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Doing Business in Angola: Overview
Practical Law Country Q&A 9-517-9446 (Approx. 28 pages)
Doing Business in Angola: Overview
by João Robles, Eversheds Sutherland FCB
| Law stated as at 01 Oct 2021 • Angola |
A Q&A guide to doing business in Angola.
This Q&A gives an overview of key recent developments affecting doing business in Angola as well as an introduction to the legal system; foreign investment, including restrictions, currency regulations and incentives; and business vehicles and their relevant restrictions and liabilities. The article also summarises the laws regulating employment relationships, including redundancies and mass layoffs, and provides short overviews on competition law; data protection; and product liability and safety. In addition, there are comprehensive summaries on taxation and tax residency; and intellectual property rights over patents, trade marks, registered and unregistered designs.
Overview
Economy
As the Angolan economy is highly dependent on oil, it was badly affected by the 2014 oil crisis, and was still recovering when the current COVID-19 pandemic started.
However, the renewed efforts from the Angolan government in making the country more attractive to foreign investors and less bureaucratic have proven to be successful. 2021 was a turning point in this regard, with the Angolan economy recovering from a six-year recession.
Dominant Industries
Angola has one of the largest national reserves of natural resources in Africa. The dominant industries in Angola are oil and gas, the diamond industry and agriculture.
Population and Language
The current population in Angola is approximately 31 million. The official language is Portuguese, but local dialects Umbundu, Kimbundu, Kikongo and Bantu are widely spoken by most of the population.
Business Culture
Business culture in Angola can vary across different industries, but, in general, is typically formal and hierarchical. Portuguese is the official language, but English is understood at senior management level. The business hours are based on the western schedule.
Public Holidays
The public holidays are:
- New Year: 1 January.
- Day of the Armed Struggle: 4 February.
- International Women's Day: 8 March.
- Day of Peace and Reconciliation: 4 April.
- Good Friday: varies.
- Easter: varies.
- Labour Day: 1 May.
- National Heroes Day: 17 September.
- Independence Day: 11 November.
- Christmas: 25 December.
Key Business and Economic Events
Since its election in 2017, the new government has been striving to make the Angolan economy more attractive to foreign investment and has made efforts to promote macroeconomic stability through:
- Implementation of a more flexible exchange rate regime.
- Fiscal consolidation.
- A more diversified economy.
The Angolan Government has implemented its "National Development Plan for 2018-2022", which aims at promoting human development, public sector reform and diversification of the economy. The authorities also reaffirmed their commitment to improve governance and fight against bribery and corruption.
In addition, a large-scale privatisation programme (PROPRIV) has been implemented, aiming at privatising public companies and assets and creating a capital market system with more business opportunities.
Political Events
In 2020, Angola was supposed to hold its first local elections, but these elections were postponed due to the current COVID-19 crisis. Angola will hold governmental elections in 2022.
New Legislation
The following legal developments have been important to the Angolan economy and its potential attractiveness for foreign investment:
- The Competition Law (Law No 5/18, 10 May 2018).
- The Private Investment Law (Law No 10/18, 26 June 2018) (PIL), which was recently amended by Law No 10/21 of 22 April 2021.
- The Privatisations Law (Law No 10/19, 14 May 2019).
- The Public-Private Partnership Law (Law No 11/19, 14 May 2019).
- The Anti-Money Laundering Law (Law No 5/2020, 27 January 2020).
The Angolan Central Bank has also approved several notices aimed at progressively eliminating the major foreign exchange restrictions, with the purpose of attracting more foreign investment.
Foreign Investment
Government Authorisations
In 2018, the Angolan government enacted a new Private Investment Law (PIL) which was recently amended by Law 10/21 of 22 April 2021.
The PIL applies to both domestic and foreign investments. When making a private investment, such as setting up of an Angolan company or branch, an investor must submit the investment to the Private Investment and Export Promotion Agency (AIPEX) in order to benefit from certain rights under the PIL (such as the right to repatriate dividends and tax benefits).
The investor must choose between the following three regimes:
- The prior declaration regime. This is the general regime under which an investment proposal must be submitted for registration with AIPEX to apply for the benefits under the PIL.
- The special regime. This regime is only available to investments in priority sectors listed in the PIL, which include:
- education;
- agriculture
- health;
- reforestation;
- textiles;
- hotel business and tourism;
- construction;
- IT;
- airport and rail infrastructure;
- production and distribution of power electricity;
- basic sanitation; and
- collecting and processing solid waste.
Investment projects under the special regime receive greater benefits (including tax benefits) compared to the prior declaration regime. - The contractual regime. A private investor can also negotiate specific tax incentives and facilities and the conditions for the implementation of its investment. This regime is available for all sectors of activity.
Restrictions on Foreign Shareholders
There is no longer an obligation to establish local partnerships for specific sectors of activity (as was previously the case). Therefore, foreign investors can normally invest in any market sector without the need for local partnerships, except when this is required by specific regulations.
Restrictions on Acquisition of Shares
Under the PIL, the acquisition of shares of an Angolan entity by a foreign investor is deemed to be a private investment operation. Therefore, if the investor wishes to repatriate funds abroad, the investment must be previously submitted to the AIPEX.
Specific Industries
The oil sector has specific foreign shareholding restrictions due to its significance in the Angolan economy. These are set out in the new Local Content Law (Presidential Decree No 271/20, 20 October 2020).
Local shareholding requirements have also been implemented in a few key sectors of the economy, such as the maritime sector, where, for example, Angolan nationals must hold the majority of the share capital of shipping agency companies.
5. Are there any restrictions or prohibitions on doing business with certain countries, jurisdictions, entities, organisations or individuals?
