Setting up a company in Algeria as a foreign investor: the decisions of the first three weeks
📌 In short: Incorporating in Algeria is not the hard part. Structuring is. Four decisions are taken in the first three weeks — the vehicle, the capital amount, the object clause and who manages — and each is difficult and expensive to undo. Together they settle whether you may hold 100%, whether your funds can be released, and whether profits will ever be transferable. This article sets out what the texts actually say, including the precise wording of Article 590 bis 2 that is widely paraphrased too broadly, the six-month clock that runs on deposited funds under Article 567 bis 1, and the change of 9 July 2026, when the Apostille Convention entered into force in Algeria and consular legalisation ceased to be required.
Keywords in this article
1. Can a foreign company own 100%, and through which vehicle?
Two questions are routinely merged, and they have different answers. How much may I own? is settled. Through what structure? is not, and it is where files are lost.
On the share. The 49/51 national shareholding requirement ceased to be a general rule with the 2020 supplementary finance law. It survives for the activities listed by Executive Decree no. 21-145 of 17 April 2021 — mining and quarrying, upstream energy and hydrocarbons transport networks, military industries, railways, ports and airports, pharmaceutical manufacturing subject to exceptions — and for import for resale in the state. Outside those, a foreign investor may hold the whole of the capital.
On the vehicle. This is where a widely repeated shortcut needs correcting. Article 590 bis 2 of the commercial code is often paraphrased as a limited-liability company cannot be the sole shareholder of a single-member company. The text says something narrower:
« A natural person may be the sole member of only one limited-liability company. A limited-liability company may not have as sole member another limited-liability company composed of a single person. »
Article 590 bis 2 of the commercial code, added by Ordinance no. 96-27 of 9 December 1996
It is an anti-cascade rule. What it prohibits is a single-member company being the sole member of another single-member company. It does not, on its face, prohibit a multi-shareholder limited-liability company from being the sole member of an Algerian single-member entity.
Two things follow. First, ruling out the single-member vehicle for every corporate investor is a reading broader than the text. Second — and this is why we still recommend the multi-partner form in most files — nothing in Algerian law tells you how a foreign corporate form is to be characterised for the purposes of this article, and the answer in practice comes from the notary and the trade register, not from a treatise. A company with two shareholders raises none of these questions.
The sanction is worth knowing before choosing: any interested party may seek dissolution, though the court may grant up to six months to regularise and may not dissolve if the position has been regularised by the time it rules.
Settle the vehicle with the notary before anything is drafted, not after the articles have been prepared. It is the cheapest decision to change on day one and among the most expensive on day thirty.
2. What does the capital decision commit you to?
Since Law no. 15-20 of 30 December 2015 the share capital of a limited-liability company is fixed freely by the members in the articles (Article 566). The former minimum no longer exists. That freedom is real, and it is a trap, because three other rules attach to the figure you choose.
One further point that surprises people used to other systems: an industry contribution is admitted in a limited-liability company, valued in the articles, but it does not form part of the capital (Article 567 bis). It cannot be used to reach a financing threshold.
Note finally when the figure is actually needed. The bank will generally not open the account that receives the capital without a notarial instrument recording the decision to incorporate — which itself states the name, the capital, the split of shares and the legal representative. The capital amount is therefore required a full stage earlier than most timetables assume.
3. Why does the object clause decide more than the activity?
The object clause is usually drafted in the week the notary asks for the articles, often from a template, and it is the clause that fixes two things for the life of the company.
| What the object clause governs | Consequence of drifting toward trading |
|---|---|
| The ownership ceiling | Import for resale in the state falls back under the national shareholding requirement — 100% ownership is lost |
| The transfer guarantee | Import for direct resale is not eligible under Regulation no. 05-03, save for significant investment efforts, an expression never defined |
Both consequences flow from the same drafting choice, and they arrive together. A company set up to advise, assist or represent, whose object is widened to cover the purchase and resale of goods so as to keep options open, may lose full foreign ownership and the right to repatriate profit in a single clause.
What we observe in practice. Two habits cause most of the damage. The first is the catch-all sentence — and generally all commercial operations connected with the foregoing — appended to an otherwise precise object. The second is the choice of activity code at the trade register: a code whose official wording mentions foreign trade invites the file to be read as trading, whatever the articles say. Confine both to the service actually performed.
4. What changed for your foreign documents on 9 July 2026?
This is the most useful change of the year for anyone incorporating in Algeria from abroad, and it is recent enough that many files are still being prepared under the old rule.
Algeria deposited its instrument of accession to the Hague Convention of 5 October 1961 abolishing the requirement of legalisation for foreign public documents on 5 November 2025. The Convention entered into force for Algeria on 9 July 2026.
Consular legalisation is no longer required for public documents moving between Algeria and the other contracting States. A single apostille issued by the competent authority of the country of origin replaces the chain of certifications. For an incorporation file, that concerns the parent company's constitutional documents, its registry extract, the resolution appointing the representative, the power of attorney and the passport certification.
Two practical consequences follow, and the second is the one that costs time.
The apostille replaces legalisation. It does not replace sworn translation into Arabic, which remains necessary for documents to be used before the notary and the trade register.
