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Algerian Legal Research

By Vincent Ramette

Vincent Ramette is Legal Knowledge Management and awareness Consultant at VIR Conseil.

NB: The content of this article is for general legal information purpose: it not exhaustive and does not intend to dispense legal advises. Attention in drawn on the fact that some texts may not be published and that official authorities or agencies should be consulted before undertaking any action.

Published February 2013

Table of contents

Introduction

1. Constitution

1.1 General constitutional provisions

1.2 The legislative power

1.3 The Judicial System

1.4 Local and Regional Government

2. Civil law

3. Commercial and corporate law

3.1 General commercial rules

3.2 Joint-stock companies

3.3 Other provisions

4. Tax law

4.1 Global revenue

4.2 Income Tax

4.3 Capital gain on sale

4.4 Asset tax

4.5 Value added tax

4.6 Local authority Tax

5. Labor law

6. Mining and hydrocarbons

6.1 Mining activities

6.2 Hydrocarbons

7. Foreign investment

8. Electronic resources

9. Key facts

10. Sitography

11. Institutional websites

12. Legal publishers

 

Introduction

The Algerian legal corpus can be divided into traditional categories of public or private law, national or international law according to the legal nature of the legal entities concerned (public entities or individuals for example, States of or international companies...).

Given the importance of public bodies and policy in Algeria, law and regulations are first class means to move, shift forward or guide the Algerian society according the social, economic, religious, ethical, cultural, fiscal or diplomatic goals the Country assigns to itself.

As a consequence, the number of texts and articles is continuously increasing with a growing impact on the overall level of activity and development pace. A selection of legal subjects has been made for the purpose of this study is to allow the reader to get an up to date view of major issues in the legal field. Since the legislative activity may introduce reforms all along the year, it is highly recommended to visit the sitography at the very end of this article. The reader is also informed that if most of applicable texts are published in official journals or bulletins not all of them are available. Thus, it is highly recommended to consult official institutions or agencies, private experts or lawyers in any decision-making process.

Understanding Algerian legislation often means to learn basics of French law : it has been playing a major role in the building of the Algerian legislation not only because from an historical point of view it has been applicable years after the French left Algeria in 1962, but also because it has been a source of inspiration for lawmakers since Independence. There is no disputing however that an independent and autonomous set of texts is getting more and more important while, in addition to official publications, a large number of law books are published in Arabic.

1. The Constitution and Public institutions

1.1 General constitutional provisions

Founded in 1962 after the war against the French colonial power, the People's Democratic Republic of Algeria succeeded to the previous French administrative institutions. The new Algerian political regime (led by Ahmed Benbella), promulgated the first constitution in 1963. This constitution has been replaced the Constitution of 1976 and then the Constitution of 1989 (modified in 1996). The last modifications have been made by two laws on constitutional revisions: law n 02-03, of April 10, 2002 and n 08-19 of November 15, 2008.

 

In its first version of 1963, Algeria was declared a one-party state, with classical Arabic as its official language and Islam as the religion of the State. Algeria's second Constitution of 1976 emphasized the role of Socialism in the society which aim at building a socialist democracy and fight against every form of exploitation of man". In 1989, the new constitutional reform introduced a multiparty system (about 50 political parties participate to the democratic debate) and abandoned the reference to socialism.

Today Algeria (1996 version of the 1989 Constitution) is defined as a People's Democratic republic (art. 1), Islam is the religion of the State (art. 2), Arabic is the national and official language (art. 3), Tamazight is a national language. Hence, while "feudalism, regionalism and nepotism" are prohibited from the institutions together with people exploitation or dependence links, the Constitution stresses that institutions aim at achieving social justice, equality and freedom for all. Algeria's motto is:By the People and for the People (art. 11). All along its provisions, the Constitution may refer to "the People", the "Citizens" or "all and every one" according to the context and the intention to stress out a more or less specific comprehension of the concept.

The country's flag is composed of two equal vertical bands (from left to right): green (symbolizing heaven in Islamic tradition) and white (symbolizing purity and peace) with a red (symbolizing blood of the martyrs) five-pointed star (each represented one of the five Islam Pillars) and a red crescent (coming from its Arabian history and symbolizing the path to heaven).

The constitution provides the basic concepts of public organization and institutions: legitimacy and sovereignty, People and citizens, State, Assemblies, Wilaya and Commune, decentralization and collectivity, public and national properties. These keywords illustrate how this part of the Constitution has been written: from general to the specific, from the political organization to transport or natural resource issues.

People's will is the legitimacy of the State (Constitution, art. 11), meaning that the actions of the State are legitimate because (if) committed in the people's interest. Because of this legitimacy, the State exercises its sovereignty on the territory and national sovereignty belongs exclusively to the People (Constitution, art. 6): terrestrial and air spaces, and waters. Any abandon or alienation of a part of this territory would affect the People's interest and is proscribed as illegitimate.

