Subsidiaries in Angola

The facets like political and economic stability, developing labor force, strong investment support, attractive investment terms, and access to renewable energy prospects drive foreign investment in Angola. The country holds the 61st rank globally in terms of GDP. The economy of this country is experiencing one of the most rapid growth rates globally.

Setting up a subsidiary in Angola assists companies in developing their presence in the country and exploring the maximum benefits of their developing economy. It is one of the most accessible and cost-effective approaches to entering Angola. Furthermore, it demands relatively less paperwork and compliance.

The below guide covers all the essential information you should know before setting up a subsidiary in Angola.

What are the Types of Subsidiaries in Angola?

The information provided below covers details of different subsidiaries you should know before setting up a subsidiary system in Angola.

Private Limited Liability Companies (Sociedades por Quotas)

• This form of subsidiary business in Angola is suitable for smaller investments.
• It requires at least two shareholders, except it is a single-shareholder company.
• The shareholders determine the share capital. The share capital is distributed into participations known as “quotas” (shares). The minimum share value must be USD 1,000.
• The shareholders are jointly and individually liable for the entire share capital contributions.
• The profits’ distribution either depends on the shareholders’ decision or at least 50% of the annual distributable profits.

Public Limited Liability Companies (Sociedades Anónimas)

• This type of subsidiary business in Angola is suitable for larger operations with large investments at stake.
• It requires at least five shareholders, except when Angolan State or Public Companies are the major shareholders.
• According to the Commercial Companies Law, the minimum share capital required is USD 20,000,00. Each share should have a minimum value of USD 5,00.
• The mandatory profits’ distribution depends on the shareholder’s resolution or the share of profits stated in the articles of association or a minimum of 50% of distributable profits.

How to Set Up a Subsidiary in Angola?

The following steps will help you to establish a subsidiary company in Angola:

Step 1: Select a company name

• Decide the company name to begin the registration process.
• Prepare multiple names if the first proposed name is unavailable for registration.
• The company name should not be identical or resemble the already registered ones in  Angolan Private Investment Agency (ANIP).

Step 2: Prepare the required documents

• The foreign company should provide its local authorized agent with Powers of Attorney (POA) for subsidiary registration.
• Prepare articles of association and memorandum. The articles of association must cover the following details:

1. 1. Subsidiary’s name and address
   2. Company goals
   3. Name of the shareholders and beneficiaries
   4. Internal regulations
   5. Shareholders’ contribution to the capital
   6. Particulars about the shares and their relevant rights

Step 3: Appoint directors and deposit capital

• Employ at least one director and one shareholder to incorporate the subsidiary.
• Prepare for a bank account and a lease. Next, pay the minimum capital, file for registration, and sign the necessary corporate documents.

Step 4: Register for VAT

• Register for VAT.
• Fill up the VAT registration form and attach copies of Business Registration documents.

Step 5: Company registration

• Register with the Angola Business Registry. The required documents are annual financial statements, annual returns, and power of attorney.

Step 6: Business bank account

• Open an Angolan bank account with any registered local bank. 
• The required documents are filling forms, a certificate of the company’s name reservation, and a copy of the IDs of the members of the Board of Directors and the shareholders.
• Deposit the minimum share capital in the bank account, depending on your subsidiary’s type.

Step 7: Register for TIN

• Register with the General Tax Administration (AGT) to get a Tax Identification Number (TIN) for mandatory annual tax returns.
• The required documents are a Certificate of Incorporation, a Certificate to commence business, and a Company’s Regulation.

Step 8: Register for Social Security

• Register at National Social Security Institute (“Instituto Nacional de Segurança Social – INSS”) for security contributions.

Step 9: License and permits

• Get Commercial Operations Permit (Alvará) from the Ministry of Commerce.
• To get a commercial operation permit, certain documents should be filed with the Municipal Delegation of the Ministry of Commerce. These documents are a company’s notary deed of incorporation, a copy of the tax identification card, commercial registration certificate, statistical registration certificate, extracts from the founders’ criminal record, and directors’ ID documents (copy of residence permit or passport with latest work permit).

Step 10: Conduct general meetings

• Conduct general meetings of the supervisory board or the shareholders to determine a board of directors.

Benefits of Setting Up an Angola Subsidiary

Here are the benefits of setting up a subsidiary company in Angola.

• The incorporation of a foreign subsidiary in Angola enables the parent company to broaden its reach and earn high profits. It allows accessing more opportunities and different markets.
• The process of incorporation of a foreign subsidiary in Angola is simplified with incentives like tax incentives, free trade zones, no minimum capital requirement, a fast incorporation process, and special economic zones.
• Setting up a subsidiary business in Angola enables businesses to hire local employees who are well-versed in available opportunities and the local market.
• One of the prime benefits of a subsidiary company in Angola is that the parent company can provide shares for their percentage of ownership and facilitate investments. Consequently, the parent company can raise the money without facing the risk of changing the parent company’s stock value.
• Creating a subsidiary business in Angola benefits the parent company by diversifying the large company into smaller parts and achieving better business efficiency.
• Setting up a subsidiary system in Angola simplifies certain transactions by decreasing the regulatory requirements.

Documents to Prepare When Opening a Subsidiary in Angola

Companies must prepare the following documents when applying for subsidiary incorporation:

• Memorandum and Articles of Association
• The company name’s consultation certificate
• Certificate of Incorporation
• Statistical registration certificate
• Commercial Registration Certificate
• Certificate of company’s name reservation
• Power of Attorney approving a Representative to work on behalf of a company for registration/incorporation purposes
• A copy of identification documents of members of the Board of Directors and the shareholders
• Copy of the tax identification card
• An official request for Business License Registration
• Identification documents (ID card/copy of passport/residence permit) of the directors, shareholders, company secretary, and legal and judicial representative.
• A photocopy of the applicant’s identification document
• A reference letter from a bank stipulating that the directors, shareholders, and company secretary have an account registered with the bank.
• Bank certificate for evidence of deposit of capital
• Proof of residence for the company administrator/ partners
• Board minutes stipulating the decision to establish a legal structure in Angola
• Declaration of the Angolan embassy in the company’s country of incorporation mentioning that the company is correctly incorporated, conforming to the Angola subsidiary laws.

