The Angolan economy emerged from five straight years of recession with slight GDP growth of 0.7 percent in 2021, thanks primarily to growth in the non-oil sector. The government forecasts more substantial growth of 2.4 percent in 2022. The oil and gas sector remains the key source of government revenue despite declining oil production and the government should benefit from higher than budgeted oil prices in 2022. The growth in non-oil sectors such as manufacturing, agriculture, transportation will be bolstered by increased demand from the lifting of COVID restrictions in late 2021 and early 2022.
The Angolan government has maintained a reform agenda since the 2017 election of President Joao Lourenço. His administration has adopted measures to improve the business environment and make Angola more attractive for investment. Angola completed the IMF’s Extended Fund Facility in December 2021, demonstrating an ability to commit to and carry out difficult fiscal and macroeconomic reforms, despite the COVID-19 pandemic. The government received three credit rating upgrades between September 2021 and early 2022.
In addition to the Privatization Program (PROPRIV), revision of the Private Investment Law, and updated Public Procurement law, the government has taken steps to recover misappropriated state assets – the Attorney General’s Office claims just under $13 billion since 2018 – and to uproot corruption. Through the Private Investment and Export Promotion Agency (AIPEX), Angola seeks to connect foreign investors with opportunities across the private sector, with PROPRIV, and a wide range of available state-owned enterprises and other assets. The public procurement process has also become more transparent. Angola plans to present its candidacy to join the Extractive Industries Transparency Initiative in 2022 to increase transparency in the oil, gas, and mineral resource sectors.
Despite the government’s efforts to address corruption, its prevalence remains a key issue of concern for investors. Angola’s infrastructure requires substantial improvement; which the government is seeking to address by attracting investment public-private partnerships to improve and manage of ports, railroads, and key energy infrastructure. The justice system and other administrative processes remains bureaucratic and time-consuming. Unemployment (32.9 percent in the fourth quarter of 2021) and inflation (which reached 27 percent in 2021) remain high. There is limited technical training, English-speaking skills are generally low. Skilled labor levels are also low, though the government has attempted to address the issue through training and apprenticeship programs.
Overall FDI increased by $2.59 billion in 2020, the last full year of reporting, from 2019.
The government has committed to reaching 70 percent installed renewable energy by 2025 and has recognized the risks of climate change for Angola. To reach its renewable energy goal, the government has signed deals with U.S. companies on the installation of solar and hydro capacity worth hundreds of millions of dollars.
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
Angola is actively seeking FDI to diversify capital inflows, boost economic growth, and diversify the country’s economy. Angola has maintained its privatization program (PROPRIV), started in 2019, despite the difficulty attracting investment during the COVID-19 pandemic. PROPRIV offers investment opportunities for foreign investment in state-owned enterprises and other publicly owned assets as the government seeks to liquidate its stake in assets across sectors such as transportation, telecommunications, and banking. Angola has also modernized its tendering process to make it more transparent. Despite the increased openness and concerted effort to attract foreign investors, Angola passed local content regulations for the oil sector in October 2020 restricting the concept of “national company” to companies fully owned by Angolan citizens, as opposed to a companies with at least 51 percent ownership by Angolan entities. The regulation has three regimes determining the types of services that must be contracted with local entities and which can be contracted with foreign entities. The local content regulations apply to all companies providing goods and services to oil sector as well as oil companies.
Angola’s trade and investment promotion agency AIPEX provides an online investment window platform for investors to register their investment proposals. AIPEX and the Institute of State Assets and Shares work together on roadshows to promote PROPRIV for foreign investors. AIPEX is also responsible for providing institutional support and monitoring investment project execution.
Limits on Foreign Control and Right to Private Ownership and Establishment
Foreign and domestic private entities can establish and own business enterprises with limitations on foreign entities holding the majority stake in companies in specific sectors. The 2018 Private Investment Law (PIL) establishes the general principles of private investment in Angola for domestic and foreign investors and applies to private investments of any value. Under the PIL, the acquisition of shares of an Angolan entity by a foreign investor is deemed to be a private investment operation. If the investor wishes to transfer funds abroad, the private investment project must be properly registered and executed, and appropriate taxes must be paid before transferring.
Majority foreign shareholding restrictions persist in specific industries such as the oil and gas sector (49 percent cap) and the maritime sector, specifically for shipping, due to their significance in the Angolan economy. Mining rights are granted to private investors by the national diamond company ENDIAMA. The PIL lifted restrictions on having Angolan partners for several strategic sectors such as he telecommunications, hospitality and tourism, transportation and logistics, and information technology.
Other Investment Policy Reviews
At the government’s request, the last Investment Policy Review (IPR) of Angola’s business and economic environments was completed in 2019 by the United Nations Conference on Trade and Development (UNCTAD). The full report and policy recommendations are accessible at UNCTAD TPR. The WTO’s last IPR was more than five years ago; OECD has never conducted an IPR of Angola.
There are no recent policy recommendations by civil society organizations based on reviews of investment policy related concerns.
Business Facilitation
Presidential Decree No 167/20, of June 15, 2020, created the “Single Investment Window” (JanelaÚnica de Investimento, or JUI), which is aimed at simplifying the contact between the investor and all the public entities involved in the approval of foreign investment projects.
To incorporate a company, investors must obtain a certificate of availability of the corporate name from the Ministry of Justice and Human Rights; deposit share capital and show proof of deposit to a notary; submit a draft incorporation deed, articles of association, and shareholder documents. The company must then register with the Commercial Registrar to register the company’s incorporation in the Angola’s Official Gazette (Diário da República).