Democratic organization and social justice are two pillars on which the State is based. The People participate to the management of public affairs indirectly, through the election of its representatives to the assembly which also stands as the elementary tool of decentralization (Constitution, art. 16), as the Commune stands for the elementary (basic) collectivity (Constitution, art. 15).

The Constitution also refers to "Public properties" which are different from "National properties" (private or public assets of the State, the Wilaya or the Commune). "Public properties" is the expression used to designate all the natural elements composing the territory, from a geological or an utilitarian perspective : "the underground, mines, quarries, natural resources of energy, mineral, natural and living resources either in maritime areas, water or forests" (Constitution, art. 17). It clearly appears as a complement to the provisions of article 12: "the sovereignty of the State is exercised on its terrestrial and air space and its waters. As the Constitution gives a list, which can be modified, the terms are so extensive that unless reducing it, it is clear that Constitutional writers tried to give the most extensive definition of the public properties. It also includes the following utilities: "rail, maritime and air transport, the mail and telecommunications" notwithstanding "other properties defined by the law". The national collectivity owns the public properties.

1.2 The legislative power

The Parliament, which exercises the legislative power, is composed of two chambers: the People's National Assembly and the Council of Nation, which members benefit from parliamentary immunity (Constitution, art.109). If an agreement cannot be found after parliamentary discussions and the meeting of a special commission composed of representatives of the two chambers, the text is withdrawn, except for the financial law, which will be promulgated by the President of the Republic in case of disagreement (Constitution, art. 120).

 

The People's National Assembly (389 members) is elected on a universal, direct and secret suffrage for a period of five years (Constitution, art. 102).

The Council of Nation (144 members which can be considered as a Senate) is partly (two third) elected on an indirect and secret balloting by the elected members of the communal assemblies and wilayas. The other part (one third) is designated by the President of the Republic (Constitution, art. 101). If the duration of the mandate is limited to 6 years, members are renewed every three years (Constitution, art. 102).

If the Constitutions does not provide the conditions for the candidates to the People's National Assembly (the law provides it), it specifies the conditions to be candidate to the election to the Council of Nation: one third of its members are designated by the President of the Republic among national personalities chosen according to the level, quality and renowned competences. Since no specific criteria or control is established, it is a specific competence of the President who is widely free to choose these members according to his idea of the personalities deserving to join the Council.

While each chamber of the Parliament set up permanent committees, it meets in two ordinary sessions per year, each lasting at least four months (Constitution, art. 117).

The Parliament is competent to legislate in limited but wide domains. It competent in State budget, tax and duties, customs, monetary and banking regulations, insurance, labour law, natural resources (mines, hydrocarbons, forest, water...), information, financial regulations, privatizations (Constitution, art. 122).

NOTE: Concerning family law and generally speaking the hierarchy of norms, the Chari cannot be considered as governing family law or Algerian law. Article 222 of the Family code refers to the Chari but only as a complementary source for subject not dealt with by the Code. For example the Code contains dispositions on marriage in its article 4 to 46, on divorce in its article 47 to 80, or custody in its articles 58 to 73. More precisely the Chari consists of two corpus : the Koran and Sunna. But at the top of the hierarchy lies the Constitution, followed by the ratified international treaties, organic laws, ordinary laws, regulations. The Law is the rule voted by the Parliament.

1.3 The Judicial System

The judicial power is constitutionally independent and guarantees the safeguard of fundamental rights. It is based on a duality of jurisdictions system, lawfulness and equality (Constitution, art.140), art. 148 also refers to the free will of the judge. A public prosecutor is represented in each jurisdictional order.

Justice decisions are pronounced in public hearing (Constitution, art. 144) by magistrates (Constitution, art. 146) and the right for defense is recognized and guaranteed in penal matters (Constitution, art. 151). The Supreme Court is the highest jurisdictional degree unifying the jurisprudence across the country. In the criminal field, a criminal court is competent for crimes, offenses and legal infringements.

Since the reform of 1996, two specific judicial orders are ruled by two distinct bodies: the High Court for the activities of courts and tribunals and a Council of State for the administrative jurisdictions (appellate judge for administrative courts or Supreme Court judge in specific matters).

Three Specialized courts and tribunal are also competent for specific matters. A Tribunal of Conflicts arbitrates conflict of competency between the two councils (Constitution, art. 152), the High Council of Magistracy is competent for magistrates concerning their professional activity (Constitution, art. 149) and the High Court of State, competent for the President of the Republic in case of high treason or the Head of Government for crimes and infringements (Constitution, art. 158). A Constitutional Council controls the conformity of organic laws and rules of procedure of the two chambers of the Parliament and controls the constitutionality of Treaties, laws and Regulations (Constitution, art. 167, Regulation of June 28, 2000).

