Foreign companies permanently established in Algeria

Foreign companies having a permanent establishment in Algeria means “joint stock companies or partnerships located in Algeria whose establishment is more or less permanent under which a profit-generating activity is carried out, enjoying legally and in practice total work independence, carrying out paid industrial or commercial transaction”.

These companies are set up either by the creation of a subsidiary, or through a branch or any other establishment (site, office, premises...), provided that complete business cycles normally give rise to remuneration.

Tax system

Foreign companies with permanent business premises in Algeria are subject, in the same way as Algerian companies, to the common law system (IBS , IRG , TAP , VAT and property tax).

Foreign companies non-permanently established in Algeria

Foreign companies which do not have permanent business establishments in Algeria shall mean joint stock companies or partnerships which temporarily are operating business in Algeria under contracts concluded with Algerian operators.

The tax system applicable to foreign companies which do not have permanent business establishments in Algeria varies according to the nature of the carried-out business: real estate or service.

Foreign companies involved in a real estate contract 

Foreign companies carrying out temporary real estate work in Algeria are subject to the common law. (IBS or IRG, TAP, VAT, and property tax).

However, under the IBS or IRG taxation, a down payment system, different from that of tax instalment of the general scheme, is reserved for such companies. The down payment is calculated at 0.5% on payments received and paid within the first 20 days of the following month.

The payment of the down payment gives the foreign company the right to a tax credit, which is basisd on the final taxation of the financial year in question.

If the tax credit cannot be fully or partially applied on the final taxation, it shall be charged over the subsequent taxation financial years. If it is not allocated, the tax credit is refunded.

The tax due on amounts that have not yet been collected is due on final receipt. It must be paid immediately to the tax collector’s desk.

Foreign companies involved in service contract (Withholding Tax)

Foreign companies with no permanent business establishment in Algeria and acting in the framework of a service contract shall be subject to withholding tax for IBS or IRG.

Foreign companies with no permanent business establishment in Algeria are subject to 2% withholding tax, on the sums collected, for any operation carried out on the import of goods and services intended for establishing and operating fixed, mobile and satellite telecommunication networks (Art.76 Act of Finance for 2018).

IBS (corporate income tax):

If the company is a joint stock company, it is subject to 30% withholding tax rate. This withholding tax covers professional activity tax and value added tax.

Withholding tax shall be collected by the contractor on the gross turnover in accordance with the regulations in force in this respect.

IRG (income tax):

If the business is a natural person or a partnership, it is subject to 24% withholding tax rate which applies in accordance with the regulations in force.

IRG and IBS are calculated on the same tax basis.

Option for Real Profit Tax System:

Foreign companies that do not have a permanent business establishment in Algeria can chose the real profit tax system. In this case, the company in question shall address a mail, in this regard, to Direction des Grandes Entreprises (DGE) which falls under the competency of the General Directorate of Taxation/Ministry of Finance or to the Inspectorate to which it is subject within a period not exceeding fifteen (15) days from the date of signature of the contract or of the contract amendment.

(Income tax) IRG/ Salaries:

A foreign company that pays salaries, allowances, and benefits in kind to its employees shall:

• make, at the time of payment of the taxable sums, a withholding tax on the said sums, calculated by applying the IRG-Salaries scale.
• It should be noted that the salaries of technical and managerial staff of foreign nationality are subject, in the same way as the other salary incomes, to the monthly IRG scale. (See Art. 6 of the Act of Finance for 2010).
• pay the amount of the withholding tax to the tax collector's desk within the first twenty days of the month following the month in which the salaries were paid.

Banking Domiciliation Tax

The opening of a domiciliation file shall be subject to the payment of the banking domiciling fee at the rate of:

• 0.3% for the import of properties or goods intended for resale as it is, provided that the amount of this tax is not less than 20.000 DA (Art. 73 Supplementary Act of Finance for 2015),
• 3% for service import operations (Art. 63 Supplementary Act of Finance for 2009).

Capital goods and raw materials not intended for resale as it is shall be exempt from such tax, subject to a prior commitment, on each import. 

The amount is paid to the tax collectors and is subject to the issue of a certificate and the delivery of a receipt.

Tax benefits:

Goods and services, acquired under a contract concluded between a foreign company, under the tax legislation in force, and notwithstanding the provisions of international tax treaties, having no permanent business establishment in Algeria and a partner benefiting from tax exemption (42 bis of Tax Code on turnover), are exempted from value added tax. 

The withholding tax basis is reduced by 60% for amounts paid as rents under an international leasing contract to people not established in Algeria (see. Article 156 of Code of Direct Taxes).