6. Are there any exchange control or currency regulations or any registration requirements under anti-money laundering laws?
Angolan exchange control and currency regulations are set out in the Angolan Exchange Law (Law 5/97, 27 June 1997).
The Angolan Central Bank (BNA) supervises all exchange operations. Several regulations and instructions set out rules applicable to specific transactions such as sales of goods, current accounts and capital transactions.
When opening a bank account or carrying out transactions greater than the equivalent of USD15,000 in national or other currency, financial institutions must request the entity that intends to carry out the transaction to provide, among other things, information on its beneficial owners. The Anti-Money Laundering Law and Notice No 14/20 of June 22 of the BNA define beneficial owners as holders of shares and voting rights with a value equal to or greater than 20% of its share capital.
Grants
Investments made under the Private Investment Law (PIL) are to benefit from tax incentives to be set out in the new Tax Benefits Code, which is yet to be enacted. Therefore, tax incentives may be available, depending on the specific circumstances and characteristics of the investment, as well as the new tax incentives that will be approved.
Business Vehicles
Main Business Vehicles
The most common form of business vehicle used by foreign companies are:
- Sociedades por quotas (SpQs). SpQs are similar to private limited companies. SpQs are companies in which the share capital is divided into quotas and the shareholders are jointly and severally liable up to the amount of their capital investment. SpQs must have at least two shareholders.
- Sociedades anónimas de responsabilidade limitada (SARLs). These are similar to joint stock companies. SARLs are companies in which the capital is held by its members and divided into shares, and each member owns a number of shares proportionate to their investment. The liability of each partner is limited to the amount of their capital share. SARLs must have at least five shareholders.
Sole shareholder companies (whether SpQs and SARLs) are also admissible. However, one of the key differences between sole shareholder companies and normal SpQs and SAs is that sole shareholder companies are prevented from acquiring shares in other companies' share capital.
As a civil law jurisdiction, Angola does not recognise the concept of trusts.
Foreign Companies
The most commonly used vehicle by foreign investors wishing to establish a company in Angola are SpQs. The is mostly because the SpQ allows for a simpler management structure without the need to appoint an audit body and a minimum of one director, thereby diminishing operational costs
9. What are the main formation, registration and reporting requirements for the most common corporate business vehicle used by foreign companies in your jurisdiction?
Registration and Formation
Companies must be incorporated in advance of notification under the prior declaration regime under the Private Investment Law (PIL). Therefore, an investment project requires incorporation of a company if the foreign investor wishes to benefit from the benefits provided for under the PIL (such as the right to repatriate dividends and tax benefits).
All relevant formalities for incorporation of an Angolan company can be executed almost simultaneously using the one-stop shop, Guiché Único. The steps are as follows:
- Approval of the new company's name by the companies' registry.
- Execution of the public deed of incorporation before a public notary (which requires the previous deposit in a national bank account of the company's initial share capital). The Angolan Government recently approved the Simplified Companies Incorporation Procedure (Law 11/15, 17 June 2015), under which the execution of the public deed is no longer mandatory. However, this new law is yet to be implemented.
- Publication of the new company's bye-laws in the Official National Gazette.
- Registration of the new company before the Ministry of Public Administration, Employment, and Social Security.
- Registration of the new company before the tax authorities (and payment of the related taxes).
In practical terms, the incorporation of an Angolan entity is normally concluded within one to two weeks of submission of all required corporate documentation.
After incorporation, in certain sectors, the proper commercial operations certificate (Alvará Comercial) must be obtained from the Ministry of Commerce. In addition, a specific certificate may be required from the Ministry responsible for the sector in which the company carries out activities.
Reporting Requirements
For both SpQs and SARLs, there must be an annual general meeting in which the shareholders pass resolutions on the:
- Management report.
- Financial year's accounts.
- Evaluation of the company's management and auditing bodies (if any).
The general meeting must be in the first three months of each calendar year.
Share Capital
Sociedades por quotas (SpQs) do not have a minimum required share capital amount.
The minimum share capital of SARLs is equivalent to US$20,000, and each share must be equivalent to US$5. There is no maximum share capital.
Non-Cash Consideration
In both SpQs and SARLs, labour is not allowed as non-cash consideration.
Other contributions in kind are acceptable but require a report made by an independent accountant.
Rights Attaching to Shares
Restrictions on Rights Attaching to Shares. As a general rule, shareholders cannot vote on matters if there is a conflict of interest.
Shareholders representing 5% or more of the company's share capital can individually file legal actions against the company's directors to claim for any damages caused to the company.
For SARLs, the following restrictions apply:
- Shareholders representing 5% or more of the company's share capital have a right to general information about the company's activity.
- Shareholders representing 10% or more of the company's share capital can request information on any specific matter relating to the company (except in certain circumstances).
- Shareholders representing 5% or more of the company's share capital can call a general meeting or propose a specific resolution.
Automatic Rights Attaching to Shares. Shares of both SARLs and SpQs give, among other things, rights to (Companies Law approved by Law 1/2004, 13 February 2004):
- Information (with the restrictions previously mentioned in relation to SARLs).
- Attend general meetings and to vote.
- A share of the profits.
- Be elected as a member of the company's corporate bodies.
- Dispute the validity of shareholders' decisions.
- Participate in share capital increases.
The company's bye-laws may also establish other specific rights for some or all shareholders.
10. What is the standard management structure and key liability issues for the most common form of corporate business vehicle used by foreign companies in your jurisdiction?
Management Structure
SpQs. SpQs are managed by at least one director (gerentes). There is no maximum number of directors.
