Exchange

Angola Stock Market (“BODIVA – Bolsa de Dívida e Valores de Angola”) began operating at the end of 2014 – currently, only treasury bonds are listed and traded by duly authorized financial institutions. The new Securities Law (Law no. 22/15, of 31 August 2015) and the Financial Institutions Law (Law no. 12/15, of 17 June 2015) provided a new framework applicable to the capital markets, providing a detailed legal background to the Angola Stock Market operation and the market regulator, Capital Markets Commission (CMC).

The securities law provides the legal framework applicable to securities and derivative instruments markets, issuing entities, public offerings of securities, regulated markets and respective infrastructures, prospectus, securities and derivate instruments investment activities and services as well sanctionary regime. The regime provided by both laws is supported by secondary legislation, namely Capital Markets Commission and National Bank of Angola (BNA) orders and instructions.

The Securities Law applies to all the activities and operations that are deemed to have significant connection with the Angolan territory – such connecting element is triggered by:

• orders directed to any members of the regulated market and registered under the Securities Markets Supervisory Body as well any operation carried out in such markets;
• activities developed and acts carried out in Angola;
• the provision of information accessible in Angola in respect of situations, activities or acts regulated by the Angolan law.

Current number of listed companies

15 (number of listed companies as at 8 January 2018)

Listing rules

• Securities Law (Law no. 22/15, of 31 August 2015)
• Financial Institutions Law (Law no. 12/15, of 17 June 2015)
• Foreign Exchange Law (Law no. 5/97, of 27 June 1997, as amended by Decree no.21/01, of 6 April 2001)

Regulatory body or bodies

• Angolan Capital Market Commission
• National Bank of Angola

Principal legislation

• Securities Law (Law no. 22/15, of 31 August 2015)
• Financial Institutions Law (Law no. 12/15, of 17 June 2015)
• Foreign Exchange Law (Law no. 5/97, of 27 June 1997, as amended by Decree no.21/01, of 6 April 2001)

Corporate Governance Code

• Securities Law (Law no. 22/15, of 31 August 2015)
• BNA Order no. 01/2013 of 19 April 2013 regarding Corporate Governance
• Commercial Companies Law (Law no. 1/04, of 13 February 2004, as amended by Law no. 22/15, of 31 August 2015)

Takeover / merger regulations

Commercial Companies Law (Law no. 1/04, of 13 February 2004)

Public offers / disclosure regulations

Securities Law (Law no. 22/15, of 31 August 2015)

Impact of regulatory regime on business

Although the competition rules, practice and procedure are in their very initial stages, the legislation already in force foresees a direct involvement of the Pricing and Competition Institute in merger proceedings. Pursuant to Articles 4(c) and 4(d) of the Presidential Decree 162/11, of 22 June 2011, the Pricing and Competition Bureau is required to intervene and provide an opinion regarding the economic aspects whenever a merger operation is to be undertaken. It was also recently incorporated the National Prices Council, an advisory body of the National Price Authority (the Ministry of Finance) with the following attributions:

• Propose the national price policy to be approved by the Government
• Manage the market regulation policy
• Draw guidelines for the management and execution of the price regulation policies
• Follow-up any activity undertaken within the price sector and propose relevant measures
• Advise on price and competition matter whenever this body is requested to do so

Scope

Legislation

Draft legislation was drawn up in 2004 but has yet to be formally enacted. More recently the Council of Ministers has reviewed a new draft version of the competition law, which is not clear when will be enacted. However, 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. Also the new Public Procurement Law has been approved recently with a view to increase and promote fair competition within competitors and the public procurement in general.

The Pricing and Competition Bureau was also created and so developments in this area are expected in the near future.

Signatories to the African Union Convention on Preventing and Combating Corruption?

Yes - signed the treaty on 22/01/2007

Signatories to United Nations Convention Against Corruption (UNAC)?

Yes - signed on 10/12/2003

(UNAC) ratified?

Yes - ratified it on 29/08/2006

Corruption Perception Index rank worldwide for 2017

167 

Ratified?

No

Corruption Perception Index for 2017

19/100

Signatories to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions?

No

Structure of the court system

Arbitration

Angola is a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. In 2016 the Republic of Angola approved its accession to the New York Convention, the respective instrument of accession to the Convention was deposited and, therefore, the Convention entered into force for Angola on 4 June 2017.

Angola is not a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States approved in Washington, in March 1965, which created the ICSID or CIRDI. Bilateral treaties on the enforcement of arbitration awards have been signed between Angola and Portugal.

Perception of the local courts

The judicial system in Angola is not as effective as it could be in resolving commercial disputes. If the parties have not agreed to submit their dispute to arbitration or when arbitration is not possible, such as in the case of inalienable rights, the disputing parties must rely on the state judicial system. Foreign parties will find the Angolan court system slow and inefficient at times.

