May 11, 2021
2021-0948 Algeria issues list of strategic activities for foreign direct investment Algeria’s Complementary Finance Act for 2020 and the Finance Act for 2021 have modified the legal provision that requires each foreign investor to have at least a 51% equity stake owned by an Algerian resident. Accordingly, this rule, known as the 49/51 rule, is no longer a condition for the creation of a legal entity under Algerian law by a foreign investor, except for "strategic activities" and commercial companies carrying out an import and resale activity. As background, “strategic activities” include: - Mines sector
- Hydrocarbon sector
- Military industry sector
- Transportation sector
- Pharmaceutical industry sector (except in special cases)
In consideration of this framework, Executive Decree n° 21-145, issued on 22 April 2021, specifies the list of strategic activities, appearing on the national nomenclature of the economic activities, which remain subject to a national majority shareholder obligation. Strategic activities related to the military industry sector will be set forth in a separate regulation. The activities concerned and their national nomenclature codes (as per the Trade Register list) are: Pharmaceutical industry sector Code | Description | 104207 | Manufacture of pharmaceutical products | 104226 | Manufacture of medical devices | 308002 | Wholesale of pharmaceutical products | 308009 | Wholesale distribution of medical devices | 602120 | Contract research organization (CRO) | 602121 | Pharmaceutical establishment for the exploitation of registration decisions for pharmaceutical products | 602122 | Pharmaceutical establishment for the exploitation of medical device licensing decisions | 607016 | Society for the promotion and medical and scientific information on pharmaceutical products |
Hydrocarbon and Mines sectors Code | Description | 102202 | Extraction of liquid and gaseous hydrocarbons | 102205 | Transport of liquid hydrocarbons and condensate by pipeline | 103101 | Mining and processing of iron ore | 103102 | Extraction and preparation of bauxite | 103103 | Mining and preparation of non-ferrous base metal ores | 103104 | Mining and preparation of ores for ferroalloys | 103105 | Mining and preparation of various metal ores | 103106 | Extraction and preparation of various metal ores | 103107 | Mining and preparation of uranium ores and radioactive ores | 103108 | Pyrite extraction and preparation, Sulphur production | 103109 | Extraction and preparation of various mineral products | 103201 | Coal mining | 103202 | Quarrying of dimension stone for construction and industry | 103207 | Extraction and preparation of various quarry products not intended for building materials | 103208 | Extraction and preparation of potassium salt | 103209 | Extraction and preparation of salts including salt marshes | 103210 | Extraction and preparation of phosphates |
Transportation sector Code | Description | 604201 | Passenger rail transport | 604202 | Rail freight transport | 604301 | Air passenger transport | 604302 | Air cargo transport | 604303 | Air transport service | 604304 | Air service for agriculture | 604401 | Maritime passenger transport | 604402 | Maritime transport of goods | 604403 | Maritime cabotage | 604406 | Urban marine transport | 604602 | handling | 604606 | Management of land transport infrastructures | 604607 | Port services company | 604608 | Airport services | 604633 | Ship’s agent | 604634 | Consignee of the cargo | 604635 | shipbroker | 604637 | Operation of a light aviation service | 604641 | Chartering and air freighting |
_________________________________________ For additional information with respect to this Alert, please contact the following: Ernst & Young Algérie, Algeria Tax, Legal and Transaction Practices Leader, Alger EY Société d’Avocats, Africa Tax Desk Leader Ernst & Young Algérie, Business Tax Advisory, Alger | 
