Would it be still possible to open a Rep Office in Algeria?

Would it be still possible to open a Rep Office in Algeria?

During the last few years, we assisted to a process where Algeria is progressively limiting the scope of the representative office.

This is a road followed by several Countries in and outside the North Africa Area, mainly because this device is considered to be used by several foreign operators for concealed commercial purposes, even if this possibility is explicitly set aside by the law. 

Now, with the foreigners being granted to own up to 100% of a local company, due to the Budget Law 2020 and Complementary Budget Law 2020, it is likely that the scrutinization on the request of opening or renewing of the representative offices will be even more strict and lead potentially to rejection, unless in very special cases.

Here it is worth to note that the Ministry of Trade has the right to assess discretionary whether to approve or not the request of renewal or establishment of a representative office, based also on the requirements of the Country and the presence on the market of other companies active in the same filed.

Therefore, we highly suggest to promptly proceed with the request of renewal for the company that are interested in having a representative office, before the new policy will be enforced.

What are the conditions for renewing a representative office?

These offices are temporary representative structures, allowed to perform scouting, marketing, collecting information and promoting products for the benefit of foreign commercial companies. 

More so, it is mentioned that the representative offices do not have legal personality and cannot carry out any business or economic activities. However, how is the renewal of such Office done?

The renewal of representative office follows the same procedures as the opening which is subject to the issuance of the Authorization by the Ministry of Trade whose duration is 2 years, renewable. But, what are the fees to be paid?

A deposit bond equal to 30,000.00 USD is opened and 5,000.00 USD is deposited on a “CEDAC” bank account. Registration taxes amount to 1, 5 Million DZD. So, are there other conditions?

The legal representative of the foreign commercial company must undertake in written to respect the laws and regulations in force in Algeria, in particular not to carry out direct or indirect economic activities. Thus, the foreign company must respect the deadlines and conditions of the renewal of its representative office otherwise it will be held liable.

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Would it be still possible to open a Rep Office in Algeria?

Which entities are prevented from registering a representative office?

The Order of October 2015 regarding representative offices excludes some activities while some corporate forms are set aside. On one hand, which activities are not permitted?

Article 9 of the Order stipulates that the exercise of commercial activities by the representative office for and on behalf of the foreign commercial company is strictly forbidden. On the other hand, which corporate forms are excluded?

The order specifies the categories that cannot claim the opening of a representative office. These are natural persons, agencies, branches, commercial representations or any other establishment belonging to a company established abroad.

 Also, companies engaged in consulting activities, customs declarants, as well as legal entities engaged in activities not subject to registration in the commercial register are expressly excluded.

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International e-commerce entering the Algerian market

International e-commerce entering the Algerian market

International e-commerce entering the Algerian market

The transition to international e-commerce is the perfect opportunity for the foreign e-provider to grow and expand its business as well as to provide its goods and services worldwide.

However, knowing the various rules and regulations governing foreign businesses is essential. The foreign e-provider is any natural or legal person who wants to provide goods or services through an electronic platform from abroad to Algeria.

 Since the Algerian government issued the law 18-05 relating to e-commerce, its rules are applicable if one of the parties is an Algerian citizen; resident in Algeria, or if the contract is formed / executed in Algeria.

More so, the mentioned law provided for international e-commerce and investments supporting e-commerce incentives.

 Thus, what are the conditions and procedures for the foreign e-provider to supply its goods and services in Algeria?

What are the conditions for a foreign e-provider to supply its goods and services in Algeria?

According to the article 07 of the above-mentioned law, the supply of products and services by a foreign e-provider in Algeria is allowed.

On one side, the foreign e-provider looking to establish e-commerce in Algeria is subjected to registration in the trade register CNRC, plus publication of a domain hosted in Algeria.

On the other side, foreign e-provider established abroad must be clearly identified and registered according to its country’s regulation as an e-provider regardless if it was the producer or the retailer or an intermediary.

 The latter must indicate the information relating to its identity and its contact details on the website.

Therefore, foreign e-provider should be in a good standing in regard to its jurisdiction and comply with the provisions of the Algerian e-commerce law.

International e-commerce entering the Algerian market

How are the e-commerce transactions conducted?

The e-commerce transactions are regulated by the law 08-15 concerning e-commerce.

On one hand, it contains provisions of the Commercial Code, such as the necessity for the transaction to be conducted through an e-commercial offer and formalized by an e-contract. On the other hand, it provides some provisions addressing competition and consumption. 