Angola is also negotiating with the EU on a Sustainable Investment Facilitation Agreement, the EU’s first bilateral agreement on investment facilitation. The sides have had two rounds of negotiations in June and December 2021. The agreement intends to simplify procedures and encourage e-governance and public-private dialogue, while diversifying Angola’s economy and helping small and medium sized enterprises invest. Its goal is to support Angola’s ability to attract and retain investment by improving the investment climate for foreign and local investors.
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.
Domestic investors often prefer to invest in Portuguese-speaking countries, with few investing in neighboring countries in Sub-Saharan Africa. The bulk of investment is in real estate, fashion, fashion accessories, and domestic goods.
Due to foreign exchange constraints, there has been very limited investment abroad by domestic investors.
Angola does not have a bilateral taxation treaty with the United States but signed the Foreign Account Tax Compliance Act (FATCA) on November 9, 2015, which entered into force on August 29, 2016, through Presidential Decree No. 162/16, of August 29. Under this agreement, Angolan financial institutions report to the IRS information on financial accounts held by U.S. taxpayers in Angola. More details can be found at https://fatca.minfin.gov.ao
3. Legal Regime
Transparency of the Regulatory System
Angola’s regulatory system is complex, vague, and inconsistently enforced. In many sectors, no effective regulatory system exists due to a lack of institutional and human capacity. The banking system is slowly beginning to adhere to International Financial Reporting Standards (IFRS). SOEs are still far from practicing IFRS. The public does not participate in draft bills or regulations formulation, nor does a public online location exist where the public can access this information for comment or hold government representatives accountable for their actions. The Angolan Communications Institute (INACOM) is the regulatory authority for the telecommunications sector and regulates prices for telecommunications services such as mobile telephone, internet, and TV services, particularly in sectors without much competition. Revised energy-sector licensing regulations have permitted some purchase power agreements (PPA) participation.
Overall, Angola’s regulatory system does not conform to other international regulatory systems.
Angola became a member of the WTO in 1996. However, it is not party to the Plurilateral Agreements on Government Procurement, or the Trade in Civil Aircraft Agreement and it has not yet notified the WTO of its state-trading enterprises under Article XVII of the GATT. A 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 Barriers to Trade regimes are not coordinated. Angola conducts distinct bilateral negotiations with seven of the nine full members of the Community of Portuguese Language countries (CPLP), Cuba, and Russia and extends trade preferences to China due to previously negotiated credit facilitation terms, while attempting to encourage and protect local content.
Regulatory reviews are based on scientific, or data driven assessments or baseline surveys. Evaluations are based on data, but not made available for public comment.
The state reserves the right to have the final say in all regulatory matters and relies on sectorial regulatory bodies for supervision of institutional regulatory matters concerning investment. The Economic Commission of the Council of Ministers oversees investment regulations that affect the country’s economy including the ministries in charge. Other major regulatory bodies responsible for getting deals through include:
The National Petroleum, Gas and Biofuels Agency (ANPG) is the government regulatory and oversight body responsible for regulating oil exploration and production activities. On February 6, 2019, the parastatal oil company Sonangol launched ANPG through Presidential decree 49/19. The ANPG is the national concessionaire of hydrocarbons in Angola, authorized to conduct, execute, and ensure oil, gas, and biofuel operations run smoothly, a role previously held by state owned Sonangol. The ANPG must also ensure adherence to international standards and establish relationships with other international agencies and sector relevant organizations.
The Regulatory Institute of Electricity and Water Services (IRSEA) is the regulatory authority for renewable energies and enforcing powers of the electricity regulatory authority. Revised energy-sector licensing regulations have improved legal protection for investors to attract more private investment in electrical infrastructure, such as dams and hydro distribution stations.
The Angolan Communications Institute (INACOM) is the regulatory authority for the telecommunications sector including for prices for telecommunications services.
As of October 1, 2019, a 14 percent VAT regime came into force, replacing the existing 10 percent Consumption Tax. For The General Tax Administration (AGT) oversees tax operations and ensures taxpayer compliance. The new VAT tax regime aimed to boost domestic production and consumption and reduce the incidence of compound tax for businesses unable to recover the consumption tax. The government introduced a temporary reduction of the VAT in October 2021 for key items in the basic basket of goods to 7 percent. The temporary measure should run at least through 2022. Corporate taxpayers can be reimbursed for the VAT on the purchase of good and services, including imports.
There are no informal regulatory processes managed by nongovernmental organizations or private sector associations, and the government does not allow the public to engage in the formulation of legislation or to comment on draft bills. Procurement laws and regulations are unclear, little publicized, and not consistently enforced. Oversight mechanisms are weak, and no audits are required or performed to ensure internal controls are in place or administrative procedures are followed. Inefficient bureaucracy and possible corruption frequently lead to payment delays for goods delivered, resulting in an increase in the price the government must pay.
No regulatory reform enforcement mechanisms have been implemented since the last ICS report. The Diário da República (the Federal Register equivalent) publishes official regulatory action.
The Ministry of Finance’s Debt Management Unit has a portal with quarterly public debt reports, debt strategy, annual debt plan, bond reports, and other publications in Portuguese and in English for the quarterly reports and the debt plan, though it does not have regular reporting on contingent liabilities.
International Regulatory Considerations
Regionally, Angola is a member of SADC and ECCAS, though it is not a member of SADC’s Free Trade Area or of the Economic and Monetary Community of Central Africa (CEMAC) the customs union associated with ECCAS. New regulations are generally developed in line with regulatory provisions set by AfCTA, SADC, and ECCAS. Standards for each organization can be found at their respective websites: AfCTA: https://au.int/en/cfta; SADC: SADC Standards and Quality Infrastructure; ECCAS: https://ceeac-eccas.org/en/#presentation
Angola is a WTO member but does not notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT). Technical Barriers to Trade (TBT) regimes are not coordinated and often trade regulations are passed and implemented without the due oversight of the WTO.
