Business Environment and EconomicInvestment Policy in Algeria

1
Business Environment and Economic/Investment
Policy in Algeria

• November 24, 2008
• Mr. Sumitaka FUJITA
• Senior Corporate Advisor
• ITOCHU Corporation

2
1. Economic Relationship between Japan and
Algeria

• Past Record of Mutual Projects

3
1. Economic Relationship between Japan and
Algeria
Financial Assistance to SONATRACH from
Export-Import Bank of Japan
4
1. Economic Relationship between Japan and
Algeria
Trade Between Algeria and Japan
In Billion Yen
Source Trade Statistics of Japan
5
1. Economic Relationship between Japan and
Algeria
Outlook of Current Algerian Economy
Source EIU
6
1. Economic Relationship between Japan and
Algeria
Outlook of Current Algerian Economy
In Billion USD
Source Ministry of Finance Algeria,
International Telecommunication Union
7
1. Economic Relationship between Japan and
Algeria
Algeria Market Attractiveness to Japanese
Companies
8
2. NIPPON KEIDANREN Survey Result
Contents of Questionnaires

• Type of Organization
• Concerns of Doing Business in Algeria
• Requests to Algerian Government
• Requests to Japanese Government

Surveyees Japan-Algeria Economic Conference
Members (28 Organization), 14 answered
9
2. NIPPON KEIDANREN Survey Result
Type of Organization
Concerns of Doing Business in Algeria
10
2. NIPPON KEIDANREN Survey Result
For Developing / Expanding Business in Algeria
Requests to Algerian Government
11
2. NIPPON KEIDANREN Survey Result
For Developing / Expanding Business in Algeria
Request to Japanese Government
12
3. Incentive Scheme Examples in East Europe
Experiences of Japanese Investments in East
Europe in 2000s
No.of Japanese Manufacturers 1999 57 ?
2007 239
(Poland 70, Czech 84, Slovakia 16, Hungary
45, Others 24)

• Good access to EU and Russia
• Low labour cost and availability of qualified
  labour
• Good infrastructure (transportation,
  electricity, water, gas, etc)
• Corporate friendly legal system, regulation and
  taxation
• Availability of good supporting industries
• Attractive incentive scheme offered by
  governments

13
3. Incentive Scheme Examples in East Europe
Overview of Incentives to Foreign Investors
b) Custom Free Zone
Overseas Suplier
Overseas Customer
Factory
a) Incentives
c) Investment Agency
d) Legal and Regulatory Framework
14
3. Incentive Scheme Examples in East Europe
Overview of Incentives to Foreign Investors
a) Incentive (taxation and direct subsidies)
Low tax rate Tax relief such as tax
holiday etc. b) Custom Free Zone (Special
Economic Zone) No need to pay import duty
and import VAT Easy customs clearance for
import and re-export c) Investment Agency
One stop shopping type coordination to meet
foreign investors requirements d) Legal and
regulatory framework Foreign Exchange -
domestic transaction in foreign currency (e.g.
EUR) Accounting - Bookkeeping in foreign
currency (e.g. EUR) Financing - Foreign
currency paid-in capital, low withdrawing tax on
dividend etc.
15
Closing Remark