1Japan-Africa Business Forum
Tokyo, 10-11 June, 2014

Presentation by:
Maria Luísa Abrantes, PhD
Secretary of State and CEO of ANIP

2ANIP - Angolan National Private
Investment Agency
ANIP is the only government entity
responsible for the execution of thenational policy on private investment, its
promotion, evaluation, approval andsupervision.

3Angola• Angola lays on the west coast of Southern Africa and it is bathedby the Atlantic Ocean• It covers an area of 481,354 square miles (1,246,700 Km²)
• 1,025 miles – (1650km) of coastline• Borders with: Congo Brazzaville,
Democratic Republic of Congo, Zambia and Namibia• 20,9 million inhabitants (est.)• Portuguese is the main language• The main religions are Catholic and Protestant• The highest geographical point is Mount Moco with 2,620 meters inheight in the province of Huambo.

4

Advantages of Investing in Angola•Angola holds approximately 12% of Africa hydrographic network•

The main rivers are Kwanza, Zaire, Cunene and Cubango•

The Maiombe forest in Angola that has an extension in Gabon is one of thelargest in the world after the Amazon forest•

Until 1975, Angola had the 3rd biggest forest of artificial eucalyptus of theworld, with 74 hectares•

Rich in flora and fauna•

Diverse mineral ores : diamonds, iron, gold, phosphates, manganese,copper, lead, zinc, tin, wolfram, tungsten/vanadium, titanium, chrome,
beryllium, kaolin, quartz, gypsum, marble, granite and uranium•

7.4 million hectares of arable land and pastures, from which only
10% are cultivated•

Microclimas•

Political and economic stability since 2002•

AngolaismemberofMIGAInvestment Garanty Agency from the World

Multilateral,Bank.

5Advantages of Investing in Angola• Angola is strategically located on the Atlantic Coast of West
Africa, acting as a gateway to Southern and Central Africa byroad and railroad networks.
• Angola is one of the fastest growing economies in the world.
• The IMF has statedaccountability are good.

that

Angola’s

governanceand• The international revenue reserves stand over the 30 million
recommended by the IMF, helping to stabilize the inflation
rate of Angola’s currency, the Kwanza

6Advantages of Investing in Angola• The Angolan government’s main goals are to revamp anddevelop the economy by diversification, prioritizing therehabilitation and construction of basic infrastructure, toenable the circulation of people and goods, as a result ofprivate investment in agriculture, agri-business, industry andfisheries• The Executive created the “Angola Investe” program tosupport micro, small and medium-sized business withsubsidized financing• The target is to reduce poverty and regional asymmetries.

7

Advantages of Investing in Angola• From 2000 to 2011, the Angolan government invested anaverage of USD 4.7 billion per year in order to rehabilitate
infrastructure.
• From 2002 to 2012 the Government rehabilitated 11 Airports
and is currently constructing the new Luanda International
Airport extending over an area of 1,324 hectares, having also
rehabilitated 552 bridges, 7,829 km of roads, and 2,000 kmof railroads.
• Five damns were rehabilitated, namely:• Mabubas• Gove• Matala• Lomaúm• Capanda (1st phase).

8

Main Government Projects 2013-2017
SectorNumber ofProjects

Power and Water

Subtotal 65

14,4 subtotal
29,1 total

Agriculture and Livestock

57

2,8

Transportation and Logistics

12324,3

Civil Construction-6,4

TotalBillion
USD

62,6

Estimated PIP (2014): 1 trillion, 380 billion AKZ equivalent to USD 14 billion
Source: National Develpment Plan 2013-2017

9

Macroeconomic Indicators
2011

2012

2013

2014

605,9

657,3

673,5

641,7

110,1

103,8

96

98

3,9%

5,2%

5,1%

8%

° Non- Petroleum GVA growth rate %

9,7%

9,1%

6,6%

4,5%

° Petroleum GVA growth rate %

5,6%

4,3%

7,3%

9,7%

° Annual inflation rate %11,4%9,02% 7,32%% 7% or 9%

Fiscal (Percentage of GDP):° Revenue° Expenditure42,243,338,2-

33,435,641,6-

Premises of the Economic Policy:° Annual oil production (million/bbl.)° Oil Price (USD/bbl.)
Goals of the Situation:° General rate of growth of GDP %Source: http://www.minfin.gv.ao/docs/dspOrcaCorren.htm

Real GDP and income per capita have shown robust growth.
In 2012 GDP was USD 114.14 billion
In 2012 GDP per Capita was USD 6,200 per year
GDP per capita (USD, currentprices)

Real GDP growth (%)

GDP per capita current prices (USD)

25Real GDP growth (%)

20151054,000

2,00020182016

2014

2012

2010

2008

2006

02004

2011 is based on IMF staff estimates.