SARLs. SARLs are generally managed by a board of directors (conselho de administração) with a minimum of three directors. There must be an odd number of directors but there is no maximum number of directors. SARLs can have a sole director (administrador único) if the company's share capital does not exceed US$50,000 and the company's bye-laws allow for this.
Management Restrictions
The Companies Law does not set out any nationality restrictions, but foreign individuals face limitations on being appointed as directors in practice.
Directors' and Officers' Liability
Company directors can be held liable in the following circumstances:
- Directors can be liable to the company or shareholders for failing to act with the diligence of a judicious manager and in the shareholders' and employees' interests.
- Directors can be liable to the company or shareholders for any damage caused by breaching the law and the company's bye-laws, unless the directors prove that they are without fault.
- Directors can be criminally liable for offences such as theft, fraud or extortion, among other things, and are civilly liable to the company, the shareholders and third parties for damages caused by their criminal conduct.
- Directors are liable for all tax debts that cannot be collected from the company that became due while they were in charge, if the company's assets are not enough for the payment of those debts.
Liability is excluded if the directors did not participate or, having participated, voted against any board resolution that caused damage to the company, provided that they have subsequently formalised their opposition.
Directors can only be held liable if the tax authorities are able to show the director's intent to commit the breach.
Parent Company Liability
Controlling shareholders and parent companies are liable for the debts of the controlled company. The directors of groups of parent companies must act towards the controlled company with the same diligence as directors of directly managed companies.
In addition, a de facto director can have statutory liability in certain circumstances, including in case of the company's insolvency or tax debts.
Environment
11. What are the main environmental regulations and considerations that a business must take into account when setting up and doing business in your jurisdiction?
Projects that could have an impact on the environment are subject to an environmental impact assessment (EIA) depending on their nature, size or location, on a case-by-case basis. The recently approved Presidential Decree No 117/20 of 22 April 2021 establishes the:
- Rules and procedures for EIAs for public and private projects.
- Environmental licensing procedure for activities that are likely to cause significant environmental and social impacts.
- Applicable fees.
- Fines for non-compliance.
Employment
Foreign Employees
The General Employment Law (Law No 7/15, 15 June 2015) is applicable to all employment relationships in Angola and to Angolan citizens working in Angola or abroad.
The employment relationships of foreign non-resident employees are regulated by Presidential Decree No 43/2017 of 6 March, as amended by Presidential Decree No 79/17 of 24 April 2017.
Main Terms
A written employment agreement is only mandatory for employment agreements entered into with:
- Foreign employees.
- Trainees.
- Employees hired to work on ships.
- Stay-at-home employees.
The employment relationship is governed by the agreement between the parties, in as far as this does not undermine any statutory obligations and does not offer less protection to the employee than the General Employment Law.
Employment agreements must contain the following information:
- Full name and addresses of the parties.
- Professional classification and professional occupational category of the employee.
- Place of work.
- Normal weekly working hours.
- Amount, means and periods of wage payments and details of additional payments.
- Hiring date.
- Place and date of the contract.
- Signatures.
Implied Terms
All employment relationships implicitly include the employer's obligation to:
- Provide work.
- Pay wages for the work.
- Provide a safe working environment for employees.
For the employee, every employment agreement implies that the employee will carry out the work and be loyal to the employer.
In addition, employment agreements are always subject to an implied probation period, unless the parties choose to reduce or exclude it in writing.
Foreign employees require a working visa/residence permit to work in Angola. The Ministry of Public Administration, Employment and Social Security must give its consent to the foreign citizen work visa or permit.
Foreign employees must:
- Be at least 18 years old.
- Not have a criminal record.
- Have never been an Angolan national in the past (that is, former Angolan nationals can no longer work in Angola).
- Have never received a scholarship granted by Angolan entities or foreign companies operating in Angola.
- Have an employment agreement or promise of employment.
- Have a certificate of all the necessary qualifications.
Work Permits
Although a working visa is valid for the entire duration of the employment agreement under the foreign and non-resident employment regime, in practice, the authorities advise that the initial duration of the contracts entered into with foreign employees cannot exceed 36 months.
Residency Permits
Residence permits can be:
- Temporary (issued for one or three years, depending on whether the employee is living for at least five consecutive years in Angola or less).
- Permanent, in which case the foreign citizen must have lived for ten consecutive years in Angola.
Foreign employees working in Angola must hold a working visa and are typically only eligible for a residence permit after living in Angola for five or ten consecutive years.
15. Are employees entitled to management representation and/or to be consulted in relation to corporate transactions (such as changes in control, redundancies and disposals)?
Termination
The General Employment Law protects the right of employees to employment stability, prohibiting and severely sanctioning the termination of employment contracts on grounds other than those set out in the law or in breach of its provisions. Terminations at will are not allowed under the Angolan Employment Law.
The main legitimate grounds for termination of employment contracts by the employer are:
- Termination during the trial period. During the trial period either party can terminate the employment contract without a specific compensation or justification. Prior notice must be given if the contract has lasted more than three months.For fixed-term employment contracts (with a term greater than three months), the employer can terminate the contract by serving the employee with 15 days' notice before the agreement expires.
- Disciplinary dismissals. Disciplinary dismissals must be based on a serious disciplinary offence committed by an employee that makes it impossible to maintain the legal employment relationship in practice. The General Employment Law provides examples of situations that are considered a just cause for disciplinary dismissal, such as:
- absences for more than three days per month or 12 days per year;
- serious non-compliance with the employer's orders and instructions;
- serious lack of respect for superior officers and/or colleagues.
- theft.
- Redundancy. This may be due to the elimination of the job position (individual redundancies) or collective redundancy (of 20 or more individuals). See Question 17.
