Policies on Foreign Direct Investment

Angola’s business environment remains one of the most difficult in the world.  Investors must factor in pervasive corruption, the legacies of and impulses toward central planning and control, an underdeveloped financial system, loss of U.S. corresponding banking relationships, abundant but unskilled labor, and extremely high operating costs.  Surface transportation inside the country is slow and expensive, while bureaucracy and port inefficiencies complicate trade and raise costs.

The new government is making concerted efforts to improve and diversify sources of foreign direct investment (FDI). The New Private Investment Law (NPIL) approved by Presidential Decree 10/18, of June 26, 2018 eliminates preferential treatment to local investors and offers equal treatment to foreign investors. There are no laws or practices that discriminate against foreign investors, including U.S. investors.  FDI is concentrated in the oil industry with negligible investments in the diamond, power generation, infrastructure and health sectors. The NPIL also eliminated local content provisions for foreign investors, with local content provisions now only applicable to investments specific to the oil & gas, mining, banking and financial services, aviation, and shipping sectors.

In addition to changes to the investment legal framework, the government created the Agency for Private Investment and Export Promotion (AIPEX), a single state-run agency with the goal of facilitating investment and export processes.  In September 2018, the American Chamber of Commerce in Angola (AMCHAM-Angola) and AIPEX launched Angola’s first investment guide in New York. Angola’s first anti-trust law, approved on May 17, aims to ensure and safeguard sound competition practices in the award and enforcement of public contracts.

The government launched a series of measures to expedite the issuance of tourist and business visas, a historically difficult process that has been a major area of complaint from international companies, expatriate workers, and investors.  The government abolished the visitor visa requirement for several countries in the region, and as of March 30, it began issuing tourism visas on arrival at the airport to citizens from 61 countries/regions, including the United States, China, and the European Union (EU).

President Lourenço continued a concerted effort to restore investor confidence by prioritizing anti-corruption and the fight against patronage politics.  In early December 2018, his administration rolled-out an ambitious five-year strategy to tackle corruption, money laundering and other economic and financial crimes. The strategy focuses on three main pillars – prevention, prosecution, and institutional capacity building, and includes short and long-term initiatives for a-whole-of society approach to help reduce the impact of corruption.  These strong anti-corruption initiatives led to the detention of several high-level public and private figures, and the President dismantled most of the influence of his predecessor’s family over key sectors of the economy. These reforms have attracted considerable international attention.

Limits on Foreign Control and Right to Private Ownership and Establishment

With the NPIL, the Angolan government eliminated the 35 percent local content requirement in foreign investments, and it offered incentives to companies investing in the domestic economy, while maintaining minimal FDI screening processes, bringing it more in line with those of its sub-Saharan African neighbors.  Foreign ownership remains limited to 49 percent in the oil and gas sectors, 50 percent in insurance, and 10 percent in the banking sectors. There are several objectives that the GRA seeks to accomplish through its FDI screening process: 1) create jobs for Angolans or transfer expertise to Angolan companies as part of the “Angolanization” plan; 2) protect sensitive industries such as defense and finance; 3) prevent capital flight or any other behavior that could threaten the stability of the Angolan economy; and, 4) diversify the economy.

Other Investment Policy Reviews

Angola has been a member of the World Trade Organization (WTO) since 1996. There have been no investment policy reviews for Angola from either the Organization for Economic Cooperation and Development (OECD) or the United Nations Conference on Trade and Development (UNCTAD) in the last five years.  The WTO performed a policy review of Angola in September 2015. Excerpts of the Trade Policy Review concluding remarks by the WTO Chairperson were as follows:

“Members noted that Angola had implemented a number of measures aimed at import substitution.  Its applied tariff rates have been significantly increased and range from 2 percent to 50 percent, with a simple average of 10.9 percent (up from 7.4 percent in 2005).  Members urged Angola to rectify the instances where applied tariff rates and other duties and charges exceed the corresponding bound levels. In lieu of import substitution, members suggested that Angola reduce production costs through lower import tariffs on inputs and further trade facilitation measures with a view to enhancing competitiveness and promoting local production.”

Members welcomed Angola’s new mining code and sought information about opportunities for foreign operators.  They sought clarifications about Angola’s agricultural policy, which deals with food security and aims for sustainability of its fisheries sector.  Some participants inquired about Angola’s plans to broaden its General Agreements on Trade in Services (GATS) commitments beyond its three existing sectors.  Members were also interested in the Government’s priorities regarding, inter alia, competition policy, Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) regimes, and state-trading and state-owned enterprises.  Noting that Angola’s intellectual property regime had not been substantially updated since 1992, members urged the country to implement the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and to broaden its participation in international conventions on intellectual property.  The Customs Tariff for import/export rights version of 2017 of the World Customs Organization (WCO) harmonized system came into force on August 9, 2018. 

