Executive Summary

Angola is an upper middle income country located in southern Africa with a $96.2 billion GDP, a 27.4 million population and a per capita income of $3,514 according to IMF data (2016 Article IV consultation). It ranks as the third largest economy in Sub-Saharan Africa. Angola is a major oil producing country and OPEC member. It produces an average of 1.8 million barrels per day, the second highest volume in the Sub-Saharan region behind Nigeria. Angola also holds significant proven gas reserves as well as extensive mineral resources. Angola’s real GDP (in U.S. Dollars) declined 6.6 percent from $103 billion in 2015 to an estimated $96.2 billion in 2016 as a result of the decline in global oil prices and a significant devaluation in the local currency, the kwanza. Inflation increased to 45 percent in 2016 from the 2015 annual rate of 14.3 percent, due to currency devaluation, removal of government fuel subsidies, and scarcity of foreign exchange. The IMF projects 20 percent inflation by the end of 2017.

The oil price slide that started in mid-2014 has substantially reduced Angola’s fiscal revenue and export revenue and stagnated growth in 2016. The non-oil sector contracted by 50 percent in 2016 as industrial production, construction and services sectors suffered from shortages of imported inputs due to limited availability of foreign exchange. After zero growth in 2016, Angola’s economy is projected to grow 1.3 percent in 2017 according to the IMF.

The Government of the Republic of Angola (GRA) is focusing on economic diversification to reduce its reliance on oil as a source of income as well as to reduce its dependence on imports. While Angola has prioritized the development of agriculture and agro-industry, fisheries, and manufacturing as part of its diversification strategy, it will take several years to see real results. The government’s strategy also focuses on encouraging small and medium enterprises (SMEs), increasing investments in infrastructure to reduce transaction costs, and improving the country’s economic competitiveness. (2016 IMF Art. IV Consultation.)

Angola is one of the United States’ three strategic partners in sub-Saharan Africa, together with Nigeria and South Africa. The bilateral strategic partnership dialogue has focused on eight key areas: political-social/regional stability, trade/economic growth, health, energy, agriculture, regional security cooperation (focused on maritime security and peacekeeping), education, and consular affairs.

In 2015, the GRA enacted a new private investment law (no. 14/15) and created the National Agency for Promotion of Investment and Exportations of Angola (Agencia para a Promocao de Investimento e Exportacoes de Angola (APIEX). These measures aim to stimulate economic growth, diversify the economy, expand the private sector, and foster greater private-sector participation in Angola’s economic development. The investment law has received a mixed reaction across the business community as it raises taxes on early repatriation of profits and dividends for foreign companies and disadvantages foreign investors relative to domestic investors by imposing local partnership requirements for foreign investment in key sectors. One year after its launch, APIEX remains underfunded, lacks focus and strong leadership, and has not been instrumental in bringing any significant new foreign investments to, or in generating new exports from, Angola. In early 2017, the Angolan Minister of Commerce replaced the APIEX Board and its senior administrators

Building infrastructure capacity in the areas of electricity, water, and transportation is also a major government focus. The expansion of the Cambambe Dam and the construction of the Lauca Dam (slated for completion in mid-2017), will increase Angola’s electric power generation capacity five-fold. This investment in new infrastructure for the production of electric power was accompanied by the 2015 incorporation of new public companies operating in the electric energy sector: Rede Nacional de Transporte, E.P. (RNT), Empresa Publica de Producao de Electricidade, E.P. (PRODEL), and Empresa Nacional de Distribuicao de Electricidade (ENDE). Multilateral development banks hold an important role in Angola’s infrastructure revitalization with the African Development Bank financing electric sector reform and the World Bank concentrated on water sector expansion. The Angolan government expansion of railroad and ports benefited heavily from Chinese government financing.

Key issues to watch:

  • Angola continues to suffer from a relatively poor investment climate due in large part due to lack of openness to competition from the private sector and the dominance of the state or state owned enterprises in the economy.
  • Angola does benefit from a relatively stable and predictable political environment, especially when compared to its neighbors in the region.
  • Angola is rich in natural resources including oil, minerals, land, and water.
  • There is an abundant supply of unskilled labor, particularly in the capital Luanda. Skilled professionals are available, but often require additional training.
  • Portuguese is commonly spoken, while English competency levels are relatively low.
  • Under the current investment law, the Angolan government offers incentives to companies investing in the domestic economy.
  • Real estate and living expenses remain prohibitively expensive, but have recently moderated due to the ongoing economic crisis. In 2016, Luanda was named the second most expensive city in the world for expatriates by Mercer, down from first in 2015 and 2014.
  • Infrastructure is limited, roads are often in poor condition, power outages are common, and water availability can be unreliable.
  • The investment climate is also heavily hampered by rampant corruption, and a complex, opaque regulatory environment, as reflected by rankings from globally recognized entities outlined in Table 1.
  • The oil crisis continues to impact the Angolan economy, creating drastic losses in export revenue and a severe limitation in foreign exchange, forcing substantial cuts in government spending.
  • Portfolio investment in Angola is negligible.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2016 164 of 176 http://www.transparency.org/
World Bank’s Doing Business Report “Ease of Doing Business” 2016 182 of 190 doingbusiness.org/rankings
Global Innovation Index 2016 N/A https://www.globalinnovation
U.S. FDI in partner country ($M USD, stock positions) 2016 USD 24 Billion http://www.bea.gov/
World Bank GNI per capita 2015 USD 4,180 http://data.worldbank.org/

Policies towards Foreign Direct Investment

Angola’s business environment remains one of the most difficult in the world. Investors must factor in pervasive corruption, an underdeveloped financial system, loss of last U.S. corresponding banking relationship in November 2016, poor infrastructure, 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 GRA actively seeks FDI although it also sets barriers to protect domestic businesses. In August 2015, the government revamped its private investment law. The two year old law, which is still being implemented, significantly changed how the government treats foreign investors versus domestic investors. The biggest change is a new 35 percent local participation requirement for foreign investment in the following strategic sectors: 1) electricity and water, 2) tourism and hospitality, 3) transportation and logistics, 4) telecommunications and information technology, 5) construction, and 6) media. Investments in the other key sectors of mining, finance, and oil are governed under different laws. The previous law did not require local partnerships with the exception of the energy, banking, and insurance sectors, though to increase chances of success, the majority of foreign operators had local associates of some kind. The 35 percent minimum local participation requirement is likely to challenge foreign investors pursuing large investments projects in qualifying local partners especially due to local capital constraints as well as the lack of technical capacity in certain industries.

As per the private investment law, the Ministry with sectoral responsibility for the subject business area is responsible for assessing the foreign investment application. For example, an agriculture project would be reviewed by the Ministry of Agriculture. With completion of this review, the investment proposal if valued under $10 million is overseen and approved by the Economic Commission of the Council of Ministers. For investments over $10 million, the Office of the President must approve and provide oversight.

The private investment law also provides number of new fiscal incentives to spur investments. However, in order to benefit from fiscal incentives, the government requires a minimum investment of $1 million for international investors while local investors only require $500,000. As a result of Angola’s costly business environment, these minimum investment requirements pose an additional hurdle for FDI and put out of reach for many the fiscal incentives offered by the government.