Fair Dismissal
The General Employment Law only allows the employer to dismiss employees in cases expressly listed as a just cause. Just causes can be either:
- Related to the employee, that is, a disciplinary dismissal due to fault in the conduct of the employee that is serious enough to preclude the possibility of maintaining the employment relationship.
- Business reasons, that is, redundancy due to the elimination of the job position (either individual redundancy or collective redundancy).
Statutory Minimum Notice. For dismissal with just cause, there is no minimum notice, but the disciplinary procedure must be complied with.
Severance Payment. There is no compensation to be paid in case of dismissal with just cause.
Unfair Dismissal
Grounds for Unfair Dismissal. All dismissals without just cause are considered to be unlawful dismissals.
Remedies. In case of an unlawful dismissal, employees can claim:
- Damages caused by the dismissal.
- Reinstatement in the company.
- Salaries accrued between the termination date and the date on which the ruling became final or the date on which the employee was hired by another company, capped by:
- six months of salaries for large-sized companies;
- four months of salaries for medium-sized companies; and
- two months of salaries for small-sized and micro companies.
Alternatively, if the reinstatement is not possible or the employee refuses to be reinstated, the employee can claim compensation depending on the employee's salary, the size of the company and the employee's length of service, as follows:
- Large-sized companies: 50% of the employee's base monthly salary multiplied by the number of years of service.
- Medium-sized companies: 30% of the employee's base monthly salary multiplied by the number of years of service.
- Small-sized companies: 20% of the employee's base monthly salary multiplied by the number of years of service.
- Micro-sized companies: 10% of the employee's base monthly salary multiplied by the number of years of service.
Such compensation cannot be less than:
- Three months' salary for large and medium-sized companies.
- Two months' salaries for small-sized companies.
- One month's salary for micro-sized companies.
Redundancies and Mass Termination
Termination of employment contracts can be based on objective reasons including both collective and individual redundancy.
Redundancy due to the elimination of the job position is based on the need to extinguish or substantially transform jobs due to demonstrated economic, technological or structural reasons, involving reorganisation or internal conversion, reduction or termination of activities.
Collective redundancy occurs whenever termination of the employment contract is determined by duly demonstrated economic, technological or structural reasons involving reorganisation or internal conversion, reduction or termination of activities affecting the employment of 20 or more employees. If the number is smaller, the individual-dismissal on objective grounds mechanism is used (see below, Procedural Requirements).
Collective and individual redundancy entitles the employee to compensation depending on the size of the company, as follows:
- For large-sized companies, the compensation is:
- the basic monthly salary at the termination date, multiplied by the number of years of service (up to five); and
- 50% of the basic monthly salary multiplied by the number of years of service in excess of five.
- For medium-sized companies, the compensation is:
- the basic monthly salary at the termination date, multiplied by the number of years of service (up to three);
- 40% of the basic monthly salary multiplied by the number of years of service in excess of three.
- For small-sized companies, the compensation is:
- two basic monthly salaries at the termination date; and
- 30% of the basic monthly salary multiplied by the number of years of service in excess of two.
- For micro-sized companies, the compensation is:
- two basic monthly salaries at the termination date; and
- 20% of the base monthly salary multiplied by the number of years of service in excess of two.
Procedural Requirements
To make an employee redundant (either through an individual or collective dismissal) a strict procedure set out under the General Employment Law must be followed.
During this procedure, the relevant authorities of the Ministry of Employment can request evidence regarding the grounds for the termination of the employment contract(s).
In an individual redundancy, 30 days' prior notice is required.
In a collective redundancy, 60 days' prior notice is required.
Tax
Tax Residence
From 1 January 2015, employees are tax resident in Angola if they either:
- Have a home in Angola with the intention to maintain and occupy that home as a habitual residence on 31 December of the relevant tax year.
- Remained in Angola for more than 183 (not necessarily consecutive) days in a given tax year.
Other Methods to Determine Residency
An employee is also considered to be tax resident in Angola if they regularly or occasionally receive income subject to employment income tax in Angola and remain in Angola for at least 60 days in the tax year. However, tax residents and non-tax residents are subject to the same taxation regime for the purposes of employment income tax (see Question 19).
19. What income tax, social security and other tax or contributions must be paid by the employee and the employer during the employment relationship?
Tax Resident Employees
Monthly employment income tax is paid at progressive rates of up to 17%, according to the relevant income band. 3% of the employee's salary is paid monthly as a social security contribution.
The employer must withhold income tax and social security contributions on the employees' behalf.
Non-Tax Resident Employees
Non-tax resident employees must pay the same employment income taxes as tax resident employees on their income arising from services rendered (directly or indirectly) to individuals or companies with residence, a head office, an effective place of management or permanent establishment in Angola.
Non-tax resident employees are not subject to social security contributions.
Employers
Employment income tax is withheld by employers (see above, Tax resident employees).
Taxes must be submitted to the Angolan Tax Authorities before the last day of the month following the payment of income. The employer must:
- Register all employment income (if paid to more than three employees) in monthly tax returns (mapas de remunerações).
- Deliver the returns to the Angolan Tax Authorities.
- Provide monthly receipts including the amount of employment income paid to employees and tax withheld.
- Maintain all documents necessary to correctly assess the amount of employment income tax due over a five-year period.
Every February, employers must submit the Model 2 IRT form declaring:
- The full name, address, tax and social security identification numbers of the employees.
- Income paid and tax withheld in the preceding year.
Employers must also:
- Pay 8% of the value of the employee's salary towards social security each month.
- Submit a monthly payroll record sheet to the competent social security authority.
- Pay the amount of self-assessed contributions before the tenth day of the following month.
