Supplementary Finance Law of 2020, vehicle manufacturers may benefit from preferential treatment applicable to:
- Inputs used to produce integrated components and sub-assemblies produced in Algeria,
- components acquired from local subcontractors, and
- components imported on any vehicle that reaches integration rates within the timeframes prescribed in the law.
Given the complexity in determining localization rates that would result in tax and customs exemptions, exporters should contact Kamal Achab, Senior Commercial Specialist, at Kamal.Achab@trade.gov for more information on the pros and cons of localization and referrals to local attorneys who may provide specific guidance per industrial sector.