In this page: FDI in Figures | What to consider if you invest in Algeria | Protection of Foreign Investment | Procedures Relative to Foreign Investment | Office Real Estate and Land Ownership | Investment Aid | Investment Opportunities | Sectors Where Investment Opportunities Are Fewer | Finding Assistance For Further Information
Rich in natural resources and economically stable, Algeria has historically attracted decent FDI flows. After declining since the outbreak of the COVID-19 pandemic, FDI inflows picked up in 2023, reaching USD 1.2 billion according to UNCTAD’s World Investment Report 2024, in line with the three-year average of USD 1.3 billion recorded in 2018-20. At the end of the same period, the total stock of inward FDI stood at USD 36.8 billion. In 2023, net inflows of foreign direct investment in Algeria targeted the extractive industries, manufacturing, and construction sectors, with respective inflows of USD 829 million, USD 133 million, and USD 74 million (data Bank of Algeria). According to official data from the Algerian Agency for Investment Promotion (AAPI), the main investors in the country in terms of stock are the United States (29%), Italy (10%), France (10%), Spain (7%), United Kingdom (6%); whereas investments are mostly directed towards the industry sector (especially hydrocarbons), construction, transport, and agriculture. In 2024, a total of 218 investment projects were registered with the AAPI, including 136 through partnerships and the remaining 82 as foreign direct investments.
Economic operators face various challenges, including complex customs procedures, bureaucratic hurdles, issues with financial transactions, and global price competition. Foreign companies in Algeria express concerns about the frequent changes in laws and regulations, increasing commercial risks for investors. Additionally, limited regional integration and import restrictions hinder the utilization of international supply chains. Until 2019, the participation of a foreign investor in an Algerian company was limited to 49% and foreign contractors are forced to find local partners for public tenders. However, the government of President Abdelmadjid Tebboune eliminated the so-called "51/49" restriction that required Algerian majority ownership of all new companies. The requirement is still in force for "strategic sectors", identified as hydrocarbons, mining, defence, the import of goods for resale in Algeria, and pharmaceutical production. In 2022, the government released supplementary regulations tied to the Investment Law issued in July. These regulations stipulate that foreign investors must cover a minimum of 25% of the total investment cost to have unrestricted repatriation of both the invested capital and its associated income. The government has also approved a new hydrocarbons law, improving fiscal conditions and contract flexibility in order to attract new international investors. As a result of the promulgation of this law, major international oil companies signed memoranda of understanding with the national hydrocarbon company Sonatrach. There are two main agencies responsible for attracting foreign investment: the Agence Algérienne de Promotion de l’Investissement (AAPI) and the National Agency for the Valorization of Hydrocarbons (ALNAFT). Algeria ranks 115th among the 133 economies on the Global Innovation Index 2024, 104th among the 180 on the Corruption Perception Index, and 164th out of 184 countries on the latest Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
---|---|---|---|
FDI Inward Flow (million USD) | 1,143 | 870 | 89 |
FDI Stock (million USD) | 33,107 | 33,977 | 34,066 |
Number of Greenfield Investments* | 6 | 10 | 4 |
Value of Greenfield Investments (million USD) | 82 | 861 | 136 |
Source: UNCTAD, Latest data available.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Main Investing Countries | 2023 (latest official data available), in % |
---|---|
United States | 29.0 |
Italy | 10.0 |
France | 10.0 |
Spain | 7.0 |
United Kingdom | 6.0 |
Main Invested Sectors | 2023 (latest official data available), in % |
---|---|
Industry | 51.0 |
Construction and public works | 15.0 |
Transport | 15.0 |
Agriculture | 6.0 |
Services | 6.0 |
Tourism | 4.0 |
Health | 3.0 |
Source: Algerian Investment Promotion Agency, Latest data available.
Algeria's strong points for FDI include:
Algeria's weak points for FDI include:
Country Comparison For the Protection of Investors | Algeria | Middle East & North Africa | United States | Germany |
---|---|---|---|---|
Index of Transaction Transparency* | 4.0 | 6.4 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 1.0 | 4.8 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 5.0 | 4.7 | 9.0 | 5.0 |
Source: The World Bank - Doing Business, Latest data available.
The various measures take the form of tax advantages, especially tax exemptions from 3 to 5 years, depending on the kind and the size of the business. Such incentives are subject to the application of a specific request with the ANDI. Companies must make their application when they make their investment declaration. Investors also benefit from the State taking over certain expenses (duty on transfers against payment for all purchases of real estate intended for investment, fixed duty as regards reduced rate registration for charters and increase of capital, etc.).
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Latest Update: March 2025