In Algeria, your turnover does not decide your legal form

Q: At what turnover must you set up a company in Algeria?

No Algerian text makes the creation of a company conditional on a level of turnover. The only mechanism linking the two is article 13 of Law No. 22-23 of 18 December 2022: a registered sole trader who exceeds the turnover ceiling for three consecutive years must enter the commercial register if he wishes to continue trading. Apart from that case, the legal form is chosen on the number of partners, the activity carried on and the capital required — not on an amount collected.

Q: Which turnover thresholds matter in 2026?

Three tax thresholds, published by the Directorate General of Taxes in its documentation updated on 28 February 2026: 5,000,000 DZD for sole-trader status, with a flat-rate tax of 0.5 % and a minimum charge of 10,000 DZD; 8,000,000 DZD for the ordinary flat-rate regime, at 5 % for manufacturing and the sale of goods and 12 % for other activities, minimum 30,000 DZD; and above that, the actual profit regime, with corporate income tax at 19, 23 or 26 % depending on the activity (article 150 of the CIDTA).

Q: Can an importer use the flat-rate tax regime?

Not for goods and merchandise intended for resale as is: article 282 ter of the CIDTA excludes that activity from the flat-rate regime. An importer therefore falls under the actual profit regime from the first dinar of turnover. It is the clearest illustration of the principle that, in Algerian law, the activity carried on weighs more than the amount collected. A narrow opening does exist for the micro-importer operating under sole-trader status, covered by article 6 of Executive Decree No. 25-170 of 28 June 2025.

Q: Is a statutory auditor required only above a certain turnover?

The answer depends on the form, not on turnover alone. In a joint-stock company, article 715 bis 4 of the commercial code makes the appointment compulsory from the first financial year, with no threshold. A holding company appoints at least two (article 732 bis 2). In a SARL, the obligation follows a three-criteria test — capital, turnover and headcount — whose figures we do not publish, the consolidated version of the implementing text setting them not having been read in full.

Q: Does a holding company reduce tax in Algeria?

Elsewhere the argument rests on a participation-exemption regime which, in Algeria, was repealed by the 2022 Finance Act (article 147 ter of the CIDTA). Without it, inserting a holding company adds a layer of taxation instead of removing one, and requires the appointment of at least two statutory auditors. A holding company may be justified on legal, governance or group-structuring grounds — the purely tax argument does not hold under the texts as they currently stand.

Q: Can you go back from the actual profit regime to the flat rate?

No. Once eligibility for the actual profit regime is acquired, it is maintained whatever the turnover of subsequent years. An exceptional financial year cannot be undone by returning to the flat rate the following year. That is what makes preparing for the crossing — setting up full accounting, building a presentable trading history — more important than the crossing itself.

BENSAID Farouk — Financial Expert 11 August 2026 12 min read Updated: August 2026

In short: The reasoning « at this level of turnover, choose that structure » travels well and applies badly. It comes from systems where the legal form carries the tax regime with it. Algerian law separates the two. Turnover drives the tax regime — sole-trader status up to 5,000,000 DZD, flat-rate tax up to 8,000,000 DZD, actual profit regime above. It does not drive the legal form, which is decided by the number of shareholders, the activity carried on and the capital required. Three facts settle the point: an importer falls under the actual profit regime from the first dinar, a joint-stock company appoints a statutory auditor from its first financial year, and a holding company appoints two — with no turnover threshold anywhere in sight.

Keywords in this article

turnover vs legal form flat-rate tax (IFU) 8 000 000 DZD threshold actual profit regime EURL / SARL / SPA article 282 ter CIDTA CASNOS · CNAS CIT 19 / 23 / 26 % statutory auditor 0.5 % registration duty participation exemption repealed import for resale as is

1. 1. Why does « this turnover, therefore that structure » mean nothing in Algeria?

The reasoning is attractive because it is simple: state a turnover, read the matching row, obtain a structure. It works in jurisdictions where the legal form carries the tax and social security regime, so that crossing a ceiling forces a change of structure.

Algerian law separates the two. On one side, a tax regime that does follow turnover. On the other, a legal form that does not, and whose conditions appear in the commercial code without a single turnover figure.

