Risks to doing business in Angola

  1. The Angolanisation Policy Risk

 The Angolan government is committed to promoting Angolan companies and entrepreneurs. This policy pervades a wide range of commercially orientated legislation in Angola as well as the tender policies of many state and privately owned companies such as Sonangol.   A foreign company (“FC”) risks losing tenders should it decide to do business in Angola without a local partner.  Moreover, should the FC wish to engage in the oil and gas sector its Angolan partner must own 51% or more of the business.  In addition, any investment in either IT, transport or logistics, requires Angolans to hold at least 35% of the company’s share capital should the FC wish to freely repatriate profits abroad in the form of dividends.   The risks associated with an Angolan shareholder possessing a majority stake or a large percentage of shares can be mitigated by: i) proper and effective due diligence on the local partner;  ii) carefully drafted shareholders agreement and iii) the Angolan partner granting a power of attorney to the FC for the exercise of a percentage of its voting rights.

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