Mainly, the detailed specifications of the goods or services, the terms and conditions of delivery, the warranty and after-sales service conditions, the conditions for terminating the e-contract, the terms and conditions of payment, the terms and conditions for returning the product and the pre-order conditions and modalities.

What about terms of payment and custom clearance?

Payment and customs tariff are vital points for any international e-commerce transaction.

On one hand, the e-provider is responsible for the delivery of its goods/services within the specified deadlines. As for the buyer its responsibility is to assure the payment of the price as agreed upon. More so, the law has allowed the e-payment as a way of executing the buyer’s duty.

The e-payment is done via secured and authentic platforms that are put under the authority of Algerian bank.

On the other hand, the customs tariff is established in compliance with the Nomenclature of the International Harmonized System provided by the Brussels Convention which sets out customer’s duties and the VAT.

It has to be noted that a postal shipment is up to 30kg. Moreover, personal postal shipments, unlike commercial ones, are not subject to custom clearance and free of tax duties provided that their value does not exceed a certain amount.

The same rule applies to free commercial samples.

At the end, Fares Group focuses on providing the best service possible and will insure the implementation of all the above mentioned procedures with efficiency.

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The e-Signature in Algeria

The e-Signature in Algeria

The e-Signature in Algeria

The business practice across the world witnessed a transformation that affected mainly the electronic transactions.

 Hence, electronic signature was adopted by many companies worldwide, since it is considered the best and safest tool to secure documents online: In fact it is widely used mainly for multinational business-to-business sales contracts, non-disclosure agreements, video conference electronic attendance sheet for general assembly et cetera. 

On that regard, Algerian legislation established procedures for the recognition of the e-Signature, where a third party called “the provider” is responsible for its identification and authenticity, but also established heavy sanctions (imprisonment up to 3 years and a fine up to 200.000 DA) for the provider in case of the absence of the required authorisation.

 More so, the subscribers are sanctions with the same sanctions in case of false statements to obtain the certificate. 

Therefore, economic operators should strictly follow procedures and refer to authorised parties to ensure the safety of their e-Signatures.

What is e-Signature according the Algerian Law ?

Handwritten signature can only be useful and safe to a certain extent nowadays. 

Article 323 ter of the Algerian civil code provides that the e-Signature is legally bidding in an equivalent way as handwritten one. 

In fact, the e-Signature is a collection of data in an electronic form joined or logically linked to other electronic data, for the purpose of authentication of documents online. 

It can take many forms, including digital signature, biometric signature, and electronic pen signature. 

The article mentioned above set specific conditions and requirements that must be met in e-Signature, for example its strict association with the platform, the fact that the owner of the signature has complete control over it, and this signature cannot be modified nor changed.

Under these conditions, the e-Signature is accepted as evidence in the same way as a traditional one.

How is the certification of the e-Signature done according to the law 15-04 ?

The law 15-04 concerning the electronic signature and certification established a set of procedures to ensure the authenticity of the e-Signature.

 The e-Signature of digital or paper documents requires a third party whose main function is to create a secure electronic transaction platform, and play the role of a trusted broker between the owners of the signatures, confirming the identity of the parties and determining their eligibility to sign.

In addition, it ensures the integrity of the data circulating, and this process is defined as electronic certification. 

The provider of such platform is required to obtain an authorisation to do so from the Economic Authority for Electronic Certification established under the Post and Telecommunications Regulatory Authority, any provider lacking such authorisation can be sanctioned pursuant to the aforementioned law.

This Authority has the duty to publish a list containing the authorised providers.

The provider is required to release to the subscriber a certificate attesting the digital signature.

Therefore, the economic operators should strictly deal with providers approved by the concerned authority and present in the mentioned list but; also, they should obtain and store the certificate proving the authenticity of the document.

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Holding a General Assembly during the Covid-19 crisis

Holding a General Assembly during the Covid-19 crisis

The deadline for holding the annual General Assembly for the companies is getting close, but the coronavirus outbreak threatens to disrupt the normal course of their holding

Directors and general managers are trying to assess the feasibility of holding the general assembly when it is necessary to maintain a physical distance and when the transportations are highly decreased, if not completely suspended.

However, not holding the general assembly also leads to potential risks and liabilities, not being able to approve the financial statements, appoint new directors, and allocating the dividends, etc. This situation can hinder the strategic development of the company.

What are the available alternatives for the companies to attend the general assembly during this period of lockdown?

