Angola

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Introduction to the Country

Quote
“Chance all; see what destiny yields.”
(Angolan proverb)

Population
18,500,000

Capital
Luanda

Government type
Republic; multiparty presidential regime

Legal system
The legal system is based on Portuguese civil law system and customary law; modified to accommodate political pluralism and increased use of free markets; has not accepted compulsory ICJ jurisdiction.

Economy overview
Angola's high growth rate is driven by its oil sector, which has taken advantage of high international oil prices. Oil production and its supporting activities contribute about 85% of GDP, Angola became a member of OPEC in late 2006 and in late 2007 was assigned a production quota of 1.9 million barrels a day.

Subsistence agriculture provides the main livelihood for most of the people, but half of the country's food must still be imported.

In 2005, the government started using a $2 billion line of credit, since increased to $7 billion, from China to rebuild Angola's public infrastructure, and several large-scale projects were completed in 2006. Angola also has large credit lines from Brazil, Portugal, Germany, Spain, and the EU.

To fully take advantage of its rich national resources - gold, diamonds, extensive forests, Atlantic fisheries, and large oil deposits - Angola will need to implement government reforms, increase transparency, and reduce corruption.

Map

Next election due
The next election was due September 2009 but was postponed.

Legal and Regulatory framework

According to the existing legal framework in Angola, the generation and distribution of electricity can be performed by companies which are not included in the public sector through concession contracts, which allows private investment especially in the form of public-private partnerships.

ENE, E.P. - Empresa Nacional de Electricidade - is a public interest company which is responsible for the generation, transportation, distribution and marketing of electricity in Angola. EDEL, E.P. - Empresa de Distribuicao de Electricidade - is a public interest company which makes the distribution of electricity, under the regime of exclusive distributor in the areas granted by the competent authorities. ENE, E.P. is part of the Southern African Power Pool (SAPP), an organization of Southern Africa Power Companies; an intergovernmental memorandum of understanding was signed for the implementation of a Power Pool in the said region. One of the most important roles of this organization was the creation and implementation of the Short Term Energy Market within the region.

The main source of power generated in Angola is hydro electric power, but there is also electricity generated by thermal power from fossil fuels. Recently, there has been a growing interest in other renewable energy sources. A special mention shall be made to BIOCOM - Companhia de Bioenergia de Angola - a joint venture set up between Odebrecht (a Brazilian company, with a share of 40%), Damer (a private Angolan group, with a share of 40%) and Sonangol (a public Angolan company, with the remaining 20%) to build a bioelectricity plant from sugarcane, which is expected to produce in 2012, the date of completion of the construction, 160 thousand MWh of electricity per year, only for domestic consumption of the country in an initial phase.

Angola has a large Russian participation in the development of its power sector. As examples of that, we shall mention the Capanda Dam, one of the largest hydroelectric complex in the country with a generating capacity of 520 MW, and the Hidrochicapa Project, whose estimated production is 16 MW. It is also planned to built two new dams, with production capacity of two thousand MW, also in the Kwanza river, where the Capanda Dam is located at.

The development of an electricity project in Angola shall be made through public-private partnerships ("PPPs"). According to the governing law, the private company can be either national or foreign (in case it is foreign it shall have a permanent representation in Angola), and may be of one of the types legally permitted; the most common types being the public limited company and the private limited company. A public limited company shall have at least five shareholders while the private limited company shall have at least two. The incorporation of a company shall follow several steps, such as the application for the trade name, the application for a tax payer number, the incorporation through a public deed, the commercial registry, the publication in the Official Journal, the registry of social security taxpayers and beneficiaries, amongst others. Nowadays, these procedures can be performed in the site of the Company's Single Desk (Guichet Unico da Empresa) - which aims to expedite the bureaucratic process of incorporating companies in Angola, nevertheless is not yet in full operation.

