Angola business and investment climate overview

Angola offers both high returns and great risks to investors and exporters. Oil and diamond revenue and intensive infrastructure rebuilding following the end of civil war in 2002 create business opportunities, though the global financial crisis has slowed Angola’s heretofore explosive growth.

Angola's economy is heavily dependent on its oil industry although government is trying to boost other sectors.

Angola's economy is heavily dependent on its oil industry although government is trying to boost other sectors.

Over recent years, the Angolan economy had double digit growth rates, but the collapse of the oil and diamond market reduced growth in 2009. The business environment is one of the most difficult in the world. Investors must factor in pervasive corruption, an underdeveloped financial system and high on-the-ground costs. Surface transportation inside the country is slow and expensive, while bureaucracy and port inefficiencies complicate imports.

The National Private Investment Agency (ANIP) helps facilitate new investment under the 2003 Basic Law for Private Investment (Law 11/03). Law 11/03 lays out the general parameters, benefits, and obligations for foreign investors, and provides for equal treatment, offers fiscal and custom incentives, simplifies the investment application process and sets capital requirements. However, investments in the energy, diamond, telecommunication and financial sectors continue to be governed by legislation specific to each sector. Decrees and regulations issued by other government ministries may take precedence over the 2003 Law. Present or future rules may erode or negate investment protections offered by the 2003 Investment Law.

The 2003 Investment Law was part of an overall effort by the government to create a more investor-friendly environment. Other legislative measures include the Company Law and the Voluntary Arbitration Law. The Company Law consolidates the rules that apply to the incorporation of commercial companies in Angola, and the Voluntary Arbitration Law provides a legal framework for non-judicial resolution of disputes.

The ANIP must approve foreign investments of US$100,000 to $5 million. The Council of Ministers must approve investments over $5 million, as well as any investment that requires a concession (such as oil or mining) or involves the participation of a parastatal. After obtaining contract approval from the ANIP or the Council of Ministers, the investor must register the company, publish the company’s statutes in the official gazette (Diário da República), obtain a business licence, and register with the fiscal authorities. Foreign investments under $100,000 do not require ANIP approval.

Obtaining the proper permits and business licences to operate in Angola can be time-consuming. The World Bank Doing Business in 2009 report identified Angola as one of the most time-consuming countries surveyed for establishing a business (168 out of 181). Launching a business typically requires 68 days, compared with a regional average of 48 days. The government established the “Guichet Único,” or one-stop shop, under the Ministry of Justice, bringing together representatives of various ministries in one place, in an effort to simplify and speed up company registration time. However, the Ministry of Justice lacks authority over the other government ministries, and the process remains slow. Nonetheless, the Guichet Único succeeded in issuing 2000 new business licences in 2008. With the assistance of advisors from the Portuguese Ministry of Justice, the GRA Ministry of Justice is in the process of reorganising the Guichet to increase its efficiency.

While no formal discrimination against foreign investment exists, Angolan or other companies familiar with the bureaucratic and legal complexities of the business environment often hold an advantage. The Promotion of Angolan Private Entrepreneurs Law gives Angolan-owned companies preferential treatment in tendering for goods, services and public works contracts.

Conversion and Transfer Policies

Economic and financial reform measures in recent years have improved local access to foreign exchange and facilitated remittance and transfer of funds. Bank service time now has been reduced from several months to a matter of hours. While Investment Law 11/03 guarantees the repatriation of profits for officially approved foreign investment, and investors can remit funds through local commercial banks, under Central Bank Order 4/2003, the Central Bank must authorise the repatriation of profits and dividends exceeding $100,000. In addition, the Central Bank can temporarily suspend repatriation of dividends or impose repatriation in installments if immediate repatriation would have an adverse effect on the country’s balance of payments.

Expropriation and Compensation

The Government of Angola is unlikely to expropriate the assets of foreign investors directly. During 2007, however, the GRA cancelled quarrying permits for several companies, including an American-owned company, without compensation or adequate explanation. Prior to 1992, the government used failure to fulfill contractual or other obligations as justification for expelling foreign investors and expropriating their facilities. Changes in legislation and enforcement of existing laws pose some risk of reducing company profits. This is especially true in the petroleum sector, which has been subject to local content regulations and three petroleum laws promulgated in 2004. The legislative process is generally secretive and closed to public review. Additionally, vague provisions in some laws permit varying interpretations.

