Algeria

Algiers is a country in North Africa, located between the Mediterranean Sea and the Sahara Desert. It is the largest and one of the most developed countries on the continent. Over the centuries, various empires and civilizations have left their mark on the territory of Algeria.

General information

The official name of the state — Algerian People's Democratic Republic (PDR). The state occupies an area of 2,381,740 km² (10th in the world). The population is about 44,226,000 people (as of the beginning of 2023). 

The ethnic composition of the population of Algeria: Arabs and Arabized Berbers — about 83%, Berbers — about 17%, other ethnic groups — less than 1%. A special ethnic group is represented by the Mozabites (25 thousand people) — inhabitants of the geographical region of Mzab, of Barbary origin, who settled in the Sahara nine centuries ago. Also here live the Tuareg (the people of the Berber group) — nomads living in the Sahara.

The official language of Algeria is Modern Literary Arabic, as specified in the country's 1963 Constitution. In addition, the constitutional amendments of May 8, 2002 by the "national" Berber is recognized as the language. French, although not officially recognized, is widely used in government, culture, media (newspapers) and education, due to Algerian colonial history. Kabyle, the most spoken Berber language in the country, is taught and partly the second official language (with some restrictions) in Kabyle (historical-geographical region located in the north of modern Algeria).

In the ANDR, the Russian language is studied at the largest university in the country, the University of Algiers. In addition, thanks to the efforts of the Ministry of Foreign Affairs of Russia, in the mid-2000s, the language courses that existed under the USSR at the University of Oran were revived. Most often, Russian is studied by representatives of the medical field, civil servants and geologists.

English, due to its status as the global lingua franca, has been taught since high school. However, only a small number of Algerians speak English, most of them young people.

Islam is the state religion of the country and regulates almost every sphere of life of citizens. Most of the population of Algeria — Sunni Muslims (Malikites and Hanafis). There are about 150 thousand Christians in the country, mostly Catholics, and approximately 1 thousand adherents of Judaism.

The official currency of the country is the Algerian dinar.

Algeria — capital and largest city of the Algerian People's Democratic Republic. The city is the most important financial and industrial center of the country. Port on the Mediterranean. Mechanical engineering, food, textile, chemical and oil refining industries are developed. There is a stock exchange.

Also, the largest cities in the country — Oran (port city), Constantine, Djelfa, Batna, Setif, Bejaia (port city), Annaba.

Annaba — a major industrial and transport center and port of Algiers. In the city there are enterprises of metalworking, aluminum, food flavoring, chemical, textile industries. The construction of new districts with modern buildings is continuously underway. Annaba — major railway station, highway junction, seaport specializes in the export of iron ore, phosphate, tobacco, cork and citrus fruits. The city is connected by a network of railways and highways both with the capital and with many wilayas (provinces). The Annaba Industrial Zone starts 4 km from the city center.

The territory of Algeria is administratively divided into:

• 48 provinces (wilay),
• 553 districts (daira),
• 1541 commune (baladiyya).

History, geography, culture, mentality

It is known that the first people who settled the Algerian lands were the Berbers. Then in the XII century BC. ancient Libyan tribes settled here, which by the 3rd century BC. founded the state of Numidia. Over time, it was divided into 2 sovereign kingdoms. In the 1st century BC. they were conquered by the Roman Empire (in 47 they became its provinces). Colonization lasted until the 5th century AD, namely until the fall of the Roman state. Despite the fact that Numidia was in slavery, this period was marked by the emergence of many new cities, the development of culture, the introduction of Christianity.

After the departure of Rome from the territory of the future Algeria, Numidia was captured by the Vandals. This happened at the beginning of the 5th century, and already in the 6th century — it and neighboring states were liberated by the Byzantines. But Numidia itself began to be ruled by tribal Berber leaders, which led the country to civil strife and anarchy. This situation provoked the enslavement of Numidia by the Arabs, who brought a new religion to it — Islam.

Arab rule over Numidia continued from the 7th to the 15th centuries. This period was marked by the complete expulsion of Byzantine rule, the strict subordination of the Berbers, as well as the introduction of Islam, the imposition by the Arabs — Muslims of their culture and language.

By the end of the 15th century, the Spaniards began to raid the territory of the Algerian state. A number of port cities were captured, including Algeria.

The authorities of these settlements turned to the rulers of the Ottoman state for help. The Turks began to rule in the liberated lands.

This rule lasted until the 19th century. During this period, Algeria from a small military colony, mainly engaged in corsairry, grew into a state with a fairly successful foreign policy and fleet, as well as its own currency and allies. 

