REALWorld Law

Does the concept of a 'permanent establishment' apply when a foreign person invests in real estate and, if so, how much does it cost to set up such a permanent establishment, how long does it take and what corporate governance requirements apply?

Foreign investors may opt to incorporate a limited liability company (either a limited liability company by quotas or a joint stock company, as detailed below). Angola has also a legal framework for investment funds which are also construed as vehicles for investment. However, although all the relevant statutes have been enacted with regard to this type of investment vehicle, there is no record with regard to the existence of same.

Last modified 1 Aug 2019

Does the concept of a 'permanent establishment' apply when a foreign person invests in real estate and, if so, how much does it cost to set up such a permanent establishment, how long does it take and what corporate governance requirements apply?

A local company may take two forms:

• as a limited liability joint stock company, locally called Sociedade Anónima (SA); or
• as a limited liability company by quotas, locally called Sociedade por Quotas (LDA).

Both are limited liability companies and may be 100% owned by foreign shareholders.

The main features of a LDA can be described as follows:

• the share capital can be freely agreed between the shareholders;
• the share capital is represented by quotas which are different from shares of an SA, as they are not materialized in titles, but merely represent an undivided equity interest of the company’s share capital;
• the minimum number of shareholders (also referred to as quota holders) is two;
• the transfer of quotas must be performed by means of a notary deed; and
• the statutory corporate bodies are the General Assembly of Shareholders and the directors.

The main features of an SA are the following:

• the minimum share capital is US$20,000;
• the share capital is represented by shares (bearer or nominative);
• the minimum number of shareholders is five;
• the transfer of shares is easily made, without significant formalities, subject only to any pre-emption rights or other conditions set forth in the by-laws; and
• the statutorily corporate bodies are the General Assembly of Shareholders, the Board of Directors and the Audit Committee.

Last modified 1 Aug 2019

Does the concept of a 'permanent establishment' apply when a foreign person invests in real estate and, if so, how much does it cost to set up such a permanent establishment, how long does it take and what corporate governance requirements apply?

The minimum share capital requirements are as follows:

• LDA:  no minimum share capital required. Shareholders are free to agree on the share capital amount as they see fit.
• SA: the equivalent in kwanzas to US$20,000.

Last modified 1 Aug 2019

Does the concept of a 'permanent establishment' apply when a foreign person invests in real estate and, if so, how much does it cost to set up such a permanent establishment, how long does it take and what corporate governance requirements apply?

The total setting up costs are:

• LDA: Kz 12,000 (approximate figure).
• SA: Kz 42,000 (approximate figure).

Last modified 1 Aug 2019

Does the concept of a 'permanent establishment' apply when a foreign person invests in real estate and, if so, how much does it cost to set up such a permanent establishment, how long does it take and what corporate governance requirements apply?

The process for the incorporation of a corporate vehicle under the laws of Angola must be done according to the terms set forth in the Private Investment Law. The incorporation of a local company is a straightforward procedure and can be done in one day, provided that all the required documents were duly submitted and approved. It is worth mentioning that the by-laws of the new company must be published in the Official Gazette and this can take between 30 to 45 days.

Last modified 1 Aug 2019

Does the concept of a 'permanent establishment' apply when a foreign person invests in real estate and, if so, how much does it cost to set up such a permanent establishment, how long does it take and what corporate governance requirements apply?

LDA

The company is governed and represented by one or more managers that can be chosen from persons outside of the company or natural persons with full legal capacity to manage. The managers are nominated through the contractual agreement or elected afterward through General Meeting. The manager must have the capability to exercise all the acts necessary and convenient for the accomplishment of the social objective, and it must relay its actions to the legally statutory dispositions of the shareholders’ resolutions.

Managers of the company must be either Angolan nationals or holders of a working permit issued by the company.

SA

The company is governed by a Board of Directors and an Audit Committee that must be constituted by an odd number of members, elected by the shareholders in General meeting.

The contractual agreement may outline that the company is governed merely by one administrator and a sole auditor, when:

• The number of shareholders is reduced to two
• The share capital is less than, the equivalent in national currency of, US$50,000, or
• Determined by law

Managers of the company must be either Angolan nationals or holders of a working permit issued by the company.

Last modified 1 Aug 2019

Does the concept of a 'permanent establishment' apply when a foreign person invests in real estate and, if so, how much does it cost to set up such a permanent establishment, how long does it take and what corporate governance requirements apply?

Corporate and accounting compliance costs are not relevant and may vary depending on the accounting firm in charge of same.

The new Private Investment Law does not set forth that the filing of a private investment project must be done simultaneously with a Technical, Economic, and Financial Feasibility Study (Feasibility Study). The new Private Investment Law established two different regimes of Private Investment, one is the Prior Declaration Regime and the other is the Special Regime for specific sectors. In the Prior Declaration Regime the foreign investor can go directly to Guiché Único da Empresa (GUE) to incorporate the company and GUE until now are not asking for this study. The Regulation of the law (Presidential Decree no. 250/18 of 30 October 2018) does not require this document to proceed with the process in AIPEX. The only required financial document is the document proving the existence of funds or other forms of realization of the private investment project. Commercial companies through which private investment projects that have benefits and facilities under the private investment law are implemented must submit a tax return, referring to the respective investment, separate from the other economic activities that they carry out.

Last modified 1 Aug 2019

Does the concept of a 'permanent establishment' apply when a foreign person invests in real estate and, if so, how much does it cost to set up such a permanent establishment, how long does it take and what corporate governance requirements apply?

Following a significant change in the applicable law there has been a reduction of taxes due. Nonetheless, once incorporated real estate companies may be deemed to pay the following taxes:

• Property Tax (Imposto Predial Urbano) –applicable to incomes generated from: urban buildings; planned urban building; buildings or structures of a continuous basis; buildings that integrate part of the legal rights of a natural or legal person; properties capable of generating income; and properties earmarked for purposes other than agriculture, forestry or livestock (payable tax of 25% or progressive rates, depending on whether the property is leased or not).
• Real Estate Transfer Tax (SISA) – applicable to ownership transfers or any law made under consideration of real estate, purchase and sale promises, long-term leases, contributions in kind to the capital of companies and in some cases, acquisition of share capital in companies (payable tax of 2%).
• Consumption Tax (Imposto de Consumo) – applicable to hotel services and other related and similar activities (payable tax of 10%).
• Stamp Tax (Imposto de Selo) – applicable to notarial acts, contracts, requirements, permits, licenses, banking operations, bills and promissory notes, customs clearance documents etc. The tax payable is variable depending on the type of instrument or document in question. It shall be a fixed amount of a percentage or per thousand of its value. It is also applicable to any stamp tax receipts (1% rate) issued by the taxpayers as a discharge of any amounts received by the supply of good, material equipment, services etc.

Last modified 1 Aug 2019