Dispute Settlement

Angola’s legal and judicial system lacks capacity and is inefficient. Legal fees are high, and most businesses avoid taking commercial disputes to court. The World Bank’s Doing Business in 2009 survey estimates that commercial contract enforcement, measured by time elapsed between filing a complaint and receiving restitution, typically takes 1,011 days in Angola. The Voluntary Arbitration Law (VAL) provides a general legal framework for faster, non-judicial arbitration of disputes, except for cases expressly excluded by the law. The VAL has been published in the official gazette, the Diário da República, and is in effect. Angola is not a signatory to the United Nations New York Convention, the World Bank’s International Center for Settlement of Investment Disputes (ICSID), or the United Nations Convention on the International Sale of Goods (CISG). Angola is, however, a member of the Multilateral Investment Guarantee Agency (MIGA), which provides dispute settlement assistance.

Performance Requirements and Incentives

Angola’s investment law gives foreign and domestic investors equal access to investment incentives. Incentives for such high-priority sectors as agriculture, manufacturing, energy, water and housing include exemption from industrial and capital gains taxes for up to 15 years and from customs duties for up to six years. Many foreign companies now operating in Angola enjoy some form of tax or duty waiver. Companies need to apply for such incentives when submitting an investment application to the ANIP.

While Angola does not impose or enforce many specific performance requirements on foreign investments, the government encourages “Angolanisation” of companies and greater use of Angolan suppliers of goods and services. Decrees 5/95 and 6/01 limit expatriate staffing of local companies set up in Angola by national or foreign investors to 30% of the workforce and require Angolan and expatriate staff with the same jobs and responsibilities to receive the same salaries and social benefits. Oil companies are now under a decree promulgated on October 14, 2008 to first seek Angolan employees to fill any vacant position prior to seeking expatriate appointment, which must first be authorised by the Ministry of Petroleum. International oil companies are working with the government on a new local-content initiative that will establish more explicit sourcing requirements for the petroleum sector. Oil service companies may meet these requirements by partnering with local Angolan firms, hiring more Angolan employees or substituting local products for imports. Foreign investors can set up fully-owned subsidiaries in many sectors and frequently are encouraged, but not required, to take on local partners.

In the oil and diamond sectors, contracts with the government spell out the commitments companies make to invest in infrastructure and social services to benefit local communities, such as building schools, equipping hospitals or funding microcredit programmes. The government also encourages downstream investments in facilities such as refineries and diamond-processing plants.

The Angolan government requires an environmental impact study for investments in petroleum, mining, road construction or power stations. The Ministry of Environment must approve all environmental impact studies before projects can be licensed.

Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish, acquire and dispose of interests in business enterprises. Public enterprises hold some practical advantages in access to markets and credit. All non-urban and some urban land is ultimately under state ownership, but can be leased to private entities.

Oil and diamond production and exploration rights are granted for limited periods of time and only as partnerships between private companies and the resource owners, Sonangol and Endiama, respectively. Diamond-exploration concessions normally last three to five years, with the possibility of extension. Diamond-production contracts are negotiated following a viable discovery. Oil-exploration concessions normally last for ten years. The government allows and encourages public-private partnerships and participation of private investors in public utilities like electricity and water. Private companies have concessions to operate hydroelectric dams and shipping terminals in the Port of Luanda.

Protection of Property Rights

Intellectual property

Angola has basic intellectual property rights protection. Angola’s National Assembly adopted the Paris Convention for the Protection of Industrial Intellectual Property in August 2005, incorporating the 1979 text and the patent cooperation treaty concluded in 1970 and amended in 1979 and 1984. The Ministry of Industry administers intellectual property rights for trademarks, patents and designs under Industrial Property Law 3/92. The Ministry of Culture regulates authorship, literary and artistic rights under Copyright Law 4/90. Angola is a member of the World Intellectual Property Organisation (WIPO) and follows international patent classifications of patents, products and services to identify and codify requests for patents and trademark registration. The fee for each patent petition varies by type of request.