Judiciary

Justice is administered by Municipal or Provincial Courts at first instance and by the Supreme Court of Justice which analyses appeals from the decisions of these courts, which specialise in criminal, civil, administrative, family and child matters and labour courts. There are also special courts, namely the Military Court.

Structure of the court system

The Angolan justice system is based upon the continental European system and particularly upon the Portuguese framework. The principle of the separation of political power from judicial power prevails and the courts are arranged in a hierarchy and divided by areas of law.

Foreign investor rules

Foreign investment is governed by Angolan Private Investment Law (Law no. 14/15, of 11 August 2015) and the Private Investment Regulation (Presidential Decree no. 182/15, of 30 September 2015 ), which apply to all investments carried out by foreign entities in the country regardless the amounts involved (this includes incorporation of companies; opening of branches; acquisition of real estate; etc.). Domestic investments equal or higher than AKZ 50 million will also be covered by the Private Investment Law and Regulation.

Upon the submission and approval of a foreign investment project and by entering into an investment contract with the Angolan State, foreign investors are entitled to pursue its investment in the country and be eligible to repatriate dividends abroad. Foreign investments above USD 1 million can benefit from certain tax benefits and incentives. These are not automatically granted and depend on the prior assessment of the project impact, based on certain criteria including: location of the investment; the value of the investment; job creation; Angolan shareholder percentage; project referring to specific sectors of activity; impact on exports; and local Angolan added value.

Foreign investment can be qualified as direct (such as equity or import of equipment or machinery) or indirect (investments by way of loans, shareholder loans, supplementary contributions, patented technology, registered trademarks or industrial secrets and patterns). Indirect investment, however, cannot exceed specified proportions of the overall investment (such as 50% in case of indirect investment and 30% in respect of shareholder loans).

The investment application shall be submitted before the so-called Technical Unit for Private Investment of the Ministry overseeing the main sector of activity in which the investment takes place. For investments exceeding the investment amount of USD 10 million, the entity responsible for the approval of the application shall be the Technical Unit of the Angolan Executive.

Investment guarantees

Angola is a member of the Multilateral Investment Guarantee Agency, which provides private sector investment guarantees and dispute settlement assistance.

Angola is a member of the World Intellectual Property Organisation and has approved the Paris Convention for the Protection of Industrial Intellectual Property. It should be noted however, that Angola has not ratified the Madrid Agreement Concerning the International Registration of Marks.

The government of Angola is unlikely to expropriate the assets of foreign investors directly. It must be noted, however, that from a short-term perspective, the financial and exchange crisis Angola is experiencing brought significant difficulties in getting profits and dividends repatriated in a timely manner.

Restricted areas

The Private Investment Law designates a number of sectors where it is necessary to establish a partnership with a local partner which holds at least 35% of the share capital of the companies where such investment takes place. It is also necessary to ensure that this local partner has an effective participation on the company’s management.

These sectors are the following:

• Electricity and water;
• Hotel business and tourism;
• Transports and logistics;
• Civil construction; and
• Telecommunications and IT Media.

Investments in other sectors such as oil & gas, mining, financial institutions, military equipment and ownership and administration of sea ports and airports are also subject to foreign shareholding limitations.

Foreign exchange regime

The import and export of foreign capital is subject to specific procedures before the National Bank of Angola (“BNA”).

Angolan law regulates commercial and financial operations that may influence the balance of payments, namely foreign exchange operations.

Exchange operations are determined as follows:

• acquisition or movement of coined gold;
• purchase or sale of foreign currency;
• opening and movement of foreign currency bank accounts by residents or non-residents in the country;
• opening and movement of national currency bank accounts by non-residents in the country; and
• settlement of any transactions for goods, capital and current invisible operations.

The concept of residency for exchange matters is established by the Foreign Exchange Law (Law no. 5/97, of 27 June 1997, as amended by Decree no.21/01, of 6 April 2001).
The following are deemed to be non-residents:

• individuals and corporate entities domiciled or with their head office registered outside of Angola;
• individuals absent from Angola for a period exceeding one year;
• branches, affiliates, representation offices or other forms of representation outside Angola; and
• diplomats, consular representatives, other representatives or with equivalent status, and their family members.

Foreign investment incentives

Foreign investment incentives are available in the following areas:

• Zone A: Province of Luanda, the capital municipalities of the provinces of Benguela, Huíla, and the municipality of Lobito;
• Zone B: Provinces of Cabinda, Bié, Cunene, Huambo, Cuando Cubango, Lunda-Norte, Lunda-Sul, Moxico, Zaire, Bengo, Cuanza-Norte, Cuanza-Sul, Malange, Namibe, Uíge and the remaining municipalities of the provinces of Benguela and Huíla; and

Special economic zones, free zones and development centres

Special foreign investment incentives are available upon negotiation with the holder of the Executive Power when the investment is equal or higher than USD 50 million and generates at least 500 (for Zone A) or 200 (for Zone B) jobs for national citizens.

