Selling your Algerian company as a foreign investor: the three gates before the money moves
📌 In short: A foreign shareholder leaving an Algerian company clears three separate gates: a prior sector authorisation, a tax settlement, and a foreign-exchange transfer — and a fourth where the assets received investment advantages. Executive Decree no. 25-304 of 16 November 2025 sets out the authorisation procedure for the first time: the target company files, eight opinions are compulsory, the ministry has sixty days, and refusal is mandatory on two grounds. This article works through the decree article by article, sets out the 20% charge of articles 149 bis and 150-3 of the Direct Taxes Code and its thirty-day clock, and explains why the transferability of the proceeds was decided at incorporation.
Keywords in this article
1. What actually happens when a foreign company sells its Algerian stake?
Foreign shareholders spend a great deal of energy on entry and almost none on exit. Yet the exit is where an Algerian holding is either monetised or trapped, and it runs through three separate gates — an administrative authorisation, a tax settlement and a foreign-exchange transfer — each with its own decision-maker, its own file and its own clock. Two of the three cannot be repaired after signature.
| Gate | What triggers it | Who decides | Statutory time |
|---|---|---|---|
| Sector authorisation | Target operates in a strategic sector and the buyer is foreign | The ministry responsible for the target's activity | 60 days maximum |
| Tax on the gain | Any disposal of shares or units by a company with no permanent establishment | Self-assessed by the seller | 30 days from the disposal |
| Transfer of the proceeds | The original investment qualified for the transfer guarantee | Bank file, under the exchange regulations | Depends on the entry file |
| Asset authorisation (if applicable) | The assets received investment advantages | The Investment Promotion Agency | Not set by the law |
The first gate is new. Until 16 November 2025 the prior-authorisation requirement existed in the Supplementary Finance Act for 2020 but had no implementing procedure: nobody could say who decided, on what file, or within what time. Executive Decree no. 25-304, published in the Official Journal of 23 November 2025, sets the whole procedure out for the first time. This article is written against its text.
2. Does your buyer trigger the strategic-sector authorisation?
Article 2 of the decree is broader than most summaries suggest. Prior authorisation is required for any disposal of shares or corporate units held in the capital of an Algerian company carrying on an activity in a strategic sector, where the transferee is:
- a foreign natural person, or
- a foreign legal person, or
- an Algerian company whose capital is majority-held by foreign persons.
That third limb is the one that catches people. Selling to a company incorporated in Algeria is not a way around the requirement if that company is majority foreign-owned.
The definition that decides everything. Article 3 defines a foreign legal person as "any company not governed by Algerian law". It is a test of applicable law, not of shareholder nationality. A company incorporated abroad is foreign even if its owners are Algerian nationals; a company incorporated in Algeria is not foreign in itself — it is caught only through the majority-ownership limb.
Whether the target is in a strategic sector is settled by Executive Decree no. 21-145 of 17 April 2021, which sets the list of activities of a strategic nature. That list, and not the buyer's perception of the business, is what determines the answer.
💡 Field observation, not a rule of law. In our engagements the question that decides the timetable is almost never "is this strategic?" — it is "can we prove it is not?". Where the company's registered object is drafted broadly enough to overlap a listed activity, the safe assumption is that the ministry will treat the file as caught. The object clause written at incorporation therefore governs the exit, years later.
3. Who files the application, what does it contain, and how long does it take?
Three points of the procedure are counter-intuitive, and each has cost people time.
The seller does not file. The target company does.
Article 4 requires the application to be introduced by the company that is the object of the transaction, with the ministry responsible for that company's activity. A foreign seller cannot lodge it, and neither can the buyer. If the seller is on poor terms with local management, the exit depends on a filing he does not control — which is a point to settle in the share purchase agreement, not afterwards.
The application discloses the price and the resulting cap table.
Article 4 lists what must be stated: the parties, the number of shares and their percentage of the capital, the nominal and the real value of each share, the total consideration, and the structure of the capital after completion. Filing produces a receipt — and the decree says expressly that this receipt "in no way amounts to a prior authorisation".
Eight opinions are compulsory, and tax arrears block the file.
Under article 7 the reviewing ministry must seek the opinion of the departments responsible for national defence, foreign affairs, the interior, justice, finance, domestic trade and health, and of the Bank of Algeria. Each must give an explicit opinion within thirty days. Article 6 requires, among other documents, an extract from the criminal record of the foreign transferee and a cleared tax position statement for every party to the transaction. An unpaid assessment anywhere in the chain stops the file.
