Investing in Algerian agriculture as a foreigner: the closed door, the open door, and the route between them

1. 1. Can a foreigner own or farm State agricultural land in Algeria?

Not directly, and not through the most common channel. The State agricultural land that investors hear about is held under concession, never sold. Most of it sits in the portfolio governed by Law no. 10-03 of 15 August 2010: former collective (EAC) and individual (EAI) farms and so-called surplus land.

Two articles close that portfolio to foreign capital.

• Article 4 defines the concession as a right granted to "a natural person of Algerian nationality". A company cannot hold it, whoever owns the company.
• Article 21 allows a farm to enter into partnerships, by notarised deed published at the land registry, but only with Algerian natural persons or with companies governed by Algerian law whose shareholders are all Algerian.

A foreign investor therefore cannot apply to an ONTA call for an EAC or EAI plot, and cannot buy into an existing concession through a partnership. A structure designed to get around this, such as an Algerian nominee holding the concession for a foreign financier, sits outside the law. Article 29 treats subletting as a breach that leads to cancellation, and the law requires the holder to farm "directly and personally" (Article 22).

For readers who want the detail of this regime, our guide to ONTA calls for applications covers eligibility and priority rules.

2. 2. Which agricultural land is open to a company with foreign capital?

Land to be developed. Executive Decree no. 21-432 of 4 November 2021 governs State private-domain land that has to be brought into production: water mobilisation, irrigation, drainage, planting, soil conservation (Article 2).

Its Article 4 names two categories of applicant: Algerian natural persons, and legal persons governed by Algerian law. An SARL or SPA incorporated in Algeria is a legal person governed by Algerian law, whatever the nationality of its shareholders. The decree adds no shareholding condition. That is our reading of the text; the call for applications may add conditions of its own, so read it in full before committing costs.

The model cahier des charges annexed to the decree also matters for a foreign shareholder. It prohibits leasing, subletting, mortgaging or transferring the concession rights, and requires prior approval for any partnership (Art. 6). Financing plans that rely on a mortgage over the land need to be rethought before the application, not after.

3. 3. What does ODAS offer on Saharan land?

The Office for the Development of Industrial Agriculture on Saharan Land (ODAS) was created by Executive Decree no. 20-265 of 22 September 2020. It is a public industrial and commercial body headquartered in El Meniâ, under the agriculture ministry (Arts. 3 to 6). Since 2021, ONTA's remit has excluded the land entrusted to ODAS (Decree 21-59, Art. 2).

ODAS was designed for scale. Its mission is to implement national policy on strategic industrial crops, meaning crops intended for processing that meet national needs and reduce imports (Art. 7). It delimits perimeters for large agricultural and agro-industrial projects (Art. 10), and applicants may come forward individually or within a partnership (Art. 34). It also runs a one-stop desk for investors.

The allocation procedure is set by the order of 21 March 2021:

Neither Decree 20-265 nor the 2021 order mentions foreign investors as such. The eligibility rule that applies is that of Decree 21-432, adopted later, which allocates Saharan perimeters through ODAS and admits legal persons governed by Algerian law. A foreign group comes in through its Algerian company.

4. 4. Does the 49/51 rule apply to an agricultural project?

Not as a general rule. The 49/51 national shareholding requirement stopped being general with the 2020 supplementary finance law. It survives for the activities listed by Executive Decree no. 21-145 of 17 April 2021 and for import for resale in the state.

That list covers mining and quarrying, upstream hydrocarbons and pipelines, rail, sea and air transport and their infrastructure, pharmaceutical manufacturing and distribution, and the military industry. Agricultural production and food processing are not on it. A foreign investor may therefore hold the whole capital of an Algerian farming or agro-industrial company, subject to how the business object is drafted.

That drafting matters. A company whose object includes importing inputs for resale in the state would bring the 49/51 rule back into play. We cover the vehicle, the capital and the object clause in setting up a company in Algeria as a foreign investor.

5. 5. How do you make sure the money can leave again?

An agricultural project ties up capital for years: boreholes, irrigation, plantations that take several seasons to yield. The question of repatriation has to be settled before the first transfer, not after the first harvest.

Article 8 of Law no. 22-18 of 24 July 2022 grants a transfer guarantee on capital invested and the income it generates, provided the contribution was imported through the banking channel, in a freely convertible currency quoted by the Bank of Algeria. Executive Decree no. 22-300 sets the share of external financing that opens the guarantee at 25% (Art. 8).

In practice this means the order of operations decides the outcome. Capital that enters as cash, or through a channel that does not leave a banking trail, will not support a later transfer request. We explain how to structure it in funding an Algerian subsidiary and how the guarantee is used in transferring dividends out of Algeria.

Registering the investment with the investment promotion agency, under Article 25 of Law 22-18, is what opens access to the law's benefits. Article 13 adds a stability clause: later revisions of the law do not apply to an investment made under it, unless the investor asks.

6. 6. In what order should a foreign investor proceed?

Steps 2 and 3 take time, and calls have deadlines. An investor who waits for a call to open before incorporating will usually miss it. Incorporate and fund first, then watch the calls.

The business plan is also more than an application document. Under Decree 21-432 it is annexed to the cahier des charges, and ONTA or ODAS can inspect against it at any time. Promise only what the project can deliver within the six-month start and the timetable you set.

FAQ — Frequently asked questions

BENSAID Farouk

Financial & Economic Research Consultant — ProfitPilot NextGen Consulting

Certified sole trader and expert in financial studies, risk analysis and market research for SMEs, startups and investors in Algeria. View full profile