1.4 Local and Regional Government

Algeria is divided into forty-eight wilayas governed by a Popular Wilaya Assembly composed of thirty deputies elected every five years. Wilaya government is responsible for the distribution of public services, regulation of small and medium-sized industry, agriculture.

 

Furthermore, 1,541 communes (basic element of the territorial structure and organization) are grouped into 227 administrative districts called Daras and are managed by Communal Popular Assemblies responsible for local administration, economy and finance, planning... Having no economic and little political autonomy, however, the communes administer central government programs rather than initiate independent projects. Each communal assembly has ten to eighty members, who are elected for five-year terms. The assembly elects a communal executive from its membership.

Selection of texts:

  • Law n90-08 of April 7, 1990 on municipalities amended and supplemented.
  • Law n 90-25 of November 18, 1990 on land policy.
  • Executive decree n91- 306 of August 24, 1991 listing the municipalities led by each chief of Dara.
  • Executive Decree n94-248 of August 10, 1994 on the organization of the central administration of the ministry of Home Affairs, local governments and of the administrative reform.
  • Executive Decree n95-87 of March 22, 1995 amending and supplementing Executive decree n94-248.
  • Executive decree n02-107 of April 3, 2002 amending and supplementing Executive Decree n94-248.
  • Law n 05-13 of October 18, 2005 granting the Ordinance n 05-03 of July 18, 2005 supplementing the Law n 90-08 of April 7 1990 on municipalities.
  • Law n 05-14 of October 18 2005 granting the Ordinance n 05-04 of July 18, 2005 supplementing the Law n 90-09 of April 7, on1990 on wilaya.
  • Law n 08- 09 of February 25, 2008 laying down the Civil and Administrative Code.
  • Law n 11-06 of March 22nd 2011 granting the Ordinance n 11-02 of February 23rd, 2011 supplementing the Ordinance n 66-155 of June 8th, 1966 laying down the Criminal Procedure Code
  • Law n 11-10 of June 22nd 2011 on municipalities
  • Organic law n 11-12 of July 26, 2011 establishing the organization functioning and competences of the Supreme Court.
  • Organic Law n11-13 of July 26th, 2011 amending and supplementing the Organic Law n 98-01 of May 30th, 1998 on competences, organization and functioning of Council of State- Conseil dtat.
  • Law n 11-14 of august 2nd, 2011 amending Ordinance n 66-156 of June 8, 1966 laying down the Criminal Code.
  • Organic law n12-04 of January 12, 2012 on political parties.
  • Law n12-07 of 21 February 2012 on wilaya.

 

2. Civil law

Concerning natural persons, the existence of a legal personality starts with the birth of the living child and ends with his death (Civil code, Art. 25). According to the Civil Code, a legal person (i.e. : the State, the Wilaya, the municipality, corporations, cooperatives or any other grouping recognized as a legal person by the Law), owns assets, legal capacity, has a legal domicile, a legal representative and the right to justice (Civil code, Art. 50).

 

The Civil Code defines a contract as an agreement according to which on or more persons undertake to give, do or not to do something (Civil code, Art. 54). A contract is a meeting of consistent will, and can be expressed either orally or in writing. The contract is formed as soon as the parties have expressed their concurrence of will (Civil code, Art. 59). If an agreement contains an offer but no acceptance deadline, the offer must be accepted immediately to bind the debtor (Civil Code, art. 61).

A contract stands as the law between the parties and must be performed in good faith according to its provisions. But if general, unforeseeable and exceptional circumstances occur, making the performance impossible or excessively expensive, the parties may request the judge to revise the contract (Civil Code, art. 107).

A contract may be annulled in the case of a substantive error (Civil code, Art. 81). A substantive error is defined as an error so serious that should the error have not occurred, the contractor would not have expressed his will to the agreement.

A contract must have a subject, either certain, even in the future, or at least determined. A contract without a lawful subject or cause is void.

3. Commercial and corporate law

3.1 General commercial rules

Merchants are defined by the Code of Commerce as people who usually operate commercial transactions (Code of commerce, Art. 1), which means that if not operated on a usual basis a commercial transaction may not always grant the status of merchant.

Are considered as commercial transactions within the field of the Code of commerce the following transactions : sales operations (like buying developed or undeveloped properties for the sole purpose of reselling them), renting movable or immovable assets, construction works, provision of services, mines or quarries development, banking and insurance activities (Code of commerce, art. 2).

