Finding a better revenue balance – F Castelo Branco

Angola may be seeing significant change in the amounts foreign investors must bring to the country in order to establish operations but this is fundamentally intended to manage the liquidity of the local economy, and to prevent companies taking out more than they bring in, says João Robles, the Head of the Angola desk at F Castelo Branco & Associados.

“The country may be rich but it is investing enormous sums in rebuilding its infrastructure, effectively from nothing. This has meant the Government and National Bank of Angola (NBA) placing significant emphasis on managing the flow of capital into and out of the country.”
The new Private Investment Law has raised the minimum investment threshold from $100,000 to $1m, as the National Private Investment Agency (ANIP) was no longer approving such investments precisely because, considering the specificities of the market, an investment would hardly be considered sustainable.
“Much of the major industrial and construction activity in Angola is performed by foreign companies, who establish offshore consortia agreements which include a local Angolan partner. This means that a significant amount of the country’s oil and diamond revenues are not retained within the country.”
The new threshold may be nominal, relative to the scale of investment the country still requires, but the Government is trying to stop even small and medium-size companies repatriating the majority of their revenues as dividends.
“Depending on the relative cash flow of the country the NBA has also put limits on the ability of the banks to transfer funds internationally. The annual limit has recently been increased from $100,000 to $300,000 but previously it was $500,000.”
If an entity wants to transfer more than this it requires special permission, says Robles. “The Government’s focus towards what it calls ´qualified investors´ – able to commit to longer-term investment – is a way of encouraging more business revenues to be retained locally.”