The basis for calculating tax is reduced by 80% on the amount of royalties in the case of software use contracts (see. Art. 156 of Code of Direct Taxes).

Transferred Profit Taxation:

Profits transferred by foreign companies, in accordance with the regulations in force, operating in Algeria, in the form of branches or any other business establishments at the headquarters of foreign companies located outside Algeria, shall be integrated in the distributed profits subject to tax.

Profit transfers are now subject, in the same way as dividends, to 15 % withholding tax applicable in respect of IBS. (Article 6 of Act of Finance for 2009).

Regardless of their nationality, employees benefit from social welfare. It includes social insurance covering sick leave, maternity benefits, invalidity and death insurance, pension, insurance in the event of an accident at work or occupational disease, family allowances and unemployment insurance.

There are four national funds, namely:

• Caisse Nationale d'Assurances Sociales des Travailleurs Salariés (National social insurance fund for salaried employees) (CNAS). Caisse Nationale de Sécurité Sociale des Non-salariés (National Social Security Fund for Non-Employees) (CASNOS).
• Caisse Nationales de Retraites ( National Pension Fund) (CNR). Caisse Nationale de l’Assurance Chômage (National Un-employment Insurance Fund) (NACC).
• Caisse Nationales de Retraites ( National Pension Fund) (CNR).
• Caisse Nationale de l’Assurance Chômage (National Un-employment Insurance Fund) (NACC).

Since 2017, the charge-sharing between the employer and the employee has been set at 25% for the employer and 9% for the employee.

The employer and the employee shall contribute to:

• Social insurance: 11.5 % and 1.5 % respectively.
• Work accidents and occupational diseases: 1.25 % to be paid solely by the employer.
• Unemployment insurance: 1 % and 0.5 % respectively.
• Pension: 11% and 6.75% respectively and early retirement: 0.25 % each.

Algeria, a Maghreb country, is one of the most popular destinations in the 54 countries of Africa. Algeria’s rich, varied, and ancient culture, its large surface and its economic sectors open to foreign investment delight many expatriates who set sail for its landscapes and cities to make and give new impetus to their career.

Arabic and Tamazight are the official languages. Arabic is the administrative language. However, French is admissibly spoken in practice.

The climate in Algeria varies between Mediterranean climate in the north, semi-arid climate in the center and desert climate in the Sahara. Solar creams, short sleeves and sunglasses are highly recommended during the summer.

TYPES OF ENTRY VISA IN ALGERIA:

To travel to Algeria, it is required to have a visa issued by the consulates of Algeria upon presentation of a professional invitation or, private grounds (see list of visas, below).

Visa may be granted for three months, six months, one year or two years, when several entries are authorized.

It includes periods of stay up to 90 days, while the cumulative presence stay in Algeria can go up to 180 days per year.

The different types of visas that may be issued are:

Business Visa

It is issued based on a letter of invitation from the Algerian partner, or a letter of commitment or a mission order from the employer body of the visa applicant, backed by a hotel booking or a covering charge certificate from the inviting body.

To obtain this visa, the following documents are required:

• Passport valid for more than 6 months.
• Visa application form, in duplicate, duly completed and signed.
• Two recent photos of the same print.

Work Visa 

It is issued based on a contract of employment and a provisional authorization of work prior to the work permit issued by the competent employment departments, and a certificate from the employer body covered by the concerned departments.

To obtain this visa, the following documents are required:

• Passport valid for more than 6 months.
• Visa application form, in duplicate, duly completed and signed.
• Two recent photos of the same print.
• Copy of employment contract.

Temporary Work Visa

A temporary work visa is also issued to a foreign national who is a party in an assistance or service contract concluded by himself or his employer with a company or body operating in Algeria.

To obtain this visa, the following documents are required:

• Passport valid for more than 6 months.
• Visa application form, in duplicate, duly completed and signed.
• Two recent photos of the same print.
• Copy of the employment contract, the duration of which may not exceed three months.
• Provisional authorization of work issued by the competent departments.

Diplomatic, service, and courtesy visas

They shall be issued on presentation of the following documents:

• Valid diplomatic, service, or special passport or ordinary passport.
• Visa application form, in duplicate, duly completed and signed.
• Two recent photos of the same print.
• A verbal note. 

Family Visa 

To obtain this visa, the following documents are required:

• Passport valid for more than 6 months.
• Visa application form, in duplicate, duly completed and signed.
• Two recent photos of the same print.
• Evidence documentary attesting to the applicant's relationship with the person or family likely to accommodate him.

Tourist Visa 

To obtain this visa, the following documents are required:

• Passport valid for more than 6 months.
• Visa application form, in duplicate, duly completed and signed.
• Two recent photos of the same print.
• Letter of invitation, or certificate of accommodation legalized by the host's municipality of residence or failing that, hotel booking letter or certificate issued by a travel agency.