What your turnover decides	What it does not decide
The tax regime: sole-trader status, flat-rate tax (IFU) or actual profit regime	The choice between sole proprietorship, EURL, SARL and joint-stock company
The rate and the tax base — turnover under the flat-rate regime, profit under the actual regime	The amount of share capital, free for a SARL since Law 15-20
The nature of your accounting and filing obligations	The duty to appoint a statutory auditor in a joint-stock company
Whether or not you fall within the scope of VAT	The director's social security scheme (CASNOS or CNAS)

There is one single point at which turnover touches the legal form, and it is narrow. Article 13 of Law No. 22-23 of 18 December 2022 requires a registered sole trader who exceeds the ceiling for three consecutive years to enter the commercial register if he wishes to continue trading. In other words, the only effect of turnover on structure is to push you out of the lightest regime — and it takes three financial years.

What this means in practice. Asking « what structure for 4 million dinars? » bundles two separate questions into one: which tax regime is open to me at this level? and which legal form do my activity and my partners actually need? Neither answer can be deduced from the other.

2. 2. Which turnover thresholds actually exist in Algerian law?

There are few of them, and all are tax thresholds. The figures below come from the documentation of the Directorate General of Taxes as updated on 28 February 2026, and from the articles of the Direct Taxes Code (CIDTA) it refers to.

Annual turnover	Regime available	Tax	Minimum
Up to 5,000,000 DZD	Sole-trader status (Law 22-23)	0.5 % of turnover (art. 282 sexies)	10,000 DZD
Up to 8,000,000 DZD	Flat-rate tax (IFU) — ordinary regime	5 % manufacturing and sale of goods 12 % other activities	30,000 DZD
Above 8,000,000 DZD	Actual profit or simplified regime (art. 282 quater)	Corporate income tax 19 / 23 / 26 % on profit (art. 150)	—

The flat-rate tax hits turnover, not a reconstructed profit

There is no standard allowance for expenses under the flat-rate regime. The tax applies to turnover actually collected, whatever the real level of costs. The consequence runs opposite to what foreign content suggests: heavy real costs are not a reason to stay on the flat rate, they are a reason to leave it. On a low-margin activity, 12 % of turnover can exceed what corporate income tax on the actual profit would have cost.

One threshold to watch, not two

Taxpayers under the flat-rate regime are outside the scope of VAT and invoice on a tax-inclusive basis. So there is no regime ceiling on one side and a separate VAT threshold on the other: crossing the flat-rate threshold changes the regime and brings you into VAT on the same day.

There is no way back

Once eligibility for the actual profit regime is acquired, it is maintained whatever the turnover of later years. One exceptional year cannot be undone by returning to the flat rate the year after. That is what makes preparing for the crossing more important than the crossing itself.

One exception to know before reasoning in thresholds. Companies holding the « start-up » label are exempt from the flat-rate tax for four years from the date the label is granted, plus two further years if it is renewed (art. 100 of the 2026 Finance Act). For an eligible project, the label weighs far more in the equation than the choice between an EURL and a SARL.

Where does your forecast actually take you?

A costed comparison of the flat-rate and actual regimes over three financial years, the full cost of the form you have in mind, and a switching timetable — delivered as a written recommendation.

Have my structure reviewed

3. 3. If not turnover, what actually decides the legal form?

Four parameters, and none of them is a turnover figure.

Form	What governs it	Legal basis
Registered sole trader	Activity listed as eligible; liberal professions, regulated professions and craft activities are excluded	Law 22-23, art. 2 and 3
EURL (single-member SARL)	One member	Commercial code, SARL chapter
SARL	From 2 to 50 members; capital free since 2015	Art. 590; Law 15-20
Joint-stock company (SPA)	Minimum capital of 1,000,000 DZD, raised to 5,000,000 DZD where there is a public offering	Art. 594
Simplified joint-stock company (SPAS)	Reserved « exclusively » to companies certified as start-ups	Art. 715 bis 133 (Law 22-09)

The decisive parameter is the activity, not the size

Article 282 ter of the CIDTA excludes from the flat-rate regime the import of goods and merchandise intended for resale as is. An importer therefore falls under the actual profit regime from the very first dinar, with full accounts and financial statements. No table of turnover brackets can capture that — and it is precisely the proof that the activity outranks the amount.

The second parameter is the exit, not the entry

A SARL share cannot be sold freely: article 571 subjects any transfer to a third party to the approval of members representing three quarters of the capital, and article 572 requires a notarised deed. A share in a joint-stock company is simply transferred. Choosing a SARL for a venture meant to bring in investors is deciding today a difficulty that will surface in three years. We develop the point in our guides Setting up a SARL in Algeria and Setting up a joint-stock company in Algeria.

From our engagements, and without this being a rule of law, two further parameters weigh as much in practice as the texts do: the documentary requirements of large buyers — a commercial register extract, sometimes a certain level of capital, are requested in supplier files — and the readability of the bank file, which rests on standardised financial statements that the flat-rate regime does not produce.