Alcohol

Matters related to alcohol advertising are set out in the General Law on Advertising (Law no. 9/17, of 13 March 2017). Alcohol advertising should respect the following requirements:

• not be directed to minors, and in particular not showing them consuming alcohol, or inciting them to consume;
• not encourage excessive consumption;
• not undervalue non-consumers;
• not suggest accomplishment, social success or special skills as a result of consumption;
• not suggest the existence of therapeutic properties or sedative or stimulating effects; and
• not associate the consumption of such beverages to physical exercise or to driving, nor suggest alcohol consumption is a positive quality.

Further, alcohol advertising on radio and television is forbidden from 7:00 AM to 9:00 PM. The exhibition of alcohol advertising must necessarily include a warning as intended for the need to moderate the consumption of alcoholic beverages as well as any possible risks for the public health.

Executive Decree no. 124/06, of 11 September 2006 and its Regulation (Decree no. 41/06, of 17 July 2006) establish the obligation of inspection before shipping applicable to certain products exported to Angola, and in particular to alcoholic beverages. Its aim is to protect the public health, the environment and the national industry. Imported alcoholic products must include labels which provide health and security warnings and instructions for use in Portuguese. In relation to the expiry date or sell by date, at the time of arrival in the country, the product must not have reached 3/4 of its duration or shelf life.

Advertising

Advertising regulations are set out in the General Law on Advertising (Law no. 9/17, of 13 March 2017). This law provides that privacy protection should be respected in every kind of advertising, regardless of how it is communicated to the public. This means that any photography or expressions of person can only be used if they are pre-approved by the relevant person.

There are also special requirements concerning the use of foreign languages in advertising. Broadly speaking it is prohibited to use any foreign language in advertising on Angolan territory – except if translated into Portuguese.

Pharmaceuticals

Regulation in respect of the promoting and advertising of medicines is managed between the government and industry, giving the National Directorate for Medicines and Equipment (DNME) a relevant role in this sector. The advertising of medical treatment and medicine is also subject to the General Law on Advertising. It is strictly prohibited to advertise prescription medical treatment and/or medicine with the following exceptions:

• advertising promoted by the Ministry of Health; and
• advertising directed to health professionals.

Private health entities are entitled to advertise their services while observing the above mentioned rules on prescription medical treatment and medicine and respecting the sanitary legislation in force (Law no. 5/87, of 23 February 1987, which approved the Sanitary Regulation for the Republic of Angola ).

Tobacco

The Angolan Government passed the Resolution no. 48/05, of 3 October 2005 approving the signature of the WHO Framework Convention on Tobacco Control, 2003.  This was ratified on 20 September 2007.  Tobacco advertisement is forbidden as per the General Law on Advertising (Law no. 9/17, of 13 March 2017), as well as any tobacco related merchandise, given that the same shall fall within the concept of advertisement to tobacco under the relevant legislation.

Capital deductions

Capital gains tax

10% over dividends distributed to the shareholders. The taxable amount shall be assed based on the company’s financial accounts on an annual basis. The law foresees an exemption on dividends paid by the company to an Angolan shareholder (tax resident) which is not exempt from tax, provided that the following requirements are met:

• Holds at least 25% of the share capital of the subsidiary; and
• Holds the participation for more than one year.

Capital gains due on sale of shares

10% applies to both resident and non-resident companies.

Stamp duty

Stamp Duty is levied on the acts, deeds, documents, papers, receipts and other transactions included in the Stamp Duty table. Amongst others, Stamp Duty is due at the rate of:

• 1% over receivables
• Credit operations between non-financial entities are also subject to stamp duty at rates varying from 0.1% and 0.5% (depending on the loan maturity)
• Interest paid over loans made by financial companies is subject to stamp duty at the rate of 0.2%

Mining royalty

This tax is levied on the value of the ores and this value is given by the average value of the sales or, if this is not possible to assess, on the average of international prices.

Special tax regimes apply to the petroleum and mining sectors, and in order to stimulate investment in certain economic areas, exemptions can be granted.

Personal income tax

0% - 17% dependent on income bracket. Applies to all individuals receiving employment income for duties performed in Angola.

Foreign tax relief

Foreign tax credits are available to relieve foreign tax paid in certain circumstances (relevant investment projects in Angola).

Consumption tax

10% standard rate; variable tax rates vary significantly depending the goods / or services acquired.

Anti-avoidance rules - transfer pricing rules

Transfer pricing legislation requires an arm's length consideration to be charged for transactions between related parts.

Double taxation treaties

Angola has not concluded tax treaties with any other jurisdiction.

Corporation tax

Corporate tax (industrial tax)

30% on the taxable amount of profits, i.e. upon prior deduction of costs or expenses duly accepted for tax purposes. The taxable amount shall be assessed on an annual basis upon the approval and submission of the accounts and financial statements of the company.

Impact of regulatory regime on business

Although the competition rules, practice and procedure are in their very initial stages, the legislation already in force foresees a direct involvement of the Pricing and Competition Bureau.