The public limited company shall have a minimum share capital of USD 20,000 while the private limited company shall have a minimum share capital of USD 1,000. According to the Private Investment Act, in order to take benefit of the tax and economic advantages and facilities granted by the State a foreign company must invest a minimum amount of USD 100,000 while national companies shall invest a minimum amount of USD 50,000.The maximum allowed in both cases is USD 5,000,000 and when the investment is over USD 5,000,000 it requires the authorization of the Council of Ministers must be obtained.

There is no formal requirement, concerning the participation of nationals in the share capital of the company. However, in practical terms, the participation of nationals in the share capital of the project company as a way to facilitate the installation and proper functioning of the company is advisable.

The Angolan jurisdiction allows the participation of foreign companies or branches of foreign companies in public PPPs since they are properly represented in the country.

Due to the current heavy bureaucratic process in the country the incorporation of a company usually takes a lot of time and money. Taxes shall be paid for many of the procedures performed for the incorporation.

 (a) Key enabling legislation

(i) Key legislation and regulations

The relevant legislation and regulations that govern a project company and a power project in Angola, particularly relating to power supply and generation, is the following:

Code of Commercial Companies (Law 1/2004, of February 13) - this law sets up the incorporation of companies in the Angolan jurisdiction.

Private Investment Act (Law 11/2003, of May 13) - this Act outlines the legislative framework concerning the granting of tax and economic benefits and advantages of investing in Angola for both national and foreign companies. The power sector is considered a priority sector for the development of the country so that it is eligible for getting special support from the government, provided that the requirements established by law are met.

Organic Status of the National Agency for Private Investment (Decree 44/2003, of July 4) - sets up the powers and functions of the National Agency for Private Investment - Agencia Nacional do Investimento Privado - the public entity responsible for implementing the national policy on private investment as well as promoting, coordinating and supervising private investments.

Organic Status of the Company's Single Desk (Decree 123/2003, of December 23) - outlines the functioning of the Company's Single Desk, a site where almost all actions concerning the incorporation of a company can be carried out.

General Law of Electricity (Law 14-A/1996, of May 31) - this law outlines the general principles of the legislative framework of production, transportation, distribution and use of electricity.

Regulation of Electricity Production (Decree 47/2001, of July 20) - outlines the legislative framework of power production under the Public Electricity System and the requirement to obtain a licence or concession for private power production.

Regulation of Electricity Distribution (Decree 45/2001, of July 13) - outlines the legislative framework of power distribution under the Public Electricity System, not including privative systems. It also sets up the need of getting a licence or concession to carry out power distribution.

Regulatory Office of the Power Sector (Decree Law 4/2002, of March 12) - outlines the powers and duties of the Office, as regulator of the power sector, particularly for the production, transportation, distribution and marketing of power.

Regulation on Licensing of Production Facilities, Transportation and Distribution of Electricity (Decree 41/2004, of July 2) - outlines the principles and rules governing the licensing of electrical facilities designed, built and operated to produce, transport or distribute power for public or private consumption.

Regulation of Power Supply (Decree 27/2001, of May 18) - outlines the framework for power provision in Very High Voltage, High Voltage and Low Voltage to electrical Facilities.

Environmental Law (Law 5/98, of June 19) - establishes the concepts and basic principles of the protection and conservation of the environment, the promotion of quality of life and the rational use of natural resources.

Land Law (Law 9/2004, of November 9) - outlines the legal framework of the land included in the original property of the State, the land rights that they can rely on and the general system of transmission, creation, performance and extinction of these rights.

Mechanisms of establishment, demarcation and attribution to authorize Land Concessions for Private Investment (Decree 99/2003, of October 28) - defines mechanisms for the establishment, demarcation and powers to grant concessions of land for private investment.

Environmental Licensing (Decree 59/2007, of July 13) - outlines the rules on environmental licensing of activities that, because of their nature, location or size, are likely to cause relevant environmental and social impact.

Regulation of the Professional Activity of Non-Resident Workers (Decree 6/2001, of January 19) - outlines the professional activity of foreign non-resident workers.