Should also be considered as commercial transactions any transaction made by a merchant in its business interest or development (Code of commerce Art. 4), and any transaction made by commercial companies, business agencies, business goodwill, or transactions between merchants.

Are part of the goodwill the movable assets acceptable as collateral, together with customers and customer traffic, brand name, leasehold rights, tools and equipment, goods, industrial property rights (Code of commerce, art. 78).

When running a goodwill, the tenant with a commercial leasehold has a right to renew the lease for at least two years if he signed a written contract. Unless the tenant gives notice within an at least six month period of time, the leasehold is renewed tacitly. The renewal period is based on the contract and cannot last longer than nine years (Code of commerce, art. 172). If the renewal request is rejected, the lessee is entitled to an eviction indemnity (Code of commerce, Art. 176).

In the case of suspension of payments, the legal or natural person declares its insolvency, which will allow the opening of a bankruptcy proceeding (Code of commerce, Art. 215). Based on the bankruptcy decision, partners who are jointly liable will be also sued (Code of commerce, Art. 223).

Any partnership, limited partnership, limited liability company or joint-stock company is considered as a commercial company (Company Code, Art. 544). But if legal or natural persons can be recognized as merchants, only legal persons (with a minimum capital of DA 2 million) can set up an import/export activity.

General rules are contained in the following provisions (see also here ):

  • General partnership : Code of Commerce art 551 bis to 563 bis 10
  • Limited liability company : (Minimum capital of 100 K DA), Code of Commerce, art 564 to 591 ;
  • Joint stock company : (minimum capital of 1 MDA (5 M DA for publicly traded companies), Code of Commerce, art 592 to 715 bis 132 ;
  • Limited partnership: Code of Commerce, art 715 ter to 717 ter 10.

 

The form, the duration (which cannot exceed 99 years), head office (Algerian law applies to companies having an activity in Algeria) and name of a company must be defined by the statutes while incorporating (or dissolution) documents must be registered in the registry of commerce upon nullity (Code of Commerce, Art. 548).

Once the company created, a managing director is appointed by the partners. Once appointed he cannot hold an employment contract with the company. By the way, any agreement between the company and one of the Directors requires a prior authorization from the Management Board after a report from the Auditor.

The share capital of limited liability companies must be in a registered form (Code of Commerce, art 567) and cannot be represented by negotiable instruments. If partners can be freely transmit their shares to their spouses, ascendants or descendants, the selling to a third person must be approved by the majority of at least of the capital share and registered in an authenticated document.

According to the Ordinance n96-27, a company which capital share is held by more than 50% by one company is its subsidiary. Holding less than 50 % of a share capital means holding an equity participation in a company (Code of Commerce, art. 729). A company holding directly or not more than 50% of voting rights of the share capital it owns or pursuant to an agreement with other shareholders or partners or if it holds more than 40 % of the voting rights and no other partner or shareholder, directly or not, hold more than what it holds, so that it can make decisions during shareholders' meeting.

Such companies controlling other companies are called "holding companies". When a company takes control of another company registered in Algeria, it must be notified in the annual report (see art. 716).

Two or more legal persons may write an agreement in order to create a grouping for a limited period of time and for the purpose to use any mean to facilitate and develop the economic activity of its members or improve and increase its results. The agreement is not opposable to third parties until it is published.

The existence of a grouping does not require making and sharing profits and it can exist without capital, but it has a personality in law. The rights of its members cannot be represented by negotiable instruments but they can issue bonds.

3.2 Joint-stock companies

In the case of a Joint stock-companies (Code of Commerce, art. 592 to 715 bis), the capital is divided into shares between at least seven partners who are liable only to the extent of their contribution. In these companies the number of votes is equal to the number of shares subscribed and cannot exceed 5 percent of the total capital share.

 

If fictive dividends are distributed or if a false balance sheet is communicated or published to hide the actual situation of the company, the President, the Directors or the Executive Officers can be sentenced to a fee and a one to five years period of imprisonment.

The Board of Directors of a joint-stock company is composed of at least three members and no more than twelve. They are elected by the ordinary general meeting of shareholders for a duration that cannot exceed six years and each natural person cannot belong to more than five directors. If they can be reelected, they can be dismissed at any time by the ordinary general assembly.

The Board of Directors also decides of the amount of the attendance fee of its members and elects a President for a duration that cannot exceed six years. He can be dismissed at any time.

An extraordinary shareholders meeting can decide to update the statutes in order to introduce a Management Board (three to five members) controlled by a Supervisory board (which members cannot belong to the Management Board). On the other hand, an ordinary shareholders' meeting will deal with any other subject than the modification of the statutes. It meets at least once a year.