Legal System and Judicial Independence
Angola’s legal system follows civil law tradition and is heavily influenced by Portuguese law, though customary law often prevailed in rural areas. Legislation is the primary source of law. Precedent is accepted but not binding as it is in common-law countries. The Angolan Constitution is at the top of the hierarchy of legislation and establishes the general principle of separation of powers between the judicial, executive, and legislative power. Primary judicial authority in Angola is vested in its courts, which have institutional weaknesses that include lack of independence from political influence in the decision-making process at times.
The Angolan justice system is slow, arduous, and often partial. Legal fees are high, and most businesses avoid taking commercial disputes to court in the country. The World Bank’s Doing Business 2020survey ranked Angola 186 out of 190 countries on contract enforcement, and estimated 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.
Angola has commercial legislation that governs all contracts and commercial activities but no specialized court. On August 5, 2020, the Economic Council of Ministers approved the opening of the Court for Litigation on Commercial, Intellectual, and Industrial Property Matters, at the Luanda First Instance Court. With the introduction of this commercial court, the GRA hopes the business environment and trust in public institutions will improve. Prior to this arrangement, trade disputes were resolved by judges in the Courts of Common Pleas. The commercial legislation provides that before going to court, investors can challenge the decision under the terms of the administrative procedural rules, either through a complaint (to the entity responsible for the decision) or through an appeal (to the next level above the entity responsible for the decision). In the new system, investors will be able, in general, to appeal to civil and administrative courts. Investors exercising their right to appeal, however, should expect decisions to take months, or even years, in the case of court decisions.
Angola enacted a new Criminal Code and a new Criminal Procedure Code which entered into force on February 9, 2021, to better align the legal framework with internationally accepted principles and standards, with an emphasis on white-collar crimes and corruption. The legal reforms extend criminal liability for corruption offenses and other crimes to legal entities; provide for private sector corruption offenses to face similar fines and imprisonment to the punishments applicable to the public sector, and modernize and broaden the list of criminal offenses against the financial system. The legal system lacks resources and independence, limiting the effectiveness of the reforms.
There is a general right of appeal to the Court of First Instance against decisions from the primary courts. To enforce judgments/orders, a party must commence executive proceedings with the civil court. The main methods of enforcing judgments are:
Execution orders (to pay a sum of money by selling the debtor’s assets).
Seizure of assets from the party and
Provision of information on the whereabouts of assets.
The Civil Procedure Code also provides for ordinary and extraordinary appeals. Ordinary appeals consist of first appeals, review appeals, interlocutory appeals, and full court appeals, while extraordinary appeals consist of further appeals and third-party interventions. Generally, an appeal does not operate as a stay of the decision of the lower court unless expressly provided for as much in the Civil Procedure Code.
Laws and Regulations on Foreign Direct Investment
Angola’s legal system is becoming more favorable to FDI and has generally not allowed FDI in specific sectors such as military and security, activities of the Central Bank, and key infrastructure port and airport infrastructure. Under PROPRIV the government has encouraged FDI in ports and airports through management and operation tenders. Investment values exceeding $10 million require an investment contract that needs to be authorized by the Council of Ministers and signed by the President.
AIPEX, Angola’s investment and export promotion agency, maintains the JanelaÚnica do Investimento(Single Investment Window), which serves as Angola’s one-stop-shop for investment.
Competition and Antitrust Laws
Mergers and acquisitions, including those which take place through the sale of state-owned assets, are reviewed by the Instituteof Asset Management and State Holdings (IGAPE) and competition related concerns receive oversight by the Competition Regulatory Authority (the “CRA”) which is also responsible for prosecuting offenses. Competition is also regulated by the Competition Act of 2018, which prohibits cartels and monopolistic behavior. A leniency regime was added in September 2020 to reduce fines for the first party to come forward under specific conditions.
CRA decisions are subject to appeal, though Angola does not have special courts of jurisdiction to deal with competition matters.
Angola’s Competition Act creates a formal merger control regime. Mergers are subject to prior notification to the CRA, and they must meet certain specified requirements. The thresholds requiring prior notification are the following:
the creation, acquisition, or reinforcement of a market share which is equal to or higher than 50 percent in the domestic market or a substantial part of it; or
the parties involved in the concentration exceeded a combined turnover in Angola of 3.5 billion Kwanzas in the preceding financial year; or
the creation, acquisition, or reinforcement of a market share which is equal to or higher than 30 percent, but less than 50 percent in the relevant domestic market or a substantial part of it, if two or more of the undertakings achieved more than 450 million Kwanzas individual turnover in the preceding financial year.
Mergers must not hamper competition and must be consistent with public interest considerations such as:
a particular economic sector or region.
the relevant employment levels.
the ability of small or historically disadvantaged enterprises to become competitive; or
the capability of the industry in Angola to compete internationally.
Expropriation and Compensation
Under the revised Law of Expropriations by Public Utility (LEUP), which came into force in October 2021, real property and any associated rights can be expropriated for specific public purposes listed in the LEUP in exchange for fair and prompt compensation to be calculated pursuant to the act. Only property strictly indispensable to achieve the relevant public purpose can be expropriated. The LEUP does not apply to compulsory eviction, nationalization, confiscation, easements, re-homing, civil requisition, expropriation for private purpose, temporary occupation of buildings, destruction for public purpose and revocation of concessions. Save for the urgent expropriation instances specifically set forth in the act, the LEUP enshrines the primacy of acquisition through private-law mechanisms, providing for a negotiation process between the expropriating entity – national or local government – and the relevant citizen or private-law entity.
Despite the reforms, expropriation without compensation remains a common practice with idle or underdeveloped areas frequently reverting to the state with little or no compensation to the claimants who paid for the land, who in most cases allege unfair treatment and at times lack of due process.