Regulation of the Legal Situation of Foreigners in the Republic of Angola (Law 2/2007, of August 31 and Decree 101/2007, of November 28) - outlines the legal situation of foreign citizens in Angola, including the conditions of entry, stay, living and exit of the country.

Tax and Customs Incentives for Private Investment (Law 17/2003, of July 25) - outlines the procedures and types of granting of tax incentives under the Law on Private Investment.

(ii) Overriding legislation and regulations

The General Electricity Law - enacted by Law 14-A/1996, of May 31-, sets out general legal principles for the generation, transmission, distribution and consumption of power activities. The law envisages promoting competition in generation and distribution of power, so as to implement private initiative. This law refers to specific diplomas and activities' regulations.

Decrees 47/2001, of July 20, and 45/2001, of July 13, respectively, set the rules for power generation and distribution within the Electricity Public Sector (SEP); Decree 41/2004, of July 2, approving the Regulation on the Licensing of Generation, Transmission and Distribution of power Installations within the private sector and outside the limits of the activities covered by the SEP which are to be developed under a licensing or a concession regime. Decree 41/2004 covers generation for self consumption as well as private and public supply of power.

Pursuant to the law of Delimitation of the Sectors within the Economic Activity Law 5/2002, of April 16 the generation, transmission and production of power for public consumption are reserved to the State, being developed by companies or entities which are not part of the public sector only by means of concession agreements or the issue of licenses for the said purposes.

 (b) Powers and capacity of the Government and Constitutional issues

(i) Governmental involvement

The Ministry of Energy and Water ("MEW") is the body of the Government that rules the Energy and Water sectors, being responsible for the development of their policies, planning, coordination, supervision and monitoring of activities related to recovery and rational use of national energy and water resources.

According to the General Law of Electricity the granting of a concession for production, transportation, distribution and marketing of power is the responsibility of the Council of Ministers while the granting of a license for the same purpose is the responsibility of local authorities, specifically the municipalities, according to the political-administrative division of the country.

(ii) Powers of Government

The powers of the Angolan Government are provided for in the Constitution and in the Government Organic Law, being the Ministry of Energy the government body responsible for implementing the national energy policy.

(iii) Powers in respect of the project

The Government shall enter into a concession or licensing agreement with a project company, which will grant special rights and duties to the project company. The Government will also be subject to special duties and have special rights deriving from the contract.

(iv) Power to contract

The Government has all necessary powers to enter into contracts on a commercial basis.

(v) Legislative restrictions applicable to the giving of sovereign guarantees

There are no legislative restrictions applicable to the giving of sovereign guarantees by the Government.

 (c) Regulator

(i) Overview of regulators and their powers

The Regulatory Office of the Power Sector (Instituto Regulador do Sector Electrico - "IRSE") is the entity that regulates the power sector in Angola, which is integrated with MEW. Its powers and competences derive from the General Law of Electricity and are defined in the Decree Law 4/2002, of March 12. MEW regulates the production, transportation, distribution and marketing of power in the Public Electric System (Sistema Electrico Publico). MEW also regulates the commercial relationship between this system and the agents not subject to it and exercises the functions related to the settlement of interests of the various interveners on the activities of the electric sector.

The granting of concessions and/or licences is the responsibility of the Council of Ministers and the local authorities, respectively.

(ii) Does the regulator typically enter into project documents relevant to the Project?

The IRSE has essentially regulatory powers, so that it does not typically enter into project documents relevant to the Project.

The licensing entities are empowered to enter into project documents relevant to the Project, namely concession or licensing contracts.

(iii) What is the form of licence issued and can it be amended?

IRSE typically does not issue any licence; these are issued by the licensing entities. The licences are granted for production, transportation or distribution of power and have a limited duration, which usually is of 50 years for concessions and between 30 days and 15 years for licences, extendable.

