The Algerian State has created structures that allow project holders to invest under the best possible conditions, namely through tax and even financial exemptions (subsidized interest rates on loans, VAT exemption, reduced customs duties on imported equipment, etc.). However, after reviewing these mechanisms, we have found that despite many advantages, starting a company is still 80% financed by owners’ equity and results in no more than 30,000 SMEs each year, far from the objective of 1 million SMEs.
This support from the Algerian State for business start-ups comes in different scales, depending on sector, age, size of the investment, foreign direct investment, etc.
To answer the question of how to start a company in Algeria, you will simply need to comply with currently legislation on the matter, such as to take advantage of the various opportunities afforded by the Algerian market where there are real needs in the different economic sectors, be it in production or services.
The entrepreneurial incentives in Algeria stem first from the country’s geostrategic position as the gateway to the African and Arab markets and its proximity to the European market which presents proven energy advantages compared with other countries in the region, not to mention its population of around 40 million inhabitants, primarily young people.
A broad development programme for the various business sectors is on the docket at different ministries, through programmes spreading from now to 2019 and beyond.
In respect of the incentives offered, some examples of these are presented below.
ANGEM - National Agency for Management of Microcredit
Microcredits are loans granted to categories of citizens no or low, unstable and irregular income. Their purpose is the economic and social integration of targeted citizens through the creation of businesses that produce goods and services.
ANSEJ - National Agency for Supporting Youth Employment
ANSEJ works with the young unemployed ages 19-35. Once the investment generates at least three permanent positions (including the company’s young founding promoters), the age limit for the new company’s manager may be increased to 40 with professional qualifications linked to the planned business and capable of making a predetermined personal contribution to the project’s funding.
CNAC - Unemployment Insurance Fund
As part of the Support Plan for Economic Growth (PSCE) and to fight unemployment and job insecurity, the CNAC placed a priority on implementing the mechanism to support business creation by unemployed promoters ages 35 to 50, beginning in 2004 and running through June 2010. As from 2010, new provisions were established to give the population segment ages 30 to 50 access to this system, with a number of new benefits such as the total investment threshold changed to DZD 10 million plus the possibility of extending production capacities for goods and services for promoters with existing businesses.
The Centre guides young project holders and future investors through the various administrative steps in founding their companies and provides training on their management, including taxes and accounts.
Business incubators are public support, hosting, guidance and assistance structures for project promoters, set up by the Ministry of SMEs.
The assistance provided to promoters essentially entails: hosting the project holders for a limited period of time and offering office space or other premises during a predetermined period of time, office furniture and computer hardware, documentation, communication and reproduction tools, Internet connection, fax, telephone, photocopier and printer; and guiding project promoters through all the necessary procedures involving financial institutions, aid and support funds, wilayas, municipalities and other organizations with a connection to their projects.
INDUSTRIAL SUPPORT STRUCTURES
ANIREF - Intermediation and Land Regulation National Agency
The Intermediation and Land Regulation National Agency (ANIREF) informs companies interested in the national and international pre-election for the establishment of a short list of engineering firms and consortia to project manage industrial parks, that the deadline for the submission of tenders, initially set as 16 December 2014, was postponed to 24 December 2014 and that the tenders must be submitted by 12 pm local time on that date.
Algerian Subcontracting and Partnership Exchange (Centre/East/West)
In response to the growing needs of large corporation in search of subcontractors and suppliers, as well as those of small units that want to receive orders from those large clients or to cooperate with other small and medium-sized industrial enterprises on production of a product, a centralized structure was needed to supply the desired information on subcontracting capacities.
ANDI - National Agency of Investment Development
ANDI’s missions are to receive, advise and accompany investors at its central and regional structures; to inform investors namely via its web site, its promotion tools and its various information points on the occasion of economic events organized in Algeria and abroad; to formalize the advantages offered by the incentive programme on the basis of equity and within a short period of time; to ensure concerted execution with the different concerned institutions (Customs, taxes, etc.) of investment incentive decisions; to contribute to the implementation of development policies and strategies in synergy with the concerned economic sectors; and to provide potential investors with access to its partnership database.