Dispute Settlement
ICSID Convention and New York Convention
Angola’s National Assembly ratified the ICSID Convention on September 1, 2021. Once the President approves, Angola will be able to deposit its instrument of accession to the convention. Angola ratified the New York convention of 1958 on March 6, 2017. There is no specific legislation related to enforcement of either the 1958 New York Convention or the ICSID Convention.
Investor-State Dispute Settlement
Angola is a member of the Multilateral Investment Guarantee Agency which can provide dispute settlement assistance as part of its political risk insurance products. Angola does not have BIT or FTA chapter with the United States but signed a Trade and Investment Framework Agreement with Angola in 2009. Angola has not made any claims on U.S. investors under the TIFA.
U.S. Embassy Luanda is aware of one ongoing formal investment dispute involving an American company since 2017. To date, the U.S. investor’s complaints against the GRA remain unsettled. The GRA denies being party to the investor dispute and advised the plaintiff to file a case in Angolan courts against its business partner. The GRA recognizes this case as being an investor-to-investor and not investor-to-state dispute.
International Commercial Arbitration and Foreign Courts
Alternative dispute resolution mechanisms are not commonly used in commercial disputes. Under the revised Public Procurement Law of December 2020, in disputes related to the termination of a public works contract, the law mandates an extrajudicial conciliation process be attempted before the case goes to court. Angola recognizes and enforces arbitration rulings against its government. Extra-judicial cases against foreign investors are rare.
Bankruptcy Regulations
Angola’s Law on Corporate Restructuring and Insolvency went into force on May 10, 2021, representing the first amendment to bankruptcy legislation since 1961. The law regulates the legal regime of extrajudicial and judicial recovery of the assets of natural and legal persons in economic distress or imminent insolvency, provided recovery is viable and the legal regime of insolvency proceedings of natural and legal persons. The law permits the conservation of national and foreign investment since investors know they have a legal remedy that has as its purpose the preservation of the company.
4. Industrial Policies
Investment Incentives
The Private Investment Law (PIL) of 2021 included amendments allowing for negotiation of tax incentives between state and potential investors. The PIL also eliminated the investment value and the value required to qualify for incentives in foreign and local investments, previously set at USD 1,000,000 and USD 500,000 respectively. It also eliminates the requirement for foreign investors to establish a partnership with an Angolan entity with at least a 35 percent stake in the capital structure of investments in the electricity and water, tourism, transport and logistics, construction, media, telecommunications, and IT sectors. Investors can determine their own capital structure in those sectors under the current law.
Angola does not yet have a legislation which offers incentives to green investment.
Foreign Trade Zones/Free Ports/Trade Facilitation
The PIL restructures the country into three economic development zones (zones A through C) determined by political and socio-economic factors, up from two as per the 2015 investment law. For Zone A, investors have a three-year moratorium on taxes reduced between 25- 50 percent of the tax levied on the distribution of profits and dividends. For Zone B, it is between three to six years with a 50 to 60 percent tax reduction, and for Zone C between six to eight years with a tax reduction between 60-70 percent of the tax levied on distribution of profits and dividends.
The Free Trade Zones Law (FTZL) passed October 12, 2020. The FTZL establishes benefits to be offered to investors by the Angolan Government in exchange for meeting specific monetary, job creation, or other investment requirements on a per contract basis. Investors are granted use of the Free Zone for 25 years and can receive industrial tax and VAT benefits, customs rights, as well as land and capital benefits for investing in a Free Zone. Investments made in Free Zones must consider environmental protection interests.
Activities to be developed in the Free Zones
Investors are allowed to carry out industrial activities, agriculture, technology activities, as well as commercial and service activities. It is possible to carry out other activities which are not specified by the FTZL, provided that such activities target an international market and relevant authorities authorize the activities. Industrial activities should use Angolan raw materials and be focused on exports).
Performance and Data Localization Requirements
The GRA follows “forced localization” in the oil and gas sector where foreign investors in the sector must use domestic goods and tertiary services as stipulated in decree 271/20 of October 20, 2020. The Local Content Law covers all companies providing goods and services to oil sector, as well as the oil companies themselves. Commercial relations for the oil and gas sector continue to be divided into an “Exclusivity Regime”, “Preference Regime”, and a “Competitive Regime. Under the Exclusivity Regime, oil and gas companies must contract wholly owned Angolan commercial companies. Under the Preference Regime, the contracted company must be incorporated in Angola, and under the Competitive Regime, there is contractual freedom in sourcing the company. The specific goods and services falling under the Exclusivity and Preference regimes must be listed by the National Oil, Gas and Biofuels Agency (ANPG) – the national concessionaire – annually. In addition, all companies operating in any segment of the petroleum-sector value chain are required to present an Annual Local Content Plan to the ANPG.
Local content regulations offer guidelines that are only loosely enforced, and companies lack clarity on how to satisfy the Angolan government’s requirements. While the lack of enforcement may make it easier for foreign companies to comply with local content regulations, the lack of specificity challenges 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. Legal guidance to get the guarantees for investors under the PIL is strongly encouraged.
Regulations around data storage, management, and encryption are still at nascent stages. The Institute for Communications of Angola (INACOM) oversees and regulates data in liaison with the Ministry of Telecommunications. The President of Angola passed Decree No. 214/16 on October 10, 2016, establishing the organizational framework of the data protection authority. The Ministry of Telecommunications and Information Technology (‘MTTI’) announced, on October 9, 2019, that the National Database Protection Agency (APD) had become operational. The APD issued the first license to a private credit agency in February and collaborates with other governments and private sector entities to train Angolan public officials on data protection.