The next period of the country's history is connected with its conquest in the 19th century by the French. By 1848, the territory of the country was completely under the control of France. As a result, the entire territory of Algeria was divided into departments, headed by prefects, who exercised administrative functions, who, in turn, were subordinate to the governor-general.

Since 1870, the local population has been considered French subjects, but people did not have any political rights.

The 20th century in the history of Algeria was marked by the emergence of a nationalist liberation movement, as well as numerous bloody wars and uprisings. This is due to the fact that during the Second World War, France began to lose its political positions in Algeria due to its defeat by the Nazi invaders. In addition, the allied troops that entered Algerian territory called on the local population to self-determination of the state. All this led to an uprising, which was crushed.

In 1954, the war for independence begins in the country. Hostilities lasted until 1962 and ended after negotiations called the Evian Accords. Their result was the creation of a temporary executive body, consisting of representatives of both states (Algerians and French) and reporting to the high commissioner.

After the referendum, a new stage began in the history of the country's formation as a sovereign state. As a result of the vote, 91% of Algerians voted for independence, a government was elected, reforms were carried out that allowed Algeria to coexist peacefully with other countries for a quarter of a century.

At first, the country lived on subsidies from France and assistance from other countries, in the form of the USSR, North Korea and even America. But, over time, the beginning does without them, receiving cash injections into the budget through the export of its own oil, oil products and gas, as well as agricultural goods.

Since the country's economy was almost completely dependent on the cost of oil and gas, in the 80s Algeria began to experience a crisis associated with a decrease in the cost of these minerals. This event led to anti-government unrest, and later to a state of emergency and civil war. This war, with varying success, lasted more than 10 years and ended only in 2000.

In February 2019, mass protests broke out in Algeria against the nomination of the 82-year-old President of Algeria, Abdelaziz Bouteflika, of his candidacy for a fifth term. As a result of the protests, Bouteflika refused to participate in the next elections, postponed them to a later date and convened a National Conference of Algeria to develop a new constitution, which would be held in a referendum.

Algeria is the largest country in Africa. Most of the country is occupied by the Sahara Desert, and the Atlas Mountains are located in the north. The subsoil of Algeria is rich in oil, gas, ores of ferrous and non-ferrous metals, manganese, and phosphorite. In the north, the country is washed by the Mediterranean Sea, in the east it borders on Tunisia and Libya, in the south on Mali and Niger, in the west on Mauritania, Western Sahara and Morocco.

There is a unique ink lake in Algeria, the waters of which, in color and chemical composition, resemble ink, which, according to local residents, can be used to write on paper. Two rivers flow into it, in one the water has a high concentration of iron salts, and in the other — a large amount of organic compounds from peat bogs. The lake and its coast are lifeless.

In total, there are 7 monuments of history, culture and architecture in Algeria, which are included in the UNESCO World Heritage List. In the capital of the country, the city of Algiers, monuments from the times of the Ottoman Empire, such as the 1612 Ketshava Mosque in the mountainous Kasbah quarter with narrow streets and stairs, have been preserved. The neo-Byzantine style Cathedral of Our Lady of Africa recalls that there was once a French colony here. The ruins of the ancient Roman city of Tipaza are located on the sea coast. The remains of the theater, the Great Basilica, the amphitheater, the Basilica of Alexander, the nymphaeum, the Basilica of Saint Salsa and the baths have survived to this day in the city.

The amazing Tassilin-Adjer National Park is also included in the UNESCO World Heritage List.

Algerian culture was formed on the basis of Islam. Islam governs all aspects of the life of the Algerians — they pray five times a day, and Fridays are considered non-working days. For Algerians, the concepts of honor and dignity are very important. In general, the country's culture has pan-Arab features, complemented by Turkish and French influences.

Algerians treat Russians with sympathy, both on a business and political level. Russians are well remembered from Soviet times, when our enterprises built various facilities here, which over time have not lost their reliability and quality. For this reason, Algerians are quite supportive of the emergence of Russian business in their country.

Algerians can hardly be called punctual and obligatory people. For example, if you made an appointment at the beginning of the week, then don't be surprised if it actually takes place only towards the end of it. But it is not worth making any claims against the Algerians. They are hostile to the open expression of emotions and may be offended. In controversial issues, it is worth remaining a diplomat, avoiding rudeness and harshness in any way. The Algerians themselves — wayward people with an explosive character, but possessing incredible endurance, tend not to show their emotions.