The obligation to hold the general assembly and the legal risks of its cancellation

The law requires that general assembly intended to approve the annual accounts of companies must be held within six months after the end of the fiscal year, according to article 676 of the commercial code.

In view of the current circumstances, the president and managing directors are confused to whether cancel or postpone the meeting due to “force majeure” events.

However, this reason cannot justify alone the cancellation of the general assembly, especially if we are in presence of shareholder’s agreement explicitly instructing that the general assembly must be hold within a fixed term.

Especially with the silence of the law which does not qualify the pandemic until now as a case of force majeure.

In addition, the article 815 of the commercial code provides with criminal liabilities in case the General Assembly is not hold within the provided deadline.

Despite the current situation, the company must find a solution to hold the General Assembly and avoid criminal and administrative sanctions.

The available legal options to facilitate the holding of the general assembly

Actually, many companies seem to opt for virtual meetings, without the physical presence of the shareholders by videoconference.

However, in order to enjoy this option, it must be explicitly mentioned in the Statutes and in any case, it should follow strict rules and requirements.

The convocation of the Assembly by the management body within the prescribed deadlines must be respected and served by registered letter, as well as by email with acknowledgment of receipt.

An electronic attendance sheet has to be established and signed electronically. In addition, the minutes of meeting of the Assembly should follow the same rules.

Furthermore, it is possible to appoint a proxy to represent a shareholder in the Assembly (and here, please note that only shareholders can be represented and not directors).

Shareholders are empowered to give proxy to another shareholder to attend the general meeting and approve decisions on their behalf, in accordance with article 581 of the Commercial Code.

Finally, if the statute allows it, the General Assembly and the decisions concerning the items present in the Agenda can be taken by written consultation, according to article 556 and 580 of the commercial code.

Meanwhile, the GA decisions must be taken by respecting the conditions of attendance sheet, minutes of meeting and the voting rights of the attendants.

Otherwise, it can expose the directors to penalties provided in the article of the commercial code.

How the directors should proceed?

Concretely, in the silence of the legislator and since no delay for the summoning of the Assembly has been resolved so far, the administrators are obliged to organize it within the deadlines specified by law. Another option, provided by art. 676 of the Commercial Code, is to postpone the hold of the Assembly, through a formal procedure.

The Directors should submit a request to the competent territorial Court, asking for such an extension of the deadline for holding the Assembly, duly justifying the reasons.

Notwithstanding the outcome of the request, directors should act proactively and try to hold it in the original deadline or the one allowed by the Court to set aside the potential risks and liabilities, as well as penalties, while complying with the safety and health measures.

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Unlike several other Countries, which went for an explicit declaration of Force Majeure, Algeria opted for setting aside fines and penalties for delays in the Public Contract, through an Instructions to the Wali sent by the Prime Minister on 15th of April.

Such Instruction legitimated an option already undertook by several Public Contracting bodies: the suspension of the contracts through an ODS d’arret

Which challenges are the foreign companies facing now in Algeria?

Indeed, the commercial operators active in the framework of Public Contracts in Algeria are suffering heavy losses due to the actual circumstances and in complying with the necessary measures taken by the Government in order to fight the spreading of Covid-19. 

That is represented mainly in major unexpected costs, direct and indirect damages and the ongoing expenses even in case of suspension of the activities, usually represented mainly by wages and banking fees. 

The effects of suspension in a Public Contract

Here, we have to refer mainly to art. 34 of the CCAG (Cahier clauses administratives générales) providing that in case of suspension of the works imposed by the contracting Party, the contractor has the right to receive a compensation on the prejudice duly proven.

It is worth to note that only strictly direct damages are usually kept in account. Again, if the suspension will last in total (even in case of the addition of multiple periods of suspensions) more than one year, the contractor will have the additional right to terminate the contract. 

It is essential not to wait until the end of the crisis. Indeed, it is the duty of the contractor to notify promptly the contracting party about the prejudices suffered, under a short deadline and in the prescribed forms.

And what if a Company already invoked Force Majeure?

Although in the practice, the results of the two options can be assimilated (no liability for the delay and compensation, persistence of the duty to pay the dues originated before the occurrence), it is worth to note that there could be a conflict between the remedies for suspension provided by the CCAG and the contractual provisions. Indeed, the Force Majeure clause of a contract could provide the contractor with broader categories for indemnification.

Again, there could be some remedies provided by some Bilateral Investment Treaties (BITs), where Algeria undertook to grant full protection and security to the investors in case of Force Majeure events, leading potentially to an extension of the categories of the prejudices subject to indemnification.