5. Protection of Property Rights
Real Property
Property rights enforcement remains difficult, given that the Land Law (Lei de Terras de Angola) has not been revised since its approval in December 2004 and two-thirds of Angolans are directly dependent on land property rights due to their work in agriculture. 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 Land Law includes a formal mechanism for transforming traditional land property rights into legal land property rights (clean titles), since a transparent system of land property rights enforcement did not exist before the civil war ended in 2002.
Foreigners are permitted to hold land in Angola through acquisition or lease under the 2004 Land Law. The Land Law sets out requirements for all potential landholders to acquire land, with the main distinctions for foreign entities being the type of identification (passport) a foreign citizen must produce.
Mortgages exist but can be difficult to obtain.
According to the Land Law, 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. The recipient of private property rights from the State can only transfer those rights with the consent of the local authority and after a period of five years of effective use of the land. Weak land tenure legislation and lack of secure legal guarantees (clean titles) are the reasons given by most commercial banks for their greater than 80 percent refusal rate for loans since land is 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, ranking 167 out of 173 according to the World Bank’s Doing Business 2020 survey, with fees averaging three percent of property value. Owners must wait five years after purchasing before reselling land. There are no written regulations setting out guidelines defining different forms of land occupation, including commercial use, traditional communal use, leasing, and private use. Over the years, the government has given out large parcels of land to individuals to support the development of commercial agriculture. However, this process has largely proceeded in an unsystematic way and does not follow any formal rule change on land tenure by the State.
Before obtaining proof of title nationwide, an Angolan citizen or an Angolan legal entity must also obtain the Real or Leasing Rights (“Usufruct”) of the Land from the Institute of Planning and Urban Management of Luanda (IPGUL), an often-time-consuming procedure that can take up to a year or more. However, if a company already owns the land, it must secure a land property title deed from the Real Estate Registry in Luanda. The local registry – if the property is not in the capital – then produces an updated property certificate (certidão predial) 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. Dispatch no. 174/11 of March 11, 2011, mandates the total fees for the property certificate 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); along with notary and other fees. The total fee is also dependent on the current value of the fiscal correction unit (UCF), set at 88 kwanzas.
Intellectual Property Rights
Domestic enforcement of Intellectual Property Rights can be difficult due to lack of resources and competing priorities, but the National Authority of Economic Inspection and Food Safety (ANIESA) was able to identify and break up a network of businesses selling counterfeit cosmetic products in early 2021. Authorities traced the source of the products to DRC, highlighting concerns about lack of border measures to intercept counterfeits. The Angolan Government signed an agreement with Portugal in October 2021 to jointly combat counterfeit medicines. In December 2021, ANIESA suspended the operations of three factories (located in Viana, Kikuxi, and Benfica) for producing counterfeit Havaianas-branded sandals. Trademark registration is mandatory to be granted rights over a mark. Angolan trademarks are valid for 10 years from the filing date and renewable for further periods of 10 years.
The Instituto Angolano de Propriedade Intelectual (IAPI) is the governmental body within the Ministry of Industry & Commerce charged with implementing patent and trademark law. The Ministry of Culture, Tourism & Environment oversees copyright law.
Regarding patents, additional fees are due for each claim after the 15th. Additionally, the request for the anticipation or postponement of the publication of a patent is now provided by the new applicable fees.
Angola is not listed in United States Trade Representative’s (USTR) Special 301 report nor the notorious market report.
For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/.
6. Financial Sector
Capital Markets and Portfolio Investment
Foreign portfolio investment is still new in Angola, but the government is seeking to increase it. The National Bank of Angola (BNA) abolished the licensing previously required to import capital from foreign investors allocated to the private sector and export income associated with such investments. This measure compliments the need to improve the capture of FDI and portfolio investment and it is in line with the privatization program for public companies (PROPRIV) announced through Presidential Decree No. 250/19 of August 5, 2019, which encourages foreign companies to purchase state-owned assets the government is liquidating. BNA has also stopped requiring a license to export capital resulting from the sale of investments in securities traded on a regulated market and the sale of any investment, in which the buyer is also not – foreign exchange resident, pursuant to Notice No. 15/2019. The BNA is increasingly removing restrictions on payments and transfers for current international transactions.
Angola’s Debt and Securities Stock Exchange (BODIVA), planned to be privatized by 2022, trades an equivalent in local currency (kwanzas) of USD 2 billion a year. In view of policies adopted by the institution, BODIVA predicts an increase in the volume of trades. The stock exchange has 23 commercial banks and two brokerages as members, which operate mainly in government denominated Treasury Bonds. BODIVA allows the trading of different types of financial instruments through an electronic auction platform to investors with rules (self-regulation), systems (platforms), and procedures that assure market fairness and integrity to facilitate portfolio investment. The Capital Markets Commission, the regulator, is updating its own supervisory framework while looking to provide new services and attract more individual investors to the capital markets. Presently, only local commercial banks can list on the nascent stock exchange. According to the Capital Markets Commissioner, portfolio investment by individuals only represents 16 percent of BODIVA’s equity.
Through the ongoing privatization program, the government announced in February its intent to sell 30 percent of the stocks it has invested in BODIVA by the end of 2022, with plans to sell the rest in phases in 2023 and 2024.
Credit is partially allocated on market terms. Since the revision of the PIL in 2021, domestic credit is accessible to foreign investors and companies that are majority foreign held (this was previously only possible after implementation of the investment project). For Angolan investors, credit access remains limited. In 2020, however the BNA directed commercial banks to increase the minimum amount of subsidized credit that they must make available to borrowers 2 percent of their assets to 2.5 percent by the end of 2020 to accelerate the diversification of domestic production. The private sector has access to a variety of conventional credit instruments provided by commercial banks.