The private investment law also requires foreign investors to pay higher taxes on dividends and profits they repatriate, particularly within the first several years of the initial investment. This is complicated by the fact that most foreign companies based in Angola can no longer readily access foreign exchange from Angolan banks due to the severe rationing of forex by Angola’s Central Bank. The new tax on dividends starts at 15 percent, and can rise to as high as 50 percent depending on how much and how soon after the initial investment the repatriation takes place to encourage in country reinvestments. This new tax scheme has not been a welcome signal to prospective investors. In an attempt to incorporate foreign companies into Angolan banking and taxation systems, the law requires financial operations through Angolan banks.

The government later provided additional clarifications to the investment law by issuing several presidential decrees. Decrees No. 181/15 and No. 184/15 issued September 2015 provided further clarifications on operational details and roles of ministries in the decision making process of approving investments. They also enabled the creation of technical support units within each ministry to assess investments and increase each ministry’s capacity to assess investments.

The investment law divides Angola into investment regions Zone A and Zone B. Fiscal incentives for investing in Angola’s less developed regions (Zone B) are twice the level of incentives compared to those given for investing near Luanda and other major city centers (Zone A). Additional tax breaks/reductions are available for investors who create more local jobs, generate higher export receipts, and source more local content in their operations.

The law expressly prohibits private investment in the areas of: defense, internal public order, state security, banking activities relating to the operations of the Central Bank and the Ministry of Finance, administration of ports and airports, and other areas where the law gives the GRA exclusive responsibility for its operations. However, it is common for Angolan companies operating in these restricted sectors to subcontract parts of, or the entire project to foreign companies. Investment in the petroleum, diamond, and financial sectors are governed by sector-specific legislation. Details on the petroleum investment guidelines are outlined in the Country Commercial Guide Best Prospect Summary of the Oil and Gas industry.

Angola’s foreign exchange laws require all companies operating in Angola to make payments through local (Angola-domiciled) banks using Angolan currency (kwanza). This law aims to strengthen demand for the kwanza, and build the capacity of Angola’s underdeveloped financial sector. The law was implemented in two phases. First in 2012, oil companies were required to pay taxes owed to the Angolan Ministry of Finance through a local bank. Then in July 2013, the regulation expanded to all companies operating in Angola, requiring them to use local banks (and local currency) for all payments, including payments to suppliers and contractors domiciled abroad.

Foreign exchange availability in the market during 2016 averaged $890.5 million per month, a substantial decrease, (almost half of the 2015 monthly average of $1.46 billion per month average and 2013/2014 $1.6 billion monthly averages. Per the February 24, 2016, Presidential Decree No. 40/16, foreign exchange availability in 2016 was expected to meet only 63 percent of demand. Angolan companies report waits of 3-8 months to access foreign exchange for imports. The government prioritized the following areas for forex: 1) employment retention (raw materials and inputs, equipment, technician salaries, and oil sector operations); 2) inflationary control (food, consumer necessities, fuel); 3) health and education; and 4) priority government expenses for necessary operations.

When preparing and entering into contracts with Angolan entities, foreign investors generally ensure that contracts are not governed by Angolan law, so as to avoid the accompanying GRA mandate that contracts be denominated and paid in kwanzas, a currency which has little commercial or practical use outside of Angola. Companies often find it advisable to seek appropriate legal advice prior to negotiating binding law, arbitration and payment clauses, and to seek to ensure that contract payments are denominated in and made in U.S. dollars. As a result of the continued drop in global oil prices, the mainstay of the Angolan economy, foreign companies with kwanza based contracts have found it extremely difficult to repatriate profits due to the Central Bank’s severe restrictions on forex.

Beyond different applications of the Angolan Investment Law between Angolan and foreign companies, Angolan or other companies familiar with the bureaucratic and arcane legal complexities of the Angolan business environment hold an advantage over newcomers. In addition, the Promotion of Angolan Private Entrepreneurs law grants Angolan-owned companies preferential treatment in tendering for government contracts for goods, services, and public works. Only firms with a majority Angolan stake can benefit from Angolan Government’s loan guarantees, generous terms, and subsidized interest rates of the newly implemented $1.6 billion fund to support micro, small, and medium-sized businesses from Angola Ministry of Economy’s Angola Invest Program.

While the crisis has been difficult for the Angolan economy, there is hope that the acute economic stress will lead the GRA to implement much needed reforms and commit to an economic diversification program. FDI in Angola has steadily increased since the end of the civil war in 2002, but peaked in 2014 just before the oil led economic crisis. The Banco Nacional de Angola (BNA) reported $16.5 billion of FDI in Angola in 2014, up from $14.3 billion in 2013, predominantly in the oil industry FDI data is unavailable for 2015 and 2016, but the oil crisis has very likely reversed this growth trend. The latest figure indicates that U.S. Direct Investment in Angola plummeted to $24 million in 2015 down from $1.8 billion in 2014, according to the U.S. Department of Commerce’s Bureau of Economic Analysis (www.bea.gov/international/factsheet/factsheet.cfm ).

Limits on Foreign Control and Right to Private Ownership and Establishment

Angola limits foreign equity participation more than most countries in Sub-Saharan Africa. Foreign ownership is limited to 49 percent in the oil and gas sectors, 50 percent in insurance, and 10 percent in the banking sectors. Foreign capital participation in excess of these limits is possible with the approval of the Council of Ministers or the central bank. Private (domestic or foreign) capital participation in fixed-line telecommunications infrastructure is prohibited. In the publishing, TV broadcasting, publishing and newspaper media sectors, foreign ownership is limited to 30 percent. (http://iab.worldbank.org/data/exploreeconomies/angola ) The private investment law requires at least a 35 percent domestic stake in FDI across six strategic sectors: 1) electricity and water, 2) tourism and hospitality, 3) transportation and logistics, 4) telecommunications and information technology, 5) construction, and 6) media. The private investment law expressly prohibits private investment in the areas of: defense, internal public order, state security, banking activities relating to the operations of the Central Bank and the Ministry of Finance, administration of ports and airports, and other areas where the law gives the state exclusive responsibility.

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 three years. The World Trade Organization (WTO) performed a trade policy review of Angola in September 2015. Excerpts of the Trade Policy Review concluding remarks  by the WTO Chairperson are 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 aiming at food security and on the 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 effectively implement the TRIPS Agreement and to broaden its participation in international conventions on intellectual property. The Government of Angola plans to introduce a new tariff schedule in 2018.

Business Facilitation

Obtaining the proper permits and business licenses to operate in Angola can be time-consuming. The World Bank Doing Business 2017report identified Angola’s permit and licensing process as one of the most time-consuming of all countries surveyed (ranked 182 out of 190 in the survey). 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 is headquartered.

In 2016, Angola made paying taxes easier and less costly by reducing the frequency of advance payments of corporate income tax and increasing the allowable deductions for bad debt provisions. At the same time, Angola interest charges related to shareholder loans are not tax deductible for corporate income tax purposes. Angola adopted a new labor law that decreased the wage premium for overtime and night work and increased the wage premium for work on weekly holidays. The law also extended the maximum duration of fixed-term contracts and made fixed-term contracts able to be used for permanent tasks, reduced severance pay for redundancy dismissals of employees with five and ten years of continuous employment and increased severance pay for employees with one continuous year.

