1. Mandatory accounting requirements for all new companies
The Commercial Code and Accounting Law No. 90-23 require businesses to maintain accurate financial records, prepare annual accounts, and submit declarations to the tax authority. Failure to comply can result in fines, penalties, or even administrative dissolution.
2. Choosing the right accounting system
The choice depends on company size, legal form, and turnover. The Chamber of Commerce (CCI) or a certified accountant can help determine eligibility.
3. Step 1: Registering with the tax authority (DGI)
Required documents:
– Certified copy of the company’s articles of association
– Extract from the Commercial Register (RNCP) issued by the National Company Registration Center (CNRC)
– Bank certificate confirming the company’s capital deposit
– Appointment of a legal representative (notarized if required)
Pitfalls:
– Delayed registration can trigger penalties.
– The DGI may request additional documents if the company structure is unclear.
4. Step 2: Opening a corporate bank account
Required documents for bank account opening:
– Certified copy of the RNCP extract
– Tax registration certificate (from DGI)
– Notarized power of attorney for authorized signatories
– Passport copies of directors/shareholders
Pitfalls:
– Some banks may require a personal guarantee from directors.
– Foreign-owned companies may face additional exchange control requirements when transferring funds.
5. Step 3: Maintaining accounting records
Digital vs. paper records:
– The DGI accepts digital records if they are secure, traceable, and backed up.
– Paper records must be stored for at least 10 years (some tax authorities may require longer retention).
Pitfalls:
– Missing or incomplete records can lead to tax audits.
– Handwritten records are not accepted by the DGI.
6. Step 4: Preparing annual financial statements
Approval process:
– The financial statements must be approved by the general meeting of shareholders (for SAs/SARLs) or the company director (for individual enterprises).
– A certified accountant (expert-comptable) must review and sign off on the accounts if the company exceeds the simplified accounting threshold.
Pitfalls:
– Late submission can result in penalties of up to 5% of turnover.
– The DGI may reject statements if they lack audit trail or consistent categorization.
7. Step 5: Filing tax declarations
Corporate tax (IS):
– Standard rate: 25% (reduced rates apply for certain sectors; confirm with DGI).
– Minimum tax (taxe minimale) may apply if profits are low.
VAT (TVA):
– Standard rate: 19% (reduced rates for essential goods/services).
– Quarterly VAT returns are mandatory for registered businesses.
Pitfalls:
– Underreporting income can trigger audits and back taxes.
– Late payments incur interest and penalties (up to 10% of the due amount).
8. Step 6: Social security and payroll obligations
Required documents:
– Employee contracts
– Bank details for salary payments
– CNAS registration certificate
Pitfalls:
– Late or incorrect social security payments can lead to fines or labor disputes.
– The minimum wage must be respected (currently 24,000 DZD/month in 2024; verify with CNAS).
9. Step 7: Auditing requirements
Pitfalls:
– Non-compliance can result in legal sanctions.
– Auditors must be approved by the Algerian Institute of Auditors (IRE).
10. Common mistakes and how to avoid them
FAQ
2. Can a foreign director manage accounting remotely?
No. Algerian law requires at least one Algerian resident director for most companies. Accounting records must be accessible to local authorities upon request.
3. What happens if a company fails to file tax returns on time?
The DGI imposes penalties starting at 5% of the unpaid tax, plus monthly interest (currently 1.5% per month). Repeat offenses may lead to legal action or business closure.
What to do next
Sources
💡 Starting a business in Algeria? GlobalStart guides you step by step: procedures, real costs, company forms (SARL, EURL, SPA) and CNRC registration.