6,000

2002

Source: IMF World Economic Outlook Database, real GDP growth from2018

2016

2014

2012

2010

2008

2006

2004

2002

08,000Source: IMF World Economic Outlook Database, GDP per capita
data from 2000 and onwards is based on IMF staff estimates

Strong population growth
Angola has a growing middle class with good purchasing power
Total population (millions)

40
30
20

Source: UN Department of Economic and Social
Affairs

2050

2045

2040

2035

2030

2025

2020

2015

2010

02005

102000Total Population (millions)

50Decreased Rate of Inflation
Inflation rate (%)

Inflation rate (%)

25
20
15
100

2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018

5Source: IMF World Economic Outlook Database, inflation data from 2012 and onwards is based on IMF staff
estimates.

Stable Exchange Rate
Exchange rate (USD per Angolan
Kwanza)0.013

Source: Thomson Reuters Datastream

2013

2012

2011

2010

2009

2008

2007

0.005

2006

0.009

2005

USD per Angolan Kwanza

0.017

Value of Oil Exports (USD billion)0

Source: IMF

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

Stable Oil Exports
Value of oil exports (USD billion)

80

60

4020

Rising Gas Production
Gas production (bcm*)

642016

2015

2014

2013

2012

2011

2010

02009

22008

Gas production (bcm)

8Source: EIA, Business Monitor International (BMI), Angola Business Forecast Report Q4 2012 - *BCM refers to billion cubicmeters

16The Main Commercial Partners of Angola
Angola 20112012 2013

ProductsMain Commercial
Partners

USD
Imports 5,6billion

USD
11billion

Machinery, Electric China 11%, Portugal
Equipment, vehicles 16%, USA 5%, SouthUSD
and parts, medicines, Africa 4%, Brazil 4%,8,3
UEA 4%, UK 4%,food products,billion
Belgium 4%
textiles, military
Others 12%
goods.

USDExports 17,3billion

USD17,8billion

USD16,6billion

Source: INE

China 54%,USA 5%,Oil, diamonds fish, Taiwan 5%, India 9%timberNetherlands 3%,
Canada 3%, Others 8%

17

Angola Needs• Rehabilitation and construction of basic infrastructures• Development of the network of water and energy• Construction and reconstruction of roads, bridges, railways, ports andairports• Modernization and increase agricultural production• Creating jobs through the implementation of new industries• A good educational system• An efficient Hospitality Infrastructure• A good network of Hospitals and Clinics• A Strong Financial institutions• The main target is to reduce poverty and regional asymmetries.

18

How to Invest in Angola

19

Incentives are Given to Priority Areas

Infrastructures

Industry

Transportation;

Agriculture and cattle
breeding;

Energy and water;

Telecommunications;Fishery

Industrial hubs andfree zones;

Education and HealthHotel and Tourism

20

Reserved for theGovernment

Government must bemajor shareholder- Production and distributionof war material;- Basic Telecommunications
System- BNA (central bank) andcurrency- Postal Services- Ports and airports- Basic infrastructure fortelecommunication networks

21

Requirements and Process

From 1
milliondollars

ANIP’sApplicationForm
USD 250

APPROVALCONTRACTUALSCHEME(ANIP)

Up to USD 10
million (60 daysmaximum)

APPROVALCONTRACTUALSCHEME(CabinetCouncil)

Over USD 10
million (75 daysmaximum )Exception: It is not considered (or applied) the private investment regime when
Private Companies have shares in Public Companies where the State owns 50% ormore of the share capital (stock capital).

22

Required Documentation

1.1. Bylaws
If investor isshareholder of analready existing
company

1. Presentation of
Proposal: Form(description ofinvestment,inventory ofequipment )2. Draft Articles ofIncorporation for
Creation of Company
3. Certificate
authorizing
company name
4. Annual Financial
reports for the last 3years
5. Power of Attorney(if necessary )Investments inindividualname :
4.1. Certificate offinancial capacity
4.2. Certified
criminal record

23

After Approval

ANIP
Issues CRIP andsends it to:

BNA

Authorizes foreign
capitaltransactions,

National Custom
Authorities

Authorizes thereduction orexemption ofcustoms duties;

National Taxes
Autorities

Which monitors
taxes;

24

Final Step

Investorshould:Registercompany

Publishbylaws inState
Gazette(Diário daRepública);

Obtainbusiness
activity
license(Ministry ofCommerce)

Register withtax
authorities(Ministry ofFinance).