The Angolan Investment and Export Promotion Agency (APIEX), housed within the Ministry of Commerce, is Angola’s investment and export promotion entity, tasked with promoting Angola’s export potential, legal framework, environment, and investment opportunities in the country and abroad. APIEX, established on September 30, 2015, by Presidential Decree No. 184/15 after the promulgation of Angola’s 2015 investment law, has gotten a slow start. Nearly two years after its launch, APIEX remains underfunded and lacking focus, not having been instrumental in bringing any significant new investments to or in generating new exports from Angola. (www.apiexangola.co.ao ). On January 25, 2017, the Angolan Minister of Commerce, dissolved APIEX Board and dismissed all its senior administrators, appointing their replacements on February 24, 2017.

Under the Angola 2015 Investment Law, the FDI review and approval is now the responsibility of the government ministry overseeing the sector where the main investment will occur. Final approval for investments under $10 million is given by the Economic Commission of the Council of Ministers. For investments over $10 million, the Office of the President oversees the process and provides final approval. The process can be time consuming and difficult to navigate, thus it is strongly recommended to retain legal counsel to assist in the investment application process.

The following documents are needed for investments under $10 million:

  • Letter of Investment Proposal addressed to the Minister of Commerce (MINCO);
  • A Power of Attorney or Delegation of Authority to represent the investment proposal (in case you are not principal);
  • Presentation Template Model of the Project, Dully Completed;
  • Note: To obtain the template model of the project you will have to make a deposit of 35,000 kwanza at the Account of UTAIP of MINCO
  • Copy of the legal documentation of the company (company status), commercial registry duly authenticated by the consular services of Angola at the country of company domicile in case of legal entities;
  • Copy of the legal documentation of the natural persons (identity card/passport and criminal record dully authenticated by the consular services of the republic of Angola at the country of residency in case of natural persons.
  • Technical economic and financial feasibility study of the proposed investment project
  • Environmental Impact Study (When is it applicable in Angola); and
  • Presentation of Documents in Duplicate

There are several objectives that the GRA seeks to accomplish through its FDI screening process: 1) create jobs for Angolans or transfer know-how to Angolan companies, 2) protect sensitive industries such as defense and finance, 3) prevent capital flight or other behavior which could threaten the stability of the Angolan economy, and 4) economic diversification.

Contact Information: Departamento de Promocao e Captacao do Investimento; Agencia para Promocao de Investimentos e Exportacoes (APIEX) de Angola. Rua Kwamme Nkrumah No.8, Maianga, Luanda, Angola Tel: (+244) 995 28 95 92| 222 33 12 52 Fax: (+244) 222 39 33 81 www.apiexangola.co.ao . For investments under $10 million, Ministry of Commerce in support of private investment Tel: + (244) 923 592 626Amarildo.araou1@gmail.com

For investments above $10 million: (+244) 926 876 914 / 938 941 035, geral@utip.gov.aowww.utip.gov.ao 

Outward Investment

The Angolan Government does not promote or incentivize outward investment. However, according to well-respected local newspaper, Expansao, based on data from the Angolan central bank, Banco Nacional de Angola (BNA), outward investments by Angolans exceeded $1 billion in 2015, for an aggregate total outward investment of more than $29 billion at the end of 2015. (Expansao Journal, March 3, 2017 edition).

In May 2009, Angola signed a Trade and Investment Framework Agreement (TIFA) with the United States, intended to provide a forum to address trade issues and to help enhance trade and investment relations between the two countries. The first meeting of the TIFA Council under this agreement took place in June 2010 with the recent meetings in 2015 and 2016 at the working level focused on work-plan development, AGOA market access, and strategies to improve the business climate but with limited engagement by the Angolan government under the current Minister of Commerce.

In July 2010, the United States and Angola signed a Memorandum of Understanding establishing a bilateral Strategic Partnership Dialogue, which commits the two parties to increased bilateral relations. Angola has bilateral investment agreements in force with Cabo Verde, Germany, Italy, and Russia. Angola has also signed agreements with Portugal, South Africa, Spain, Brazil, France, and the United Kingdom, but these agreements have not yet entered into force. A list of current bilateral investment treaties and their status can be found on the United Nations Conference on Trade and Development (UNCTAD) website.

Angola does not have a bilateral taxation treaty with the United States.

Transparency of the Regulatory System

The regulatory system is complex, vague, and inconsistently enforced. In many sectors, no effective regulatory system exists due to lack of capacity. The banking system is slowly adhering to International Financial Reporting Standards (IFRS). IFRS is still far from being practiced by public sector companies (SOEs). The public does not participate in draft bills or regulations formulation, nor does a public online location exists where public can access this information. The Angolan Communications Institute (INACOM) sets prices for telecommunications services and is the regulatory authority for the telecommunications sector. Revised energy-sector licensing regulations have improved allowing for some purchase power agreements (PPA) participation. Draft bills are not made available for public comment.

International Regulatory Considerations

Angola’s overall national regulatory system does not correlate to other international regulatory systems. However, Angola is a member of the African Development Bank (AfDB), the Organization of Petroleum Exporting Countries (OPEC) (January 2007), the United Nations (UN) and most of its specialized agencies – International Conference on Reconstruction and Development (IBRD), the United Nations Development Program (UNCTAD), the International Monetary (IMF), the World Health Organization (WHO), World Trade Organization (WTO) and the European Union (EU). At the regional level, the GRA is part of the Common Market for Eastern and Southern Africa (COMESA), the Community of Portuguese Speaking Countries (CPLP), and the Southern African Development Community (SADC), among other organizations. However, Angola has yet to join the SADC Free Trade Zone of Africa as a full member. Angola is also a member of the Port Management Association of Eastern and Southern Africa (PMAESA) which seeks to maintain relations with other port authorities or associations, regional and international organizations and governments of the region to hold discussions on matters of common interest.

Angola became an original WTO Member on 23 November 1996; however, it is not party to the Plurilateral Agreements on Government Procurement, the Trade in Civil Aircraft Agreement and has not yet notified the WTO of its state-trading enterprises within the meaning of Article XVII of the GATT. A new government procurement management framework introduced in late 2010 stipulates a preference for goods produced in Angola and/or services provided by Angolan or Angola-based suppliers. Technical Trade Barriers to Trade (TBT) regimes are not coordinated. 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 three years, Angola has conducted negotiations with Mozambique and Cuba. However, Angola at present does not extend trade preferences to any country, in an attempt to encourage and protect local content.

Legal System and Judicial Independence

Angola’s formal legal system is primarily based on the Portuguese legal system and can be considered civil law based, with legislation as the primary source of law. Courts base their judgments on legislation and there is no binding precedent as understood in common law systems. The Constitution proclaims the Constitution as the supreme law of Angola (article 6(1)) and all laws and conduct are valid only if they conform to the Constitution (article 6(3)).

The Angolan justice system is slow, arduous, and not always impartial. Legal fees are high, and most businesses avoid taking commercial disputes to court in the country. The World Bank’s Doing Business 2017 survey ranks Angola 186 out of 190 countries on contract enforcement, and estimates that commercial contract enforcement, measured by time elapsed between filing a complaint and receiving restitution, takes an average of 1,296 days, at an average cost of 44.4 percent of the claim.