(iv) Is the regulator regarded as being genuinely independent from government/the utility? How is the regulator funded?

The IRSE is an entity incorporated in the structure of the MEW, which has legal personality and administrative and financial autonomy. Insofar it is responsible for combining the interests of the various interveners in the production, transportation and distribution of power, promoting the national arbitration and overseeing the actions of those interveners. IRSE should always be independent from both the stakeholders and the government.

 (d) Procurement

(i) Procurement or tender process

According to the General Law of Electricity, the approval and award of licences and concessions require the projects to be submitted to prior public hearing, including local authorities, social organizations and the entities that may be affected by the activities subject to licensing or concession. The award of concessions shall be preceded by a public tender.

(ii) Other specific procurement requirements

There are legislative provisions promoting the use of labour local.

 (e) Power plants

(i) Is there a standard form of power purchase agreement?

There is no standard form of PPA used in Angola.

(ii) Independent Power Projects: are there any IPPs in existence?

Please see “Legal and Regulatory Framework” section.

(iii) Merchant power: are there merchant power plants and if so, are they allowed to (or obliged to) sell power back to the grid?

Pursuant to the General Law of Electricity, the responsibility of meeting the national needs of power is assigned to the Public Electric System, which includes the National Network of Power Transport ("NNPT") and all the production facilities and transportation and distribution network connected to it. Both the NNPT and the facilities connected to it are provided for by way of a public service concession.

The law provides for the existence of power distribution companies. The tariffs within the Public Electric System are subject to regulation by the government, after the concessionaires' proposal; the government may subsidise the consumers in order to bear the costs of power producers, ensuring the profitability of their activity. Outside the Public Electric System the terms of the marketing of power are set by the parties contractually.

The power generated in Angola is only allotted to supply the domestic market and is still insufficient to meet national needs. In addition, some power consumed in Angola is currently imported from Namibia utilising the regional power grid, promoted by SADC, with an estimated power production capacity of 39,000 MW. The importing and exporting of power is subject to prior approval of the relevant entity, plus the finance and trade entities, being the prices set through negotiation with the consent of the relevant body and the financial entity.


 (f) Consents required and authorisations from other ministries

(i) List of key licences, permits or consents

A project company that wants to build and operate a power plant in Angola must obtain key licences, such as the Certificate of Registration of Private Investment (Certificado de Registo do Investimento Privado) if it is a project incorporated according to the Law of Private Investment and is issued by the National Agency of Private Investment (Agencia Nacional do Investimento Privado); and an operation licence or concession, granted by the local authorities or the Council of Ministers, respectively.

(ii) Are consents capable of being secured and are transferable to the lenders?

No.

(iii) Process of application for consents

The application for the licensing of electrical facilities, is done through a standard form provided by the licensing authority of the Ministry of Energy and Water. The application to National Agency for Private Investment ("ANIP") is a standard form provided by that entity, upon payment of a fee of USD 150. There is no standard form for the application for other licenses; it may vary depending on the concerned entity, the same regarding the costs.

 (g) Competition law

(i) Exclusivity: are any rights of exclusivity granted to a project company enforceable?

The IRSE is responsible for ensuring and promoting competition in the power sector, preventing anti-competitive and monopolistic conduct from the sector interveners and for that purpose it may lead enquiries, request information and/or apply sanctions according to the specific case.

(ii) Restrictions on competition: are there any restrictions on the ability of a project company to compete freely in the country?

There are no restrictions to a project company to compete freely in Angola. One of the basic principles of the power sector is the promotion and guarantee of competition as a way of improving efficiency in the performance of the activities of the power sector.

 (h) Environmental regulations

(i) Regulations: are there any environmental or health and safety regulations or legislation applicable to power plants?

The Sustainable development is one of the main vectors of the Angolan economy. Thus, it is necessary to obtain an environmental licence for implementing any power project which requires a positive assessment of the environmental impact of the project. The environmental impact assessment aims to ascertain the social, environmental and economic feasibility of the project, the methods of neutralising and/or minimising its effects and must necessarily include a public consultation (hearing of the communities that may be harmed because of the project).

