Transcript UK Angola Investment Forum

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UK - Angola
Investment Forum
Contents
1.
Background information
2. Pre investment phase
3. Restricted sectors
4. Investing
5. Critical success factors
6. Conclusion
UK Angola Investment Forum
PwC
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Background information
Some relevant data
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PwC
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Background information
Some relevant data
Angola
Area
1,246,700 Km2
War
1961 - 2002
Still poor infrastructure and education
Annual expenses on infraestructure:
USD 4.300 Millions
Economy still based on oil sector (63%
Angolan Budget revenues)
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Background information
Some relevant data
2007
2008
2009
2010
2011
GDP (USD million)
Population (thousand)
GDP/capita (USD)
60.500
17.600
3.443
84.000
18.000
4.671
75.600
18.500
4.086
82.500
19.100
4.319
99.000
19.700
5.025
Inflation (%)
USD = AKZ
11,8%
75,0
13,2%
75,0
14,0%
88,0
15,3%
93,0
11,4%
93,0
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Pre investment phase
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Pre investment phase
Knowing the marketplace
Scarce information about the market
Meet local key-players
• Central bank (BNA)
• Investment agency (ANIP)
• Relevant Ministry/ies
• Commercial banks
• Potential clients and partners
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Pre investment phase
Acknowledging high cost environment
•4 bedroom house
lease
USD 10 to 15,000
•Office space lease/m2
from
USD 70 /month
• Flights to Europe (Econ)
USD 1,300
• Expatriates
…
…… but
• 1 liter of petrol
USD 0.60
• PwC fees
 due to strong Pound
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Pre investment phase
Partnering with Angolans?
•
For regulatory reasons?
•
For commercial reasons?
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Restricted sectors
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Restricted sectors
Fully restricted
War material
Central bank
Property rights over ports and airports
Property over primary telecommunications infrastructure
Postal services
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Restricted sectors
(cont)
Concessions may be granted
Basic sanitation
Production, transport and distribution of electricity
Treatment and distribution of water
Exploration of ports and airport services
Railways
Regular domestic air transportation
Urban collective transportation
Complementary telecommunication and postal services
Telecommunication infrastructures
Oil & gas and diamonds (in association with private entities)
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Investing
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Investing
•Profit margins
•Commercial regulations
•ForEx regime
•Accounting & statutory audit
•Taxes
•Immigration and ‘Angolanisation’
•Investment regulations
siess Vehicle
•The process
Investing
Profit Margins
Producers & wholesalers
25% * (Product cost + 20% overheads)
Retailers
25% * (Acquisition to producer + transport + 14% overheads)
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Investing
Commercial regulations
Commercial Code & Company Law (Portuguese)
Typical business vehicles
-
SA
(joint stock company)
USD 20,000
-
Lda
(private company)
USD 1,000
-
Branch
Rep Office
-
If no commercial activity in loco)
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Investing
ForEx regime
Angolan ForEx residents cannot remit funds overseas
Exceptions, cleared by BNA
- To pay for importations
- Approved contracts (loans included)
- No prior approval for
• Up to USD 300,000/yr/beneficiary
• Local disclosed salary for expatriates (approved investments)
Profits/dividends/proceeds of sale and gains
Only for approved investments
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Investing
Accounting & statutory audit
Angolan Chart of Accounts (PGC) must be complied with
- Accounts numbering and coding predefined
- In Kwanza (AKZ)
- In Portuguese
- Predefined financial statements
Accounting packages allow accounts conversion
Statutory audit required by law…
… but the tax authorities have not been enforcing
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Investing
Taxes
Profits
35%
Stamp duty
1%
Dividends
10%
Interest
15%
Royalties
10%
Withholding tax
5.25% or 3.5%
PAY up to
17%
Soc Security
3% e 8%
Exemptions for private investors
• Profits
• Dividends
• Import duties and Excise
• Real estate transfer tax
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Investing
Immigration and ‘Angolanisation’
Expatriates
Work visa
• Employment contract
• Visa applied for and obtained overseas
• Special, facilitated regime for oil & gas
service companies
• Usually takes 1 to 3 months
‘Angolanisation’
• Quota of maximum of 30% expatriates
• Training programs to be strictly followed
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Investing
Investment regulations
Objectives of the investment law
• Grow the economy in all provinces
• Increase national productive capacity and efficiency
• Promote partnerships with Angolans
• Increase employment and capacity of Angolans
• Increase exports and reduce imports
• Rehabilitate, expand and modernise infrastructures
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Investing
Investment regulations
Sectors entitled to incentives
• Agriculture and “Animal husbundry”
• Transforming industry
• Fishing industry
• Building construction
• Health and education
• Infrastructures
• Turism
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Investing
The process
Steps to incorporate a company in Angola
Step
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Action
Entity
Apply for name approval
Ministry of justice
Complete investment application
Investor
File investment project with ANIP
ANIP
Get investment certificate (negociations included) ANIP
Apply for BNA's permit to import funds
BNA
Open bank account
Bank
Transfer share capital to Angola
Investor
Notarial deed to incorporate company
Public notary
Publication of articles in gazette
Official gazette
Tax registration
Tax authorities
Commercial registration
Commercial registrar
Statistical registration
INE
Social Security registration
INSS
Operating licence
Varies with sector
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Critical Success Factors
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Critical Success Factors
Cultural aspects
Preference to Angolan executives
If not, should be senior, flexible and able to understand differences and
its causes; must inspire confidence
•
International experience = great value
Time and patience
Not less than 4 to 6 months to start a business
… shortcuts can, and will, be very expensive
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Critical Success Factors
Strict compliance
Investment project must be realistic
Programs to train Angolans must be carried out
Expatriates do require work visas (some flexibility)
Strict adherence to Angolan GAAP (issue in Oil & Gas)
Taxes should be paid on time (in addition to endangering incentives
investment license, fines and interest are very severe)
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Investing
Conclusions
Investing in Angola takes time and money
Short term investment is a myth
Local (appropriate) partners may be very valuable or even key
Investment incentives may be very attractive
Complying with obligations allows
•
Attractive return on investment
•
Risks tend to reduce
Get appropriate professional advice
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Angola is moving forward…
… Do not loose the opportunity …
Thank you
[email protected]
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