In 2008, the Angola Attorney General ruled that Angola’s specialized tax courts were unconstitutional. This effectively left businesses with no legal recourse to dispute taxes levied by the Ministry of Finance, as the general courts consistently rule that they have no authority to hear tax dispute cases, and refer all cases back to the Ministry of Finance for resolution. Angola’s Law 22/14, of December 5, 2014, which approved the Tax Procedure Code (“TPC”) sets forth in its Article 5 that the courts with tax and customs jurisdiction are the Tax and Customs Sections of the Provincial Courts and the Civil, Administrative, Tax and Customs Chamber of the Supreme Court. Article 5.3 of the law specifically states that tax cases pending with other courts must be sent to the Tax and Customs Section of the relevant court, except if the discovery phase (i.e., the production of proof) has already begun.

Laws and Regulations on Foreign Direct Investment

The Angolan Investment and Export Promotion Agency (Agencia Promocao de Investimentos e Exportacoes de Angola – APIEX), housed within the Ministry of Commerce, is Angola’s investment and export promotion center, tasked with promoting Angola’s export potential, legal framework environment, and investment opportunities in the country and abroad. APIEX, established on September 30, 2015, by Presidential Decree No. 184/15 after the promulgation of Angola’s 2015 investment law, has gotten to a slow start.

Competition and Anti-Trust Laws

The Pricing and Competition Bureau under the Ministry of Finance was created in 2011 (Presidential Decree 162/11) to ensure the coordination and consistency of pricing and revenue which divided goods and services into three categories: 1) Preco Fixo (Fixed Price): Oil, gas, electricity, water, urban transportation. 2) Preco Vigiado (Monitored Price): Basic Food Basket: Sugar, rice, oil, salt, milk tomatoes, onions, fish, meat, etc., plus transportation (air, surface, rail, sea, ports.) and 3) Free Price (Preco Libre): items not included in categories one and two. The February 25, 2016 Presidential Decree (28/16), further established price formation on categories two and three. Angola does not have a competition law, but it is possible to occasionally find references in statute to the prohibition of certain restrictive agreements and practices. For example, the law regulating the press expressly forbids situations of monopoly or oligopoly that may prejudice the independence of the media, pluralism, and fair competition. Single-firm conduct is not specifically regulated in Angola.

Expropriation and Compensation

The Port and Maritime Institute of Angola (IMPA) is Angola’s regulatory authority for ports. Decreto Presidencial no50/14 (Presidential Decree number 50 of 2014), published in February 2014, establishes the new Statute for Navigation Agents. This law requires shipping agencies to be exclusively owned by Angolan nationals in order to be granted a license to operate in the country. This legislation implements Law on Merchant Marine, Ports and Related Activities (Lei no 27/2012, published in August 2012), requiring that port concession activities be reserved for 100 percent control by Angolan-owned firms. The 2012 law has so far not been consistently applied or enforced.

Changes in legislation and enforcement of existing laws pose risks of reducing company profits. This is especially true in the petroleum sector which has recently been subject to revised local content regulations, and continues to be impacted by the new foreign exchange law of 2012 which requires the petroleum industry to channel all payments through the local banking system. Given current severe limitations of access to foreign exchange in Angola, the requirement severely impacts petroleum service providers because they can be paid only in local currency and face extreme difficulties repatriating remittances or paying for supplies sourced abroad. The legislative process is generally secretive and closed to public review, though the government increasingly consults with major companies and industries on the drafting of legislation that will affect them, as was the case with the foreign exchange law.

Dispute Settlement

ICSID Convention and New York Convention

Angola is not a member state to the International Centre for Settlement of Investment Disputes (ICSID Convention), but has ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Its ratification was endorsed domestically via resolution No. 38/2016, published in the Official Gazette of Angola on 12 August 2016.

Investor-State Dispute Settlement

The Angolan Arbitration Law (Law 16/2003 of 25 July) (the Arbitration Law) provides for domestic and international arbitration. Angola is also a member of the Multilateral Investment Guarantee Agency (MIGA), which can provide dispute settlement assistance as part of its political risk insurance products. The U.S. Embassy is not aware of any formal investment disputes that have either gone to court or arbitration involving U.S. companies beyond complaints about market obstacles such as lack of foreign exchange access for remittances. However, in early 2017, a U.S. company submitted a notice of dispute to an Angolan parastatal that could lead to arbitration if not resolved in a timely and satisfactory manner.

International Commercial Arbitration and Foreign Courts

In June 2014, the Ministry of Justice and Human Rights (MINJHR) opened the Center of Legal Alternatives for Conflict Resolution. Among other functions, the Center is tasked with providing consultation, mediation, and arbitration of contract disputes for both Angolan and foreign businesses. The process is designed to be faster and less costly than the traditional court system. The U.S. Embassy is not aware of any cases having been reviewed by this court.

Bankruptcy Regulations

With a score of 0.00 out of 16, Angola is 169 out of 190 on the World Bank’s 2017 Doing Business Report in terms of resolving insolvency.

As a former Portuguese colony, Angola inherited the Portuguese insolvency legislation. The current civil procedure code in force since 1961 establishes two different processes:

1. A bankruptcy procedure applicable exclusively to commercial debtors.

2. An insolvency procedure applicable to non-commercial debtors.

The World Bank 2017 report found that no foreclosure, liquidation, or reorganization proceedings were filed within the past 12 months. While a law adopted in 2003 (Arbitration Law No. 16/03) introduced the concept of domestic and international arbitration, the practice of arbitration law is still not widely implemented.

Investment Incentives

Angola is a signatory of the Agreement on Trade-Related Investment Measures (TRIMs).

Angola’s 2015 Investment Law no. 14/15, passed August 11, 2015 gives foreign and domestic investors access to investment incentives, with a minimum investment value of $500,000 for Angolan companies and a $1 million minimum investment for foreigners. Incentives for high-priority sectors such as agriculture, manufacturing, energy, water, and housing include exemption from industrial and capital gains taxes for up to 10 years and from customs duties for up to 6 years. Many foreign companies now operating in Angola enjoy some form of tax or duty waiver. Companies need to apply for such incentives when submitting an investment application to APIEX and the relevant ministry.

This law identifies six key industries where the government requires 35 percent local partnership: 1) Electricity and Water; 2) Tourism and Hospitality; 3) Transportation and Logistics; 4) Telecommunications and Information Technology; 5) Construction; and 6) Media. Investments in the key sectors of mining, finance, and oil are governed under different laws. For more details on the oil and gas sector please refer to the Department of Commerce’s Country Commercial Guide (CCG) Best Prospects.

In response to Angola’s economic situation, a Presidential Decree No 40/16 was issued February 24, 2016, outlining strategies for economic recovery. This Decree called for measures to: 1) encourage private investment in productive areas for domestic consumption and for exports including support by government credit facilities; 2) prioritization of productive-sector related infrastructure development (energy/water, transportation/construction, human resource development and business climate improvement); and, 3) expansion of government revenue sources, such as taxes.