4. 4. At what point does the chosen form start to cost money?

This is the useful question, and it is not answered as a percentage of turnover. A company carries fixed costs: painless at 30 million dinars, crushing at 3 million.

Item	What triggers it	Legal basis
Notarised incorporation deed	Every company — on pain of nullity	Commercial code, art. 545
Registration duty on capital	0.5 % of share capital, minimum 10,000 DZD (capped at 300,000 DZD for joint-stock companies)	Registration code, art. 248
Full accounting, financial statements, filing of accounts	Every commercial company	Law 07-11; art. 584 (AGM within six months)
Statutory auditor	Joint-stock company: from the first financial year, no threshold SARL: three-criteria test (capital, turnover, headcount) Holding company: at least two auditors	Art. 715 bis 4; art. 732 bis 2
Corporate income tax	19 % manufacturing · 23 % construction, public works, water and tourism · 26 % other activities	CIDTA, art. 150
Withholding on dividends	10 %, final, on distributions of shares and corporate units	CIDTA, art. 104

Two rows deserve a second reading, because they contradict head-on the idea that a turnover threshold governs everything.

First: in a joint-stock company, statutory audit is inherent to the form. Article 715 bis 4 provides for no threshold, no exception and no grace period — the obligation arises in the first financial year, whether the company has generated a billion dinars or nothing at all. Second: a holding company appoints two statutory auditors at least (art. 732 bis 2), again with no threshold. A group structure set up « to optimise » therefore begins by doubling a fixed cost.

Conversely, in a SARL the obligation depends on a three-criteria test — capital, turnover, headcount. We do not publish the figures: the consolidated version of the implementing text that sets them could not be read in full, and publishing an unverifiable number would be worse than publishing nothing. It is the point we flag for confirmation in our SARL guide, and it ranks first in its next review.

The line that comparisons forget. The tax on professional activity is gone: the whole of Title III of the CIDTA, articles 217 to 231, was repealed by article 14 of the 2024 Finance Act. Any comparison still listing it among the costs of an Algerian company has not been updated for two financial years — a good freshness test for any page you read on this subject.

5. 5. Which foreign playbooks do not work in Algeria?

Foreign material on choosing a legal form is abundant, well made, and largely inapplicable here. These are the five lines of reasoning we most often meet in Algerian directors who have read it.

1. « The micro-enterprise is the same as the Algerian sole-trader status »

They are two different schemes. The Algerian status comes from Law 22-23; it waives commercial register entry, caps turnover at 5,000,000 DZD, excludes liberal, regulated and craft professions, and taxes turnover at 0.5 %. There is no standard allowance for expenses. The whole « my real costs exceed the allowance » argument therefore has no object — the real question is the rate applied to turnover against the actual margin of the business.

2. « Self-employed at 45 %, salaried-equivalent at 82 % »

That opposition has no equivalent in Algerian law. The dividing line runs between CASNOS, for a majority member-manager who is not an employee, and CNAS, for a minority or non-member manager paid under an employment contract. The rates and bases of the two schemes cannot be transposed from another country, and we do not publish them here: they call for a check with both funds, file in hand.

3. « A holding company lets dividends flow up tax-free »

This is the costliest piece of reasoning. It rests on a participation-exemption regime which, in Algeria, was repealed by the 2022 Finance Act (art. 147 ter of the CIDTA). Without it, inserting a holding company relieves nothing: it adds a layer of tax, and two statutory auditors with it. A holding company can be justified on legal and governance grounds — we set out the figures in our guide Setting up a holding company in Algeria.

4. « A share-retention pact cuts the cost of passing the business on by three quarters »

In the texts we read and cite at the foot of this page, we found no Algerian scheme comparable to a share-retention pact with a valuation abatement. This is a negative statement: it is strictly limited to the texts we opened and is not proof of absence. What is written in black and white, and points the other way, deserves to be known: articles 77 and 77 bis of the CIDTA treat gifts made beyond the second degree of kinship, and to non-relatives, as transfers for consideration. A gift to a nephew is, in tax terms, a sale.

5. « Put the property into a civil company taxed as a corporation »

Same reservation, and the same candour: we did not identify in the 2026 edition of the CIDTA any election regime comparable to the one that makes this structure common elsewhere. We flag it as a point to be confirmed by the expert rather than settle it ourselves.

And the « simplified joint-stock company to look professional »? It exists in Algerian law as the SPAS, but it cannot simply be chosen: the last paragraph of article 715 bis 133 of the commercial code reserves it « exclusively » to companies certified as start-ups. It is the only Algerian corporate form conditioned on a label. See our guide Setting up a SPAS in Algeria.

