News

July 14, 2020

Information for Foreign Investors on the Angolan exchange control regulations

On 23 December 2019, the National Bank of Angola (Banco Nacional de Angola (BNA) published new regulations applicable to foreign investment in Angola (Notice 15/2019). 

The regulations apply to: 

a) all foreign investments made before the publication of the new regulations, and which had been registered at BNA, and 

b)all foreign investments made after the date of publication of the regulations, with the exception of investments in the oil sector which are regulated by specific regulation.

Note: A reference to exchange control approval refers to the prior approval of the transaction by the National Bank of Angola.

1. Opening and transacting a bank account

Foreign investors wanting to invest in Angola must open a non-resident bank account at a commercial bank in the country, to which they will be able to transfer funds in foreign currency from abroad. The main account will be denominated in the domestic currency (Kwanza) with one or more sub-accounts denominated in the foreign currency or currencies transferred from abroad.

Payments to residents, including for the purchase of securities listed on the stock exchange and denominated in Kwanzas, may only be made in domestic currency, and the foreign investor shall sell the foreign currency to the commercial bank where the accounts are held for this purpose. The exception to this rule is the purchase of Angolan government bonds issued in foreign currencies which shall be paid for in foreign currency.

The proceeds from the sale of any investments as well as income therefrom shall be credited to the investor’s bank account in domestic currency, with the exception of those related to foreign currency denominated government bonds. The investor shall be entitled to purchase foreign currency for the transfer abroad of these proceeds, subject to the submission of supporting documentation to the commercial bank, as detailed in Annexure I to this information note.

Foreign investors are able to convert the proceeds from the sale of investments to foreign currency immediately upon receipt, or alternatively, keep them in domestic currency for reinvestment or for the purchase of foreign currency at a later date. Once converted to foreign currency, the funds can be transferred abroad immediately or can be maintained in the foreign currency denominated accounts for transfer at a later date, at its own discretion.

Foreign investors are not allowed to receive any amounts in domestic or foreign currency into their bank account that do not relate to the investments made in Angola. 

Adequate account opening information and documentation will have to be provided under the terms of the anti-money laundering regulations applicable in Angola, which are similar to those applicable internationally, and which require the complete identification of the account holder, be it an individual or corporate entity, including information on residency/domicile, as well as confirmation of the source of his/her income/business activity, as applicable.  

Commercial banks are obliged to ensure that all transactions registered in the bank accounts held by foreign investors are supported by documents which enable the clear identification of the source or destination of funds, as well as the justification of the movement, in order to assess the legitimacy of all transactions recorded in these accounts, whether the transactions need exchange control approval and that the amounts qualify for transfer abroad.

2. Investing in Angola

2.1 Foreign investors are able to invest, without the need for any exchange control approval, in:

a) Companies incorporated in Angola (existing or newly created), whether these are listed on the stock exchange or not; 
b) Securities listed on the stock exchange, with the exception of investment in government debt, which requires prior exchange control approval.

2.2 The funds used for the investment can be: 

a) Transferred from abroad, or 
b)Funds already deposited in a non-resident bank account in a bank in Angola, either denominated in domestic or foreign currency, but which qualify for repatriation, i.e. funds resulting from earlier transfers from abroad, the divestment/maturity of investments in the country, or income earned therefrom.

2.3 In addition to investing through financial flows, investment in a business entity which is not listed on the stock exchange can also be made through:
 
a) The import of machinery, equipment, accessories and other tangible fixed assets;
b) The incorporation of technologies and knowledge, provided it represents added-value to the participated entity and it is capable of having a monetary value attributed to it; 
c) Shareholders loans; 
d) Conversion into equity, of amounts owing to foreign investors resulting from the supply of machinery, equipment and goods, provided that the repayment of the owed amounts would have qualified for transfer abroad in terms of the exchange control regulations.

Investments made in terms of a) and b) above must always be complemented by the transfer of funds from abroad to cover set-up and other related costs.

3. Transfer abroad of capital or income from investments

3.1 As long as adequate supporting documentation is submitted to the commercial bank, foreign investors can freely transfer abroad:

a) dividends, interest and other income resulting from their investments; 
b)shareholder loan repayments;
c) proceeds of the sale of securities listed on the stock exchange; 
d) when the participated entity is not listed on the stock exchange, the proceeds of the sale, when the purchaser is also a foreign investor and the amount to be transferred abroad by the seller is equal to the amount to be transferred from abroad by the purchaser, in foreign currency;

3.2 The transfer abroad of capital, requiring the purchase of foreign currency, when the participated entity is not listed on the stock exchange, requires prior exchange control approval when it relates to the following:

a) The sale of the whole or a part of an investment; 
b) The dissolution of the participated entity;
c) Any other corporate action that would reduce the capital of the participated entity.