Angola scores low on the World Economic Forum’s survey of Intellectual Property Protection index with a score of 2.6 (on a sliding scale of 1 to 7). In comparison, Brazil and South Africa score 3.3. and 5.2 respectively. Weak protection of intellectual property rights can discourage investment involving innovative or proprietary technologies.

Real estate

Angola’s Law on Land and Urban Planning affirms that all land ultimately belongs to the state, but permits most urban and some non-urban land to become effectively privately owned through long-term renewable leases from the Angolan government. However, registering property takes 11 months, according to the World Bank’s Doing Business in 2009 Survey, with fees reaching 11.6% of property value. Owners must also wait five years after purchase before selling land. Implementing regulations, when written, are supposed to set out guidelines defining different forms of land occupation, including commercial use, traditional communal use, leasing and private homes.

Transparency of Regulatory System

The government is making progress in establishing clearer written regulations. Traditionally, the regulatory system has been complex, vague and inconsistently enforced. In many sectors, no effective regulatory system exists, due to lack of capacity. The Angolan Communications Institute (INACOM) sets prices for telecommunications services and is the regulatory authority for the telecommunications sector. Revised energy-sector licensing regulations have improved legal protection for investors to attract more private investment in electrical infrastructure, such as dams, power plants and distribution grids.

Efficient Capital Markets and Portfolio Investment

Angola’s financial sector, though still underdeveloped, has grown rapidly and key indicators have improved in recent years. Most banks focus their operations on such short-term commission-related activities as currency trading and trade finance. Foreign investors do not normally access credit locally, and local investors either self-finance or seek financing from non-Angolan banks and investment funds. Subsidised government loan programmes to promote economic development are available only to majority-owned Angolan companies and on a very selective basis. Local businesses must take loans in kwanzas, the Angolan currency, though exceptions are granted.

In the past, triple-digit inflation resulted in a high level of dollarisation in the economy and banking system, with 70% of banking assets held in dollars. Since the end of the civil war in 2002, the Central Bank has devoted considerable effort to rebuilding trust in the kwanza, bringing inflation down to 12% in 2006 and 11.8% in 2007. In 2008, however, inflation rose to 13.2%. The mandatory reserve requirement for non-government deposits, whether in kwanzas or foreign currency, is 30%. The reserve requirement for government deposits is 100%, a measure that seriously limits lending by state-owned banks.

The number of private banks has been growing since 2003, transforming a sector previously dominated by state-owned banks. Two of Angola’s three largest banks are privately owned. As of late 2008, Angola had 18 commercial banks, three of them state-owned. While every provincial capital has at least three bank branches, only 6% of the population uses banks, and few businesses even apply for loans.

Banks have begun to offer a more diverse array of financial products and instruments. Auto loans and mortgages are increasingly available, as are 15-year mortgages at 8% interest. Unclear land titles and ill-defined property rights may, in some instances, complicate and lengthen the process of applying for a mortgage.

The normal banking need to identify customers and require collateral are blocked because state-owned property cannot be offered as collateral, the judicial system is weak, credit histories cannot be tracked and few houses have street addresses. Banks profit from transactions, short-term trade financing and investments in high-interest government bonds, but also increasingly from loans, especially in the construction sector. In the past, state and state-affiliated companies enjoyed privileged access to loans, often at concessionary rates, leading to several bank failures. Currently, the non-performing loan rate is relatively low, reflecting conservative lending practices throughout the sector. Legislative changes and development in the banking sector are expected to widen the availability of credit. The new land law should reduce confusion over property rights and help identify sources of collateral.

The Central Bank has developed a market for short-term bonds called Títulos do Banco Central and long-term bonds called Obrigações do Tesouro. Most of these bonds are bought and held by local Angolan banks. The Obrigações have maturities ranging from 1 to 7.5 years, whereas the Títulos have maturities of 91 to 182 days. For up-to-date information on current rates, see

Political Violence

Political violence is not a substantial risk in Angola. The security situation in its oil-rich enclave of Cabinda has improved markedly since the 2006 peace accord between the leading separatist movement and the central government. Nonetheless, Cabinda has continued to experience violence, often targeted at foreigners.