CGCI - Investment Credit Guarantee Fund
The CGCI was created at the initiative of the public authorities to support the creation and development of SMEs by facilitating their access to bank loans (financing for investment projects).
From this perspective, it is the mission of the CGCI-PME, a banking risk sharing agency, to cover the risk of non-repayment of investment loans granted to SMEs. The guarantee fund is a response to the concerns of various economic actors and a stakeholder in the process of SME creation and development in our country.
FGAR - SME Credit Guarantee Fund
The main objective of the FGAR is to facilitate access to medium term bank financing in support of the start-up and expansion of SMEs by granting credit guarantees to commercial banks in order to supplement the financial arrangements of viable business plans orientated toward business creation and/or development.
ANDPME - National Agency for Development of SMEs
ANDPME is the State’s instrument for the implementation of its national development policy for small and medium-sized enterprises.
To that end, the Agency’s missions are as follows: to implement sectoral strategy for the promotion and development of SMEs, to implement and monitor the national upgrade programme for SMEs, to promote SMEs’ expertise and management consulting, to track the demography of SMEs in terms of the creation, suspension and modification of activities, to produce industry studies and periodic economic memoranda, and to collect, exploit and disseminate information specific to the domain of SMEs.
INAPI - National Industrial Property Institute
Mission for the State (public service): to implement the national industrial property policy.
IANOR - Algerian Standards Institute
The recent development of standards has been marked by the significant impetus given to international standardization by globalization, which is gradually imposing itself.
With the globalization of markets and the acceleration of technological change, standards and certifications are becoming communication development tools for economic actors.
Within this context, IANOR’s role is to lead this standardization and to respond to the expectations of economic actors and anticipate their changing needs (developing the reference bases requested by them, helping actors gain access to standards reference bases, helping actors to apply those standards reference bases, and offering certification).
ONML - National Office of Legal Metrology
ONML is a public administrative structure under the Ministry of Industry, endowed with financial autonomy and created in 1986 by Decree No. 86-250 of 30 September 1986.
Its primary mission is to ensure the reliability of measurements by instruments requiring legal qualification and having a direct impact on fair trade, healthcare, safety, the environment and the quality of industrial production.
ALGERAC - Algerian Accreditation Body
ALGERAC’s primary mission is to accredit compliance evaluation organizations.
Within this context, the Algerian Accreditation Body is namely responsible for setting up a national accreditation system that meets the relevant national and international standards, completing the national quality infrastructure, evaluating the qualifications and competencies of compliance evaluation organizations, issuing accreditation decisions, and renewing, suspending or withdrawing decisions on compliance evaluation organizations’ accreditations.
ECOFIE - Financial Analysis and Prospective Evaluation Research Group
ECOFIE is a business corporation created by former holding companies in 1998.
Its mission is to collect and process economic and financial information relating to the merchant public sector, i.e.:
- To produce monthly dashboards for public corporations in the portfolios of portfolio management companies and for unaffiliated public corporations;
- To establish quarterly performance reports produced by the executive teams of portfolio management companies and unaffiliated public corporations;
- To create and update an economic and financial database on public corporations;
- To handle audit assignments of portfolio management companies and unaffiliated public corporations, as mandated by the CPE (Council of State Holdings) or MIPMEPI (Ministry of Industry, SMEs and the Promotion of Investment);
- To provide technical secretarial services for the general assemblies of portfolio management companies and unaffiliated public corporations.
CALPIREF - Assistance Committee for the Location and Promotion of Investments and Land Regulation
CALPIREF is charge of placing concessions for available investment land up for open or restricted public auction.
It is responsible for defining an investment strategy for each wilaya, contributing to the regulation and sustainable use of land for investments, and putting any requests for private concession arrangements to the National Investment Council (CNI). It supports all public and private land promotion initiatives for the production of improved, equipped land for investments and assists investors in locating grounds for investment projects.