Tax Resident Business
Business vehicles are tax resident if they have either a head office or an effective place of management in Angola.
Non-Tax Resident Business
Commercial or industrial activities carried out by non-tax resident business vehicles with a permanent establishment in Angola are subject to industrial tax at the same rates as tax-residents on:
- Profits attributable to the permanent establishment.
- Profits obtained from activities in Angola of a similar nature to those carried out by the permanent establishment.
Non-tax resident business vehicles with no permanent establishment in Angola that render services in Angola or that render services to entities with a head-office, effective place of management or permanent establishment in Angola, are subject to definitive withholding industrial tax in Angola.
See Question 21.
21. What are the main taxes that potentially apply to a business vehicle subject to tax in your jurisdiction?
Industrial Tax
Industrial tax is applied to worldwide income at a standard rate of 25%. This tax rate may be reduced or increased according to the specific type of activity carried out.
Tax-rate reductions, as well as other tax benefits, may also be applicable under the PIL under the yet to be enacted new Tax Benefits Code (see Question 7). Therefore, depending on the specific circumstances and characteristics of the investment, as well as the new tax incentives that will be approved, certain tax incentives may be granted, which may supersede the general rules.
From 1 January 2015, income arising from the supply of services rendered by entities with a head office, effective place of management or permanent establishment in Angola, is subject to withholding industrial tax at a rate of 6.5%. This tax must be withheld at source and delivered to the Angolan tax authorities before the last working day of the month following the income payment.
Income arising from the supply of services rendered by non-tax resident business vehicles without a permanent establishment in Angola is subject to definitive withholding industrial tax at a rate of 15%. This tax must be withheld at source and delivered to the Angolan tax authorities before the last working day of the month following the income payment.
When the withholding tax applies to tax resident business vehicles, the withheld tax can be deducted from the industrial tax due in the relevant year.
From 1 January 2015, industrial tax is provisionally paid in two instalments, at the rate of 2% over the total volume of sales obtained in the first six months of the year to which the income refers to, in July and August of that same year.
Until the end of May of the following year, business vehicles should pay the negative difference between the amount of provisional tax paid and the amount that is due in that given period, as well as submit an annual income tax return (Model 1 form).
From 1 January 2015, business vehicles that are required to have their financial statements audited by an accountant must submit the income tax return along with the report and technical opinion of the accountant on the financial statements.
Capital Income Tax
Income from capital is subject to tax at rates between 5% and 15%, according to the type and nature of the income, which includes loan interest, shareholders profits and royalties.
Capital income tax is levied on a business vehicle's Angola source income. Depending on the nature of the income, capital income tax may be either assessed by the Angolan tax authorities or subject to withholding.
Tax rate reductions, as well as other tax benefits, may also be applicable under the PIL and the new Tax Benefits Code.
Value Added Tax (VAT)
Angola implemented a VAT as of 1 October 2019. VAT replaced a previous consumption tax, which was repealed as of that date.
VAT applies to all supplies of goods or services for consideration by taxable persons within Angola and to imports of goods, at the standard rate of 14%. The VAT Code foresees a reduced rate of 5% for certain supplies, and sets out various supplies and imports that are exempt from VAT.
Persons are generally only taxable for VAT purposes if their annual turnover exceeds the mandatory VAT threshold of AOA10 million or less.
Entities whose turnover does not exceed the mandatory VAT threshold are not considered taxable persons under the VAT Code. However, they are required to file a declaration of commencement of business activity.
The Law 42/20, of 31 December 2020, which approved the State Budget for 2021, introduced a new simplified VAT regime for taxpayers whose annual turnover and/or import operations in the previous 12 months was AOA350 million or less. However, taxpayers can still elect to be included in the standard VAT regime.
If applicable, under the simplified VAT regime:
- VAT is charged at a rate of 7% on the turnover amount effectively paid by customers for non-exempt sales of goods and services subject to VAT.
- Taxpayers must submit a monthly periodic declaration and pay the VAT owed to the Angolan tax authorities by the last day of the month following the month to which the transactions relate.
- The total amount of VAT owed during a period can be reduced (including to less than zero) by a credit for input VAT that has been incurred on certain purchases related to a supply.
- If a taxable person's deductible input VAT exceeds the output VAT liability for a taxable period, the excess can generally be carried forward and deducted in a subsequent period. The excess of input VAT over output VAT may be refunded if the excess is carried forward for more than three months and the amount exceeds 3,409 Fiscal Correction Units (UCFs).
22. How are the following taxed:
- Dividends paid to foreign corporate shareholders?
- Dividends received from foreign companies?
- Interest paid to foreign corporate shareholders?
- Intellectual property (IP) royalties paid to foreign corporate shareholders?
Dividends Paid
Dividends paid to foreign corporate shareholders are subject to capital income tax, at a single withholding tax rate of 10%.
Dividends Received
Dividends received by tax resident shareholders are subject to taxation in Angola at a 10% rate.
Interest Paid
Interest paid by entities with a residence, head-office, effective place of management or permanent establishment to which the payment is attributable in Angola, is subject to capital income tax, at a 15% single withholding tax rate.
24. Must the profits of a foreign subsidiary be imputed to a parent company that is tax resident in your jurisdiction (controlled foreign company rules)?
Transactions that take place between companies with a special relationship must follow an arm's-length principle for tax purposes. The conditions of the transaction must not be different than those that normally agreed between unrelated parties or result in an accounting profit different from the profit that would be accounted for by unrelated parties. Angolan tax authorities may make any adjustment necessary in calculating the appropriate taxable basis.
Imports and exports are subject to customs duties, excise duties and other customs fees.
