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The 2020 finance bill, along with the regulating hydrocarbon activities, were also unanimousely adopted

04/12/2019

Following its adoption on 14 November by the National Popular Assembly (APN), the 2020 finance bill, along with the much anticipated and discussed bill regulating hydrocarbon activities, were also unanimousely adopted by the upper house of the Algerian Parliament (the Council of the Nation).

The policy to improve the business climate proposed by the government in its finance bill (see our News Flash dated 20 September) is therefore confirmed.

Thus, the legislator confirms the removal of the limitation on foreign holdings in the share capital of Algerian companies (known as the 51/49 rule) for non-strategic sectors. However, the definition of sectors considered as having a “special” or “strategic” interest was not included. An ad-hoc commission is due to examine the question. The Ministry of Finance is also expected to give a presentation on the production of goods and services likely to be considered strategic.

The use, “if needed and selectively”, of external financing from international financial institutions to finance structural and beneficial economic projects, was also approved. The Ministry of Finance is also expected to give a presentation of projects which could use such financing.

In the same way as the abolition of the 51/49 rule for non-strategic sectors, the MPs of the lower house of Parliament and the Council of Nations adopted the draft bill on hydrocarbons, designed to bring greater flexibility and streamlining to the legal and tax rules applicable to the sector, in the hope of boosting the level of foreign investments and increasing national production in the medium term.

The next stage in the progress of these bills will be their examination and discussion by the upper house of Parliament (the Council of the Nation) scheduled for 24, 25 and 26 November. 

Once again, although the adoption of such reforms cannot be taken for granted ahead of their scheduled enactment at the end of December, the Algerian authorities are certainly demonstrating their desire to make the Algerian economy more attractive.


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Samir Sayah
Partner Africa Practice – Corporate, M&A
Algiers