In addition, the BIT prohibits treatment less favorable than that offered to national or third-party foreign investors.

Furthermore, it is worth to underline that with the issuance of an ODS d’Arret, all the works in the scope of a contract will be suspended, while under Force Majeure, only the obligations set forth in the contract which result impossible to perform will be targeted.

In that case, we highly suggest proceeding with an assessment in order to understand how the different provisions will relate and coordinate each other, with the aim to obtain the most satisfactory result.

Which solutions in case the contractual conditions became too burdensome?

Besides the recognition of actual and direct damages thanks to the provisions of CCAG, it is worth to underline that if the balance of the contract is altered and became, if not impossible, extremely burdensome, it could be possible to ask the contracting Party for it rebalance.

This could claim under the general theory of public contracting, but also based on the international principle of hardship, briefly enounced under art.

107 of the Civil Code. In that case, normally the unit prices could be increased until the neutralization of the disequilibrium. 

In order to have higher chances to invoke successfully such right, the respect of formalities, especially during the crisis, must be absolute and a company should prepare a pertinent detailed file in compliance with the local usages.

Indeed, one of the requirements is to prove that an excessive burden has been met and not only a higher, but tolerable burden, since in this latter case it will be considered implicit to the entrepreneurial risk and it will not entitle to any compensation.

So how a Company should proceed now?

We highly suggest now to be proactive and promptly perform several actions. In particular, you should draft a detailed report of the prejudices suffered, proceed with the draft and notification of formal letters and communication, within the deadlines, with a particular attention to the wording and in compliance with the local usages.

In addition, it is worth to understand if your specific case falls into the scope of a Bilateral Investment Treaty. Again, it is suggested to assess which are the remedies provided for Force Majeure in the executed contracts.

Finally, in case the contract became too burdensome and the conditions changed dramatically, it would be useful to claim for a rebalance.

In lack of the respect of all the provided deadlines, formalities and local usages, it is likely that a request for indemnification will be set aside.

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What does the Algerian Law provide if a seller is subject to a serious breach of contract combined with fraudulent acts?

Algerian law provides both criminal and civil penalties for operators that are considered to commit a fraud during a commercial transaction.

In fact, it is not rare that foreign and local companies may have a sale contract with a buyer or contractor who does not show any signs of unreliability at the early stage, but by the time comes the payment, it appears that the latter is a fraudster or commits a fraud.

Actually, according to the Executive Decree n° 13-84 laying down the arrangements for organizing and managing the national fraudster file, and the Law n°18-18 ( budget law of 2019), the fraud or the fraudulent acts are characterized by fraudulent procedures carried out, voluntarily, with the aim of evading, in whole or in part, the duties or for obtaining, unduly, any advantage and intended to give the appearance of sincerity to actually inaccurate statements.  Indeed, according to the Algerian Law, the fraudsters are the ones who committed serious infringements with the tax, commercial, customs, banking and financial laws and regulations as well as the lack of legal deposit of the balance sheet. Thus, the fraudsters are listed within a national file called FNF “Fichier National des Fraudeurs”.

 The National Fraudsters File, managed by the services of the General Department of Taxes, is supplied by the authorized services of Customs, Taxes, Commerce and the Central Bank of Algeria.  The database of the file is transmitted, at each update, to the tax services and the Customs for the follow-up of the domiciliation of foreign trade operations; public procurement tenders; request for tax, customs and commercial benefits; administrative facilitation and issuance of tax status attestations; etc. Furthermore, in the absence of regularization of their situation, these companies are excluded from foreign trade operations and from submission to public contracts.

However, despite the previous mentioned means, implemented by the authorities, in order to frame this kind of behaviors, and discourage fraudsters, foreign exporters still face the issue of no payment.

Meanwhile, if a Seller ever faced this kind of situation, in dealing with a defaulting buyer in Algeria, there is a fast procedure aiming to recover the due amount. Indeed, Seller can seek for a debt recovery, if the debt fulfils the required conditions (a determined amount, due, payable and ascertained in writing). Here, the first solution is to go before the Court for a payment injunction, where the judge issues an order to the debtor to proceed with the recovery of his debt within a deadline.


Thus, our Law Firm deals with such cases on daily basis, by handling the procedure of the debt recovery from the first step before the Court till the last step before the bank. In addition, we can obtain the blacklisting of fraudulent contractor before the competent authorities.


" Doing business in Algeria 2019"

Provide you with an overview of the applicable legal framework in Algeria for international business transactions

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