Under Presidential Legislative Decree 10/19 of 29 November 2019, import duties are subject to ad valorem (according to value) tariffs with rates of between 2% and 70% according to the product classification. In addition, a 2% customs fee is due on the importation.
The export of goods that are not produced in Angola is subject to customs duties at the rate of 20% plus customs fees (at rate of 0.5%) computed on the customs value (except for goods covered by the customs regime applicable to the petroleum and mining sectors).
Excise duty entered into force in Angola from 1 October 2019 onwards. All production, imports and sales by public auction are subject to excise duty, with different rates of 2%, 5%, 19% and 25%, depending on the product.
The rates applicable to oil derivatives generally remain at 2%.
Competition
28. Are restrictive agreements and practices regulated by competition law? Is unilateral (or single-firm) conduct regulated by competition law?
Restrictive Agreements and Practices
The Angolan Competition Law (Law No 5/2018, 10 May 2018) and the Competition Law Regulation (Presidential Decree No 240/18, 12 October 2018) establish the principles and rules governing competition in Angola.
The Competition Law applies to any entity carrying out any economic activity in Angola, whether regularly or occasionally, and whether or not the entity is Angolan. The Competition Law prohibits:
- Collective practices, including:
- anti-competitive agreements between undertakings;
- concerted practices;
- decisions by associations of undertakings.
- Unilateral anti-competitive conducts (abuse of dominant position).
There are no criminal penalties. However forbidden practices are punishable with administrative fines of up to 10% of the annual turnover of the companies involved (for both collective and individual practices).
Collective Practices
The Competition Law prohibits agreements between undertakings, concerted practices, and decisions by associations of undertakings that have as their object or effect the prevention, distortion, or restriction of competition in the domestic market, in whole or in part and to a significant extent.
Prohibited agreements between undertakings may be either:
- Horizontal (made by firms that would otherwise compete at some level of trade or industry).
- Vertical (made by firms at different levels of trade or industry).
The hardcore examples of forbidden horizontal agreements refer to price-fixing, market or customers sharing, and supply reducing. The most paradigmatic example of a vertical agreement is in relation to resale price maintenance.
A typical example of concerted practices between competitors is the exchange between competitors of strategic data, that is, data that reduces strategic uncertainty in the market (for example, future prices and quantities).
An example of an anti-competitive association decision is the adoption of price lists by professional associations (for services provided by its members).
Unilateral Conduct
The Competition Law prohibits any abuse by one or more undertakings of a dominant position in the domestic market or in a substantial part of it. Such abuse can, in particular, include:
- Breaking, in whole or in part, a business relationship unjustifiably.
- Obliging a supplier or customer not to contract with a competitor.
- Selling goods, unjustifiably, below cost.
- Refusing to provide, for adequate remuneration, to any other company access to a network or other essential infrastructure, without which the competitor will not be able to compete with the dominant company.
Transactions Subject to Merger Control
A concentration between undertakings is understood to exist when a change of control in the whole or parts of one or more undertakings occurs on a lasting basis.
Control results from any act, irrespective of the form it takes, that gives rise to the possibility of exercising a decisive influence over the activity of an undertaking on a lasting basis, whether solely or jointly. Therefore, concentrations can include:
- The acquisition of the whole or a part of a company's share capital.
- The acquisition of ownership rights, or rights to use the whole or a part of the assets of an undertaking.
- The acquisition of rights or the signing of contracts that confer a decisive influence on the composition, voting or decisions of the undertaking's corporate bodies.
Concentrations between undertakings are subject to prior notification when they fulfil one of the following conditions:
- An entity would acquire, create or reinforce a market share equal to or greater than 50% of the domestic market, or a substantial part of it, in a specific product or service as a consequence of the concentration.
- Both:
- an entity would acquire, create or reinforce a market share equal to or greater than 30% but smaller than 50% of the domestic market, or a substantial part of it, in a specific product or service as a consequence of the concentration; and
- the individual turnovers in Angola in the previous financial year of at least two of the undertakings involved in the concentration were greater than AOA450 million, net of tax directly related to the turnover.
- The undertakings that are involved in the concentration have an aggregate turnover in Angola in the previous financial year greater than AOA3.5 billion, net of tax directly related to the turnover.
Notified concentrations are appraised to determine their effects on competition in the relevant market, taking into consideration the need to preserve and foster effective competition in the domestic market or a substantial part of it in the interests of intermediate and final consumers.
Non-authorised concentrations are punishable with fines of up to 5% of the annual turnover of the companies involved.
Anti-Bribery and Corruption
Under the Public Probity Law (Law 3/2010, 27 June 2010), public servants must refuse any grant of an unjustified privilege or advantage to public or private citizens or legal entities.
In addition, public servants must not benefit in the performance of their duties from offers by natural or legal entities, directly or by an interposed person, except in certain exceptional circumstances.
The Angolan Criminal Code (Law 38/2020, 11 November 2020) also establishes penalties of imprisonment or fines for individuals that either themselves or through a third party offer or promise an advantage to an official or person providing public services in order to induce them to perform an act or omission relating to their office or function.
Intellectual Property
Patents
Definition and Legal Requirements. A patent is a right granted to protect an invention, giving the owner exclusive rights to exploit the invention. For an invention to be patentable, it must:
- Be new.
- Imply an inventive step.
- Have an industrial application
Registration. Patents are only protected if registered. Registration should be sought with the Instituto Angolano de Propriedade Industrial (IAPI).
Enforcement and Remedies. Patent holders or licensees can claim civil damages and bring criminal proceedings against infringers. However, licensees are only authorised to claim civil damages or bring civil proceedings if this is expressly stated in the licence agreement.
