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Algeria’s economy is in the midst of a difficult and halting transition from bureaucratic state control to an open market. Much has improved however in the consequence of democratisation in the region, liberalisation of trade policies (free trade agreement with the European countries, imminent accession of Algeria to the world trade organization).
Algeria economy is experiencing a rapid growth; this growth was led by the hydrocarbons industry, which is highly cyclical in the current high price ceiling for oil and natural gas.
Under political stability, the president Boutaflika is pursuing a strategy to reduce the level of unemployment by attracting direct foreign investment in manner to create jobs and to assist the economic development in Algeria. In a 2007 survey of business conditions in 178 countries, the World Bank ranked Algeria 125 for ease of doing business. Algeria is seeking more DFI direct foreign investment. For example, Algeria‘s hydrocarbons law passed in April 2005 is designed to encourage foreign investment in energy exploration. Algeria has signed bilateral investment agreements with 20 different nations. In 2006 FDI in Algeria totalled U.S$ 1.8 billion the petrochemical, transport, and utilities sectors.

The Algerian law is characterized by highly changeable nature; change is due to tremendous growth that requires revision and appropriate adaptations in all areas of the law of Algeria.

The Algerian legal system for the promotion of foreign investment

The legal system for the promotion of the investment is essentially defined in the Ordinance n°01-03 of August 20.2001 relating to the development of the investment” (thereinafter “Ordinance n°01-03” or “Algerian investment code”), amended a completed by the Ordinance 06-08 of July 15. 2006. (thereinafter: “Ordinance 06-08).

1. The investment field

Only companies incorporated under Algerian law, i.e. the Algerian sister company of foreign companies, can benefit from