5. What is the real sequence, and how long does it take?
Published timelines describe the administrative core. They are not wrong; they are incomplete, because they start after the steps that actually take the time. The sequence below is the one we plan against.
| # | Step | Indicative duration |
|---|---|---|
| 0 | Clearing the blockers: parent company documents, apostille, sworn translations, capital amount, corporate resolution, beneficial-ownership chain | The variable — often the longest phase |
| 1 | Name reservation and securing the registered office | Days |
| 2 | Notary, first instrument: the decision to incorporate, stating name, capital, share split and legal representative | Days |
| 3 | Bank: holding account for the company in formation, then the capital transfer in convertible currency | 3–5 weeks, of which 2–3 for the transfer itself |
| 4 | Notary, second instrument: final articles in Arabic, then legal publication | 2–3 weeks |
| 5 | Registration in the trade register | Days once the file is complete |
| 6 | Declaration of existence and tax identification | Around a month |
| 7 | Conversion of the holding account into an operating account | Days |
Note steps 2 and 4. There are two visits to the notary, not one, and the first comes before the bank because the bank requires the notarial instrument to open the account. Most planning we are asked to review assumes a single notarial step after the money has arrived, which inverts the order and loses a month.
Our observation is four to seven weeks for the administrative core where the file is complete, and three to four months to operating capability for a company whose shareholder is a foreign legal entity. The gap between those two figures is step 0, and step 0 is the part no published guide covers.
After incorporation, two deadlines run in parallel and are easily missed: the declaration of existence with the tax administration, and the foreign trader's card for a foreign manager, which must be applied for shortly after registration and takes months to obtain. Treat the manager's status as a parallel workstream from the start, not as a formality that follows.
6. Which costs are actually fixed by regulation?
Most published cost tables for Algerian incorporation disagree with one another, because notarial fees, publication charges and stamp duties vary by wilaya, by practitioner and by successive finance laws. We do not reproduce figures we cannot source, and neither should a business plan.
One figure is fixed by decree and is worth knowing early, because it is the one that surprises foreign investors.
| Investment file processing fee | Amount |
|---|---|
| Project below two billion dinars | 60,000 DA |
| Project at or above two billion dinars and foreign investments | 400,000 DA |
The fee is set by Executive Decree no. 22-299 of 8 September 2022 and is payable on the day the file is filed. Read the second row carefully: a foreign investment pays the large-project fee irrespective of the size of the project. A modest services company owned from abroad and a two-billion-dinar industrial plant pay the same amount.
Registering the investment is optional. Registration with the agency opens access to the incentive regimes; it is not a condition of incorporating or of trading. Where a small services company would draw little benefit from the incentives, the fee deserves to be weighed rather than paid reflexively. Where the incentives matter, note that registration must precede realisation of the investment to open the advantages at all.
7. Who can manage, and what does that require of them?
Article 576 of the commercial code is short and decisive: a limited-liability company is managed by one or more natural persons, who may be chosen from outside the members.
The parent company therefore cannot manage its Algerian subsidiary. Someone must be named, and the choice has consequences that reach well beyond the articles.
| Option | What it entails |
|---|---|
| Resident foreign manager | The fullest and heaviest: visa, accommodation, residence card and foreign trader's card |
| Non-resident foreign manager | Lighter, but requires the notary, the bank and the wilaya to be aligned in advance |
| Local manager | Fastest to start, provided powers are precisely bounded and banking signature is controlled |
The point to settle before you promise anyone anything. The foreign trader's card file asks for the residence card, while a non-resident director is in principle outside the residence-card regime. That tension is resolved locally, with the wilaya, and it should be resolved before filing rather than discovered during it. Our observation on the banking side is more encouraging: account-opening forms tend to require the foreign representative's passport, and the residence card only where the person actually resides in Algeria — so a non-resident manager is generally bankable.
8. What do we see go wrong?
The following are observations drawn from assignments supporting foreign investors, not regulatory requirements.
Keep every banking record of the capital inflow from the very first transfer — the transfer message, the deposit certificate, the surrender advice. It is the only legal support the authorities will ask for when profits are later transferred, and they will ask for it long after the person who arranged the transfer has moved on.
This article sets out the applicable regulatory framework and constitutes neither legal advice, nor tax advice, nor a guarantee that any authorisation will be granted. It does not substitute for the notary, who alone draws the instruments. Amounts, thresholds and deadlines are those applicable at the date of verification shown below. Every situation must be examined on its own facts.
FAQ — Frequently asked questions
🔎 Sources and references
- Commercial code, Articles 566, 567, 567 bis, 567 bis 1 and 590, as amended by Law no. 15-20 of 30 December 2015 (capital, release, industry contributions, six-month restitution, number of members) — Official Gazette of the Algerian Republic no. 71 of 30 December 2015 · Verified on 04/08/2026
- Commercial code, Article 576 (management by natural persons) and Article 590 bis 2 (sole member), Book V — Ministry of Commerce — Commercial code, Book V, commercial companies · Verified on 04/08/2026
- Law no. 22-18 of 24 July 2022 on investment — Articles 8, 13, 18, 19, 25 and 32 — Official Gazette of the Algerian Republic no. 50 of 28 July 2022 · Verified on 04/08/2026
- Executive Decree no. 22-299 of 8 September 2022 on the registration of investments and the file processing fee — Official Gazette of the Algerian Republic · Verified on 04/08/2026
- Accession of Algeria to the Hague Convention of 5 October 1961 abolishing the requirement of legalisation for foreign public documents — instrument deposited 5 November 2025, entry into force 9 July 2026 — Hague Conference on Private International Law (HCCH) · Verified on 04/08/2026
- Executive Decree no. 21-145 of 17 April 2021 setting the list of activities of strategic importance — Official Gazette of the Algerian Republic no. 30 of 22 April 2021 · Verified on 04/08/2026
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