To lower investment risks and provide greater assurance to investors, Angola needs greater progress toward good governance, the rule of law and diminished corruption. Senior officials are widely seen as corrupt, while the government’s limited publication of accounting information fuels public suspicions. Since 2006, under pressure from the international community, the government has made significant strides towards greater transparency by publishing financial information and preventing extra-budgetary expenditures. Angola is not a signatory to the OECD Convention on Combating Bribery, but is a participant in the New Partnership for Africa’s Development (NEPAD), which includes a Peer Review Mechanism on good governance and transparency. Angola’s government approved an Audit Court in 2000 to investigate misuse of public funds by public institutions.

Low civil-service salaries and a proliferation of bureaucracy and regulations present opportunities for rent-seeking and encourage corruption. Complicated procedures and long bureaucratic delays sometimes tempt investors to seek quicker service and approval by paying gratuities and facilitation fees. Transparency International’s 2008 Corruption Perception Index (CPI) placed Angola at 158 of 180 countries. The Heritage Foundation ranked Angola 143 of 162 countries surveyed on its 2008 Index of Economic Freedom, describing Angola as “repressed”.

Although the nation’s public and private companies historically have not used transparent accounting systems consistent with international norms, Angola, encouraged by the IMF, has invited major international accounting firms to conduct regular audits of its largest public companies. The 2002 Audit Law requires audits for all “large” companies, but the lack of a professional accounting oversight body has impeded enforcement.


Angola’s General Labour Law (Law No. 2/00) provides significant protection and benefits to workers. The law expands maternity and other leave and provides the right to strike and bargain collectively. The law spells out proper procedures for hiring workers. For work contracts of indefinite duration, the law provides for a basic probationary period of up to six months, during which the worker or employer can terminate the contract without notice or justification. After the probationary period ends, dismissed workers have the right to appeal to a Labour Court. Many employers prefer to reach a monetary settlement with workers when a dispute arises, rather than bring cases before the Court. The World Bank Group’s 2009 Doing Business report placed the average cost of firing a worker in Angola at 58 weeks worth of wages.

The local labour force has limited technical skills, English language ability and managerial ability. Many employers invest heavily in educating and training their Angolan staff.

The government conducts annual surveys of the oil industry to implement a requirement that oil companies hire Angolan nationals when qualified applicants are available. If no qualified nationals apply for the position, then the companies may request the government’s permission to hire expatriates. This rule also requires equal pay and benefits for equal work. Outside of the petroleum sector, policies to encourage Angolanisation of the labour force discourage bringing in expatriate labor. This has extended to delays in approving visas for technicians to visit for a few weeks. In late 2008, the government began enforcing its Angolanisation policy. An announcement was issued by the government directed at the international oil companies. A similar announcement for companies outside the petroleum sector was not released.

Foreign-Trade Zones/Free Ports

Angola is a signatory to the Southern African Development Community (SADC) Free Trade Protocol that seeks to harmonise and reduce tariffs and establish regional policies on trade, customs and methodology. However, in 2008, Angola announced that it would delay implementation of this protocol until 2010, fearing a flood of imports from other SADC countries, particularly South Africa.

The government aims to revive internal production before lowering its tariff barriers. In September 2004, the government announced reduced customs duties on imported goods and in December exempted businesses and individuals in the enclave of Cabinda from all customs duties. In early 2009, the newly expanded port of Cabinda began operations. An initial investment of $100 million was made to deepen the port and increase port capacity. These reductions and exemptions do not apply to the oil industry.

Angola has signed customs cooperation agreements with Portugal and São Tomé and Principe, and more recently (December 2006) with neighbouring Namibia. Other agreements are expected with South Africa and members of the Community of Portuguese-Speaking Countries (CPLP). Angola is also currently negotiating customs agreements with two other neighbours, Zambia and the Democratic Republic of Congo, both fellow SADC members.

This information was produced by the US Embassy, Angola