Accounting records must be kept by any commercial company with a personality in law (art.716): assets and liabilities must be accounted and the operating account, a profit and loss statement and the balance sheet must be kept. All these documents are sent to the statutory auditor together with a report on the activity during the year. Once validated by the shareholders' meeting, the corporate accounts are deposited in the registry of commerce (Code of Commerce, art. 717).

Dividends: the share paid as dividends is decided by the shareholders' meeting after the approval of accounts (art. 723). The shareholders' meeting (or in its absence, the board of directors or the managers) decides the way dividends is being paid in a maximum period of nine months after the closing of the fiscal year (art. 724).

3.3 Other provisions

A project of merger or spin-off must be approved by the shareholders meeting and has to contain the purpose and conditions, date of the closing of the accounts, designation of the assets and liabilities to be transferred to the absorbing company, the exchange ratio, the value of merger/spin-off premium. It also must be registered in a notary firm and published in an announcement journal of legal notices.

 

In the case of a dissolution, a company is in liquidation and its personality in law ends with the company but it has no effects to third parties if it has not been published and registered in the business and company registry. The names of the liquidators are published in a journal of legal notices of the wilaya where the registered office of the company is located. The liquidators communicate all the information published to the shareholders.

The selling of total or part of the assets to the liquidator, its employees, spouse, ascendant or descendant is forbidden.

Selection of texts:

  • Executive decree No 03-453 of December 1st 2003 on trade registration
  • Law No 04-02 of June 23rd, 2004 laying down the rules applicable to commercial practices in order to regulate the professions and business activities that require special regulation
  • Law No 04-08 of August 14, 2004 on conditions for conducting business that provides inter alia, the basic rules on registration with the trade registry
  • Rule n09-03 on general provisions applicable to banking conditions of banking operations
  • Rule n08-04 on minimum capital applicable to banks settled in Algeria
  • Rule n11-08 on internal control of banks and financial institutions

 

4.Tax Law

4.1 Global revenue

Individuals with a tax residence in Algeria are taxable on the base of the Global revenue provisions. Are exempted:

  • Persons whose global annual net revenue is less or equal to the tax threshold
  • Ambassadors and members of diplomatic corps, consuls from countries providing reciprocal advantages to the members of the Algerian diplomatic and consular corps.

 

Their global revenue (Tax Code, Art. 1) is the addition of the total net revenues coming from (Tax Code, art. 2) the following activities (net of the deficit in an income category, interest rates of professional loans, pension and social security insurance, maintenance allowance) :

  • Industrial, commercial and craft profits coming from the following activities : industrial, commercial or professions ; mining ; purchasing or selling properties ; renting commercial or industrial buildings ; bidding, dealing, conceding communal rights ; benefiting from poultry or rabbit activities, salt waters ; compensation for Managing Director positions, fishermen or ship-owners;
  • Non-commercial professional profits: liberal professions and legal officers who are not considered as merchants.
  • Agricultural holdings revenues : non -industrial agriculture and sheep breeding (...) managed by the farmer in its own agricultural holding
  • Incomes of developed or undeveloped properties if not included in the profits of an industrial commercial or craft company
  • Investment income (shares or share capital)
  • Wages, pensions or life annuity
  • Capital gains resulting of a transfer for consideration of developed or undeveloped properties

 

4.2 Income Tax

Any company (except partnerships and joint ventures) and public bodies with commercial and industrial activity (art.136) is taxable for its effective profits or business revenues in Algeria.

The net profit is the result of the difference between the net asset value at the closing and opening fiscal year, minus the capital surplus plus debits done during this period (Tax Code, art. 140).

The following charges are deducted to calculate the net profit (Tax Code, art. 141):

  • General costs, staff costs, rent of building dedicated to the activity
  • Value of capital goods imported without payment
  • Depreciation really carried
  • Taxes (except the tax on profits)
  • Provisions for identified or likely loss or costs to happen.

 

4.3 Capital gain on sale

Short-term capital gain result from the selling of elements of the fixed assets acquired or created since a period no longer than three years. Long-term capital gain result from the selling of elements of the fixed assets acquired or created since a period longer than three years.

 

Are also considered as fixed assets: Fully owned shares or capital shares acquired giving control of at least ten percent of the capital of a third party company and investment portfolio acquired since a period of at least two years before the selling.

 

4.4 Asset tax

Are subject to asset taxes (Tax Code, art 274) individuals with their tax residence in Algeria for their properties (located in Algeria or not) and whose tax residence is not located in Algeria but who owns a property in Algeria. But work related properties (properties necessary for the activity and share or capital share) are exempted.

 

4.5 Value added tax

The VAT is applicable on sale transactions, construction work and provision of services (sales transactions, delivery operations, banking and insurance operations...). It is applicable to legal or natural persons (VAT Code, art.4) with no consideration of the type importation transactions possibly involved in the taxable transaction (VAT Code, art.1).

