The Finance Act No 15-18 for 2016 (LF), published on 31 December 2015, was promulgated at the beginning of a crisis caused by the fall in the price of oil.

With a view to addressing this crisis, the act makes some advances in terms of investment, especially foreign investment, such as:

  • Articles 2 and 51 of the LF makes it possible to lower the profit reinvestment rate corresponding to tax breaks from 100% to 30%. This measure is aimed at making the Algerian economy more attractive to investors.
  • Article 55 of the LF makes it possible to use external financing. Nevertheless, this advance is conditional upon authorisation from the government and is only for projects of strategic importance. As a result, the provisions of this article may be invoked in the framework of a public private partnership contract (PPP).
  • Article 58 of the LF gives economic players, especially those in the private sector, the opportunity to create, develop and manage industrial zones.
  • Article 62 of the LF allows share capital to be opened to public companies with resident shareholders, but the companies must keep at least 34% of the total company shares for 5 years. Once this 5-year has expired, the resident shareholder may exercise an option to purchase the public company.
  • Finally, it is noteworthy that Article 66 of the LF upholds the share capital distribution regulation (known as “49/51”), via the use of the provisions of Article 4a of the Investment Code.

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