(ii) Additional consents required by a project company

The Environmental Law, Law 59/2007, of 13 July, applies to activities that are susceptible to causing environmental and social significant impact. The law sets forth that an installation/construction licence shall be previously obtained from the entity competent for the environmental policy, i.e., the Ministry of Environment/the Provincial Governments (a National Environment Institute is still not created but its creation was recently set forth as a priority for the next years) and thereafter an operation licence must be obtained by means of verification of the fulfilment of all the requirements set forth by the Environmental Impact Study obtained previously.

The decision on the attribution of any of the above environmental licences shall be issued within 90 days from the date of submission of the application for such purpose and the costs vary according to the executive decree jointly enacted by the Ministers for Finance and Environment.

Finance and Tax matters

(a) Financial assistance

(i) Does the concept of financial assistance exist

No.

(b) Lending restrictions/banking monopolies

(i) Any restrictions applicable to the importation of capital by lenders?

According to the Angolan financial legislation all capital operations are subject to the authorization of the National Bank of Angola ("BNA"). Foreign banks must apply for a licence of the BNA to lend money to a company project in Angola.

(ii) Requirement for the lenders/security agent to be registered in the jurisdiction?

The performance of financial operations is limited to entities with head office, branch or representative office in Angola, duly registered with the BNA.

(iii) Can foreign lenders lend into the jurisdiction?

Foreign lenders are allowed to lend into the jurisdiction in the terms mentioned above.

(c) Restrictions relating to repatriation of dividends

(i) Are there any restrictions relating to repatriating dividends?

Pursuant to the Angolan Exchange Law (Law 5/97, of June 27) and the Private Investment Law, investors may repatriate dividends after deduction of the legal redemptions and payment of all taxes.

(d) Convertibility

(i) Are there any restrictions on the convertibility of the jurisdiction's currency?

There are some restrictions on the use of foreign currencies.

(e) Interest payments

(i) Are there any restrictions on the payment and compounding of interest? If so, does this also affect both local and foreign lenders?

The interest on commercial transactions cannot exceed 75% per year plus 5 or 7 %, depending on the type of security of the loan.

(f) Tax

(i) Are there any withholding tax issues in relation to interest payments and fees to foreign lenders or payments received under any agreements?

Domestic dividends, interest and royalties are subject to withholding tax on income from capital under the provisions of Law 7/1997 on Tax Restraint.

The Capital Income Tax levied on income deriving from the use of capital, interest, distributed profits and royalties accrues at the rate of 15% or 10%, as applicable.

In terms of territorial incidence, the rules vary between the taxation of entities established in Angola on obtained capital income, regardless of its origin and, at the same time, the taxation of non residents in Angola which do not have a permanent establishment there, from capital income originated (established debtor) in the country - e.g. interest on loan agreements and taxation only on income from capital originated (established debtor) in Angola - e.g. distributed profits and royalties. Finally, it should be noted that credit institutions are exempted from this tax in respect of interest on loans and lines of credit and default interest, provided that they are subject to Industrial Tax.

(ii) List of double taxation treaties.

No.

(iii) Lender risks in respect of tax liabilities/tax domiciliation as a result of providing debt and/or taking/enforcing security interests

According to the tax regime a resident company shall be taxed on income earned worldwide. The non-residents who earn income in Angola are subject to the same rules as the residents.

(iv) Can loan repayment / enforcement proceeds be treated negatively from a tax perspective for the lenders?

Apart from the applicable specific taxes on the proceeds we are not aware of any negative consequences.

(g) Stamping costs

(i) Details of stamp duty costs

Some documents and acts concerning the project company are subject to stamp duty.

