The National Bank of Angola (BNA) Notice no. 15/19, published 30 December 2019, defines new procedures for foreign exchange operations carried out by non-residents.
According to Legis-PALOP+TL legal database, these apply to foreign exchange transactions related to foreign direct investment – that is, foreign exchange non-resident operations carried out, alone or cumulatively, including divestment operations – in the following ways:
- Transfer of own funds from abroad;
- Application of cash and cash equivalents in national and foreign currency, in bank accounts opened in Banking Financial Institutions domiciled in Angola, held by foreign exchange residents, susceptible to repatriation;
- Imports of machinery, equipment, accessories and other tangible fixed assets;
- Incorporation of technologies and knowledge, provided that they represent an added value to the investment and are susceptible to financial evaluation;
- Provision of supplementary capital payments or supplies to partners or shareholders;
- Application, in national territory, of funds in the scope of reinvestment; and
- Conversion of credits resulting from the execution of contracts for the supply of machinery, equipment and goods, as long as they are proven to be liable to payments abroad.
- Foreign investment in securities or divestment of such assets, covering: i) shares; ii) obligations; iii) units of participation in collective investment undertakings and other documents representing homogeneous legal situations.
These procedures also apply to foreign exchange transactions related to foreign investment projects that have been registered with the National Bank of Angola (BNA) before 30 December 2019.
However, they do not apply to investments made by non-foreign exchange residents in the oil sector, which will continue to be governed by proper legislation.
The following obligations are applicable to non-resident foreign exchange entities that intend to invest in Angola, within the scope of the new procedures:
- They must be holders of foreign exchange non-resident accounts, opened with a banking financial institution domiciled in Angola,
- For the purpose of receiving payments, including for the purchase of shares listed on the stock exchange, foreign currency must be sold to the investment banking intermediary financial institution, except in the case of purchase of securities denominated in foreign currency traded on a regulated market in Angola;
- Transfer income related to a foreign direct investment is only allowed after the project has been completed and after payment of the taxes due.
The non-resident foreign exchange investor is allowed to maintain in national currency values relating to income, reimbursement of supplies or proceeds from the sale of investments to make new investments or convert to foreign currency at a future date.
Finally, the following obligations are now imposed on bank financial institutions that carry out transactions with non-resident foreign exchange entities:
- Report to BNA the transfer of securities to and from abroad related to the import and export of capital and associated income, at the time of registration in the accounts of its clients who are not foreign exchange residents;
- Require full identification and knowledge of its customers, as well as confirmation of their status as non-resident foreign exchange;
- Transfer the financial resources designated for making investments to a specific sub-account created, that should be used only for that purpose;
- Ensure that movements in bank accounts held by foreign exchange non-residents, in national and foreign currency, are supported by documents that allow a clear identification of the origin or destination of the funds;
- For the purpose of assessing the legitimacy of transfers abroad of income from foreign direct investments not quoted on a stock exchange, make sure that the investment was made, through the copy of the Private Investment Registration Certificate (CRIP), among other requirements.
- For the purpose of validating the export proceeds from the sale of securities and related income, validate the source of the credit in the bank accounts of non-resident customers.
Breach of the obligations summarised above is punishable by fines of up to AOA 150 million (US$305,000) for individuals or up to AOA 500 million (US$1.02 million) for legal persons.