4. Exchange control implications for investments under the Private Investment Law

When the investment qualifies for benefits under the Private Investment Law, the requirements of that Law must be taken into account, namely that:

a) foreign investors may only transfer revenues related to a foreign investment after the complete implementation of the project, duly attested by the competent authorities and after the payment of the taxes due and the constitution of the required reserves;

b) shareholders loans are limited to a value of less than or equal to 30% of the value of the investment in the participated entity, and the loan can only be repaid three years after the date it was accounted for in the company's books of account.

5. Stock Exchange Transactions

Securities have to be transacted through the commercial banks that are registered to transact on the stock exchange.

6. Supporting documentation required

Investors must ensure that their investments are properly documented, so that supporting documentation can be provided to the commercial banks and, when applicable, to BNA, for the transfer abroad of their earnings or sale proceeds. The required documentation is listed in Annexure I to this information note.

7. Before making an investment
Investors should consult the commercial banks in Angola for more information on the foreign exchange regulations applicable to foreign investments prior to making their investments.

Annexure I
Supporting documentation required for foreign investment transactions

This annexure serves to list the supporting documentation which should be submitted to the commercial bank with the requests for an investment in government debt, and for the transfer abroad of amounts relating to investments in entities not listed on the stock exchange. 

For investment in securities, the commercial bank shall obtain the necessary supporting documentation for the transfer abroad of funds, from the stock exchange. 

1. Purchase of public debt securities, which requires prior exchange control approval:

a) Identification of the interested investor and information about its nature, namely, whether individual or corporate entity, and when applicable, the form of incorporation and the nature its business activity;
b) Amount of the intended investment;
c) Identification (negotiation code) of the intended investment; 
d) Investor’s intention, namely, of holding the investment to maturity or for trading.

2. Transfers abroad relating to participated entities which are not listed on the stock exchange:

2.1 Income derived from the investment (no exchange control approval required)

a) A copy of the Private Investment Registration Certificate (CRIP - Certificado de Registo de Investimento Privado) issued by the appropriate government authority when the investment was made under the Private Investment Law;
b) Other documentary evidence confirming the investment, when it has not been made under the Private Investment Law;
c) Financial statements of the last financial year, audited by an independent external auditor of recognized personal and professional good standing and competence;
d) When the transfer relates to distribution of profits or dividends, copy of the shareholders' resolution authorising such distribution;
e) When the transfer relates to interest charged on a shareholder’s loan, copy of the loan agreement. (Note: the interest rates charged should be market related rates.)

Note 1: The participated entity must ensure: 

a) The foreign investment, including any shareholders’ loans, has been correctly registered in the books of account of the participated entity, and when the investment was made under the Foreign Investment Law, that its registration in the books is consistent with the CRIP.
b) Full compliance with the tax obligations related to the payment of profits and dividends;
c) That it has no overdue loans in the banking system, recorded at the Credit Risk Information Registry (CIRC).

Note 2: When the investment is made under the Private Investment Law, the provisions of that Law must be taken into account, namely that foreign investors may only transfer revenues related to a foreign investment after the complete implementation of the project, duly attested by the competent authorities and after the payment of the taxes due and the constitution of the required reserves.

2.2 Repayment of shareholders loans (no exchange control approval required)

a) A copy of the signed loan agreement;
b) Financial statements of the last financial year, audited by an independent external auditor of recognized personal and professional good standing and competence.

Note: in the case of investments made under the Private Investment Law, shareholders shall ensure compliance with this Law, namely, that shareholders loans are limited to a value of less than or equal to 30% of the value of the investment in the participated entity, and the loan is only refunded at the earliest, three years from the date it was recorded in the entity's books of account.

2.3 Proceeds of the sale of a participation in an entity, where both the buyer and seller are foreign investors (no exchange control approval required)

A copy of the sales contract.

Note: the transfer of foreign currency funds from abroad by the purchaser shall be used exclusively to transfer abroad the proceeds of the sale to the seller.

2.4 Proceeds of a sale/divestment /dissolution requiring the purchase of foreign currency (prior exchange control approval required)

a) Foreign investment registration certificate (CRIP), issued by the competent authority, for investments made under the Private Investment Law or any other supporting document confirming the investment, when that was not the case;
b) Latest financial statements of the participated entity, audited by an independent external auditor of recognized personal and professional good standing and competence;
c) In the case of the sale of an investment, copy of the sales agreement concluded with the purchaser;
d) In the case of the dissolution of the participated entity, official document certifying the dissolution and the confirmation, by the tax authority, of the inexistence of unpaid taxes.
e) In the case of any other corporate action, the documents confirming such action.