Money and Banking System
Forty-seven percent of Angola’s income-earners utilize banking services, with 80 percent being from the urban areas. Angola is over-banked for the size of its economy. Although four banks have been closed since 2018, 26 banks still operate in Angola. The banking market remains marked by concentration and limited financial inclusion. The top six banks control nearly 80 percent of sector assets, loans and deposits, but the rest of the sector includes many banks with minimal scale and weak franchises. The total number of customers in the six largest banks is 9.9 million. Angola’s largest bank Banco Angolano de Investimentos has an asset value of approximately USD 5.5 billion.
Angola has a central banking system. The banking sector largely depends on monetary policies established by Angola’s central bank, the National Bank of Angola (BNA). Thanks to the ongoing IMF economic and financial reform agenda, the BNA is adopting international best practices and slowly becoming more autonomous. On February 13, 2021, President Joao Lourenco issued a decree granting autonomy to the BNA in line with IMF recommendations. Since that time, the bank has made decision on monetary, financial, credit, and foreign exchange policies without political influence, while also maintaining its oversight, regulatory, and supervisory role of the institutions in the financial system. The reforms taken under the Lourenco administration have lessened the political influence over the BNA and allowed it to more freely adopt strategies to build resilience from external shocks on the economy. As Angola’s economy depends heavily on oil to fuel its economy, so does the banking sector. The BNA periodically monitors minimum capital requirements for all banks and orders the closure of non-compliant banks.
Credit availability is limited and often supports government-supported programs. The GRA obliges banks to grant credit more liberally in the economy, notably by implementing a Credit Support Program (PAC). For instance, the BNA first issued a notice obliging Angolan commercial banks to grant credit to national production equivalent at a minimum to 2.5 percent of their net assets in 2020 and extended the notice through the end of 2022. Although the RECREDIT Agency purchased non-performing loans (NPLs) of the state’s parastatal BPC bank, NPLs remain high at 23 percent, a decrease of 9 percent since 2017.
The country has not lost any additional correspondent banking relationships since 2015. At the time of issuing this report no correspondent banking relationships were in jeopardy. The Eastern and Southern Africa Anti-Money Laundering Group is evaluating Angola’s anti-money laundering regime. A positive result could lead private foreign banking institutions to reestablish correspondent banking relationships. Most transactions go via third party correspondent banking services in Portugal banks, a costly option for all commercial banks.
Foreign banking institutions are allowed to operate in Angola and are subject to BNA oversight.
Foreign Exchange and Remittances
Foreign Exchange
There are no current limitations or restrictions for foreign investors converting, transferring, or repatriating funds following the issuance of a series of notices from the BNA. The regulations on Foreign Investment Operations by Non-Residents allow investors to freely convert funds in their accounts from the national currency to world currencies, transfer values from their accounts in Angola to accounts overseas, and keep funds in kwanzas or foreign currencies deposited in their accounts in Angola. The exchange rate in Angola is freely determined by the market, following the principle of supply and demand and the rate fluctuates. The central bank may intervene whenever it deems nece.ssary to make corrections in the event of excessive currency volatility.
Remittance Policies
To ease access to foreign exchange for investment remittances and to increase the efficiency of the Foreign Exchange Market, the National Bank of Angola decided to expand the base of entities that negotiate the purchase and sale of foreign currency with commercial banks through the Bloomberg FXGO trading platform. In 2021, the BNA granted the possibility of participating in the negotiation of the platform to airlines and insurance companies. In 2022, it plans to add the main national importers. There are no time limitations on the transfer of the operations, as they do not require any authorization from the central bank.
Sovereign Wealth Funds
The Angolan Sovereign Wealth Fund (FSDEA) was established in 2012 with $5 billion USD in support from the petroleum sector. The fund was established in accordance with international governance standards and best practices as outlined in the Santiago Principles. As of March 2021, the FSDEA reported $2.97 billion USD. Angola is a full member of the International Forum of Sovereign Wealth Funds
7. State-Owned Enterprises
There are currently 81 public enterprises listed on the State Institute of Asset and Shares Management website; 70 are wholly owned by the state, 8 with majority-ownership for the state and 3 with minority stakes for the government. A list of all of Angola’s SOEs can be found at the following link: https://igape.minfin.gov.ao/PortalIGAPE/#!/sector-empresarial-publico/universo-do-sep. Based on the IMF definition of government owning at least 50 percent equity and revenue being greater than 1 percent of GDP, SONANGOL, the state oil company, and Sodiam, the state diamond company qualify as SOEs.
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. All SOEs in Angola are required to have boards of directors, and most board members are affiliated with the government.
Other public enterprises operate in the agribusiness, oil and gas, financial services, and construction sectors as well as others.
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. President Lourenço has launched various reforms to improve financial sector transparency, enhance efficiency in the country’s SOEs as part of the National Development plan 2018-2022 and Macroeconomic Stability Plan
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 SOEs.
Privatization Program
Angola began its privatization program (PROPRIV) in 2019, with an aim to privatize 195 assets by 2022. By January, the government had privatized 73 assets and raised $1.7 billion in revenue through the program despite COVID-19 pandemic-imposed hurdles. The program is supervised by State Institute of Asset and Shares Management (IGAPE) and will implemented through the Angolan Debt and Securities Exchange Market (BODIVA). The government plans to partially privatize the state-owned telecommunications company and the national oil company Sonangol, as well as the national airline TAAG, and companies in the extractives sector, health, manufacturing, and agriculture.
The privatization process is open to interested foreign investors and the government has improved the transparency of the bidding process. The government has an “electronic auction” site where investors can submit their bids for the various tenders: https://leilaoigape.minfin.gov.ao/.