25

Tax Incentives
Economic Zones

Zone A

Luanda, main municipalities
of Benguela, Lobito, Huilaand Cabinda

Industrial
Tax

CapitalProperty transfer
Gains TaxTax

Criteria for
Applying
Maximum Limits

1 to 5 years

For the acquisition ofUp to 3 years
land and real estateconnected to the project

Investments ≥ USD 50
million; Investments
which generate ≥ 500
jobs;

1 to 8 years

For the acquisition of
Up to 6 years
land and real estateconnected to the project

Zone Bremaining municipalities ofBenguela, Cabinda, Huíla,
Kwanza Norte, Kwanza Sul,
Bengo, Uíge, Lunda Norteand Lunda Sul

Zone C

Huambo, Bié, Moxico,
Kuando Kubango, Cunene,
Namibe, Malange and Zaire

1 to 10 years

For the acquisition of
Up to 9 years
land and real estateconnected to the projectInvestments ≥ USD 20
million; Investments
which generate ≥ 500
jobs;

In Zone C the subcontracts could also be eligible for tax exemption and reduction.
The tax incentive is granted after the implementation of the project and at least 90% of the estimatedwork force being in place. The reduction in the percentage of the rate of tax may not exceed 50%.

26

Tax Incentives
Tax incentives and benefits do not constitute a rule.
They are not granted automatically or for an indeterminate period of time.
When considering the proportion and scaling of tax and customs incentives andbenefits to be granted, criteria must take into account:a) The type and value of investment.
b) The investment’s insertion into the country’s economic development
strategy.
c) Perception of direct and indirect capital gains.
d) Complexity of investment.
e) Estimated time required for a return on capital.
f) Type of technology to be utilized.
g) Commitment to reinvestment of profits.
h) Volume of goods or services to be produced.
i) Creation of production lines.

27Tax Incentives
Tax incentives or tax reductions are granted after negotiation ona case-by-case basis.
An extraordinary tax incentive could be granted to:a) Investments declared highly relevant for strategic
development.
b) Investments capable of creating at least 500 jobs.
c) Investments capable of contributing to a major boost intechnological innovation and scientific research.
d) Annual exports that could exceed USD 50 million.
e) Investment projects evaluated at above USD 50million.

28

Liabilities:

Dividends

The dividends or profits can be transferred after the payment of taxes;- Corporate Tax Rate 35% and a reduced rate of 25% for rural areas- Sales Tax / VAT Rate 10% and,- Property Transfer Tax Rate (SISA) 2% to 10% .
The repatriation of dividends is proportional to the:a) Investment value;b) tax reduction or tax exemption concession period;c) customs incentives and benefits;d) investment period;e) profits effectively realized;f)socio-economic impact of investment;g) influence on the reduction of regional asymmetries;h) impact of the repatriation of dividends on the balance of payments.

29

Transfer of Dividends
Zone A:From USD 1 million up to USD 10 million,transfer of dividends upon third year.

Luanda, principal municipalities From USD 10 million up to USD 50 million,of Benguela, Lobito, Huila and transfer of dividends upon second year.
CabindaFrom USD 50 million, transfer of dividends upon
first year.

Zone B:

From USD 5 million, transfer of dividends upon firstyear.

Remaining municipalities ofBenguela, Cabinda, Huíla, Kwanza
Norte, Kwanza Sul, Bengo, Uíge, From USD 1 million to USD 5 million, transfer ofdividends upon second year.
Lunda Norte and Lunda Sul

Zone C:

Huambo, Bié, Moxico, Kuando
Kubango, Cunene, Namibe,
Malange and Zaire

To be Negotiated30Investors Protection- Access to courts and right to defense- Monetary restitution in event of expropriation- Private investments are not nationalized; if thisoccur, the Government ensures all investor rights- The law guarantees professionalism, privacy andconfidentiality- Reciprocal Protection of Investment Agreements(based on Bilateral Cooperation Agreements)

31

Corporate Structure• Branch• Unlimited Company• General Partnership• Limited Partnership• Private Limited Company
Foreign investors are allowed to create 100% (onehundred percent) private company except in thediamond and oil industries.
Note : Representation Office only before theapproval of the proposal and 50% of the employees
must be angolans.