Note: All required documents for the registration process should be translated into Portuguese, endorsed by a Notary Public, and authorized by the Angolan embassy in the company’s country of incorporation.

What Business Forms Can Angola Subsidiaries Take?

Subsidiaries in Angola can take on one of the following standard subsidiary forms:

• Private limited company
• Public limited company

The company can opt for the most pertinent subsidiary form as per its requirements and business plan.

Angola Subsidiary Laws

Companies intending to set up a subsidiary business in Angola should consider the below laws:

• A public limited company’s minimum share capital requirement is USD 20,000,00, of which 30% should be paid on the effective incorporation date.
• The private limited company must have a minimum share capital of USD 1,000,00.
• At least two shareholders are required to open any limited liability company.
• Depending on the business type, the subsidiary may acquire permits and licenses from the relevant authorities in Angola.
• Before establishing a subsidiary business in Angola, the company should have a registered office where it can accept legal documents and support formal communication.

Post-Incorporation Compliance

The following aspects are important for the compliance checklist for the incorporation of foreign subsidiaries in Angola:

• Obtain the business certificate of commencement within 180 days of commencing its business activity.
• Obtain the unique company number and incorporation certificate from the registrar of companies.
• Establish the company’s registered office within 30 days of the subsidiary’s incorporation. The applicable office address would allow all official communication from varied authorities.
• The shareholder must be issued with a share certificate within 60 days of the subsidiary’s incorporation date.
• After the establishment of your Angola subsidiary, you should manage banking principles, local tax laws, payroll withholdings, and employment requirements.
• Within 30 days of incorporating the subsidiary, the Board Meetings (BOD) will engage the company’s initial auditor. They will oversee the office administration until the first AGM (Annual General Meeting) lasts.
• After establishing a subsidiary, 4 BODs must be held each year with at least 120 days gap between two meetings.
• All private limited companies must file their Annual Return within 60 days of arranging the Annual General Meeting.
• All private limited companies must file their Balance Sheet with the Director Report and statement of Profit and Loss Account within 30 days of arranging the Annual General Meeting.
• The Company must file form INC-20A (Declaration of Commencement of Business) within 180 days of incorporation of a subsidiary business in Angola. But, the company can’t commence its business operations until the proclamation of commencement is filed with the ROC.
• Before making national pension contributions on an employee’s behalf, the employer should register their employees with the National Social Security Institute (“Instituto Nacional de Segurança Social – INSS”).

Taxes on Subsidiaries in Angola

A subsidiary in Angola is subject to the following taxes:

Tax Incentives for Businesses Setting Up a Subsidiary in Angola

You should focus on tax incentives when working on the incorporation of a foreign subsidiary in Angola. Irrespective of the business sector, your subsidiary business in Angola can benefit from the following tax incentives:

• Renewable energy manufacturers benefit from reducing the IT rate to 16.25%.
• Tax Benefits Code includes incentives for savings, diversity in the workforce, and remuneration of capital.
• The Tax Benefits Code also provides private investment incentives, incentives for investment in free trade zones, and incentives for the generation of electricity from renewable sources.
• Apart from the tax exemptions for acquiring land and constructing industrial premises, customs tax-exempt status is also provided for importing raw materials, industrial equipment, and goods.
• Specific financial incentives (for example, tax breaks) apply to various sectors, including construction, agriculture, textiles, energy, fishing, tourism, and education.
• According to the Private Investment Law, the tax incentives apply to the contractual, special, and prior declaration regimes.
• The contractual regime applies to investments with a minimum capital of USD 10M. It allows the investors to determine the tax incentives for the project within certain limitations.
• The special regime is valid for private investments with an amount below the one set for the contractual regime. It covers the performance of the activities explicitly mentioned in the Regulation of the Private Investment Law.
• An exemption on taxation of foreign subsidiaries in Angola may apply if the dividends are funded to a shareholder possessing a minimum of 25% of the company.

Other Important Considerations

Apart from the compliance checklist for incorporation of foreign subsidiaries in Angola, you should also focus on the following significant considerations.

• It is obligatory to pay both the authorities and the employees from an in-country bank account.
• To establish a subsidiary system in Angola, plan for the travel and expenses involved.
• You should consider insurance, residence permits, registration with the federal tax administration, and registration for any licenses (if required) to create a subsidiary system in Angola.
• As per the business sector, the Government may ask for additional investment capital to establish your subsidiary.
• The process of incorporation of foreign subsidiaries in Angola should be precise and reliable. Any errors can cause penalties, fines, and extra setup time.
• If the company members are not fully aware of Angola’s subsidiary rules, the company must hire an attorney or a staff member well-versed in these rules. 

How Can Multiplier’s Employer of Record Help You Hire & Expand in Angola?

Expansion of a business in a foreign country is possible if you dedicate enough time and investment. You must devote considerable time and effort to conform to the industry standards as well as the country’s labor rules. You can use the services from a third-party service company like Multiplier to create a subsidiary system in Angola.

Multiplier oversees all the regulations, from recruiting talented employees to payroll processing, when developing the business in a foreign country. It discards the need to set up a subsidiary. Furthermore, Multiplier assists you in hiring local and global talent while assuring compliance with Angola’s regulations and labor laws.