Transferring dividends out of Algeria: the decisions that settle it years before you ask
📌 In short: The transfer guarantee is not a banking formality at the end of the year. It is a legal status your investment either acquires at incorporation or never acquires at all. Article 8 of Law no. 22-18 of 24 July 2022 attaches it to four cumulative conditions on how your capital enters the country, and Executive Decree no. 22-300 adds a minimum financing threshold of 25% of total investment cost. Miss the threshold and you keep every tax incentive — you simply lose the right to take your money home. This article sets out the four conditions, the contents of the transfer file, the deadlines, the tax actually withheld, and the practical points on which we see files fail.
Keywords in this article
1. Why is the right to transfer dividends decided at incorporation?
Most foreign investors discover the transfer rules in the year they first want to distribute a dividend. By then the decisive facts are three years old and cannot be changed.
Article 8, first paragraph, of Law no. 22-18 of 24 July 2022 on investment grants the guarantee of transfer of invested capital and the income deriving from it to investments made from capital contributions that meet four cumulative conditions.
| Condition | What it means in practice |
|---|---|
| Cash contribution imported through the banking channel | Cash carried in, offset against a receivable, or funded locally does not qualify. The money must arrive by bank transfer and leave a trace. |
| Denominated in a freely convertible currency | The currency must be regularly quoted by the Bank of Algeria. |
| Sold to the Bank of Algeria | The often-overlooked condition. The currency is surrendered; what enters the company's capital is the dinar counter-value. |
| Amount at or above the minimum threshold | Set by reference to the overall cost of the project — see the following section. |
The guarantee is broader than dividends. Article 8, fourth paragraph, extends it to the net real proceeds of disposal and liquidation of the investment, even where those proceeds exceed the capital originally invested. Your exit is covered by the same status as your dividends — and lost with it.
Two further provisions are worth knowing. Reinvested profits and dividends that have already been declared transferable count as external contributions (art. 8, second paragraph). And contributions in kind of external origin, valued under the ordinary company-formation rules, open the same right (art. 8, third paragraph).
2. What is the 25% threshold and what happens if you fall below it?
Article 8 refers to minimum thresholds fixed by regulation. Executive Decree no. 22-300 of 8 September 2022 sets that threshold at 25% of the total cost of the investment, measured on the share of foreign-origin financing attributable to the investors.
The consequence of missing it is precise, and it is not the one most people expect.
Falling below the threshold does not cost you the incentives. It costs you the exit. The investment keeps the tax, customs and land advantages it qualifies for. What it loses is the transfer guarantee of Article 8 — that is, the right to send the capital and its income abroad.
Read that sentence from the point of view of someone building a financial model. A project financed 80% by local bank debt and 20% by an imported equity contribution can be perfectly profitable, fully compliant, and eligible for a five-year corporate income tax exemption — while the shareholder has no guaranteed right to repatriate a single dinar of the resulting profit.
The threshold is a ratio, so it is driven as much by the denominator as by the numerator. Every increase in the total cost of the project financed from local sources dilutes the foreign share. A structure that satisfied the threshold at incorporation may cease to satisfy it after a large debt-financed extension.
3. Which activities lose the guarantee whatever you do?
Two categories of activity sit outside the mechanism, and both are decided by a clause drafted at the notary in the first weeks of the company's life.
Import for resale in the state. Instruction no. 01-09 of 15 February 2009 provides at Article 6 that importing products for direct resale on the Algerian market is not eligible under Regulation no. 05-03, save where significant investment efforts are made. That expression has never been defined. Its assessment lies with the Directorate General of Exchange at the Bank of Algeria.
Strategic activities. Since the 2020 supplementary finance law, the 49/51 national shareholding requirement no longer applies generally. It survives for 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 with exceptions — and for import-for-resale operations.
What we observe in practice. The object clause is usually drafted quickly, in the week the notary needs the articles, and copied from a template. It is also the clause that determines, for the life of the company, whether 100% foreign ownership is available and whether profits will ever be transferable. Where an activity sits close to a restricted category, the safe course is to confine the object strictly to the service actually performed — advice, assistance, representation — and never to extend it to production or to import for resale.
4. What does the transfer file actually contain?
Transfers are instructed and executed by banks and financial institutions acting as authorised intermediaries (Regulation no. 05-03 of 6 June 2005, Article 3), which keep the file for five years (Article 5). The composition of the file derives from Instruction no. 03-2000 of 25 April 2000; the list published by the AAPI is more detailed and more recent.
| Document | Point of failure |
|---|---|
| Transfer request and transfer order | — |
| Trade register extract; articles of association and their updates | Updates often missing after a capital increase |
| Bank certificate evidencing the foreign shareholders' contribution, supported by proof of repatriation and surrender to the Bank of Algeria | The single most important document. Issued years earlier. |
| Minutes of the ordinary general meeting allocating the profit, in authentic form, showing amounts and payment terms | Must be an authentic deed, filed and published |
| Attendance sheet of the general meeting; legal filing and publication in the official bulletin of legal announcements | Publication reference required |
| Balance sheet and income statement for the year concerned, with the auditor's report certifying the accuracy and regularity of the accounts | See the following section |
| Statement certified by the auditor showing the income allocated to each beneficiary, net of taxes | — |
| Tax clearance certificate and tax assessment extract | No clearance, no transfer |
| Statistical tables B and C, three originals, as defined by Bank of Algeria Instruction no. 09-05 | — |
Note what the second row of that table really says. The document that decides whether your dividend leaves the country is a bank certificate describing a transfer made before the company existed.