32

Procedures- Necessary registrations:•Tax I.D.

•Commercial•

License as importer or exporter;•Social Security (for employees)•

Commercial and/or industrial operating license- Bank account must be opened;- Deposit funds required for capitalization;- Proof of deposit must be presented to Notary Public whendrawing up company’s Deed of Incorporation

33

Reciprocal Protection of Investment
Agreements
AfricaCape Vert
Guinea Bissau
Namibia

EuropeFranceGermany
Great Britain
Italy
Portugal
The Netherlands
Spain
Switzerland
RussiaLatin America
Cuba

34

Success Cases

35

Case 1. KFC• KFC started operating Angola in 2012.
• In the 1st quarter of 2013, 2 KFC restaurants recorded sales of 3.3 million
Euros (some 4 million dollars); almost as much as the 18 restaurants it ownsin Portugal.
• KFC invested in Angola through the Ibersol Group, which also operates inPortugal and Spain, and had a 5.2% drop in the overall sales as compared to2012.
• Portugal and Spain recorded falls in income of 6.8% and 4.4%, respectively.
• Without its business in Angola, sales would have fallen by 6.1%.
• KFC is going to open 2 more restaurants in Luanda, before the end of 2014.

36

Caso 2. SHOPRITE• Last year, five Angolan stores sold more cans of the energy
drink than the chain of 382 stores in its country of origin.
• And, he added, those same five stores in Angola also sold morebottles of JC Le Roux sparkling wine than the whole South
African chain.
• It is not by mere chance that Shoprite wants to open 44 stores
outside South Africa this year, with its sights set on countries
rich in natural resources, like Angola, Nigeria and Zambia.
• Thanks to the growth of business done outside South Africa, forthe first time, Shoprite’s half-yearly sales reached 50 billion
rand (455 billion Kz)

37Case 3. Alex Thomson-Payan• Alex Thomson-Payaness, a graduated from Babson College in
Boston, arrived in Angola in 2007 with $200,000 raised fromSwiss and American friends.
• Today the 29-year-old runs Thomson Group International,
which earns monthly revenue of more than $2 million fromselling mobile phones and supplying oil explorers with services.

• Thomson-Payan
began
byforming
Electrix
Telecommunicacoes SA to manufacture and sell mobilephones, including a unit with a 30-day battery.

38

Case 3. Alex Thomson-Payan• He distributed through 25 stores, 20 of them in Luanda, andexpanded to become the country’s largest phone distributor
by offering other retailers stock financing in exchange for ashare in their businesses.
• Thomson-Payan said he’s started a consulting side-line tooffer advice, a $4 million investment fund offering an 18
percent return, and trade finance to give newcomers a leg up.

39

Case 4. Rupert Wetterings• Another young entrepreneur, Rupert Wetterings, 25,
used $250,000 raised from friends and familyin South Africa and the U.K. to transform hiscompany, Fides Mediador de Seguros Lda., also
known as AIBA, into the market’s largest insurance
broker.
• Wetterings, who has a degree in management andfinance from the University of Birmingham, England,said the company had gross written premiums of $30
million in 2013, mostly from oil and gas clients.

40

Case 4. Rupert Wetterings• Wetterings benefited from having only two state-run
insurance companies AAA and Empresa Nacional de Seguros
e Resseguros de Angola had on the insurance market.
• In November, Groupe Saham, a Morocco-based investmentcompany, paid an undisclosed amount for GA Angola Seguros
SA, Angola’s largest closely held insurance company byrevenue, to gain access to Angola’s $1 billion-a-year insurancemarket.
• “Angola is an exciting and challenging investment destination
for those who have an abundance of enthusiasm and theresources that match your determination to succeed,” he said.
“The start was very difficult, but through working very longhours and attracting the right people, we’ve been able to build
up the business.”

41

Source: http://www.bloomberg.com/news/2014-02-04/babsongraduate-defies-angola-myth-to-make-millions-from-phones.html

Ranking

World Bank Ease of Doing Business Index
2014

179th of 189 countries

Transparency International's 2013
Corruption Perception Index

153rd of 177 countries

GDP Growth 2012 (World Bank)

6,80%

Expected GDP Growth 2013(World Bank)

5,10%

42

Thank you!
Invest in the future, Invest in Angola!

www.anip.co.ao
www.anip-angola-us.com
PowerPoint by: Maria Luisa Abrantes
Translated by: Lynn de Albuquerque