Press Visa

To obtain this visa, the following documents are required:

• Passport valid for more than 6 months.
• Specific application form for a press visa, in triplicate, duly completed and signed.
• Two recent photos of the same print.
• Cover letter issued by the employing media.
• Photocopy of the press card.
• Possibly a letter of invitation from the Algerian partner.

Study Visa

To obtain this visa, the following documents are required:

• Passport valid for more than 6 months.
• Visa application form, in duplicate, duly completed and signed.
• Two recent photos of the same print.
• Certificate of registration in a public or private school approved by the State.
• Evidence documentary of financial means supporting studies and meeting one’s needs.

Medical Visa

To obtain this visa, the following documents are required:

• Passport valid for more than 6 months.
• Visa application form, in duplicate, duly completed and signed.
• Two recent photos of the same print.
• Medical Certificate.
• Covering of medical costs.
• Host medical institution agreement or accommodation certificate and evidence documentaries of financial resources for the care duration.

Cultural Visa

To obtain this visa, the following documents are required:

• Passport valid for more than 6 months.
• Visa application form, in duplicate, duly completed and signed.
• Two recent photos of the same print.
• Copy of the invitation to any cultural, scientific or sports seminar or event.
• Evidence documentary of financial resources for the stay duration.

Group Visa

This type of visa is issued to foreigners traveling under cover of a valid collective passport.

To obtain this visa, the following documents are required:

• Passport valid for more than 6 months.
• Visa application form, in duplicate, duly completed and signed.
• Two recent photos of the same print, per traveller.
• Hotel booking.
• Evidence documentary of financial resources for the stay duration.
• Travel ticket.

Transit Visa

To obtain this visa, the following documents are required:

• Passport valid for more than 6 months, backed up with valid visa of the country of destination.
• Visa application form, in duplicate, duly completed and signed.
• Two recent photos of the same print.
• Evidence documentary of financial resources for the transit duration.

Note: 

A stopover permit of two to seven days may be issued by the competent authorities to crews of foreign ships and aircraft.

Special case of port of call (French nationals traveling by ship): a visa is not required if travel is limited to the port.

Tax:

Payment of a chancellery fee is required for the issuance of visa. The price varies according to the applicant’s country.

Extension of Stay in Algeria:

An extension of visa, the duration of which may not exceed 90 days, may be granted, under certain conditions, by the administrative authorities territorially competent abroad to the one who wishes to extend his stay in Algerian territory beyond the period granted by the visa. 

Before the expiry of the current visa, the application for extension must be sent to the Foreigners’ Office near the Wilayas where the foreigner is staying.

Staying in Algeria for a period of one year and more requires a residence card, for which the person concerned must first register with the embassy (or consulate) of which he is a national. 

To obtain the residence card, a file containing a birth certificate, a family record, and an employment certificate (if the person has a contract of employment in Algeria) or Articles of Association (if he is a business manager) is submitted with the department of foreigners under the territorially competent wilaya (province).

The foreigner nationals operating in Algeria shall obtain a work permit or a temporary authorisation issued by Labour Inspectorate Departments of the concerned wilayas (provinces). 

Health

The national health system is based on administrative and technical structures, specialized institutions, scientific and technical bodies.

The system is available in the following structures:

• Standalone specialized structures: Five (5) health regions with five (5) regional health councils (CRS) and five (5) regional health observatories (ORS).
• Sixteen (16) University Hospital Centers (CHU).
• Nine (9) hospital facilities. 
• Two hundred and four (204) public hospitals.
• Seventy-six (76) specialized hospitals.
• Two hundred and seventy-three (273) public community healthcare facilities (EPSP).
• One hundred and eighty-seven (187) private hospitals (HPEs) with a total capacity of 77,245 beds.

Media 

The democracy opening and political pluralism established by the Constitution of February 1989, combined with press freedom, have resulted in the diversification and expansion of the press landscape, which today includes 293 publications (newspaper, periodical, magazine).

96 daily newspapers, including 6 public daily papers and 33 regional newspapers with an average circulation of 2,800,000 copies daily.

Radio and Television

Algerian radio has 58 national and local channels broadcasting in Arabic, Berber or French, rich and varied programs. Algeria now has 43 television channels, including 5 public channels.

Despite an unemployment rate of 11.4% recorded in 2019 and around 14% in 2020, finding a job in Algeria remains accessible.

Potential business sectors for recruitment

It is important to know the sectors that recruit expatriates. Oil exploitation is a great asset for the Algerian economy, having experience in this field, makes it possible to find work. 