6. 6. In what order should the decisions be taken?

Four questions, and they come in this order. Reversing the first two is the mistake we correct most often.

Is my activity free of constraints of its own?

Import for resale as is, a regulated profession, an activity subject to approval, a project eligible for the start-up label: these close or open doors before any consideration of amounts. It is the first question, never the last.

How many of us are there, and who will come in later?

A sole owner, two founders, an investor expected in two years: the number of partners determines the form, and the way securities are transferred determines what leaving will cost. This is settled at incorporation, not at the first disagreement.

Which tax regime does my forecast turnover open?

This — and only this — is where turnover comes in. Compare the flat rate against the actual margin of your business: on a low-margin trading activity, the flat rate is not always the cheaper regime.

Can the fixed costs of the form be absorbed in year one?

Notary, registration duty on capital, full accounting, statutory auditor where required. These are start-up costs, due before the first collection — and it is their timing, not their amount, that puts young structures under strain.

On what it costs to take the money back out once the company exists, see our article Taking money out of an Algerian company, which prices the four channels. And on the lightest status of all, see Registered sole trader in Algeria: what Law 22-23 really allows.

Disclaimer. This article is for information only. It is not legal advice, individual tax advice or investment advice, and it guarantees no outcome with any administration or bank. The texts cited are those in force at the verification date shown in the sources block; Algerian tax law is amended every year by the Finance Act, and the thresholds quoted can change through that channel alone. Always check the state of the law applicable to your situation before deciding.

FAQ — Frequently asked questions

At what turnover must you set up a company in Algeria?

Which turnover thresholds matter in 2026?

Can an importer use the flat-rate tax regime?

Is a statutory auditor required only above a certain turnover?

Does a holding company reduce tax in Algeria?

Can you go back from the actual profit regime to the flat rate?

Sources and references

Law No. 22-23 of 18 December 2022 on the status of the registered sole trader — art. 2 and 3 (definition, conditions, excluded activities), art. 9 (waiver of commercial register entry), art. 13 (compulsory registration where the ceiling is exceeded for three consecutive years) — Official Journal of the People's Democratic Republic of Algeria No. 85 of 19 December 2022 · Verified on 03/08/2026
The flat-rate tax regime (IFU) — scope, thresholds of 5,000,000 DZD and 8,000,000 DZD, rates of 0.5 %, 5 % and 12 %, minimum charges, exclusion of import for resale as is (art. 282 ter), transition to the actual profit regime (art. 282 quater), exemption for companies holding the « start-up » label (art. 100 of the 2026 Finance Act). Page updated on 28 February 2026 — Directorate General of Taxes (DGI) · Verified on 03/08/2026
Ordinance No. 75-59 of 26 September 1975 on the commercial code, as amended — art. 545 (notarised deed on pain of nullity), art. 571 and 572 (approval and form of share transfers), art. 584 (approval of accounts within six months), art. 590 (from 2 to 50 members), art. 594 (minimum capital of a joint-stock company), art. 715 bis 4 (statutory audit in a joint-stock company), art. 715 bis 133 (SPAS reserved to certified start-ups), art. 732 bis 2 (at least two statutory auditors for a holding company) — Ministry of Trade · Verified on 06/08/2026
Law No. 15-20 of 30 December 2015 amending Ordinance No. 75-59 on the commercial code (OJ No. 71) — removal of the SARL minimum capital and increase in the number of members from 20 to 50 — Official Journal of the People's Democratic Republic of Algeria · Verified on 05/08/2026
Direct Taxes Code (CIDTA), 2026 edition — art. 150 (corporate income tax rates 19 / 23 / 26 % and allocation by activity), art. 104 (final 10 % withholding on income from shares and corporate units), art. 147 ter (participation-exemption regime repealed by the 2022 Finance Act), Title III art. 217 to 231 repealed by art. 14 of the 2024 Finance Act (tax on professional activity) — Directorate General of Taxes · Verified on 06/08/2026
Direct Taxes Code — art. 77 and 77 bis: gifts made beyond the second degree of kinship and to non-relatives treated as transfers for consideration — Directorate General of Taxes — text published by the Institut de la formation bancaire · Verified on 07/08/2026
Registration Code, 2026 edition — art. 248: 0.5 % duty on share capital in company incorporation deeds, minimum 10,000 DZD and maximum 300,000 DZD for joint-stock companies — Directorate General of Taxes · Verified on 06/08/2026