Article 10 gives the reviewing ministry sixty days at most to answer, running from the delivery of the filing receipt. A favourable decision is notified in the form annexed to the decree; an unfavourable one is notified in writing. Where the seller is a State-owned economic enterprise, article 5 adds a prior approval of the State Shareholdings Council.
Two numbering slips in the published text. Article 8 refers to "the ministerial departments listed in article 8 above" where the list is in article 7, and article 6 introduces the supporting documents as those of "the application referred to in article 5 above" where the application is governed by article 4. The substance is not in doubt — the opinions are those of article 7, and the documents attach to the article 4 application — but anyone quoting the decree by article number should quote the sentence as well.
4. On what grounds must the authorisation be refused?
Article 9 does not give the administration a discretion to refuse: it obliges it to. The application "is compulsorily rejected" in two cases:
- where there are indications of situations liable to affect public order and security, public health or the economic interests of the country;
- where the transferee is involved in acts of corruption or in financial and economic crime.
The second limb is why the criminal-record extract of article 6 is required for the buyer, including — the decree says so expressly — a criminal record sheet for a transferee that is a company. It is also why the opinions of justice, the interior and the Bank of Algeria are compulsory: the check is on the buyer, not on the transaction.
Note what the decree does not say. It fixes no consequence for the expiry of the sixty-day period, and it provides no appeal channel of its own. Silence is not stated to be consent, and it is not stated to be refusal.
⚠️ Practical reading, offered as such. Because the ground of refusal bears on the identity and record of the buyer rather than on the price or the structure, the due diligence that matters most in an Algerian exit is the one the seller runs on his own purchaser. A buyer who cannot produce a clean record in his own jurisdiction is not a buyer, whatever he is willing to pay.
5. What tax does a foreign corporate seller pay, and when?
The regime sits in two articles of the Direct Taxes Code, both introduced by the Finance Act for 2021.
Article 150-3 subjects capital gains on disposals of shares, corporate units or assimilated securities realised by the persons referred to in article 149 bis to a rate of 20%.
Article 149 bis governs the mechanics, and it is unusual. Companies with no permanent professional establishment in Algeria that realise gains falling under article 77 bis must compute and pay the tax themselves within thirty days of the disposal. They may appoint a duly empowered agent to complete the filing and payment formalities. Payment is made to the tax collector of the place of the registered office of the company whose securities were disposed of — not of the seller, who by definition has no establishment in Algeria.
| Seller | Dividends | Capital gain on shares | Text |
|---|---|---|---|
| Non-resident legal person, no permanent establishment | 15% final | 20% | Art. 150-2 and 150-3 |
| Non-resident individual | 15% final | 20% final | Art. 104-III |
| Resident individual | 10% final | 15% final, 5% if reinvested | Art. 104 |
Two consequences follow, and both are timetable consequences. First, the thirty days run from the disposal, while the sector authorisation takes up to sixty days before it: the tax clock and the authorisation clock do not overlap, they follow one another. Second, the tax is due in Algeria, at a local tax office, by a seller who has no presence there — which is precisely why article 149 bis allows an agent to be appointed. That appointment is prepared before signature, not in the thirty days that follow it.
How the Algerian charge interacts with the seller's own country of residence depends on the double taxation treaty applicable to it, where one exists. That analysis is specific to each situation and is not addressed here.
Plan the exit before the agreement is signed
We map the authorisations your transaction triggers, build the ministerial file with the target company, and check that the transfer guarantee actually exists on your original contribution.
Plan my exit →6. Can the sale proceeds actually leave Algeria?
This is the question that decides whether the transaction was worth doing, and the answer was written at the time of the original investment.
Article 8 of Law no. 22-18 grants the transfer guarantee to investments made from capital contributions in cash imported through the banking channel, in a freely convertible currency regularly quoted by the Bank of Algeria and sold to it, where the amount reaches minimum thresholds determined by reference to the total cost of the project. The guarantee covers the invested capital and the income arising from it.
The fourth paragraph is the one that matters on exit, and it is rarely quoted. The transfer guarantee "also covers the real net proceeds of the disposal and of the liquidation of investments of foreign origin, even where their amount exceeds the capital initially invested". The upside is transferable, not merely the original stake — but only for an investment that qualified for the guarantee in the first place.