Locals are religious people who honor and observe the customs of their ancestors, perform rituals. For many foreigners not familiar with Algeria, this seems strange at first. Another feature of Algerians unusual for Europeans — do everything calmly and slowly. Success in Algeria awaits only those who are stubborn and patient also because it is a bureaucratic country with many administrative barriers.

Algerians prefer to solve all business issues over a cup of coffee or tea. They appreciate subtle humor, willingly talk about their families and children. If you ask an Algerian a couple of questions about the health of his relatives, it will be taken as a sign of great respect and friendliness.

When starting a business in Algeria, you need to be prepared for the fact that people may appear on your way who, posing as friends or relatives of a high-ranking official, may actually turn out to be fraudsters. Therefore, you need to be careful when choosing a local partner.

In Algeria, it is worth remembering that not all locals like to be photographed. Here they believe that a picture can cause many physical diseases and affect the mental state of a person. There is a strict ban on photographing women in black headscarves; for this oversight, a fine or threat of imprisonment can be imposed.

Power

According to the Constitution, Algeria — It is a parliamentary republic headed by a President elected for 5 years. The President is also the head of the army, the Council of Ministers and the Supreme Security Council.

The bicameral Algerian parliament consists of the Senate (144 senators) and the People's Assembly (462 deputies).

Economy

Algeria's economy remains heavily dependent on imports of consumer, food, industrial and other goods. For this reason, the domestic market of the country may be of significant interest to exporters.

Possessing significant reserves of natural gas (about 4500 billion m³, 2.37% of the world's proven reserves), Algeria is one of the leaders in the global oil and gas industry. It ranks 7th among the top gas exporters and 17th among oil exporters. Algerian oil is considered one of the best in the world in terms of its parameters. The state is a member of the Organization of the Petroleum Exporting Countries (OPEC) and the Natural Gas Exporting Countries Forum. The basis of the Algerian economy is the hydrocarbon sector — on average, it accounts for more than 95% of export earnings, almost 60% of budget revenues and about a quarter of GDP.

In 2020, negative trends were noted in the development of the socio-economic situation, caused primarily by a recession in the global economy in the context of the introduction of quarantine measures (pandemic), as well as changes in the domestic political situation in the country. The government's efforts made in 2021 were aimed at stabilizing the economy, carrying out reforms mainly at the expense of revenues received from the energy sector. Investment projects continued in food production and agriculture. Agriculture accounts for about 8% of GDP. The cultivation of wheat, oats, as well as fruits, in particular citrus fruits, and vegetables is developed. The country's agro-industrial complex is unable to meet its own demand, which is why Algeria is forced to import food.

Catching of fish and seafood is more than 20 thousand tons per year. Sardines, mackerel and even sprats are caught in the waters of Algeria. Fresh fish is exported to France, dried and canned — to Spain, Italy and other European countries.

Algeria has significant deposits of iron, zinc, lead, copper, arsenic, mercury, phosphates and gold.

The policy pursued by the country's government to reform the economy, aimed at creating new jobs, reducing inflation and developing production capacities within the country (non-resource segment), is implemented mainly through administrative regulation.

Algeria's key economic indicators in 2021:

• economic growth — 3.2%;
• GDP per capita — 3216 thousand US dollars;
• export — USD 35.19 billion;
• import — USD 46.05 billion;
• inflation — 3.9%;
• unemployment — 14.56%.

Main exports:

• mineral fuels and petroleum products;
• fertilizers;
• inorganic chemicals;
• sugar;
• table salt, sulfur.

The main foreign trade partners of Algeria are Italy, France, China, Spain and the United States. In Algeria, they buy gas, oil and some oil products, supply mainly industrial equipment, cars and auto components, household appliances, food and other goods. According to official figures, Algeria is Russia's second largest trading partner in Africa, with a trade volume of nearly $3 billion.

Algeria's main export destinations are the EU, the US and Turkiye.

Main imports:

• machines and mechanisms;
• cereals;
• electronics;
• vehicles;
• plastics and products;
• pharmaceutical products;
• dairy products;
• metals and articles of iron and steel.

The main importing countries for Algeria are China, France, Italy, Germany and Spain.

In terms of iron ore reserves, Algeria is in 2nd place in Africa. According to oil reserves — 3rd in Africa. On the territory of Algeria, 183 oil and gas fields are known, confined to the Algerian-Libyan oil and gas basin; most of the deposits are located in the northeast of the Sahara region. In terms of gas reserves, Algeria ranks first in Africa. The largest gas field Hassi-Rmel lies in the sandstones of the Triassic, significant gas reserves have been explored in the fields of Gurd-Hyc, Nezla, Oued Numer.

