Algiers – Algeria has introduced a new regulatory framework requiring prior authorization for the transfer of shares in companies operating within strategic sectors. This move aims to exert greater control over foreign investment and safeguard national economic interests.
A recently published executive decree (25-304) outlines the stringent new requirements. The decree, signed by the Prime Minister on November 16th, stipulates that any transfer of shares or social holdings to foreign entities, whether directly or indirectly, necessitates prior approval from the relevant ministry overseeing the sector.
The regulation applies to transfers benefiting foreign individuals or companies governed by Algerian law with foreign capital participation. This encompasses a broad range of transactions and strengthens government oversight.
For state-owned economic enterprises, the process involves an additional layer of scrutiny. The State Shareholding Council must grant preliminary approval before the final authorization can be issued, ensuring alignment with national economic objectives.
Before a decision is reached, the decree mandates consultation with key ministries, including National Defense, Foreign Affairs, Interior, Justice, Finance, Domestic Trade, and Health, as well as the Bank of Algeria. These entities are required to provide their explicit opinions within 30 days of receiving the request.
The relevant ministry is bound to respond to the authorization request within 60 days. Applications will be automatically rejected if there are indications of risks to public order, public safety, health, or economic stability.
The decree specifies instances where authorization will be mandatorily denied. These include situations posing risks to public order, national security, public health, or the country’s economic interests. Furthermore, proven involvement of the beneficiary in corruption, economic crimes, or financial offenses will result in automatic rejection.
This new regulation underscores Algeria’s commitment to protecting its strategic assets and ensuring that foreign investment aligns with its national interests.
