If there is one thing international investors can agree upon regarding how to calculate the possibilities for success is this: having the ability to find investment opportunities neglected by majorities is way more important than elements such as capital and taxation benefits. 

The chances for a particular investment to pay dividends are closely related to its inherent ability to provide benefits regardless of the nature of the business, a fact that becomes more relevant if such an opportunity is bluntly overlooked by everybody else.

The aforementioned principles can (and should) be applied to the case of Angola, an African thriving nation with a tremendous potential that is being left out of most traditional consulting portfolios. According to the World Investment Report for 2020, this nation’s Foreign Direct Investments improved for three consecutive years, only finding a slight decrease during the COVID-19 pandemic catastrophe.

When trying to understand the reasons behind this fresh interest in Angola, the question that arises is why investors didn’t come earlier. A country that has the third-largest Sub-Saharan market on top of being an absolutely rich nation in a wide variety of natural resources ranging from hydrocarbons, mineral, and agricultural goods will always be appealing for those willing to create and expand their wealth. 

Until 2018, and according to the World Bank, up to 93% of the country’s exploitable land lacks proper investment mechanisms. Luckily, the national government quickly detected the problem: its former legislative structure. 

That’s why in 2018 a brand new private investment law was deployed, looking for fresh ways to attract Foreign Direct Investments by reducing the minimum capital requirement, lowering requirements for the repatriation of capital, and eliminating much of the unattractive bureaucracy of the former legislation (in which, for example, local investors had to have a 35% stake in all new corporations).

Furthermore, both competition law and privatization laws were approved in late 2019, looking to promote even more strongly the way in which foreign capital entered the country. Under the creation of the National Agency for Investment Promotion and Export, the objective of succeeding in the stimulation of internal productivity while diversifying the economy and enlarging the private sector’s share within the country seems to be right on track. 

If we consider that there is an enormous potential found in basically every non-oil business sector, and added to the fact of having one of the largest and youngest labor forces in Africa, the elements required to succeed seem to be aligned. Let’s dive in on the specifics of investing in Angola, how to manage your funds and which considerations are applicable for any Foreign Direct Investment.

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Investing in Angola: What You Should Take into Account

The Private Investment Act is the legal instrument that regulates any Foreign Direct Investment entering Angola, and demonstrates the intention of the local government of facilitating the entrance of all kinds of external capital to the country. Even when it doesn’t explicitly cover the economic rights in specific sectors of the economy, like oil and diamonds, it does present foreigners with a wide array of financial options in all the other business markets.

The coordination of all investment funds’ procedures is led by the National Private Investment Agency, an organization that has widely expressed its desire to promote, encourage and facilitate investments in Angola during the past decade. Its representatives will be in charge of approving any potential investment as well as mediating any negotiation between them and the Angolan government. 

As said before, the minimum amount of capital needed to invest in Angola was lowered in 2018, and now, when a non-resident or international financial entity is willing to import at least $500,000, it will be eligible to create a new corporation in the country. In other cases, and depending on the desired business sector, the minimum amount of capital must reach $1 million, after which the National Private Investment Agency will be responsible for guiding the group of investors into the best methodologies to introduce such capital in Angola. 

There are two types of private investments under Angolan law: domestic or foreign.

Domestic Private Investments

• The individuals are responsible for the allocation of their own funds.
• Includes the creation of brand new corporations, the expansion of already existing ones, or the acquisition of all or part of shares of companies.
• The capital allocation must be done in Angola banks, even when part of the capital is the result of international loans.

Foreign Private Investments

• The individuals are responsible for the transfer of funds from other countries into Angola.
• Includes the constitution of new companies or the partial or complete acquisition of already existing ones.
• Capital must be allocated within Angolan banks regardless of its origin
• Individuals are responsible for the allocation of machinery and accessories required as well as for the incorporation of new technology and its correspondent pedagogic procedures for internal workers.

It’s important to highlight that any investment that reaches the $10 million must be approved by the Board of Directors of the National Private Investment agency while taking into consideration the posture of the current Minister of Finances. This specification is in place as elements such as tax incentives and other administrative benefits must be discussed by the country’s highest authorities on the matter. 

For those investments exceeding the $50 cipher, the President of the country could compose an ad-hoc group (often called a Facilities and Incentives Negotiation Committee) for the proper negotiation of all administrative details attached to such a large amount of capital. 

Once the investment plan is approved by authorities, the issuing of a registration certificate is in order. This registration includes:

• Current identification document of the investor
• Financial methodology utilized 
• The exact amount of capital being used
• Deadline for the constitution of the project
• Specific location 

Mixed Investment Funds

Under the current Angolan Law, the constitution of a Public-Private partnership is in order. Aiming a full decentralization of how some economic sectors are being managed, the local government believes this instrumental instrument can appeal to foreign investors with a reduced amount of capital that still want to compete within the Angolan market. 

The aforementioned legislation states that public partners that could be included in these instruments are the State of Angola, Local governmental institutions, the Autonomous Funds and Services (either national or local) and any public entity regulated and registered within Angola. 

According to recent investigations, the business sectors that have become more appealing under this type of financial figure are highway concessions, the energy sector, infrastructure projects, and agricultural investments.

Real-Estate Funds

After the Presidential Decree of July 27 was enacted, many of the legislative contradictions within the Angolan Real-Estate market and its investment conditions were settled and clarified. This update allowed properties purchased by the State to be sold to private entities for their development while guaranteeing property rights formerly in jeopardy. 

Moreover, a brand new Real-Estate Investment Funds legislative instrument is close to being deployed in Angola, and it aims at being even friendlier for all investors looking to create real-estate investment funds. All funds fueled by international investors are often managed by fund companies within Angola, although foreign consulting is in order.

At Mundo, we know first-handedly how Angola represents a tremendous investment opportunity for foreign investors throughout the world. Why? Thanks to our partners, one of the greatest financial consulting agencies currently working in Africa and offering capital holders fantastic opportunities. 

Our team of professionals has the single largest investment portfolio in the region, focusing on presenting clients across the globe with impressive business options regardless of the business sector at hand. Among such options, we can highlight:

• Consulting partnerships
• Transaction services & funds
• Infrastructure projects
• Commodity trading
• Energy-related business
• Lobbying & Conferences

MUNDO, together with our partners,  is creating an enhanced investment environment for clients to plan their strategic operations in countries often discarded due to ignorance or prejudice. 

Luckily for you, all the information on this thriving nation is at hand, and you are ready to begin a new chapter of financial success if you trust our services.

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