5. Can your auditor's report block the transfer?
This is the part of the mechanism that surprises foreign shareholders most, and it deserves to be stated plainly.
The file requires the statutory auditor's report certifying the accuracy and regularity of the accounts. According to the list published by the AAPI, that report is expected to be unqualified. Where the auditor has expressed qualifications, a further statement from the auditor is required, certifying that the qualifications raised are not blocking for the purposes of the dividend transfer.
The practical consequence. An audit qualification is not only an accounting opinion. In this mechanism it becomes a condition of access to your own money. A qualification raised in March over an unsupported balance, an unprovisioned receivable or an inadequately documented related-party transaction can delay a transfer by an entire cycle.
Two things follow from this, and they are the reason we insist on them from the first year of a foreign-held company.
6. What are the deadlines, and what happens if you miss them?
The calendar is short and it is not the bank's calendar. It is company law's.
| Step | Deadline | Basis |
|---|---|---|
| Approval of the accounts by the members' meeting (SARL and EURL) | Within six months of the year end | Article 584 of the commercial code |
| Payment of the dividend | Within nine months of the year end | Article 724 of the commercial code |
| Instruction of the transfer file | Two months from filing | Regulation no. 2000-03, art. 4 |
| Beyond nine months | Court order granting an extension | Article 724 |
For a company whose financial year ends on 31 December, the nine-month rule of Article 724 places the payment deadline at the end of September. That date is a consequence of the rule, not an independent regulatory deadline — but it is the date that governs the year in practice, and the transfer formalities have to be complete before it, not started on it.
Missing it does not extinguish the dividend. It moves the file from a banking procedure to a judicial one: an extension must be obtained by court order, which adds delay and cost to an operation that was already the slowest part of the year.
7. How much of the dividend actually leaves the country?
Dividends paid to a non-resident are subject to a withholding tax of 15%, deducted at the time of payment. The withholding is final. Profits transferred by a foreign company through a branch or other permanent establishment in Algeria are treated as distributed income and bear the same rate.
Upstream, the profit has already borne corporate income tax. The rate depends on the activity, and a company carrying on several activities without separate accounting is exposed to the highest of them.
| Activity | Corporate income tax rate |
|---|---|
| Production of goods | 19% |
| Construction, public works, hydraulics, tourism | 23% |
| All other activities, including services | 26% |
Do not assume your double taxation treaty helps. Many investors budget a reduced rate because a treaty exists between Algeria and their country. Treaties differ. Some cap the source-state rate at 5% for qualifying holdings above a participation threshold. Others cap it at 15% with no reduced rate for large holdings — which is exactly the domestic rate, so the treaty produces no benefit at all. The only reliable answer is to read the dividend article of your own treaty before you build the number into a model. Claiming treaty benefits also requires a certificate of tax residence and evidence of beneficial ownership.
One further point of drafting, which costs nothing to get right and a great deal to get wrong: how a service supplied by the foreign parent is named in the contract can move it between treaty articles, and therefore between a nil rate and a withholding. Describing pure advisory work as technical assistance or know-how is not a cosmetic choice.
8. What do we see go wrong in practice?
The following are observations drawn from assignments supporting foreign investors, not regulatory requirements. They are the points on which otherwise complete files lose time.
On timing, our observation is four to seven weeks for the administrative core where the file is complete, and two to three months in practice — longer where the shareholder is a foreign company, because of document legalisation and the currency account.
The one instruction worth following from day one. Keep every banking record of the capital inflow, from the very first transfer: the SWIFT message, the deposit certificate, the surrender advice. It is the only legal support the Bank of Algeria will ask for, and it will ask for it years after the person who arranged the transfer has left the company.
This article sets out the applicable regulatory framework and constitutes neither legal advice, nor tax advice, nor a guarantee that a transfer will be authorised. Rates and thresholds are those applicable at the date of verification shown below and are amended by successive finance laws. Every situation must be examined against the company's actual position, the wording of its constitutional documents and the practice of the bank concerned.
FAQ — Frequently asked questions
🔎 Sources and references
- Law no. 22-18 of 24 July 2022 on investment — Article 8 (guarantee of transfer of capital and income) — Official Gazette of the Algerian Republic no. 50 of 28 July 2022 · Verified on 04/08/2026
- Executive Decree no. 22-300 of 8 September 2022 setting the lists of activities, goods and services not eligible for advantages and the minimum financing thresholds for the benefit of the transfer guarantee — Article 8 — Official Gazette of the Algerian Republic no. 60 of 18 September 2022 · Verified on 04/08/2026
- Regulation no. 05-03 of 6 June 2005 on foreign investments — Articles 3, 5 and 31 — Bank of Algeria · Verified on 04/08/2026
- Commercial code, Article 584 (approval of the accounts by the members' meeting within six months of the year end — SARL and EURL) and Article 724 (payment of dividends) — Ordinance no. 75-59 of 26 September 1975 on the commercial code, Book V — Ministry of Commerce · Verified on 04/08/2026
- Foreign investment in Algeria — transfer file documents, 25% threshold, 15% withholding tax — Algerian Investment Promotion Agency (AAPI) · 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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