Security, Enforcement and Insolvency

(a) Overview of security regime

(i) Can a security interest be obtained over a company's assets, e.g.:

(A) accounts receivable (book debts);
(B) inventory (stock in trade);
(C) shares of a company (issued and authorised);
(D) equipment;
(E) real property;
(F) insurances; and
(G) project contracts.

Pledges may be created over all movable (e.g.: shares, accounts receivable, etc) and immovable assets, although on all immovable assets (real property specifically) the pledge has to be created by means of a public deed and subsequent registration. Other types of security bringing any restriction to the disposal of the assets shall be examined on a case by case basis although, in general, this security shall be of a contractual nature only. The pledge of rights is conditioned to the rights referring to a movable asset and to that movable asset being transferrable.

(ii) Can a company grant a security interest in order to secure its obligations (i) as a borrower under a credit facility, and (ii) as a guarantor of the obligations of other borrowers and/or guarantors of obligations under a credit facility?

Charges can be created over shares in order to guarantee loans.

Shares can be validly pledged and the pledge can be enforced under an English law share charge although it might be of interest to the claimant to submit the securities to Angolan law as the system of recognition of foreign judicial decisions may be time consuming and even more complicated than the prosecution of the legal action regarding the said pledge, in Angola.

(iii) Debt obligations: can a company grant a security interest in order to secure its obligations (i) as a borrower under a credit facility, and (ii) as a guarantor of the obligations of other borrowers and/or guarantors of obligations under a credit facility?

A company can provide various types of security only in order to secure its obligations. According to the legal Angolan system several types of securities may be granted, such as mortgages, liens, pledges, etc.

(iv) If the borrowings to be secured are under a revolving credit facility, are there any special priority or other concerns?

No.

(v) Can the relevant security interests be granted to a security agent or trustee on behalf of the lenders from time to time?

Security agents and trustees do not exist in Angola.

(vi) Please indicate the claims that would have priority over the relevant security interests.

In some situations the government is considered as a preferred creditor and so do the workers. Creditors with pledges or mortgages are also considered as preferred creditors.

(vii) Is there a public security registry?

There is a commercial public registry's office.

(viii) Formalities in respect of security creation:

(A) Statutory perfection requirements;
(B) Any other formalities
(C) Steps for perfection and length of time taken
(D) Any significant financial costs or significant time delays required to create and perfect the relevant security interest?

The costs and time required for the establishment of loan guarantees will vary depending on the type of guarantee. There are security procedures, such as pledges, that do not require many formalities, while others, such as mortgages, are subject to greater formalism and charges, in particular, require a public deed, settlement and registration duties and stamp duty.

(b) Insolvency and enforcement regime

(i) Is there a court or similar register that can be searched in respect of proceedings and insolvency actions ?

There is a commercial public register office.

(ii) Summary of the different options for an insolvency related process.

The law determines that the merchant unable to meet its obligations is considered insolvent.

The Civil Procedure Code ("CPC") has some steps to recover insolvent companies, which are listed below:

  • The agreement (Concordata)

When a company finds itself unable to fulfil its obligations, before the cessation of payments or within ten days after the termination, it has a duty to file at court for a declaration of bankruptcy and request the convening of its creditors (article 1140 of the CPC). Following the petition, the court shall appoint an administrator to manage the company and prepare a report and a proposal for a composition of the credits. This report and proposal shall be submitted to the approval of the creditors in a general meeting and once it is approved it becomes mandatory.

  • The agreement of creditors

If there was no proposal for a composition or in the event of having been adopted the creditors may decide on setting up a limited liability company (sociedade por quotas) in order to continue to operate the business. The shares of the creditors are represented by the corresponding value of their claims after deducting the amounts for claims relating to those who have not signed the agreement.

  • The bankruptcy

In the absence of bankruptcy or creditors' agreement, that agreement had been reached with creditors and this agreement was rejected by the court, the debtor's bankruptcy should be immediately enacted (article 1173 of the CPC), at the request of any creditor, of the public prosecutor in the case mentioned in section b) of paragraph 1 of article 1174 of the CPC or ate the presentation of the merchant outside the period provided in article 1140 of the CPC.