 

In the case of import deals: goods exempted from the VAT in the internal Algerian market are also exempted when imported.

In the case of export deals, are exempted of VAT, sales or work transactions.

The main tax rate applicable is the following (see also here ):

  • Profit tax : 19 % for production of goods, building and public work or tourism ; Trade and services activities :25 %
  • Tax on Global income: withholding tax of 15% on shareholders (natural persons), and from 0 to 40 %for salaries depending on the salary range.
  • Tax on Professional activity : 2 % of the turnover
  • VAT : 17 % (reduced rate of 7 %, 0% subject to certain conditions)
  • Customs : maximum of 30 % (minimum 5%, 0% under certain conditions)
  • Transfer duty : from 5 to 8 % (0% under certain conditions)

 

4.6 Local authority Tax

For the benefice of local authorities, a flat rate tax is calculated on the amount of wages and value of benefits in kind paid by natural or legal persons registered or having an activity in Algeria (Tax Code art 208).

 

Are subject to the property tax (Tax Code, art. 248) developed properties located in Algeria, and are also concerned : facilities used as shelters for people or goods, commercial facilities of airports or train stations, soils directly adjacent to buildings, and non-commercial terrains used for commercial or industrial purpose.

Public buildings (State, Wilaya or municipalities) are exempted from the property tax, as long as they are dedicated to a public service and do not generate incomes. Places of worship are also exempted.

Are subject to the property tax (Tax Code, art. 261) undeveloped properties like terrains located in urbanized areas (or suitable for being urbanized), quarries, sand pits, saltpans and agricultural land.

Public properties (State, Wilaya or municipalities, public scientific, social or educational bodies) are exempted from the property tax, as long as they are dedicated to a public service and do not generate incomes. Places of worship are also exempted.

Selection of texts:

Law 10-13 of December 29th, 2010 laying down financial law for 2011 (Official Journal n80, December 30th, 2010)

Ordinance n11-11 of July 18th, 2011, laying down supplementary financial law for 2011 (Official Journal n40 of July 20th, 2011)

Law n11-16 of December 28, 2011 laying down financial law for 2012 (Official Journal n72, December 29th, 2011)

Ordinance n 12-03 of February 13th, 2012 laying down supplementary financial law for 2012 (Official Journal n08 February 15th, 2012)

Law n 12-12 of December 26th laying down financial law for 2013 (Official Journal n72, December 30th, 2012)

5. Labor law

The official working hours amounts to 40 hours a week: 8 hours a day (including a one-hour period of rest, 30 minutes of which considered as working time). The guaranteed minimum wage amounts to DA 15 000 per month. Extra work time is paid with an additional bonus of 50% per hour.

Foreign workers are allowed to work in Algeria provided they ask for a work permit at the national Employment agency. Applications for resident cards must be submitted to the local police station.

Salaried workers are employed to provide an intellectual or a manual job and receive a compensation for it workers benefit from trade unions right and collective bargaining, social security and pension entitlement, health, safety and medical services, strike (...).

The working relationship exists with written or verbal contract since the work is done on behalf of the employer. In the case of a verbal agreement, the contract is permanent. If the contract is written, it can be either permanent or temporary.

The minimum age to go into a working relationship is sixteen years old. Each worker enjoys a weekly rest of one day (Friday) while annual holidays are based on the number of days worked from July to June (acquisition of a maximum of 2.5 days per month). An employment contract can be modified by a mutual agreement on the changes to be made.

Wages paid include a base salary and bonuses (seniority, overtime, performance...). In order to allow equal pay for equal work, each employer guaranties equal treatment between its employees. Minimum wages are applicable in some specific business sectors and include the base salary and flat rate allowances or premiums.

The breach of an employment contract results either from a resignation of the employee or a collective or individual dismissal.

Working relations also benefit from the framework of collective agreements, which can deal either with global working and employment policy for one or several occupational categories or with specific aspects of working and employment conditions. Such agreements are written and signed by the employer (or a group of employers) and the union representatives.

6 Mining and hydrocarbons

6.1 Mining activities

Mineral heritage is by nature incorporated into the public domain. But permit or titleholder must implement a major hazard prevention plan. Mineral exploration, prospection or exploitation are subject to the authorization by special permits and payment of corresponding duties. Collecting activity is also subject to authorization and duty payment.

 

Mining activities can be operated without condition based on status or nationality of the operator providing he has been delivered a permit or title deeds (an impact assessment must be attached to the permit applications form). If exploration permits or title deeds can be transmitted or sold (under authorization of the National Agency for the Mining Heritage), exploitation permits or title deeds are not considered as mining titles.