Foreign Trade Zones/Free Ports/Trade Facilitation

Angola is a signatory to the Southern Africa Development Community (SADC). GRA has indicated that they may join the SADC Free Trade Zone, pending the country’s ability to build internal industrial capacity that is able to compete with other regional markets. Since such industrialization will take some time it is likely that GRA will opt for another 3-year extension on the decision to join SADC FTZ.

In 2009, Angola established the Luanda-Bengo Special Economic Zone (SEZ). Under the new investment law, the SEZ offers tax incentives to its twenty resident companies. The new law established the general basis of private investment in Angola in special economic zones, free trade zones, development areas and other areas subject to specific regulations defining regimes of access to incentives. Benefits to operating in the zone include more reliable water and electricity access, as well as increased access to quality roads and infrastructure.

Performance and Data Localization Requirements

The government encourages “Angolanization” of companies’ work force and urges use of Angolan suppliers of goods and services. Presidential Decrees 5/95 and 6/01 limit expatriate staffing of local companies set up in Angola by national or foreign investors to 30 percent of the workforce and require Angolan and expatriate staff with the same jobs and responsibilities to receive the same salaries and social benefits. Enforcement of these laws is inconsistent. A 2008 decree requires oil companies to first seek Angolan employees to fill any vacant position prior to seeking expatriate appointment, which must also first be authorized by the Ministry of Petroleum.

International oil companies are working with the government on a new local-content initiative that will establish more explicit sourcing requirements for the petroleum sector in staffing and material. At this time, local content regulations offer only guidelines that are loosely enforced and companies lack clarity as to how much is enough to satisfy the Angolan government. While this situation may make it easier for foreign companies to comply with local content regulations, this lack of specificity challenges companies in their business planning. For example, it is difficult for companies to compare their competitive position against each other when competing for lucrative concessions and licenses from the government as local content is sometimes considered during competition for government tenders. In recent years, the government has begun to enforce Decree 5/95 more strictly. Expatriate employees typically receive no more than three renewals to their one-year work visas, for a total of three to four years in country. Approval for the fourth year is contingent upon the company identifying the Angolan employee who will take over the position after the expatriate leaves. After multiple renewals, some expatriate workers get around these limits by asking for residency, or starting a new process.

Presidential Decree No. 43/17, of March 6, 2017, legislates that foreign non-resident employees (not an Angolan national or foreign resident), must be paid in kwanzas with their benefits not exceeding 50 percent of their salaries and term of employment not more than three years. Angolan companies need to prove that skill-set is not available within the local labor force and that their foreign non-resident employees do not exceed 30 percent of their workforce. The effects of this law are currently being reviewed by Angolan tax and legal provider firms. Legal guidance to adhere to this new law is strongly encouraged.

Real Property

Land reform  in Angola  took place after the end of the Angolan Civil War  in 2002. After two years of preparation, the land law (Lei de Terras de Angola) was passed on 18 December 2004. While the land act is a crucial step towards addressing land tenure, normalization of land ownership in Angola  persists with problems such as difficulties in completing land claims, land grabbing , lack of reliable government records, and unresolved status of traditional land  tenure. Among other provisions, the law included a formal mechanism for transforming traditional land property rights into legal land property rights (clean titles). During the civil war, a transparent system of land property rights did not exist, so it was crucial to re-establish one shortly after the end of hostilities. Transparency and land property rights are critical for the Angolan economic development given that two thirds of Angolans work in agriculture  and are thus directly dependent on land property rights.

One of the main tasks of the new Angolan land laws is to protect people from evictions, which had frequently taken place during the colonial period as well as during the civil war, largely due to unclear land property rights. Under the Constitution, the state has ultimate ownership of Angola’s land with the exception of land protected under international law. The Land Law authorizes private rights to urban land (i.e. cities, townships) that have qualities of freehold titles: the landholder has a perpetual right to occupy and use the land, and the landholder can transfer, mortgage, and sell the right. However, the purchase and sale of untitled urban land must be by public auction, with prices of urban land fixed by price. The law permits most urban and some non-urban land obtained for economic purposes to be leased through long-term renewable leases from the Angolan government for up to 60 years, a process used especially in the case of rural agricultural land used for economic purposes which often include renewal options at the end of the lease.

Legislation governing the right of access to land includes the 2004 “Land Act” and “General Concession of Land Regulations”. According to the “Land Act”, the State may transfer or constitute, for the benefit of Angolan natural or legal persons, a multiplicity of land rights on land forming part of its private domain. Although it is possible to transfer ownership over some categories of land, the transfer of State land almost never implies the transfer of its ownership, but only the formation of minor land rights with leasehold being the most common form in Angola. The recipient of private property rights from the state can only transfer those rights with consent of the local authority and after a period of five years of effective use of the land (GRA 2004 law). Weak land tenure legislation and lack of secure legal guarantees (clean titles), are the reasons given by most commercial banks for their 86 percent refusal rate for loans since land used as collateral. Foreign real-estate developers therefore seek out public-private partnership (PPP) arrangements with state actors who can provide protection against land disputes and financial risks involved in projects that require significant cash outlays to get started.

Registering parcels of land over 10,000 hectares must be approved by the Council of Ministers. Registering property takes 190 days on average, according to the World Bank’s Doing Business 2016 survey, with fees averaging three percent of property value. Owners must also wait five years after purchasing before reselling land. Implementing regulations, once written, are expected to set out guidelines defining different forms of land occupation, including commercial use, traditional communal use, leasing, and private homes. Over the years, the GRA has given out large parcels of land to individuals in order to support the development of commercial agriculture. However, this process has largely been unsystematic and does not follow any formal rule change on land tenure by the state.

Before obtaining proof of title, an Angolan citizen or an Angolan legal entity must also obtain the Real or Leasing Rights (“Usufruct”) of the Land from the Instituto de Planeamento e Gestao Urbana de Luanda. This is often a time consuming procedure taking up to one year or more. However, in the case that company X already owns the land the company must secure a land property title copy from the Real Estate Registry in Luanda. An updated property certificate (“certidao predial”) is obtained from the relevant Real Estate Registry, with the complete description of the property including owner(s) information and any charges, liens and/or encumbrances pending on the property. The complex administration of property laws and regulations that govern land ownership and transfer of real property as well as its tedious registration process may reduce investor appetite for real estate investments in Angola. Despacho no. 174/11 of March 11, 2011, mandates the total fees for the “certidao predial” include: stamp duty (calculated according to the Law on Stamp Duty); justice fees (calculated according to the Law on Justice Fees); fees to justice officers (according to the set contributions for the Justice budget); notary fees and other fees. The total fee is also dependent on the current value of the fiscal unit (UCF), which is currently at AOA 88.00 ($.54 cents equivalent)

Intellectual Property Rights

Angola adopted the Convention for the Protection of Industrial Intellectual Property in August 2005, incorporating the 1979 text, and the patent cooperation treaty concluded in 1970, and amended in 1979, and 1984. The Ministry of Industry administers intellectual property rights for trademarks, patents, and designs under Industrial Property Law 3/92. The Ministry of Culture regulates authorship, literary, and artistic rights under Copyright Law 4/90. However, based on U.S. Embassy records, no court case involving U.S. intellectual property has ever tested the strength of these laws. Angola is a member of the World Intellectual Property Organization (WIPO), and follows international patent classifications of patents, products, and services to identify and codify requests for patents and trademark registration. There are no comprehensive statistics available regarding counterfeit goods seized by the Angolan government.