8. Responsible Business Conduct
There is a general awareness of expectations of or standards for responsible business conduct (RBC) or obligation to conduct due diligence to ensure no harm with regards to environment, social and governance issues. Projects that could have an impact on the environment are subject to an environmental impact assessment (EIA) depending on their nature, size or location, on a case-by-case basis. Presidential Decree No 117/20 of April 22, 2021 establishes the:
Rules and procedures for EIAs for public and private projects.
Environmental licensing procedure for activities that are likely to cause significant environmental and social impacts.
Applicable fees.
Fines for non-compliance.
The government has few initiatives to promote responsible business conduct. In March 2019, the UNDP launched the National Network of Corporate Social Responsibility, “RARSE,” to create a platform to reconcile responsible business conduct with the needs of the population. The government, through the Ministry of Education, also held a campaign under the theme, “Countries that have a good education, that enforce laws, condemn corruption, privilege and practice citizenship, have as a consequence successful social and economic development” in 2020.
The government has enacted laws to prevent labor by children under 14 and forced labor, although resource limitations hinder adequate enforcement. In June 2018, the government passed a National Action Plan for the Eradication of Child Labor (PANETI) (2018-2022) to eradicate the worst forms of child labor. This plan was updated on March 17, 2022 and is implemented by the Multisectoral Commission for the Prevention and Eradication of Child Labor. The National Plan aims to eliminate child labor in Angola, by creating strategies, prevention policies, a favorable environment for the harmonious development of children, and creating institutional capacity to solve the problem of worst forms of child labor in the country.
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 established the Principles of Ethical Business in Angola.
The GRA does not fully meet the minimum standards for the elimination of trafficking in persons but is made significant efforts to do so, especially considering the impact of the COVID-19 pandemic on its anti-trafficking capacity. Those efforts led to Angola remain on Tier 2 in 2021. Some of the efforts taken by Angolan authorities include convicting multiple traffickers, including five complicit officials, and sentencing all to imprisonment; offering long-term protective services that incentivized victims to participate in trials against their traffickers; dedicating funds specifically for anti-trafficking efforts, including for implementation of the national action plan; and conducting public awareness campaigns against trafficking.
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 formally announced its intention to join the EITI in September 2020 and in November 2021 announced its intention to formally present its candidacy in March 2022. Angola has been a member of the Kimberley Process (KP) since 2003 and chaired the KP in 2015. Angola is not a party to the WTO’s GPA and does not adhere to the OECD guidelines on corporate for SOEs.
According to Article 5 of Decree No. 51/04 of July 23, 2004, every project (private or public) must present an Environmental Impact Study to the Ministry of Environment for their approval.
Angola aims to address the impacts of climate change as stated in its National Development Plan. It includes the main goals and actions to tackle current and future impacts on important sectors for economic development and for environmental sustainability. In addition, the National Strategy for Climate Change (2018–2030) includes five pillars on mitigation, adaptation, capacity building, funding, and institutional coordination. In addition, the Government of Angola has ratified the UNFCCC and developed and submitted its National Adaptation Plans of Action (NAPAs).
Angola has not made firm commitments or introduced policies to reach net-zero carbon emissions by 2050. Angola prioritizes the implementation of adaptation measures in coastal zones, land use, forests, ecosystems and biodiversity, and water resources. On mitigation, Angola aims to reach 70 percent of installed renewable energy by 2025 and to sequester 5 million tons of CO2e per year through reforestation by 2030. Angola, like many African countries, needs access to abundant, always available, and cost-effective power to support economic growth. As part of a path towards sustainable transition, Angola needs to reduce emissions from its existing fossil fuel facilities.
The Forest and Fauna law 06/17 of January 24, 2017, has significantly changed how natural forests are managed in the country, introducing the concept of forest concessions for the first time, allowing for a more rational use of forest resources. Recognizing the potential of the blue economy, the government has expanded the mandate of the Ministry of Fisheries to cover issues of the sea, launched a marine spatial plan to address conflicting uses of marine resources, and is planning to establish the first marine protected area in the country. In addition, the government has started the preparation of guidelines to regulate private concessions in protected areas, as an effort to attract private investments in nature-based tourism and has also established the Kavango Agency to ensure further multi-sectoral coordination in the management of the high-sensitive Kavango watershed.
The Strategic Plan for the Protected Areas System of 2018 (PESAP 2018) is the most recent policy document for protected areas. The plan focuses on measures to allow fundraising, train staff, and strengthen institutions such as the National Institute for Biodiversity and Protected Areas. It also emphasizes the importance of maintaining the socioeconomic and financial sustainability of conservation areas.
9. Corruption
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. The Lourenço administration has developed a comprehensive anti-corruption and anti-money laundering legal framework, but implementation remains a challenge. Angola has made several arrests of former officials and family members of the former president who were accused of embezzling state funds and has made a concerted effort to recover assets it accuses those individuals of stealing.
Some of the recent anti-corruption legislation includes:
The revised Criminal Law Code and Criminal Procedure Code, which both entered into force in February 2021: The updated laws include corporate criminal liability; harsh penalties for active and passive corruption by public officials, their family members, and political parties; criminalization of private sector corruption; and seizure of proceeds.
The updated Public Procurement Law, which entered into force on December 23, 2020, emphasizes the management of potential conflicts of interest in awarding public contracts, including the requirement for foreign investors to have a local partner, which historically made procurement ripe for bribery and kickbacks.
The Whistleblower Protection Law, which came into force on January 1, 2020, provides a protection system – including anonymity – for victims, witnesses, and the accused during judicial proceedings that involve corruption and/or money laundering allegations.
The government does not require the private sector to establish internal codes of conduct and does not provide a mechanism for reporting irregularities related to public officials.