That last condition is the whole difficulty. An investment funded by a shareholder loan, by local bank debt or by contributions that did not pass through the banking channel in the required form does not build a transfer guarantee, and no amount of documentation at exit will create one retrospectively. The decisions that determine whether the proceeds can be repatriated are the funding decisions taken at incorporation — which is the subject of our article on financing an Algerian subsidiary, and, for the income stream, of our article on transferring dividends out of Algeria.
Article 13 of the same law adds a point in the seller's favour: future revisions or repeals of the investment law do not apply to an investment made under it, unless the investor expressly asks for them to.
7. Is a second authorisation needed for the assets themselves?
Often, and it is missed because it sits in a different text from the one everybody reads.
Article 14 of Law no. 22-18 provides that goods and services which benefited from the advantages granted by that law — or by earlier provisions — may be transferred or disposed of only on an authorisation issued by the Agency. Where the Algerian company was set up under an incentive scheme and imported equipment free of duty or VAT, the equipment carries that restriction independently of the shares.
This is a different gate from the sector authorisation of Decree no. 25-304: a different legal basis, a different decision-maker, a different file. A share transaction that leaves the assets in place inside the company does not necessarily trigger it; an asset deal, a restructuring or a liquidation does. The distinction between selling the company and selling what is inside it is therefore not only a tax question in Algeria — it is an authorisation question.
8. What we see fail in practice
The following are observations drawn from our engagements. They are experience, not rules of law, and they are stated as such.
The share purchase agreement is signed before the authorisation is filed
The parties agree a completion date that assumes an administrative process nobody has costed. Sixty days for the ministry, thirty days for each opinion sought within that period, plus the time to assemble criminal records and cleared tax statements from several jurisdictions.
The filing depends on management the seller no longer controls
The application is the target company's, and the target company is run by people whose position the transaction may change. Where this is not addressed in the agreement, the exit stalls on a signature.
A tax arrear in one of the parties surfaces at the file stage
Article 6 requires a cleared position for all parties. Assessments under appeal, or instalment plans not properly annotated, are discovered when the file is assembled rather than when they arose.
The transfer guarantee was never built
The most expensive failure, and the least visible: the sale completes, the tax is paid, and the proceeds stay in a dinar account because the original contribution never met the conditions of article 8. Nothing at exit can repair it.
⚠️ Disclaimer. This article sets out the framework applicable at the stated date, for general information. It is not legal, tax or investment advice, it is not advice on exchange control, and it guarantees no authorisation, no transfer and no outcome. Texts and thresholds change: they must be checked in their version in force before any decision. Figures given as examples are illustrative.
FAQ — Frequently asked questions
🔎 Sources and references
- Executive Decree no. 25-304 of 16 November 2025 setting out the terms for granting prior authorisation for the transfer, to foreign natural or legal persons, of shares or corporate units held in the capital of an Algerian company operating in a strategic sector — articles 1 to 12 and annex — Official Journal of the People's Democratic Republic of Algeria no. 78 of 23 November 2025 · Verified on 07/08/2026
- Law no. 22-18 of 24 July 2022 on investment — article 8 (transfer guarantee, and its fourth paragraph covering the real net proceeds of disposal and liquidation), article 13 (stabilisation), article 14 (transfer or disposal of assets that received advantages, subject to Agency authorisation) — Official Journal of the People's Democratic Republic of Algeria no. 50 of 28 July 2022 · Verified on 07/08/2026
- Law no. 20-16 of 31 December 2020, Finance Act for 2021 — article 14 creating article 149 bis of the Direct Taxes Code (self-assessment and payment within thirty days by companies with no permanent establishment), and article 15 amending article 150: 15% final withholding on dividends paid to non-resident legal persons, 20% on capital gains on disposals of shares and corporate units — Official Journal of the People's Democratic Republic of Algeria no. 83 of 31 December 2020 · Verified on 07/08/2026
- Law no. 20-07 of 4 June 2020, Supplementary Finance Act for 2020 — articles 49, 50 and 52 as amended (opening to foreign investment, list of strategic sectors, prior authorisation for transfers) — Directorate General of Taxes · Verified on 06/08/2026
- Executive Decree no. 21-145 of 17 April 2021 setting the list of activities of a strategic nature — Algerian Agency for Investment Promotion · Verified on 06/08/2026
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