Principles governing the investment “Freedom to invest, non discrimination,
investment protection, intangibility of benefits”, these are the main principles
governing investment in Algeria.

The current legal and regulatory framework in Algeria encourages investments and
favours development of the private sector.

It allows any individual or legal entity, whether this be Algerian or foreign, to invest in
economic activities concerning the production of goods and services, as well as the
investments made as part of the awarding of concessions and/or licences.

It is essentially constituted by edict 01-03 of 20 August 2001 regarding investment
development completed by edict 06-08 of 15 July 2006.

By modifying the old legislation, edict 06-08 traced the major revision axes for the legal
framework governing investment promotion in order to make it develop into the best
international practices.

Based on this new legislative text, an application system is currently being implemented
gradually. It particularly involves the institutional framework, the eligibility system, the
process for granting benefits and the type of benefits granted to investors.

Institutional framework – The legislative restructuring from October 2006 allowed the
) to be unified; the secretariat of the CNI
investment’s institutional framework (the ANDI
and that of the recourse Commission are from now on positioned around the ministry
responsible for the investment, which, within it, thus combines the resources necessary
to execute its tasks.

The investment competencies have incidentally been redefined, specified and organised
into three levels:

A strategic level represented by the National Investment Council (CNI).

The activities of the CNI are carried out namely regarding strategic decisions relating
to the investment
and the examination of the portfolios posing an interest for the national economy.

A political level represented by the Ministry for Industry and Investment Promotion (MIPI).

To promote and mobilise investments, the MIPI is responsible, among other things,
for creating the national investment policy and for ensuring its application.
In this area, the MIPI carries out its tasks through the General Investment Administration (DGI).

An executional level namely represented by two agencies which perform their
tasks under the control and orientation of the MIPI:

• National Agency for Investment Development (ANDI)
• National Agency for Intermediation and Property Regulation (ANIREF)
  

Right to recourse – The protection of investor rights has been reinforced by the new legislation.
The right to recourse, previously restricted to certain ANDI activities, is from now on
open to all activities related to implanting the benefit grant decision made by all organisations concerned.

See executive decree n°06-357 of 9 October 2006 regarding formation, organisation and
function of the recourse commission responsible for investments.

The guarantees granted to investors – The Algerian legislation regarding investments
grants essential guarantees to investors, namely:

• Non-discrimination in relation to Algerian individuals or legal entities.
  
• Legal security / Intangibility of the law: Unless expressly requested by the investor, the future revisions or repeals of the legislation on investment do not apply to the projects carried out within the current legislation on the day of the investment.
  
• Settlement of disputes: Any dispute between foreign investors and the Algerian
  state, resulting from the investor's actions or a measure taken by the Algerian state
  against this, will be subjected to the competent jurisdictions, except for multilateral
  agreements concluded by the Algerian state regarding reconciliation and arbitration or a
  specific agreement stipulating a compromising clause or allowing the parties to agree on
  an ad hoc arbitration compromise.
  

The list of conventions and agreements concluded by Algeria is accessible through this
link: http://www.andi.dz/convention/convention.htm

Direct foreign investments (DFI) – Financial attraction measures already
implemented in Algeria are gradually being accompanied by activities which are
significant to the final decision of foreign investors and which namely concern the
improvement of the business environment and the minimising of delays and set-up costs
and the start-up of businesses.

As part of the implementation of the industrial strategy, measures will be taken to focus
the DFIs on the financing of activities with a high capitalistic intensity, the distribution of
new technologies, the improvement of managerial capacities, a better access to the
global market and a greater diversification of national exports.

Eligibility system – A new benefits eligibility system has been put in place with the
promulgation of decree 07-08 of 11 January 2007 establishing the list of goods and
services excluded from the benefits. It introduces the general rules uniformly applicable
to all investors.

Processes for granting benefits – The process for granting benefits has also been
simplified. The handling of investment portfolios is from now on codified by two executive
decrees (currently being published) regarding the forms and methods for the investment
declaration, the request to grant benefits and the decision to grant benefits.

Noticeable progress towards the declarative process has been recorded in this area.
The prior compliance check previously conducted by the ANDI has been replaced by a
simple verification of the admissibility of the portfolio presented by the investor.

The check for observance of investor commitments will from now on be conducted by the
administrations concerned (tax and customs) and will be carried out a posteriori.