Local content

Angolan Local Content policies aim to protect the domestic market for products and services for the oil and gas industry, invoking the infant industries argument. Local Content rules broadly aim to promote:

  • Angolan employment
  • Angolan ownership of businesses
  • Angolan industry, production and services

 

Companies should have a work force consisting of at least 70% Angolan nationals. This aspect is also referred to as Angolanization. Oil companies have an obligation to submit an Angolanization plan to the Ministry of Petroleum annually, detailing how they plan to achieve their targets.

 

Oil companies are expected to source certain products and services exclusively from Angolan companies; meaning companies with majority Angolan ownership. These are activities that do not require a high amount of capital or know-how. Provision of certain other products and services is open to international companies in association with an Angolan company, or in exceptional cases, fully foreign owned companies.

 

Other rules are aimed at promoting investment in industry and services. A 10% price preference for local companies is meant to stimulate local production. Another example are the new exchange rules for the Oil & Gas sector, which will give a boost to the local banking sector.

 

Overview of the most important legislation on Local Content and their main implications:

(visit Useful Info to download English translations of the laws)

 

Law

Relevance

Oil Activities Law (Law 10/04)

Preference for local suppliers if up to 10% more expensive;

Lower taxes for local oil companies

Oil Taxation Law (Law 13/04)

Certain training and social expenses deductible

Oil Customs Law (Law 11/04)

Training equipment exempt from import duties;

Tariff protection of domestic market

Law for the Promotion of Business for Local Private Companies (Law 14/03)

Preference for local companies for concessions

Mandatory Hiring and Training of Angolan Citizens (Decree 20/82 and Law 17/09)

Minimum 70% nationals in the organization; regulation of work visa application

Fund for Training and Development of Human Resources (Decree 14/10)

0,5% Training tax; company’s efforts deductible

Contracting Services from Local Companies in the Oil Industry (Decree 127/03 and 48/06)

Three competition regimes: some activities exclusive to Angolan companies or JV’s.

Exchange Regime for Petroleum Sector (Law 02/12)

Use of local banking system

Private Investment Law (PIL, Law 20/11)

Assessment of impacts on economy, job creation

 

 


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