These activities can take the form of an industrial undertaking, a small or medium sized undertaking, an artisanal operation, a collection activities or quarries and sandpits exploitations according to the production capacity of the plant and to the automated means involved in the production.

Title deeds delivered by the Wali in charge can be either authorizations for prospection or exploration permits: in the case of mining researches; a mine concession, a small or middle-sized mining exploitation permit or an artisanal mining activity: in the case of exploitation activities.

The State may also entrust a private company with public share capital to undertake mining activities on his behalf. In the case of a concession, an agreement is signed with the company beneficiary of the title deed or permit.

6.2 Hydrocarbons

Sonatrach is a public owned company supplementing the action of the State in the field of research, exploitation, transport, refining and transformation of hydrocarbons. Hydrocarbon resources or substances unveiled or not, are national properties, which the State is in responsible for.

 

Environmental considerations must be taken into account in the exploitation of these resources.

Exploration, exploitation, transportation, refining or transformation activities are commercial transactions opened to any natural or legal person with a fiscal existence en Algeria.

Net oil and gas prices are established on a yearly basis in order to promote low environment impact hydrocarbon products and encourage natural gas consumption in industrial activities. The sales prices include the price measured at the refinery gate, refining, transport, storage and distribution costs in addition to depreciation cost and a reasonable margin.

The main taxes applicable to research and exploitation activities are: a superficiary tax, an income tax (payable on a yearly basis), monthly royalties and tax on oil profits and property tax on operating assets.

Selection of texts :

Law n 86-14 of August 19th, 1986 on prospection, research, exploitation and pipeline transportation of hydrocarbons (Official Journal n35 of August 27th, 1986)

Decree n 87-157 of July 21st, 1987 on the classification of hydrocarbon research and exploitation areas (Official Journal n30 of July 22nd, 1987)

Decree n87-158 of July 21st, 1987) on identification and control modalities of foreign applicant companies for prospection, research and exploitation of liquid hydrocarbons (Official Journal n30 of July 22nd, 1987)

Decree n 87-159 of July 21st, 1987 on the involvement of foreign companies in prospection, research and exploitation of liquid hydrocarbons (official Journal n 30 of July 22nd, 1987)

Decree n 88-34 of February 16th, 1988 on granting and withdrawal of mining rights for prospection, research and exploitation of hydrocarbons (Official Journal n7 of February 17th, 1988).

Law n05-07 of April 28th, 2005 on Hydrocarbons (Official Journal n50 of July 19, 2005)

Ordinance n 06-10 of July 29th, 2006 supplementing and amending law n05-07 of April 28th, 2005 on Hydrocarbons (Official Journal n48 of July 30th, 2006)

Executive Decree n07-297 of September 27th, 2007 on pipeline transportation works construction permit and pipeline transportation of hydrocarbons (Official Journal n63 of October 7th, 2007)

Executive Decree n 07-294 of September 26th, 2007 on the procedures and conditions for the granting of permit to prospect for hydrocarbons.

Executive Decrees n 07-184 and 07-185 of June 9th, 2007 on the Procedures of research and exploitation contracts and hydrocarbon exploitation contracts following a call for tender (Official Journal n63 of October 7th, 2007)

Executive Decree n 08-115 of April 9th, 2008 on prohibited relationships between buyers and sellers in a gas contract (Official Journal n20 of April 13th, 2008)

Executive decree n10-21 of January 12th, 2010 supplementing and amending Executive Decree n07-391 of December 12th, 2007 (Official Journal n04 of January 17th, 2010)

Executive Decree n 10-182 of July 13, 2010 on tariffs and calculation methodology of pipeline hydrocarbon transportation rate per area (Official Journal n43 of July 14th, 2010)

A reform of the hydrocarbon regime has been voted on 2013 January 21st.

7. Foreign investments

Investments with external contribution benefit from the guarantee as capital invested and net profit sold. Banks, financial institutions and licensed intermediaries are entitled to examine the requests for transfer, and to proceed to the transfer in respect of dividends, profits or disposal of the foreign investments, together with attendance fees for foreign Board Directors.

 

During the implementation phase of a foreign investment project (see here ), the following taxes rate are equal to 0 %: VAT, customs and transfer duties. During the operational phase, a 0% rate is applicable for the tax on profits and the tax on the professional activity. Additional advantages are also provided with local financing programs and export incentives.

Profits and dividends of mixed investments (national and foreign investments) can be transferred within the limit of the amount of the foreign contribution in the capital.

