The most common form of security over real estate is the mortgage. Due to the existing restrictions to foreign ownership of real estate, foreign investors are granted surface rights over real estate. Security over these rights can be created but it requires the prior authorization of the grantor. The creation of security over immovable assets, related rights or movable assets subject to registration is created through mortgage. The mortgage must be executed by notarial deed and is subject to registration.
The most common form of security over receivables is a pledge of credits, which is created by a written agreement. The pledge of receivables is subject to the notification of the respective debtor. Thus, it is also possible for security to be granted over the rental income from a property. This usually takes the form of an assignment whereby the tenants are directed to pay the rental income to the lender so that the rental income does not pass through the hands of the borrower.
Last modified 1 Aug 2019
Real estate includes the land, buildings erected on it and fixtures which form part of those buildings.
It is also possible to take security over fittings, furniture and moveable objects.
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No. These concepts are not recognized under the laws of Angola.
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It is not common for secured debt to be traded between lenders in the Angolan market.
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There are no restrictions on granting security to foreign lenders. However, as mentioned above, there are restrictions to foreign ownership of real estate, being the granting of surface rights the most common way for foreign to own title over property. According to the relevant Angolan law it is possible to execute a mortgage deed having as security a surface right.
Last modified 1 Aug 2019
There may be notary fees and land registry fees, plus stamp duty, save if the creation of security is deemed ancillary to a financing transaction, as same is already subject to stamp duty.
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In Angola, a company is not allowed to finance another company or to provide its assets, such as real estate, as a guarantee, unless it has a direct interest in the transaction or in cases where the debtor is part of the same group of companies.
The law also provides for the prohibition of financial assistance, which means that a company cannot grant loans or create any type of security over its assets to or in favour of third-parties to finance or pay for the subscription or acquisition of shares in its share capital.
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The Foreign Exchange Law governs commercial and financial transactions having an actual or potential impact on the balance of payments of Angola, and applies to capital transactions and foreign exchange trading. The following are deemed the most important foreign exchange (FX) operations:
Payments between FX residents and non-FX residents are subject to BNA’s control.
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Lenders and borrowers do not have the right to postpone an existing secured debt due to a newly created debt.
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As a general principle the physical location of the property determines the applicable law. However, for those matters not directly related to real estate, but rather with lenders or borrowers rights and obligations under finance agreements and security documents, a foreign law may be recognized and applied by Angolan courts, provided that certain conditions are met, including:
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Mandatory formal requirements under Angolan law, including registry with the relevant Land Registry Office, must be satisfied in relation to a security document for it to be valid and enforceable. A creditor holding a non-registered security, such as a mortgage, against an insolvent debtor will be treated as an ordinary unsecured creditor.
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Under Angolan environmental law, a lender holding or enforcing security over real estate in its country has no liability if the lender did not cause any pollution or environmental damage to the property, does not hold possession of the real estate and does not manage the asset. Consequently, the holder of security cannot and could not control or prevent the material cause of any damage or environmental breach.
A holder of security over land is not liable for environmental damage provided it does not take possession of the land and does not itself cause, or knowingly permit, damage to the environment.
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The enforcement of mortgages consists of the sale of the asset through court proceedings and the State has the right of first refusal. The sale of pledges may be conducted judicially or extrajudicially.
The enforcement of securities may involve additional red tape andenforcement actions usually take many years and out-of-court remedies are not common practice.
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Under the Civil Procedure Code (CPC), the board of directors may file for bankruptcy before the company ceases all payments to creditors or in the ten days following this event. If the filing is performed in a timely manner, the CPC allows the insolvent company to propose an agreement to the creditors in order to achieve the restructuring of its debts and to avoid the declaration of bankruptcy. This agreement must be approved by creditors representing 75 percent of the credits.
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One pivotal issue is the date such security is created as such security might be construed as a form to prevent specific assets to be included in the assets that will be used as payment to creditors.
Last modified 1 Aug 2019
The Angolan Civil Code sets forth that some credits are paid with preference over others. There are two types of preferential credits: movable; and real estate.
Preferential movable credits may be general, if they cover the value of all movables (eg credits emerging from an employment contract) or special, if they only cover the value of certain assets (eg state credits from taxes levied over donations). Preferential real estate credits are always special (eg state or local authority credits from taxes levied over real estate property). General preferential movable credits do not prevail over a third party guarantee. Between a special preferential movable credit and a third party’s right, the oldest credit prevails. Preferential real estate credits always prevail over a third party’s rights to real estate property. When assets secured by a real guarantee are liquidated, creditors are paid immediately. However, if there is a conflict between said credit and a preferential real estate credit or an older special preferential movable credit, the latter prevails.
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Is the concept of a trust or a split between legal ownership and beneficial ownership recognized?
No. These concepts are not recognized under the laws of Angola.
Last modified 1 Aug 2019