(iii) Are summary or expedited proceedings available?

Apart from the possibility of choosing arbitration, in Angola there is no special jurisdiction for business or commercial cases.

(iv) Are any governmental or other consents required in connection with:

(A) the enforcement of a security interest in shares;

Please contact us for further information.

(B) the enforcement of a security interest in other assets; or

Please contact us for further information.

(C) the enforcement of a guarantee (sovereign or otherwise)?

Please contact us for further information.

There is no need for governmental authorisation to initiate legal proceedings for debt recovery and enforcement of secured interests, nor to enforce a guarantee.

(v) Do lenders inherit all environmental liabilities when they become owner of the shares upon enforcement (or at any other time)?

Upon take-over of the Company, whatever the reason shall be, the rights and liabilities of the company shall be transferred to the responsibility of the new shareholders of the company. However, lenders may contractually foresee the right to (judicially) demand the former shareholders for any liabilities (more likely to be expressed financially) regarding the time before acquisition of the shares by the lenders.

(vi) Enforcement of security: can security interests be enforced by both private sale and public auction, and is it necessary to appoint a court or other official to carry out the enforcement?

Yes, as long as it is done through a legal proceeding.

Corporate, Insurance and Employment matters

(a) Corporate vehicle

(i) Project company incorporation:

(A) Type of corporate vehicle

Please refer to the "Introduction to Power Sector" section.

(b) General corporate issues

(i) Is a private company free to lend and/or issue guarantees?

Private companies can lend and/or issue guarantees freely.

(ii) Are there any restrictions on dividend distribution?

There are no restrictions on dividend distribution since the deduction of the legal redemptions and payment of all taxes due are met.

(c) Insurance

(i) Mandatory insurance: are there any insurances which the project company or the Project is required to have by law (or regulations or similar)?

Mandatory insurance has been introduced lately. Presently, a company shall have workers compensation insurance and car insurance is also going to be mandatory in 2010.

(ii) Is there any minimum requirement to place the insurance with local insurers or any other similar restrictions? If so, can reinsurance be lawfully placed internationally?

Insurance and insurance mediation activity in Angola can only be performed by companies duly authorised to operate as such by the government.

The reinsurer activity may be performed by companies previously authorised to exercise the insurance and reinsurance, international reinsurer agencies with head office in Angola and international reinsurer agencies from which the Angolan government is a shareholder.

(iii) Are there any restrictions in respect of granting security rights over the insurances or reinsurances?

There are no restrictions other than the obligation of contracting with an Angolan insurance company.

(d) Employment

(i) Legislative/regulatory issues: is there any legislation or regulation impacting on foreign employees, in particular the conditions relating to work and residence permits? Please give an indication of the process and costs in relation to obtaining work and residence permits.

In order to work in Angola, foreign citizens shall obtain a working permit. This permit, which application shall be submitted to an Angolan consulate/ embassy, must be used within 60 days after its issuance and is valid for one year, but can be renewed. There is a fee that must be paid for the application, which varies according to the country where the permit application is filled.

(ii) Foreign restrictions: are there any restrictions that apply to foreign employees and foreign contractors/subcontractors and if so what do they need to do in order to comply with local legislation?

As mentioned above all foreign employees shall have a working permit to work in Angola. The Angolan General Labour Law establishes the responsibilities of employees and employers. The regulations encourage the recruitment of Angolan citizens and require equal payment for both national and foreign staff with the same attributions and responsibilities. Foreign staff in Angola is limited to 30% of the workforce of the company.

Land

(a) Land registry: is there a land registry (or similar) in the country that can be searched to confirm whether a project company has granted of any mortgage, charge, option assignment, lien or other encumbrance over the whole or part of the properties or assets of a company?

The Angolan jurisdiction has the Land Registry, which aims to publicise the legal situation of the real property, namely its description, ownership, mortgage, covenants or other charges concerned.

