Algeria’s Week in Business and Policy

The 2025 Finance Law came into force with provisions targeting foreign investors and domestic corporates. Tanzania will host Algeria’s first cashew-processing factory, raising Algerian export capacity in East Africa. Algeria’s first tire manufacturer will exhibit at CITEXPO, signaling entry into a new industrial sector. Parliament passed constitutional amendments that include technical changes to judicial practice. Solar sector regulations received updates intended to accelerate project deployment.

Finance Law 2025: Foreign Ownership and Local Content Rules

The 2025 Finance Law, enacted this week, includes three measures directly relevant to foreign investors and Algerian corporates:

1. Foreign investors holding at least 25% of equity in strategic sectors—defined as agro-industry, automotive components, pharmaceuticals, and renewable energy—are exempt from the standard 30% minimum local ownership requirement. This applies only to projects registered under Law 22-18 on Investment Promotion and implemented through the National Investment Development Agency (ANDI).

2. New corporate tax rebates for EURLs—limited liability single-shareholder companies—operating in free zones: a 50% reduction in the 23% corporate tax rate for the first three years if 60% or more of revenue originates from exports.

3. Import duties on industrial machinery used in strategic sectors are reduced from 5% to 2% if the buyer holds a certificate of origin from a country with which Algeria has a double taxation treaty. This covers machinery for tire production, cashew processing, and solar panel assembly.

The law maintains a 19% VAT rate on imported capital goods outside these exemptions.

Foreign Investment: From Policy to Deployment

The 2025 Finance Law’s foreign ownership clause aligns with Algeria’s broader push to attract capital without public austerity measures. The government has not reduced public spending or subsidies, maintaining fiscal deficits above 6% of GDP in 2024, according to the IMF’s latest Article IV report. ANDI reports 147 foreign-invested projects registered in 2024, totaling $2.1 billion in pledged capital—down 12% from 2023. The largest single project remains the $650 million Chinese automotive components plant in Oran, currently under construction.

The cashew-processing initiative in Tanzania involves a private Algerian group, Groupe Atlas, which will deploy a $12 million facility in Morogoro region. The plant will process 8,000 metric tons of Tanzanian cashews annually, with 60% of output earmarked for Algerian confectionery manufacturers under a three-year supply agreement. Tanzanian cashew exports to Algeria reached $47 million in 2024, making Algeria the third-largest buyer after India and Vietnam.

Industrial Expansion: Tire Manufacturing and Solar Updates

Algeria’s first tire manufacturing company, El-Khalil Tires, will debut at CITEXPO in Algiers next month. The Oran-based plant, owned by Groupe El-Khalil, is completing certification for ISO 9001 and will produce 1.2 million tires annually, primarily for the domestic market. Local tire imports totaled $320 million in 2024, according to customs data. The company has secured a $75 million syndicated loan from three state-owned banks—BNA, BADR, and CPA—to cover working capital.

In the solar sector, the Ministry of Energy and Mines issued a circular this week clarifying the application of Decree 24-188, which governs private solar projects. Key points:

– Minimum project size for private solar farms is reduced from 5 MW to 1 MW.
– Excess electricity fed into the national grid will be purchased at 85% of the regulated feed-in tariff, down from 100% in previous drafts.
– Foreign ownership restrictions remain at 49% for projects connected to the national grid.

Algeria added 187 MW of solar capacity in 2024, bringing total installed solar to 560 MW. The government’s 2030 target remains 3 GW of solar, with 1.2 GW allocated to private developers under the new rules.

Judicial Reform: Constitutional Amendments and Arbitration

Parliament approved a set of technical amendments to the Constitution, including revisions to Articles 166 and 170. The changes:

– Explicitly authorize commercial courts to enforce international arbitration awards without prior judicial review, provided the award does not violate public order.
– Reduce the statute of limitations for commercial disputes from 15 to 5 years.
– Establish a new High Arbitration Council within the Ministry of Justice to certify arbitrators and oversee ethical standards.

The amendments were passed unanimously but follow a separate crackdown on civil society organizations, with 24 NGOs dissolved in the past six months, according to Human Rights Watch. The amendments do not modify the constitutional ban on foreign judges presiding over Algerian disputes.

Armed with the new arbitration provisions, Algerian EURLs operating in free zones may now resolve cross-border disputes more efficiently. The World Bank’s 2024 Ease of Doing Business report ranks Algeria 158th out of 190 economies for enforcing contracts, a metric directly tied to arbitration enforceability.

Interconnections Across Sectors

The 2025 Finance Law’s foreign ownership clause intersects with the cashew processing project in Tanzania. The exemption for strategic sectors allows Groupe Atlas to retain Algerian capital while exporting processed goods back to Algeria, a structure that leverages both the tax rebate and the double taxation treaty with Tanzania.

The tire manufacturer’s loan from state-owned banks reflects the government’s continued use of public financial institutions to catalyze private sector expansion in industrial goods. The solar circular’s feed-in tariff adjustment suggests a policy shift toward cost recovery while maintaining private sector participation.

Judicial amendments enhance the predictability of dispute resolution for foreign investors in Algeria’s free zones, a factor cited by ANDI in its 2024 investor survey. The changes may partially offset perceptions of regulatory risk flagged by foreign chambers of commerce.

Balance of the Week

– Policy: 2025 Finance Law enacted with foreign ownership and tax incentives.
– Industry: First Algerian tire manufacturer to exhibit at CITEXPO; cashew-processing plant in Tanzania announced.
– Energy: Solar regulations updated, reducing feed-in tariff but lowering minimum project size.
– Governance: Constitutional amendments passed to streamline arbitration; no changes to public spending or austerity measures.

Key takeaway for entrepreneurs: The 2025 Finance Law offers concrete tax and ownership incentives for foreign investors in strategic sectors. For EURL founders, the reduced corporate tax in free zones and faster arbitration enforcement are immediate operational benefits. Solar project developers must adjust to lower feed-in tariffs but face smaller minimum project sizes. Cross-border ventures in agro-processing should verify eligibility for double taxation treaty benefits when structuring export-oriented operations.