Algeria is a member of OPEC, WTO (observer), African Union.

In September 2005 received the status of an associated member of the European Union.

Algeria officially applied to join the BRICS organization at the 2022 summit in China. Algerian President Abdelmajid Tebboun said that his country has almost all the conditions for joining the BRICS and it is very interested in joining this alliance, and also expressed hope for the country's entry into the BRICS in 2023.

In addition, Russia and Algeria are closely cooperating within the framework of OPEC + and the Forum of Countries — gas exporters.

With the participation of Russia, major projects have been implemented in various areas of the Algerian economy: many facilities of a metallurgical plant have been created in the city of El Hadjar, a metallurgical enterprise has been built in the city of Annaba, a thermal power plant in the city of Jijel, the Alrar gas pipeline — Tingfuye — Hassi Messaoud, Beni Zeed Dams and Tilesdit. A significant place in bilateral cooperation has always been occupied by the training of national personnel for various branches of the national economy of Algeria. With the help of Russia, four institutes were created in the People's Democratic Republic of Algeria (PDR), and 40 trade union training centers were built or expanded.

Algeria became the first state on the African continent with which Russia signed a Declaration on Strategic Partnership in 2001. In development of the provisions of this document, work is currently underway on a draft of a new declaration on in-depth strategic partnership, which will be designed to fix the even more advanced nature of Russia's relations with Algeria.

In the course of ongoing bilateral contacts between Russia and Algeria, promising areas for building up trade and economic cooperation are being discussed. In particular, we are talking about establishing cooperation in the automotive industry and the supply of railway equipment, further intensifying joint work in the field of agricultural exports (the volume of supplies of Russian wheat to the ANDR in 2022 increased significantly and exceeded 700 million US dollars). The Russian side is ready to continue to contribute to ensuring the food security of friendly Algeria.

In the field of energy, agriculture, pharmaceuticals, Russian companies are interested in building mutually beneficial partnerships with Algerian economic operators and their readiness to search for and jointly implement promising projects and initiatives.

Business climate

Algeria has a number of legislative acts and measures aimed at attracting investment and supporting entrepreneurship. Some of them are:

• Investment Law: Adopted in 2016, this law provides investors with a number of preferences and benefits, such as tax credits, guarantees of property rights, freedom of movement of capital, etc.
• Partnership Law: adopted in 2017, it aims to establish partnerships between foreign investors and local companies.
• Free Trade Law: passed in 2016, it aims to expand international trade and create favorable conditions for the export of Algerian goods.
• Energy Efficiency Law: Passed in 2015, it provides investors with benefits and incentives for using energy-saving technologies and equipment.
• Small Business Law: Enacted in 2014, it provides small and medium enterprises with benefits and support such as tax credits and financial assistance.

Investment climate

The country's main source of income — hydrocarbon production. Algeria — the largest gas producer in Africa, so registration of a company providing services in the oil and gas industry is promising for foreign investors.

The country's subsoil also contains ores of ferrous and non-ferrous metals, manganese, and phosphorite. Experts suggest that here are the largest deposits of shale gas, which by itself require investment in the development of deposits.

The country's government encourages investment in other sectors, such as agriculture.

Despite the presence of the coast, tourism is not developed here, so this is practically a free niche for a foreign investor.

In addition, with a high degree of probability, business has good prospects in the following industries: power industry, oil and gas industry, light industry, construction and medicine.

Algeria has a mixed legal system. On the one hand, it is based on the civil law system and includes codified acts adapted from the French legal system, and on the other hand — on the system of Islamic law, in particular, on issues related to the regulation of personal status and civil legal personality.

Basic legal forms (OPF) of doing business in Algeria:

• Limited Liability Partnership (LLC);
• Limited Liability Company (SARL);
• Free Zone Company (FZC);
• Partnership (LP/GP);
• Joint venture (JV);
• Joint Stock Company (SPA);
• General partnership (SNC);
• Representation (RO).

For a non-resident, an LLC or FZC would be the best solution. As a rule, companies of this type are small or medium-sized businesses.

The Algerian Tax Authority is the key national tax authority.

Companies pay the following taxes in the country:

• income tax;
• solidarity tax;
• property tax;
• tax on professional activities;
• income tax when applying transfer pricing;
• Value added tax

Income tax is levied on profits derived from all sources in Algeria, including profits of representative offices of foreign companies and profits of companies that do not have a representative office but carry out a full cycle of commercial activity in Algeria.