Are excluded from the foreign investments regime: activities not registered in the Commercial Register, some imported second-hand capital goods in the case of relocation of activities from foreign countries. The beneficiaries of the foreign investments regime are not allowed to sell or transfer their investments before the end of the depreciation period without reporting to the Tax Office and the commitment of the purchaser to undertake the liability for the obligations incumbent to the initial investor.

In the case of a partial transfer of assets, the pro-rated part of the advantages perceived from the foreign investments regime will be refunded.

Are excluded from the regime activities such as restaurants, drugstores, wrapping and packaging, real estate agencies, insurance general agencies, commercial agents, stockbrokers.

Selection of texts :

Executive Decree n 07-08 of January 11th, 2007 laying down the list of activities, goods and services excluded from the benefit of the ordinance, as supplemented and amended, n01-03 of August 20th, 2001 on the development of investment.

Executive Decree n07-121 of April 23rd, 2007 implementing the ordinance n06-11 of August 30th, 2006 on the conditions and modalities of public land concession for investment purpose.

Ordinance n08-01 of February 28th 2008 supplementing ordinance n01-04 of August 20th, 2001 on organization, management and privatization of public economic companies.

Law n 08- 11 of June 25th, 2008 on the conditions of entry, stay and movement of foreign people in Algeria.

Ordinance n 2008-04 of September 1st, 2008 on the conditions and modalities of public land concession for investment purpose.

Executive Decree n2009-152 of May 2nd, 2009 on the conditions and modalities of public land concession for investment purpose.

8. Electronic resources

SCALER (CD-Rom, published by Imprimerie Officielle) containing the texts published in the Official Journal since 1962.

 

Web site of the Supreme Court: http://www.coursupreme.dz

Web site of the State Council: http://www.conseildetat.dz

Web site of the Official Journal: http://www.joradp.dz

Portail du Droit Algerien: http://www.droit.mjustice.dz/index.htm

 

9. Key facts on Algeria

According to E&Y's 2012 Africa attractiveness survey, with 328 new FDI projects since 2003, Algeria ranks at the fourth position in the Top 15 African Country Destinations after South Africa, Egypt and Morocco (FDI Intelligence, February 3rd, 2012, E&Y). With an index of 152 out of 185, Algeria Ranks above the regional average (Middle East and North Africa) in the World Bank "ease of doing business" classification (World Bank, Doing Business, 2013).

      Area covered : 2,381,741 km2

      Time Zone : GMT +1

      Population: 35,980,193

      Working population : 9,300,000 (2007)

      Unemployment rate : 11,8 % (2007)

      Average salary : 41 K DA (public sector), 34 K DA (private sector)

      Inflation rate (October 2012) : 8,96 %

      GNI (Gross National Income) per capita (US$): 4,470 DB

      Weights and measures : metric system

      Telephone numbers (country code) : +213

 

10. Sitography

 

General information

KPMG study on Algeria

World Bank Report on Algeria

Algerian corporate governance code (non official document)

Association of Business leaders

Tender offers in Algeria

Algerian companies

Portal of the insurance industry in Algeria

Law University (Algiers)

Algerian center for scientific and technical information

Islamic faculty (Algiers)

 

11. Institutional websites

Prsidence de la rpublique

Conseil de la nation

Assemble Populaire

Conseil Constitutionnel

Conseil dEtat

Secrtariat Gnral du Gouvernement

 

Prime minister

Religious and Wakfs affairs

Ministry of Justice

Ministry of Energy

Ministry of Water Resources

Ministry of Commerce

Ministry of Land use planning and environment

Ministry of Transport

Ministry of Culture

Ministry of Public Works

Ministry of Post Office, Information technologies and communications

Ministry of Habitat and Urban Affairs

Ministry of Tourism

Ministry of Youth and Sports

Ministry of relations with the parliament

Ministry of Finance

Ministry of Foreign Affairs

Ministry of Education

Ministry of agriculture and rural development

Ministry of Health and Hospital reform

Ministry of Internal Affairs and local Government

Ministry of Solidarity and Family

Ministry for Fisheries and fishery resources

Ministry of Higher Education and scientific research

Delegate Ministry in charge of family and women condition

 

12. Legal publishers:

IMPRIMERIE OFFICIELLE
Les Vergers, Bir-Mourad Ras, BP 376
ALGER-GARE
Tl: 021.54.35.06

Berti Editions
Lotissement EN NADJAH N 24
16320 Dely Ibrahim Alger
Tel: + 213 21 33 50 75
URL: www.berti-editions

Office des Publications Universitaires
place centrale de Ben Aknoun
Alger Tl. : 213 21 912314
URL: http://www.opu-dz.com

Belkeis Edition
021 50 54 02

Editions Baghdadi
021.49.89.26

Editions Dahlab

021.23.33.19

 

Edition Houma (Algiers), + 213 219 419 36