Includes steps involved in establishing a local office.

  A presence in Algeria can take three basic forms:

  1. A liaison office with no local partner requirement and no possibility to perform commercial operations (only representation is allowed).
  2. A branch office, or a temporary establishment, to execute a specific contract, with no obligation to have a local partner.
  3. A local company with 51% of share-capital held by a local company or shareholders.


Exporters may wish to read the Guide to Investing in Algeria by visiting the website of the National Agency of Investment Development (ANDI) to understand the details.
http://www.andi.dz/index.php/en/

U.S. companies should hire well-established local legal representation and other consulting services to assist in establishing a presence in Algeria. Conflicting information and bureaucratic procedures, particularly related to registration and visas, can be considerable.

Well-connected partners are invaluable in obtaining advanced notice regarding upcoming opportunities. It is essential that U.S. firms also consider security arrangements as an integral element of opening an office in Algeria. The U.S. Embassy can provide U.S. companies with briefings and contacts for security firms operating in Algeria.
Since January 2015, the Government of Algeria (GoA) has tightened requirements for establishing or renewing liaison offices. The GoA has prohibited liaison offices that are not compliant with the new regulations from conducting any commercial activities in Algeria, including collecting new commercial orders from clients.

Formerly the liaison office was the only viable form of presence for foreign firms. It is now far less attractive because of extensive legal limitations placed on the functions and income of such offices.  
A branch office may be opened to allow the parent company to conduct commercial activity in Algeria. A branch office is considered a resident Algerian entity without full legal authority. Drawbacks to this form include foreign exchange controls and the inability of a branch office to sign contracts on behalf of the parent company. 

The temporary establishment is a tax entity allowing for a full, but temporary presence associated with a particular contract to be performed in Algeria. This form is more agile and allows for substantial repatriation of revenues. However, due to the temporary nature of this business form, certain tax benefits are not available.
A business entity can also be incorporated as a joint stock company (JSC), a limited liability company (LLC), a limited partnership (LP), a limited partnership with shares (LPS), or an undeclared partnership. Groups and consortia are also used by foreign companies when partnering with other foreign companies or with local firms.

Foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity.  However, the 51/49 rule requires majority Algerian ownership (at least 51 percent) in all projects involving foreign investments.  This requirement was first adopted in 2006 for the hydrocarbons sector and was expanded across all sectors in the 2009 investments law.  The rule was removed from the 2016 Investment Law but remains in force by virtue of its inclusion in the 2016 annual finance law, which requires foreign investment activities be subject to the incorporation of an Algerian company in which at least 51% of capital stock is held by resident national shareholder(s). 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.