The Private Investment Law establishes that tax and customs benefits are granted to private investment projects depending on the investment regime in which they are framed, considering three possible regimes:
- Contractual regime
- Special regime
- Prior declaration regime
Contractual regime
The contractual regime applies to investments with a minimum amount of 1M US dollars, allowing the investors to negotiate the tax incentives for the project within certain frames and limitations.
Among these frames and limitations are:
- Reduction of Corporate Income Tax, Individual Income Tax and Stamp Tax rates for a maximum period of 15 years.
- Tax credit for an amount corresponding up to 50% of the investment amount for a maximum period of 10 years.
- Increase of the depreciation and reinstatement rates up to 80% for a maximum period of 10 years for investments located in zones B, C and D of Angola.
- Possibility of deferment of tax payments.
- Considering as cost 80% of the value of the investment used to create infrastructures required to the execution of the investment which, by its nature, should have been created by the government.
Special regime
The special regime applies to private investments with an amount below the foreseen for the contractual regime and entailing the performance of the activities specifically listed in the Regulation of the Private Investment Law, which are all in the priority sectors. In this regime, the tax benefits are granted automatically and vary according to the zone where the investment is made (Zone A, B, C, and D).
Special regime benefits
Other characteristics
Under the special regime, the private investment vehicle company is exempt from paying fees and charges due for any service requested, including customs, by a non-business public entity, for a period not exceeding 5 years.
Additionally, AIPEX (Agency for Private Investment and Exports Promotion of Angola) provides expedited and simplified procedures for investments in the special regime for the following services:
- Records of a legal, fiscal and social security nature
- Registration of intellectual property, movable property and real estate
- Obtaining activity licenses, construction, environmental and other licenses
- Hiring of energy and water services
- Obtaining visas and residence permits
- Other registrations, licenses and administrative services necessary for carrying out investment projects.
Reinvestment of reserves
Profits retained and then reinvested in new installations or equipment during the following three financial years may be deductible from taxable income during the following five years after the investment is finalized, at up to 80% of the value reinvested depending on the location of the investment performed.
Prior declaration regime
The prior declaration regime applies to investments not covered by any of the regimes previously referred, specifically outside the sectors considered priority for the purposes of the private investment law, being some tax benefits granted automatically.
Automatic benefits of the prior declaration regime
- Reduction of Property Tax rate in 50% for the acquisition of properties to be used as the office and establishment of the investment.
- Reduction of Corporate Income Tax rate in 20%
- Reduction of the Individual Income Tax rate applicable to dividends in 25%
- Reduction of the Industrial Tax in 20%
- Reduction of the Stamp Tax in 50%
- Reduction of the Capital Application Tax in 25%.
In addition to the above listed benefits, entities may also benefit from other facilities, such as applications for permits, work visas, energy, water supplies, and others.