(b) Landlord's rights: please indicate whether there are any rights which accrue to the landlord (or the government or any other bodies) that may override the terms of a land lease or threaten the rights of a project company particularly any right of repossession or acquisition.

According to the Land Law, the ownership of the land originally belongs to the State. Only land included in the State private domain are likely to be granted.

The Law of Private Investment in Angola prohibits the nationalisation of assets of private investors. In an exceptional case of nationalisation and in case of expropriation, the investor shall be paid a fair compensation by the Government.

(c) Direct agreement: are you aware as to whether a direct agreement in respect of a lease has been previously been provided to lenders on other transactions?

Many of the transactions performed in Angola or relating to Angola involve foreign parties; the structures of financing and project contracts usually follow the international structure, always bearing in mind local limitations. Thus direct agreements are common.

(d) Forfeiture rights: do relief from forfeiture rights exist and would the lenders be entitled to rely on such rights?

Property rights can expire by their non-use or non-compliance with the rates of appropriate and effective utilisation for three consecutive years or six interpolated years.

(e) Is there any additional legislation governing property rights?

Property rights are established in the Angolan Constitution and Land Law (Law 9/2004, of November 2004). The main requirements on this matter concerned the power sector are mentioned on the answers above and below.

(f) Are there any formalities with which lenders need to comply when enforcing security over land?

Protective orders such as attachment, seizure, sequestration and other non specified measures are subject to registration in Angola. This registration aims to safeguard the prior right of plaintiff or applicant in the process, because he is protected against any subsequent transfer of the building.

International law and arbitration

(a) Supra-national treaties

(i) List all Bilateral Investment Treaties to which the country is party.

Angola has currently Bilateral Investment Treaties with Portugal, South Africa, United Kingdom, Italy, Germany and Cape Verde.

It also has agreements on customs cooperation with Portugal and Sao Tome and Principe and is negotiating with South Africa, the Community of Portuguese Language Countries (CPLP), Namibia, Zambia and the Democratic Republic of Congo to enter into similar agreements.

(ii) Is the country a signatory to the Energy Charter Treaty?

Angola is not a signatory to the Energy Charter Treaty.

(b) Arbitration

(i) Requirements and restrictions applicable to the choice of arbitration roles and place of arbitration

According to the Angolan Arbitration Law (Law 16/03, of July 25) it is possible to use arbitration as a mean to solve disputes on available rights, between private companies and between those and the State. The seat shall be chosen by the parties or the arbitrators may fix. In the case of international arbitration, the parties may choose the language and the law ruling the Arbitration Convention.

(ii) Are foreign arbitral awards / decisions are enforceable in the country (i.e. is the country a party to the New York Convention on the Recognition of Foreign Arbitral Awards?

Angola is not a party to the New York Convention on the Recognition of Foreign Arbitral Awards.

Renewable Energy

(a) Has the country enacted any legislation specifically designed to promote and enable the development of renewable energy projects?

There are no specific legislation to promote and enable the development of renewable energy projects in Angola yet; this is still in preparation by the government. The African Development Bank (BAD in Portuguese) has plans to finance an environmental project of about USD 19.6 millions in Angola, starting this year. This project, on the global amount of USD 21.77 millions, which main purpose is to reduce poverty in Angola, by improving social services rendered to the population and creating better conditions for the development of the private sector, shall be performed by the Ministry of Environment within the period 2009-2014 and the Angolan government will support the remaining costs. The main proposal is to review the national environmental legislation, performing of environmental information campaigns throughout the country and training of staff and technical experts on the matter.

(b) Is the country is a signatory to the Kyoto Protocol?

Angola has ratified the United Nations Framework Convention on Climate Change in May 2000 and the Kyoto Protocol in March 2007. The ways and tools of implementing the Kyoto Protocol in the country are still in a settlement phase.

[1] CIA World Fact Book.

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