Length of Protection. Patent registrations are granted for a 15-year term, which is non-renewable.
Trade Marks
Definition and Legal Requirements. A trade mark can consist of a sign or group of signs capable of being graphically represented, provided they are adequate to distinguish the products or the services of an entity.
Protection. Trade marks are only protected if registered. Registration should be sought with the IAPI.
Enforcement and remedies. Trade mark holders or licensees (if the relevant licence agreements expressly foresee such a right) can:
- Claim civil damages.
- Bring criminal proceedings.
- Request that the Angolan Customs or the Angolan Economic Police seize any goods that infringe rights granted by registered trade marks.
Length of Protection and Renewability. Trade mark registrations are granted for a ten-year term, and can be renewed for consecutive ten-year terms, without any restriction.
Registered Designs
Definition. To be registered, the design must both:
- Be new, that is, it cannot correspond to any design previously disclosed to the public. Protection is also granted to designs that, not being entirely new, are constituted by a new combination of existing elements, provided they have singular character.
- Be applied to a product, defined as any industrial or craft item.
Registration. Registered designs are only protected if registered with the IAPI.
Enforcement and Remedies. Registered design holders or licensees (if the relevant licence agreements expressly foresee such rights) can claim civil damages from infringers and bring criminal proceedings against such infringers.
Length of Protection and Renewability. Registration is granted for five years, which can be renewed for two consecutive five-year terms. After the second renewal has lapsed, the registered design is no longer protected.
Copyright
Definition and Legal Requirements. Protection does not depend on registration, but only on the creation of an original work (such as literary, scientific and artistic creations).
Protection. The protection of copyrighted works does not depend on registration.
Enforcement and Remedies. The holder of the copyrights can seek enforcement, civil damages and criminal proceedings against the infringement of copyrighted works by unauthorised third parties.
The inheritors of moral rights can also enforce such rights. If these inheritors unreasonably do not enforce these rights, the Angolan Culture State Secretary can claim the right to enforce them.
Length of Protection and Renewability. Economic copyrights last for 50 years after the author's death for most works (25 years in the case of photographic works and applied arts).
The protection of moral rights for copyrighted works is not time limited.
Confidential Information
Definition and Legal Requirements. Angolan law only addresses confidential information in relation to the infringement of industrial property and as a form of unfair trade practice. Protection is granted to trade secrets that are not generally known or easily accessible by people acting in the environment that normally deals with this information. These trade secrets must have a commercial value inherent to their secrecy and must have been the object of relevant actions aimed at ensuring secrecy.
Protection. The protection of confidential information is guaranteed either by means of non-disclosure agreements or by the general law relating to unfair trade practices.
Enforcement and Remedies. The owners of any confidential information are allowed to claim civil damages and to bring criminal proceedings against infringers.
Length of Protection and Renewability. Confidential information is protected for as long as it remains confidential.
Marketing Agreements
Agency
Agency, franchising and commercial concession agreements are governed by Law 18/03 of 12 August 2003.
An agency agreement is where the agent undertakes to promote the execution of agreements on behalf of the principal, acting autonomously, stably and in return for pay.
An agency agreement assigns a group of clients or area to the agent. The agent is only empowered to execute agreements on behalf of the principal if they are expressly authorised in writing to do so.
Distribution
A commercial concession agreement grants the right to distribute a determined product in a determined area and to promote their resale.
Franchising
A franchise agreement is defined as an agreement in which the franchisor licenses the franchisee the distribution rights of its goods or services using the franchisor's trade mark and other distinctive marks and according to the franchisor's plan, method and guidelines.
As with an agency agreement, the franchisor can assign to the franchisee a determined area or circle of clients.
Law 18/03 of 12 August 2003 does not impose any specific requirements on agency, distribution and franchising agreements in relation to exclusivity or competition law considerations.
E-Commerce
E-commerce is regulated by the Information Society Technologies and Services' Regulation (Presidential Decree 202/11, 22 July 2011), which also deals with:
- The legal effectiveness of electronic signatures, cryptography and electronic documents.
- Intellectual property rights and the protection of software and databases.
- Domain names.
- The liability of information society service providers.
The Regulation contains consumer protection provisions relating to the sale of goods or services over the internet, covering:
- Minimum information to be provided before the conclusion of any contract.
- Electronic advertising and commercial communications (spam).
Distance selling provisions in the Retail Commerce Organisation, Execution and Functioning Regulation (Presidential Decree No 263/10, 25 November 2011) are also applicable. These provisions deal with:
- Licensing of distance sales.
- The minimum information to be provided before the conclusion of any contract.
- The right of withdrawal (seven days, counting from the day of delivery).
In addition, the Legal Regime on Measures to Protect IT Networks and Systems came into force in 2017 (Law 7/17, 16 February 2017). This new law sets out rules to safeguard the country's information infrastructure.
Advertising
Digital Advertising
Advertisement agencies must meet formalities set by the National Advertisement Office of the Ministry of Media.
The Advertisement Law (Law 9/17, 13 March 2017) is applicable to all kinds of advertisement, irrespective of the media used.
The Consumer Protection Law (Law 15/03, 22 July 2003) contains general provisions forbidding misleading advertisement, which is a crime under Article 43 of the Penal Code.
The Media Law (Law 1/17, 23 January 2017) sets out specific requirements for press, radio and television advertisements.
The Outdoor Advertisement Regulation sets out requirements for outdoor advertisements.
Presidential Decree 41/87 of 20 July 1987 governs advertisement at sporting events.
In addition, in 2017, the following legislative package was published in relation to media activities in Angola:
- The Law of the Press (Law 1/17, 23 January 2017).