Health, education, and agriculture fields are fast-growing sectors in which employment is still possible.

How to find a job in Algeria

Algeria is the fourth largest economy in Africa. Hydrocarbons are its main wealth.

It is recommended to know the regulations regarding job search in Algeria. Like all countries in the world, the regulations in force in Algeria favours nationals having the same qualification and experience.

Many websites on the Internet allow job search, such as: emploi algerie, emploipartner, emploitic, indeed, nrecrutic, career-algerie, fibladi...

To apply for job in Algeria, a foreigner must have a work visa and a work permit (or a temporary work authorization). Hence, it is preferable to apply beforehand because a visa application can take time. 

Working environment and terms

The minimum working age in Algeria is 16. The legal number of working hours per week is 40 hours. The legal day off in Algeria is Friday.

To be eligible for a permanent contract, a trial period of six months is required but may be extended up to twelve months for executive positions. Fixed-term contracts may not exceed 36 successive months.

In Algeria, any employee can claim the right to social security which constitutes a social welfare covering sick leave, disability allowance, maternity benefits, etc.

The retirement age in Algeria is 55 for women and 60 for men.

Administrative procedures 

Work Visa: 

It is issued on presentation of an employment contract and a provisional work authorization prior to the work permit by the competent employment departments, with a certificate from the employer body stamped by the concerned departments.

To obtain this visa, the following documents are required:

• Passport valid for more than 6 months.
• Visa application form, in duplicate, duly completed and signed.
• Two recent photos of the same print.
• Copy of employment contract or provisional work authorization.

Work permit: 

A work permit, valid for two years, shall be issued by the competent employment departments.

To obtain this work permit, the following documents are required:

• Technical Specifications Sheet.
• Certified copies of degrees and any other documents proving professional qualifications.
• Copy of the signed employment contract.
• Two identity photos.
• Copy of medical certificates.
• Other documents provided by the employer will complete the file.

The professional card shall be issued by the Wali (prefect) of the province of the beneficiary’s place of residence or of the place of establishment of the commercial premises or of the head office of business companies.

The foreign company must apply for a global agreement in principle with the local employment departments. The employment department will forward the general agreement in principle and a provisional work authorization to the Province’s Employment Directorate and the Ministry of Employment, which will, after review, issue the general agreement in principle.

The worker must apply for a work visa at the Algerian consulate. In this regard, the following documents are required:

• Provisional work authorization. 
• Repatriation commitment, countersigned by the Employment Directorate.
• Employment contracts, countersigned by the Employment Directorate.
• The form duly completed.
• Two photos.

Upon arrival in Algeria, the employee must apply for a work authorisation/permit with the National Office of Foreign Manpower, the following documents are required:

• Copy of work visa.
• Technical Specifications Sheet.
• A general medical certificate issued by an Algerian doctor.
• A specific medical certificate (pulmonology) issued by an Algerian specialist in pulmonology.
• Certificate of accommodation.
• Copy of consular card.
• Five photos.
• An application made on a specific form provided by the Province’s Regulatory and General Affairs Directorate.
• A copy of the criminal record of the concerned person.
• A certified true copy of the trade register or the relevant receipt.

Legal framework for foreigner’s stay as resident 

A foreigner, who wishes to establish his/her actual, habitual, and permanent residence in Algeria, may be authorized to do so by means of residence card issued by the province (willaya) of the place of residence, whose validity is two years. In this regard, he must have the following documents:

• Work permit.
• Temporary work authorization.
• Foreign worker employment declaration for foreigners not subject to work permit.

The concerned person shall pay a stamp duty fixed by the Act of Finance for the issuance of the residence card.

Terms and conditions for issuing residence cards for foreigners 

The concerned person must present himself to the security departments of his place of residence with the following documents:

• A work visa.
• A special printed application issued by the police station.
• Five recent identity photos. 
• Tax stamps.
• Applicant’s medical certificates (for good health and non-tuberculosis exposure). 
• Habitual vaccination certificate for children aged 1 to 14.
• Valid passports.

Depending on the situation:

• Work permit issued by the Ministry of Labour.
• Certificate of registration in a School or University.
• Evidence documentary of operating an industrial, craft, commercial or liberal activity by the competent departments.
• Evidence documentary of sufficient resources if the applicant does not intend to carry out an activity.

Upon verification of the file, the said authority shall issue to the applicant a submittal receipt serving as a residence card whose validity may not exceed three months.

After having carried out investigation on the applicant, the security departments will forward the complete file with their opinion to the wilaya’s authorities which will establish the residence card.

The residence permit shall be delivered through the same security department to the concerned person.