IAPI (Instituto Angolano de Propriedade Intelectual), is the governmental body within the Ministry of Industry charged with implementing patent and trademark law. The Ministry of Culture oversees copyright law. IP infringement is widespread, most notably in the production and distribution of pirated CDs, DVDs, and other media, largely for personal consumption. Counterfeit pharmaceuticals are another major area of concern.

INADEC (Instituto Nacional de Defesa dos Consumidores), under the umbrella of the Ministry of Commerce, tracks and monitors the seizure of counterfeit goods. They do not currently have a website, nor do they regularly publish statistics. They publish the seizure of counterfeit products on an ad-hoc basis, primarily in the government-owned daily, Jornal de Angola.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles  at http://www.wipo.int/directory/en/ . The US Embassy point of contact for IPR related issues is Mballe Nkembe (NkembeMM@state.gov). For legal counsel, refer to Angola’s Country Commercial Guide Local Professional Services List (http://export.gov/ccg/angola090710.asp )

Capital Markets and Portfolio Investment

Angola’s capital markets remain very underdeveloped. To respond to the need for increased sources of financing of the economy, in 2013, the Angolan Government created the Capital Market Commission (CMC). The CMC announced that in 2016 it will prepare a study regarding the establishment of a Commodity Exchange to trade agricultural and livestock commodities contracts. http://www.cmc.gv.ao/ . Angolan authorities anticipate that the establishment of a functioning capital market, including a commodity exchange, will allow Angolan companies to access both domestic and international capital to support their growth and financing needs. Angola’s banks are likely the most established businesses that could potentially list on an exchange. However, a lot of Angolan banks have a high rate of non-performing loans, unofficially reported to be as high as 40 percent. Angola’s banks have struggled in recent years due to the country’s deteriorating economic environment and increasing high rate of delinquent loans. Local analysts believe that Angola’s banks may go through a massive consolidation phase over the next several years, which may limit their ability in the near-term to list on the country’s fledgling stock exchange.

Angola has been slowly testing the waters in terms of accessing the international capital markets. In August 2012, Russia’s second-largest bank, VTB, managed the sale of Angola’s first international bond, a US$1 billion, 7-year bond with a 7.0 percent yield. In November 2015, Angola placed a US$1.5 billion, 10-year Eurobond with a 9.5 percent yield. Deutsche Bank, Goldman Sachs, ICBC managed the 2015 bond placement.

The BNA has developed a market for short-term bonds, called Titulos do Banco Central, and long-term bonds, called Obrigacoes do Tesouro. Most of these bonds are bought and held by local Angolan banks. The Obrigacoes have maturities ranging from one to 7.5 years, whereas the Titulos have maturities of 91 to 182 days. For information on current rates, see: http://www.bna.ao/ .

Foreign investors do not normally access credit locally. For Angolan investors, credit access is very limited, and if available comes with a collateral requirement of 125 percent, so they either self-finance, or seek financing from non-Angolan banks and investment funds. Subsidized government loan programs to promote economic development, such as the Ministry of Economy’s Angola Invest US $1.6 billion fund to support small and medium-sized enterprises with loans of up to $5 million, are available only to majority-owned Angolan companies, but due to reports of limited quality projects and commercial banks reticence, only a handful of the Angola Invest loans were approved in 2016

Money and Banking System

Angola experienced 45 percent inflation in 2016, compared with 14.3 percent inflation in 2015, with IMF forecasts for 2017 at 20 percent. The BNA established a new monetary policy framework in October 2012 guided by the BNA daily published base interest rate, and a Luanda Interbank Offered Rate (LUIBOR). The BNA has been under considerable pressure to stabilize Angola’s economy as the kwanza lost 35 percent of its value in 2015, and close to 60 percent in the last 16 months. In February 2016, the Financial Action Task Force (FATF) recognized that Angola has made significant progress in improving its regime to combat money laundering and terrorist financing and will therefore no longer be subject to the FATF’s monitoring process. However, the BNA has struggled to fully implement reforms across Angola’s banks, which have lost their correspondent relationships with banks in the United States. Angola has been impacted by the broader global de-risking trends wherein banks decide to close business in markets deemed too risky from an anti-money laundering and terrorist financing standpoint.

In November 2015, Bank of America, one of the last, if not sole global wholesaler of dollar notes, ceased selling physical dollar notes to Angola. As part of their de-risking strategy, Bank of America also instructed South Africa-based FirstRand Bank to stop providing dollar banknotes to Angolan banks due to concerns with downstream risks related to Angola. The supply of other hard currencies, including the euro, was also severely impacted by this decision. In December 2015, London-based bank Standard Chartered Plc. also ended its U.S. dollar services and corresponding banking relationships in Angola, citing similar compliance concerns. In December 2016, Deutsche Bank, the last international bank providing dollar clearing services, closed its dollar clearing services in Angola. A limited number of international banks still operate in Angola and provide limited trade finance such as Germany’s Commerzbank and South Africa’s Standard Bank. International banks have held back on entering the Angolan market because the risk of fines and other penalties outweighs the potential rewards of doing business in Angola.

The mandatory reserve requirement for non-government deposits in kwanzas is 20 percent, and in foreign currency is 15 percent. The reserve requirement for government deposits is 100 percent, a measure that seriously limits lending by state-owned banks. Angolan banks extend little unsecured credit, instead requiring significant amounts of collateral (125 percent) in the form of property, or dollar deposits from the borrower. Commercial credit in Angola remains tight. Unclear land titles and ill-defined property rights frequently complicate and lengthen the process of applying for a mortgage. While the Central Bank tries to limit foreign currency risk, some loans are denominated in foreign currencies, but are consequently weighted at 130 percent for the calculation of risk-weighted assets.

Five banks, Banco Angolano de Investimentos (BAI), Banco Economico, Banco de Fomento Angola (BFA), Banco BIC Angola (BIC) and Banco de Poupanca e Credito S.A.R.L. (BPC), control over 80 percent of total banking assets, deposits and loans. Angolan banks focus on profit generating activities including transactional banking, short-term trade financing, foreign exchange, and investments in high-interest government bonds. Loans to most sectors have slowed as a result of the economic crisis. BNA and local bankers have also indicated that there is a growing level of non-performing loans (12 percent in 2015 and 18 percent in 2016 as of the first quarter) across most sectors as clients struggle to make payments on loans as a result of the of the economic crisis. However, traditional commercial loans are still only a small part of banking in Angola. In the past, state and state-affiliated companies enjoyed privileged access to loans, often at concessionary rates without regard to risk, leading to several bank failures. As of December 2013, the latest figures available indicated that total customer deposits with the Angolan commercial banks was 4.6 trillion Angolan kwanza , an increase of 17 percent since 2012. Most banks focus their operations on short-term commission-related activities such as currency trading and trade finance. Even with the severe economic slowdown and reduction in overall foreign exchange availability, bank profit margins are still high enough to allow them to sustain operations. This statement holds true for the large banks, and may be reinforced by current draft legislation(“Implementation Strategy of Executive Macroeconomic Program 2017”), which seeks to designate six Angolan Banks – (BAI, BIC, Banco Economico, Banco Millennium-Atlantico, BNI and Banco Sol) to handle 80 percent of Forex in the primary market. The remaining 22 Banks are likely to survive only by merging with other banks.