- The Organic Law of the Angolan Social Communication Regulatory Entity (Law 2/17, 23 January 2017).
- The Television Law (Law 3/17, 23 January 2017). The Television Law sets out the rules that apply to audio-visual communications and television advertising.
- Radio Broadcasting Act (Law 4/17, 23 January 2017).
- The Legal Statute of Journalists (Law 5/17, 23 January 2017).
However, this legislative package did not have a strong impact on the current advertising rules.
Specific areas of economic activity also have special rules governing advertising, such as the BNA's Order No 3/15 of 10 April 2015, which outlines the rules regarding the advertising of financial products and services.
Direct Marketing
Direct marketing (including spam) is dealt with in the Data Protection Act (Law 22/11, 17 June 2011) and in the Information Society Technologies and Services' Regulation (Presidential Decree 202/11, 22 July 2011).
Express opt-in consent and prior notification of the data processing to the Data Protection Agency is required.
Express opt-in consent is not required (and notification of the Data Protection Agency is also not required) when the communication is sent:
- To a data subject who is a representative, an employee or part of the personnel of a corporate entity.
- By government authorities.
- To individual persons with whom the sender has previously entered into a contract if they have been given the opportunity to opt out of direct marketing.
Receivers who have opted in or not opted out of direct marketing when entering into an agreement with the sender must be able to, freely and without cost, revoke consent at any time, and the sender must make available the means for them to do so.
Senders must keep a do-not-call or "Robinson" list. Under the law, the Data Protection Agency must also keep an opt-out list. However, this list has not yet been created.
Sales promotions are ruled by Presidential Decree No 263/10 of 25 November 2010.
Three different types of sales promotions are allowed:
- Seasonal sales. These:
- are only allowed at the end of each season of the year;
- cannot sell seasonal sales products that were acquired specifically to be sold during that sales period. Products that have been acquired during the seasonal sales or during the month that precedes the seasonal sales are considered to have been acquired specifically to be sold during sales;
- cannot sell products that have been included in a sales promotion of any kind during the month that precedes the seasonal sale.
- Clearance sales. These sales are possible only in the event of:
- a court decision;
- a partial or total cease of commercial activity;
- a change of business activity;
- a transfer or assignment of a store;
- construction works in the store that require selling the products;
- damages to the goods due to force majeure situations;
- situations that pose a relevant obstacle to the commercial activity.
- Promotional sales ("reward" sales). These are sales that:
- place in the market a new product and promote its sales;
- increase the sales of an existing product in the market;
- develop the business of one or more stores with the offering of a product or group of products.
All three types of sales must be previously approved by the authorities competent for licensing the commercial activity.
The law sets out a list of mandatory requirements in relation to the communication of such sales.
Data Protection
37. Are there specific data protection laws? If not, are there laws providing equivalent protection?
Data Protection Laws
The Data Protection Act (Law 22/11, 17 June 2011) sets out the rules that data processors must comply with, including:
- The requirement to notify the Data Protection Agency of every data processing.
- Special provisions regarding particular categories of sensitive data.
- Specific formalities for international data transfers.
The Electronic Communications and Information Society Services Law (Law 23/11, 20 June 2011) contains specific data protection rules for personal data generated from electronic communications.
The Angolan Government has also enacted the Legal Regime on Measures to Protect IT Networks and Systems (Law 7/17, 16 February 2017).
Although the Organic Statute of the Angolan Data Protection Agency (Presidential Decree 214/2016, 10 October 2016) was approved in 2016, the provisions relating to personal data protection have only been actually established and in operation since the beginning of 2020.
Product Liability
Under the Consumer Protection Law (Law 15/03, 22 July 2003), a seller, producer, manufacturer or constructor of goods or service provider, whether they are Angolan or non-Angolan, is liable, independent of fault, for damages caused to consumers arising from defects of:
- Design.
- Manufacturing.
- Building.
- Assembly.
- Handling.
- Presentation.
- Packaging.
- Insufficient or inadequate information regarding usage and/or risks.
Products and services are considered to be defective whenever they are not as safe as a consumer may reasonably expect, taking into consideration all the relevant circumstances, including:
- Their presentation.
- Usage and risks that may be reasonably anticipated.
- The state-of-the-art at the time they were placed on the market.
Regulatory Authorities
39. What are some of the key regulatory authorities relevant to doing business in your jurisdiction?
Competition
Main Activities. The Angolan Competition Authority (Autoridade Reguladora da Concorrência) is the regulator for competition matters, including ensuring compliance with laws, regulations and decisions designed to protect competition.
Environment
Main activities. The National Directorate for Prevention and Assessment of Environmental Impacts of the Ministry of Environment (DNPAIA) is responsible for:
- Assessing environmental impacts in projects of public and private entities.
- Issuing technical opinions on EIAs.
- Environmental licensing of projects whose activity significantly affects the environment.
- Monitoring compliance with environmental standards likely to cause environmental damage.
Financial services
Main activities. The Angolan Central Bank (Banco Nacional de Angola) is the banking supervisory and regulatory authority.
W www.bna.ao
Contributor profile
João Robles, Partner and Head of Angolan Desk
Eversheds Sutherland FCB
T +351 21 358 7500
F +351 21 358 7501
E [email protected]
W www.eversheds-sutherland.com
Professional qualifications. Portugal, Lawyer
Non-professional qualifications. 2002, Universidade Lusíada, Lisbon, Portugal; post-graduate in Landlord and Tenant Law (Leasehold), 2006, University of Lisbon, Portugal; post-graduate in Corporate and Commercial Law, 2008, Universidade Católica, Lisbon, Portugal.
Areas of practice. Corporate; commercial and M&A; real estate; banking & finance; O&G.