Income tax rates:

• 19% — for production activities;
• 23% — for construction and public works, tourism and resort services;
• 26% — to all other activities.

Value Added Tax (VAT), which is an indirect tax, is levied on the sale of goods or services, including import operations. Algeria has standard (19%) and reduced (9%) VAT rates, and a number of transactions are exempt from VAT.

When opening a business here, you need to keep in mind that foreigners do not have the right to fully own Algerian companies and are required to find a resident partner for 51% of the joint venture. It will take 14 days to sign contracts to register a company in Algeria. After 4 months, the company can fully function and make a profit.

When opening a company in Algeria, you will need to come up with a unique name with an indication of the legal form at the end (for example, LLC). The number of directors must be from one or more (resident, individual / company). The number of shareholders must also be from one or more (individual / company). The authorized capital of the company — minimum 1000 USD. In addition, a local registered office, a corporate account in Algeria is required. Submission of tax and accounting reports is required.

Algeria's business advantages:

• dynamic growth of the economy;
• a stable political position;
• high interest of local authorities in attracting foreign investors;
• developed banking system;
• joining the Pan-Arab Free Trade Area;
• loyal taxation;
• DTA agreements signed with African and European countries;
• easy and fast business registration process;
• skilled workforce.

Value Added Tax (VAT), which is an indirect tax, is levied on the sale of goods or services, including import operations. Algeria has standard (19%) and reduced (9%) VAT rates, and a number of transactions are exempt from VAT.

When opening a business here, you need to keep in mind that foreigners do not have the right to fully own Algerian companies and are required to find a resident partner for 51% of the joint venture. It will take 14 days to sign contracts to register a company in Algeria. After 4 months, the company can fully function and make a profit.

When opening a company in Algeria, you will need to come up with a unique name with an indication of the legal form at the end (for example, LLC). The number of directors must be from one or more (resident, individual / company). The number of shareholders must also be from one or more (individual / company). The authorized capital of the company — minimum 1000 USD. In addition, a local registered office, a corporate account in Algeria is required. Submission of tax and accounting reports is required.

Algeria's business advantages:

• dynamic growth of the economy;
• a stable political position;
• high interest of local authorities in attracting foreign investors;
• developed banking system;
• joining the Pan-Arab Free Trade Area;
• loyal taxation;
• DTA agreements signed with African and European countries;
• easy and fast business registration process;
• skilled workforce.

Business and investment support structures

In Algeria, there are a number of government agencies that provide support to businesses and investors:

• National Investment Development Agency (ANDI) — it is an organization created to attract and support foreign investment in the country. It provides investors with information about investment opportunities in the country, assists them in the business registration process and provides support throughout the life cycle of the project.
• Agency for the Promotion and Development of Industry (AADPI) — is an organization created to support industry in Algeria. It provides advisory services, helps investors obtain loans, and provides other forms of support.
• Industry Development Fund (FDI) — is an organization that provides financial support to investors in Algeria. It provides loans at low interest rates and other forms of financial support for investment in various sectors of the country's economy.
• National Fund for the Development of Small and Medium Enterprises (FNAC) — is an organization that provides financial support to small and medium-sized businesses in the country. It provides loans at low interest rates and other forms of financial support for the development of small and medium enterprises in the country.
• National Agency for the Support of Small and Medium Enterprises (ANSEJ) — an organization created to support small and medium enterprises in Algeria. It provides financial assistance and advisory services, assists in obtaining loans and provides other forms of support.

In order to diversify an economy that has long been dependent on hydrocarbons, Algeria is the first in the region to create a start-up ministry.

There are several structures that support Russian investments in Algeria. One of the main players is the Russian-Algerian Business Council, which was created to promote the development of economic ties between Russia and Algeria, as well as to support Russian companies operating in Algeria. The business council includes representatives of leading Russian companies such as LUKOIL, Gazprom, Russian Railways; and others.

In addition, Russian companies operating in Algeria can receive support from the Russian Export Center (REC). REC provides companies with consulting services, helps with the search for new markets and partners, and provides financial support in the form of exhibition guarantees and export credits.

The Russian Chamber of Commerce and Industry operates in the country, which provides support to Russian companies operating in Algeria and helps them establish business contacts with local partners.

Russia and Algeria have an intergovernmental commission on trade, economic, scientific and technical cooperation, which coordinates economic cooperation between the two countries and provides support to Russian companies in Algeria.