Foreign Exchange and Remittances

Foreign Exchange

In a bid to deal with the foreign currency shortage affecting the currency, the allocation of forex by the Central Bank BNA in the market has been prioritized for strategic areas such as the oil, food and health sectors. This has had a negative impact on companies’ ability to pay foreign suppliers and foreign firms seeking to convert kwanza into foreign currency for remittances abroad, repatriation of dividends, royalties and other services.

Angola has since been trading mostly in only two currencies, the USD and the euro. Following the financial and economic crisis that started in 2014 due to the global oil crisis, it became harder for investors to convert proceeds in local currency to foreign currency. Scarcity of USD in the market following lack of access to USD has created a demand for euros. The BNA has been availing USD through auction sales and now it has been auctioning in euro currency only.

Angola has artificially maintained a fixed exchange rate since April 2016 and disallowed fluctuations in the official exchange rate. This has created false appreciation of the local currency or discouraged devaluation, making the local currency Kwanza one of the most overvalued currencies in the world. Factors that could have influenced fluctuations in the exchange rate such as the parity in the interest rate, balance of payments, the purchasing power of economic agents, were not observed. During 2016 the spread between the official and market rate for kwanza reached up to 385 percent in June before settling at 280 percent by December.

The law requires foreign investors to pay higher taxes on early repatriation of dividends and profits within the first several years of an initial investment. The new tax on dividends starts at 15 percent and can rise to as high as 50 percent depending on the value and how early repatriation occurs. Under regulations established in July 2013 aimed at tracking capital movement, strengthening the banking system and capturing tax revenue, foreign companies are required to process transactions through Angolan banks.

Remittance Policies

The Angolan government established anti-money laundering restrictions in January 2014 to combat illicit remittance flows. The subsequent drop in foreign exchange availability in Angola beginning in 2015 due to declining petroleum revenues has severely impeded legitimate business and personal remittances. International and domestic companies operating in Angola face significant delays securing foreign exchange approval for remittances to cover key operational expenses, including imported goods and expatriate salaries. Profit and dividend remittances are even more problematic for most companies. The Angolan government is reportedly prioritizing foreign exchange for essential goods and services including the food, health, defense, and petroleum industries. Due to the tremendous strains on foreign exchange, in 2017 reports indicate that the country is drawing from its international reserves to increase foreign exchange liquidity in the market. This has resulted in Angola’s international reserves, which had been protected carefully at $24 billion, falling to $20 billion, as of March 2017. Foreign exchange allocations from the Central Bank since 2016 have been almost exclusively in euros, partly driven by loss of corresponding banking privileges with U.S. Banks. Profits and dividends repatriation are not prioritized. This is driven by the BNA, which aggressively protects the country’s foreign exchange.

Sovereign Wealth Funds

In October 2012, President dos Santos established a petroleum-funded US $5 billion sovereign wealth fund called the Fundo Soberano de Angola (FSDEA). The FSDEA was established in accordance with international governance standards and best practices as outlined in the Santiago Principles. In February 2015, FSDEA was recognized as transparent by the Sovereign Wealth Fund Institute (SWFI), receiving a score of 8 out of 10. FSDEA has the express purpose of profit maximization with a special emphasis on investing in domestic projects that have a social component (http://www.fundosoberano.ao/investments/ ). Jose Filomeno Dos Santos, son of President Jose Eduardo dos Santos, was appointed chairman of FSDEA in June 2013.

Half of the initial endowment of FSDEA was invested in agriculture, mining, infrastructure, and real estate in Angola and other African markets, and the other half is allocated to cash and fixed income instruments, global and emerging-market equities, and other alternative investments. In April 2015, FSDEA announced five venture capital funds totaling US $1.4 billion to be invested in mining, logging, agriculture, health, and entrepreneurship. In January 2017, FSDEA announced a $180 investment on a new deep sea port in Cabinda. China EXIM will reportedly lend $600 million to complete the project. Cabinda province provides most of the oil exported from Angola.

In Angola, certain state-owned enterprises (SOEs) exercise delegated governmental powers, especially in the mining sector where the government is the sole concessionaire. Foreign investors may sometimes find demands made by SOEs excessive, and under such conditions, SOEs have easier access to credit and government contracts. There is no law mandating preferential treatment to SOEs, but in practice they have access to inside information and credit. Currently, SOEs are not subject to budgetary constraints and quite often exceed their capital limits.

SOEs, often benefitting from a government mandate, operate mostly in the extractive sectors, transportation, commerce, banking, and construction. All SOEs in Angola are required to have boards of directors, and most board members are affiliated with the government. SOEs are not explicitly required to consult with government officials before making decisions. By law, SOEs must publish annual financial reports for the previous year in the national daily newspaper by April 1. Such reports are not always subject to publically released external audits (though state oil firm Sonangol is publically released). The standards used are often questioned. Not all SOEs fulfill their legal obligations, and few are sanctioned. In April 2016, Angolan President dos Santos vacated the board of Sonangol, and in June 2016, installed one of his daughters, well-known business woman Isabel dos Santos, as its Chief Executive, to “ensure transparency” in its management and to improve the Angolan oil sector’s ability to compete globally. In December 2016, the Angolan Supreme Court ruled that Ms. dos Santos’ appointment did not constitute a criminal act under Angola nepotism laws.

Angola’s supreme audit institution, Tribunal de Contas, is responsible for auditing SOEs. However, the Tribunal de Contas does not make its reports publicly available. Angola’s fiscal transparency would be improved by ensuring its supreme audit institution audits SOEs as well as the government’s annual financial accounts and makes public its findings within a reasonable period of time. This would improve the transparency of contracts between private companies and SOEs.

In November 2016, the Angolan Government revised Law 1/14 “Regime Juridico de Emissao e Gestao da Divida Publica Directa e Indirecta”, which now differentiates between ‘direct’ and ‘indirect’ public debt. The GRA considers SOE debt as indirect public debt, and only accounts in its state budget for direct government debt, thus effectively not reflecting some substantial obligations in fact owed by the government.

Angola is not a party to the WTO’s Government Procurement Agreement (GPA). Angola does not adhere to the OECD guidelines on corporate governance for State-owned enterprises

Privatization Program

In December 2014, the GRA implemented the Electricity Sector Transformation Program (PTSE), which unbundled Angola’s two electricity companies to create three separate public companies. While the new companies are still public, the restructuring program financed by the African Development Bank also included passage of legislation to allow for power purchase agreements (PPAs) and is designed to create an environment attractive for private sector investment, including off-grid and renewable energy projects. Electricity sector investment is open to both foreign and domestic firms; however, under the 2015 Investment Law, international investors in this sector must have a 35 percent Angolan partner. Starting late 2016, the U.S. government, through Power Africa, funded a one-year technical Energy Advisor imbedded at Angola’s Ministry of Energy. The purpose of the Energy Advisor is to help build capacity and the climate attractive to private energy sector investors.

In May 2015, the Angolan subsidiary of Portuguese conglomerate Nabeiro purchased Liangol, the Angolan state coffee company for 1 billion USD. Angola, once the 4th largest coffee producer in the world, is seeking to develop the coffee industry after it was devastated by the civil war. This is not expected to be an immediate process.