Business Facilitation

The World Bank Doing Business 2019 report ranked Angola 173 out of 182 countries and also recorded an improvement in Luanda’s electrical grid and overall access to electricity, and the government’s facilitation of border trade by improving infrastructure at the Port of Luanda. Dealing with construction permits was made easier and less time-consuming because of improvements in the permit applications system, according to the World Bank.  Angola also made exporting and importing easier by implementing an automated and standardized customs data management system, ASYCUDA World (Automated System for Customs Data), and by upgrading its port community system to allow for electronic information exchange between different parties involved in the import/export process. Launching a business typically requires 36 days, compared with a regional average of 27 days.

In 2012, the government opened approximately twenty “Balcoes Unicos do Empreendedor” (Single “One stop” Shop for Entrepreneurs).  In addition to the Balcoes Unicos process, new business owners must also complete processes at the Ministry of Commerce, the tax office, and a provincial court in the location where the business has its headquarters. The newAIPEX that replaced the Angolan Investment and Export Promotion Agency (APIEX) now serves as a one-stop shop to promote investments, exports and the international competitiveness of Angolan companies. The new state-run private investment agency website is http://www.aipex.gov.ao/PortalAIPEX/#!/  . Contact Information: Departamento de Promoção e Captação do Investimento; Agencia de Investimento Privado e Promoção de Investimentos e Exportações de Angola (AIPEX). Rua Kwamme Nkrumah No.8, Maianga, Luanda, Angola Tel: (+244) 995 28 95 92| 222 33 12 52 Fax: (+244) 222 39 33 81

To encourage the flow of investors and boost tourism, Presidential Decree 56/18, of February 20, 2018 exempts several neighboring countries from visa entry requirements, and as of March 30, visas upon arrival are available to 61 countries/regions including the United States and the EU upon presentation of proof of accommodation and financial support. The 2018 NPIL eliminates the 35 percent local partner stake in the capital structure of foreign investment in the electricity and water, tourism, transport and logistics, construction, media, telecommunications, and information technology (IT) sectors.

Angolan law provides equal access for women entrepreneurs and underrepresented minorities in the economy.  However, in practice, the investment facilitation mechanisms do not provide added advantages to these groups.  Programs to benefit female entrepreneurs and underrepresented groups such as startup projects, business capacity building and development, and financial assistance including micro credit, are mainly implemented by non-governmental organizations and international financial institutions such as the African Development Bank (AfDB), the World Bank (WB), and private sector companies.

Outward Investment

The Angolan Government does not promote or incentivize outward investment nor does it restrict Angolans from investing abroad.  Investors are free to invest in any foreign jurisdiction. According to data from the BNA, in 2018, government did not invest abroad but received returns on previous investments abroad.

Corruption remains a strong impediment to doing business in Angola and has had a corrosive impact on international market investment opportunities and on the broader business climate.  Transparency International’s 2019 Corruption Perceptions Index ranks Angola 165 out of 175 countries in its corruption level survey, down two places from the previous year due to ongoing efforts to bring down corruption to lower levels.

Since coming into office, President Lourenco has led a concerted effort to restore investor confidence by prioritizing anti-corruption and the fight against nepotism.  President Lourenco has dismissed a number of prominent Angolan figures from government ministries and SOEs and has replaced board members charged with developing plans to improve operations and accountability in public institutions.  The president approved a set of amendments to the Public Contracts Law on November 16, 2018, which imposed further requirements for the declaration of assets and income, interests, impartiality, confidentiality, and independence in the formation and execution of public contracts.  On December 6, the Government of Angola rolled out of a national anti-corruption strategy (NACS) billed under the motto, “Corruption – A fight for All and By All.” The five-year strategy, developed in concert with the UNDP, is designed to improve government transparency, accountability, and responsiveness to citizen needs.  The NACS focuses on three pillars in the fight against corruption – prevention, prosecution, and institutional capacity building.

The government also passed the Law on the Repatriation of Financial Resources in June 2018, which established the terms and conditions for the repatriation of financial resources held abroad by resident individuals and legal entities with registered offices in Angola.  The law exempted individuals and legal entities, who voluntarily repatriated their financial resources within a period of 180 days following the date of entry into force of the Law, by transferring the funds to an Angolan bank account, from any obligation or liability of tax, foreign exchange and criminal nature.  Upon expiry of the grace period for repatriation, the Law allowed for the possibility of coercive repatriation by the government. The government estimates that USD 30 billion of Angolan assets are sheltered overseas. In early 2019, the government established the National Asset Recovery Service (SNRA), an institution linked to the Attorney General’s Office (PGR), in charge of ensuring compliance with the repatriation law.

The 2010 Law on Administrative Probity, unlike President Lourenco’s mandate for senior government officials, requires all public officials to disclose their assets and income once every two years, and it prohibits public servants from receiving money or gifts from private business deals.  The Penal Code makes it a criminal offense for private enterprises to engage in business transactions with public officials. Angola has incorporated regional anti-corruption guidelines and into their domestic legislation, including: the SADC “Protocol Against Corruption,” the African Union’s “Convention on Preventing and Combating Corruption,” and the United Nation’s “Convention against Corruption.”  Angola does not have an independent body to investigate and prosecute corruption cases, and generally, enforcement of existing laws is weak or non-existent. Three institutions – the Audit Court, the Inspector General of Finance, and the Office of the Attorney General – perform many of the anti-corruption duties in Angola. http://www.business-anti-corruption.com/country-profiles/sub-saharan-africa/angola/initiatives/public-anti-corruption-initiatives.aspx  

It is important for U.S. companies, regardless of their size, to assess the business climate in the sector in which they will be operating or investing, and to have an effective compliance program or measures to prevent and detect corruption, including foreign bribery.  U.S. individuals and firms operating or investing in Angola, should take the time to become familiar with the relevant anticorruption laws of both Angola and the United States in order to properly comply with them, and where appropriate, they should seek legal counsel.