U.S. firms in Angola are aware of cases of corruption in Angola despite efforts to combat the phenomenon and view it as a significant impediment to FDI. Corruption in Angola is pervasive in public institutions, government procurement customs and taxation. Foreign investors seeking to do business in Angola must remain mindful of the corruption risks and the extraterritorial reach of the U.S. FCPA.
Resources to Report Corruption
Contact at the government agency or agencies that are responsible for combating 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: 244-222333 172
Sebastiao Domingos Gunza
Inspector General of State Administration
Office of the Inspector General of State Administration
Rua 17 de Setembro, Luanda, Angola
+244 993 666 338
10. Political and Security Environment
Angola maintains a stable political environment, though demonstrations and workers strikes occur with regularity, particularly in the last two years due to increased socio-economic difficulty. Politically motivated violence is not a high risk, and incidents are rare. The Front for the Liberation of the Enclave of Cabinda—Military Position (FLEC MP) based in the northern province of Cabinda threatened Chinese workers in Cabinda in 2015 and claimed in 2016 that they would return to active armed struggle against the Angolan government forces. No attacks have since ensued and the FLEC has remained relatively inactive to date.
Local elections were anticipated to take place in 2020 but have not yet occurred due to the COVID-19 pandemic and the lack of key legislation governing the elections. General elections are scheduled to occur in August 2022. Young people take to the streets occasionally to protest economic hardship and what they view as unrealized political pledges. Large pockets of the population live in poverty without adequate access to basic services. Crimes of opportunity such as muggings, robberies and car-jackings occur across the country.
11. Labor Policies and Practices
In the fourth quarter of 2021, the unemployment rate for economically active Angolans 15 years and older – who represent half of Angola’s 33 million people – was 32.9 percent. The labor market in Angola is largely characterized by high unemployment and a high level of informality. There is also a deficit of skilled and well-trained labor, especially in the industrial sector due to the low level of vocational training. The foreign/migrant labor force bridges the gap in specialized labor. The Angolan labor force also has limited technical skills, English language capabilities, and management training.
Companies in the construction and manufacturing sectors are significant sources of formal and informal mechanisms for workers to acquire skills and abilities particularly relevant to public and private construction works and manufacturing industry.
In the fourth quarter of 2021, the economically active population in Angola age 15 years and older was estimated to be approximately 16.2 million people (48.3 percent male and 51.7 female). Over 80 percent of the employed population in Angola was estimated to work in the informal sector as of the fourth quarter of 2021, equal to around 8.8 million people out of the 10.9 million people 15 years of age and older and employed in the same period. Informal employment was highest among Angolans aged 15-24 years and 65 years or older – reaching over 90 percent. The unemployment rate for women was also 90 percent for women and 71.5 percent for men.
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. There have been reports of forced labor in agriculture, construction, artisanal diamond mining, and domestic work, each sometimes as a result of human trafficking. Additional information is available in the 2021 Trafficking in Persons Report, (https://www.state.gov/reports/2021-trafficking-in-persons-report/angola/), 2020 Country Report on Human Rights Practices (https://www.state.gov/reports/2021-country-reports-on-human-rights-practices/angola/), and 2020 Findings on the Worst Forms of Child Labor.
The General Labor Law 7 of September 15, 2015, governs all aspects of the employment relationship and provides guidelines on employment adjustments to respond to fluctuations in market or economic conditions. The law differentiates between layoffs and firing. However, there are unemployment insurance mechanisms in place or social safety net programs for workers laid off for economic reasons. All forms of termination must rely on Social Security contributions along the years of employment in due course as the benefits are not readily available at termination but only when the beneficiaries reach retirement age or become physically impaired to maintain employment status.
All employers and unions may enter into collective bargaining agreements under the Law on the Right to Collective Bargaining (20-A/92). Where there is no union representation, the employees may set up an ad hoc commission aimed at negotiating and concluding a collective bargaining agreement with the employer, subject to complex requirements. If more than one union represents an employer’s employees, the unions must set up a joint negotiation committee composed of representatives from each union in the same proportion as the employees are represented.
The negotiation process for a collective bargaining agreement must be finalized within 90 days of the employer receiving the union/employees’ initial proposal. If this process is unsuccessful, the Law on the Right to Collective Bargaining provides for alternative dispute resolution mechanisms to resolve collective labor conflicts – notably conciliation, mediation and arbitration. Unions/employees may call a strike if the negotiations are deadlocked when the deadline for reaching an agreement passes.
A collective bargaining agreement requires all the parties to maintain social peace while it is in force, rendering illegal any strike action or collective labor conflict during that period. Once the effective period has elapsed, the agreement shall continue to bind the parties until it is replaced by a new or amended collective bargaining agreement. 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.
12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs
DFC provided a $100 million loan facility for Africell Group which received Angola’s fourth universal electronic communications license in February 2021. DFC financing also supported the construction of the Luanda Medical Center, one of the premier medical facilities in Angola
OPIC’s portfolio in Angola prior to the creation of the DFC was over $20 million. Angola is seeking to diversify its economy as well as its sources of financing. There is huge potential for the implementation of DFC-financed projects to accelerate private sector growth and encourage public private partnership. U.S. investors can apply for DFC insurance, including coverage under the “Quick Cover” program for projects valued at less than USD 50 million. Since the agreement, DFC’s support has helped facilitate critical investments in the energy, services, health care, manufacturing, and financial services sectors.
Angola is a member of the Multilateral Investment Guarantee Agency (MIGA), which provides insurance to foreign investors against such risks as expropriation, non-convertibility, and war or civil disturbance. MIGA also provides investment dispute resolution on a case-by-case basis.
13. Foreign Direct Investment Statistics
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source*
USG or international statistical source
USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other
Economic Data
Year
Amount
Year
Amount
Host Country Gross Domestic Product (GDP) ($M USD)