U.S. Embassy Angola is not aware of any formal privatization efforts by the GRA.

The government has enacted laws to prevent labor by children under 14 and forced labor, although resource limitations hinder adequate enforcement. With limitations, the laws protect the rights to form unions, collectively bargain, and strike. Government interference in some strikes has been reported. The Ministry of Public Administration, Employment, and Social Security, has a hotline for workers who believe their rights have been infringed. Angola’s Chamber of Commerce and Industry (CIACC) established the Principles of Ethical Business in Angola.

In 2015, Angola organized an interagency technical working group to explore Angola’s possible membership in the Voluntary Principles on Security and Human Rights (VPs) and the Extractive Industries Transparency Initiative (EITI). Angola has been a member of the Kimberley Process (KP) since 2003, and chaired the KP in 2015, until handing over the rotating chair to the United Arab Emirates.

Angola is not a party to the WTO’s Government Procurement Agreement (GPA).

Angola does not adhere to the OECD guidelines on corporate governance for State-owned enterprises.

Transparency International’s 2016 Corruption Perceptions Index ranks Angola 164 out of 176 countries in its corruption level survey. Perceived corruption in Angola flourishes unabated and is one of the biggest concerns after unemployment. Prevalent in all sectors of the Angolan society, corruption remains widespread due to a lack of political will, checks and balances, insufficient institutional capacity and a culture of impunity.

The 2010 Law on Administrative Probity requires public officials to disclose their assets and income once every two years and 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 incorporated them into their domestic legislation, including: the Southern Africa Development Community’s (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. 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.


Irrespective of the laws on the books and institutions that exist to combat corruption, corruption, including bribery, raises the costs and risks of doing business and can create an uneven playing field for foreign investors. Corruption has a corrosive impact on market opportunities for U.S. companies and the broader business climate. It also deters greater international investment, stifles economic growth and development, distorts prices, and undermines the rule of law.

It is important for U.S. companies, irrespective 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 GAO enacted by presidential decree the Alta Autoridade Contra Corrupcao (High Authority Against Corruption) Act. The law has been in effect since then. However, no action to implement it has ever been taken.

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.

Resources to Report Corruption

Mrs. Claudia J Dumas, President, Transparency International
1023 15th Street, NW, Suite 300, Washington, DC 20005
Tel: 1-202-589 1616; Fax: +1-202-5891512
Email: transparency@transparency-usa.org; Website: http://www.transparency-usa.org/ 

Politically related violence is not a high risk in Angola, and incidents are rare. Widespread civil disturbances are not anticipated for national elections to be held in 2017. Still a young democracy, Angola is setting a global example with the announcement of current President Eduardo dos Santos’ decision not to run in the 2017 elections after ruling for 37 years. While not a perfect democratic transition of power, most observers believe it will be peaceful, and Angolans are generally welcoming the transition as offering opportunities for new openings. The last significant incident of political violence happened in 2010 during an attack against the Togolese national soccer team by FLEC-PM (Front for the Liberation of the Enclave of Cabinda—Military Position) in the northern province of Cabinda. FLEC threatened Chinese workers in Cabinda in 2015 and claimed in 2016 that they would return to active armed struggle against the Angolan government forces. Both claims have so far proven to be largely untrue. More recently, during the trial of 17 Angolan youth activists in 2016, the government suppressed demonstrations and vigils in support of the activists. The activists were all eventually convicted of preparatory acts of rebellion and criminal association, and sentenced in 2016 to between two and eight year prison terms. However, all the activists were released under a new Amnesty Law enacted in July 2016 after serving roughly six months of their sentences.

The likely continuation of depressed global oil prices (remaining in the mid $50s and below) will continue to pressure the GRA regarding maintaining stability in the country. The GRA has already slashed its budget by half since the start of the economic crisis in 2014, necessitating the cutting of many subsidies for Angolans (including the gasoline and diesel subsidies). In addition, the GRA has increased tax rates. Although many Angolans take advantage of lax GRA implementation capabilities, the combination of decreasing government services and increasing costs for them, could raise tensions, particularly in an environment where the government has a spotty track record of delivering basic services. In response, the GRA has maintained robust spending on its internal security and military budget. The government has also attempted to levy new taxes on the oil industry and has promulgated a plan to impose taxes for trash collection on residents and businesses. These taxes would be payable through electricity bills. There has been sharp criticism from the oil industry and the public regarding these tax increases due the government’s spotty track record on delivering basic services. Many believe the tax measures are not well timed, considering the enormous pressure businesses and individuals are under at the moment.

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 (SNI) study indicates that unemployment is around 26 percent, although these figures are based on limited data taken primarily from urban centers. Eighty-six percent of primary school age children attend school. The Law mandates that children must attend school for six years beginning at age six. Twenty-nine 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 the agriculture, construction, fishing, and coal industries. Forced labor is sometimes used in the agricultural, fishing, construction, domestic service, and artisanal diamond mining sectors. Additional information is available in the 2015 Trafficking in Persons Report, (http://www.state.gov/j/tip/rls/tiprpt/2016/), 2015 Country Report on Human Rights Practices (https://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/), and 2015 Findings on the Worst Forms of Child Labor, (http://www.dol.gov/ilab/reports/child-labor/findings/ ).

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 Banks Doing Business 2016 report placed the average cost of firing a worker in Angola at 26.7 weeks of salary weighting for workers with one year, five years, and 10 years of tenure. 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, possibly due to application systems upgrades by the GRA or less expatriates demand due to the general economic slowdown.

Since 1994, the Overseas Private Investment Corporation (OPIC) has provided investment insurance to projects in Angola. U.S. investors can apply for OPIC insurance, including coverage under the “Quick Cover” program for projects valued at less than US $50 million. OPIC’s portfolio in Angola currently totals US $20.4 million. Since the agreement, OPIC’s support has helped facilitate critical investments in the energy, services, health care, manufacturing, and financial services sectors.

Angola is a member of the Multilateral Investment Guarantee Agency (MIGA), which provides insurance to foreign investors against such risks as expropriation, non-convertibility, and war or civil disturbance. MIGA also provides investment dispute resolution on a case-by-case basis.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Host Country Statistical Source USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2016 $96.2 billion 2015 $103 Billion www.imf.org 
Foreign Direct Investment Host Country Statistical Source USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2015 $24 Million 2014 $1,803 Million BEA data available at
Host country’s FDI in the United States ($M USD, stock positions) 2015 $207 Million 2014 $89 Million BEA data available at
Total inbound stock of FDI as % host GDP 2015 0% 2014 1.42% N/A

Recently the World Bank has put Angola among the ten countries in Africa least able to make available credible indicators, according to the indicator Capacity Statistics BM – an instrument that measures the capacity of States to collect, analyze and disseminate data on their populations and economies.


Table 3: Sources and Destination of FDI

No data available.


Table 4: Sources of Portfolio Investment

No data available.

Dorcas Makaya, Economic Specialist, United States Embassy, Luanda,
Rua Houari Boumedienne 32 Miramar, Angola
+244 222 641 154

2017 Investment Climate Statements: Angola
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