In 1996 the Government of Angola enacted by presidential decree the Alta Autoridade Contra Corrupção (High Authority Against Corruption) Act.  There has been no action taken to implement the law since it was enacted in 1996.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Angola is not a member state to the UN Anticorruption Convention or the OECD Convention on Combatting Bribery.  On March 26, 2018 it ratified and published in the national gazette the African Union Convention on the Prevention and Fight against Corruption and now takes legislative measures against illicit enrichment (Article 8), confiscation and seizure of proceeds and means of corruption (Article 16), and international cooperation in matters of corruption and money laundering (Article 20).

Resources to Report Corruption

Hélder Pitta Grós
Procurador Geral da Republica (Attorney General of the Republic)
Procurador Geral da Republica (Attorney General’s Office)
Travessa Antonio Marques Monteiro 22, Maianga
Telephone: 244-222-333172

The Angolan labor force has limited technical skills, English language capabilities, and managerial ability.  Many employers find it necessary to invest heavily in educating and training their Angolan staff. Angola’s labor force was estimated to be 10.85 million in 2016.  The literacy rate is estimated to be 71.1 percent (82 percent male, 60.7 percent female). A 2013 National Statistics Institute study indicates that formal unemployment is around 26 percent, although these figures are based on limited data taken primarily from urban centers.  86 percent of primary school age children attend school. The law mandates that children must attend school for six years beginning at age six. 29 percent of boys and 17 percent of girls attend high school.

There are gaps in compliance with international labor standards which may pose a reputational risk to investors.  Children are sometimes employed in agriculture, construction, fishing, and coal industries. Forced labor is sometimes used in agricultural, fishing, construction, domestic service, and artisanal diamond mining sectors.  Additional information is available in the 2017 Trafficking in Persons Report, (https://www.state.gov/j/tip/rls/tiprpt/2018/), 2018 Country Report on Human Rights Practices(https://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/), and 2018 Findings on the Worst Forms of Child Labor, (https://www.dol.gov/agencies/ilab/resources/reports/child-labor/angola  ).

Angola’s General Labor Law (Law No. 2/00), updated in 2015, recognizes the right of workers, except members of the armed forces and police, to form and join independent unions, to collectively bargain, and to strike, but these rights are either limited or restricted.  To establish a union, a minimum of 30 percent of workers from a sector at the provincial level must participate and prior authorization by authorities with accompanying bureaucratic approvals is required. Unlike workers in the private sector, civil service employees do not have the right to collective bargaining.  While the law allows unions to conduct their activities without government interference, it also places some restrictions on engaging in a strike. Strict bureaucratic procedures must be followed for a strike to be considered legal. The government can deny the right to strike or obligate workers to return to work for members of the armed forces, police, prison staff, fire fighters, “essential services” public sector employees, and oil workers.  The government may intervene in labor disputes that affect national security, particularly strikes in the oil sector. The definition of civil service workers providing “essential services” is broadly defined, encompassing the transport sector, communications, waste management and treatment, and fuel distribution.

Collective labor disputes are to be settled through compulsory arbitration by the Ministry of Labor, Public Administration and Social Security.  The law does not prohibit employer retribution against strikers, but it does authorize the government to force workers back to work for “breaches of worker discipline” or participation in unauthorized strikes.  The law prohibits anti-union discrimination and stipulates that worker complaints be adjudicated in the labor court. Under the law, employers are required to reinstate workers who have been dismissed for union activities.

The General Labor Law also spells out procedures for hiring workers.  For work contracts of indefinite duration, the law provides for a basic probationary period of up to six months, during which the worker or employer can terminate the contract without notice or justification.  After the probationary period ends, dismissed workers have the right to appeal to a labor court. Many employers prefer to reach a monetary settlement with workers when a dispute arises, rather than bring cases before the labor court.  The World Bank’s Doing Business 2018 report found that fired workers with one to ten years of service received on average 26.7 weeks of salary compensation.  The notice period before dismissing a worker is 4.3 weeks.

The government conducts annual surveys of the oil industry to implement a requirement that oil companies hire Angolan nationals when qualified applicants are available.  If no qualified nationals apply for the position, then the companies may request the government’s permission to hire expatriates. Outside of the petroleum sector, policies to encourage “Angolanization” of the labor force, i.e. the hiring of locals, discourages bringing in expatriates.  However, the associated visa processes for the oil industry are currently easier and faster due to a special process the Angolan Ministry of Petroleum offers companies in that sector. Additionally, working visas for other sectors are also easier to obtain and the GRA has launched the investor’s visa in 2018.