Algeria

Exchange controls

A non-resident foreign company can open a non-resident account in local currency (i.e. dinars), called an ‘INR account’, based on the contract to be performed and on its registration to tax. An INR account can be used only for the object (purpose) for which it is opened.

A non-resident foreign company can also open a CEDAC (Compte Etranger en Dinars Algériens Convertible) account, which must be credited only from abroad in foreign currency.

The CEDAC account allows payment in dinars as well as in hard currency. Furthermore, there is no restriction or limitation for transferring any remaining sum in the CEDAC account back abroad in foreign currency or for drawing any foreign payment instrument. The exchange rate that will be used for converting Algerian dinar to foreign currency is the official rate at the date of the debit.

Please note that a non-resident foreign company will not be able to transfer any balances from INR accounts to its CEDAC account or abroad without the express authorisation of the central bank, except in case of reimbursing temporary funding from the CEDAC account as part of a cash call (such reimbursement must be for the exact same amount).

Please note that trading companies cannot pay any dividends to their foreign shareholders.

Choice of business entity

Foreign companies can run a business in Algeria through various forms of legal entities (e.g. joint stock company [SPA], limited liability company, partnership company), a joint venture or consortium, or PE. As for legal entities, the foreign companies should comply with the local shareholding requirement for importation for resale activities and strategic activities. Indeed, the foreign company cannot hold more than 49% of joint venture share-capital performing importation for resale activities and strategic activities in Algeria.