On the past day 18 October 2021, the new Economic Activity Delimitation Law no. 25/21 came into force in Angola, revoking the Law no. 5/02 of 16 April.
This new Law came along with the purpose to highlight the right of free enterprise and cooperative initiative recognized in the Constitution for all private entities, with the State playing the role of economy regulator and coordinator of harmonious national economic development, without prejudice to its action in areas of public reserves, absolute and relative.
This new Law only has 11 articles in contrast with the 18 articles of the old Law.
In the old Law there was an article about the private sector that mentioned free private initiative, however, in the new Law, article 4 points up the free private initiative, mentioning that the general regime for access to Economic Activity in the Republic of Angola is that of free private economic and entrepreneurial initiative, without prejudice, to the provisions of the absolute and relative reserves of the State.
It also mentions that the State shall protect, and respect private property and free economic and entrepreneurial initiative exercised under the terms of the Constitution and this Law.
The access to Economic Activity is permitted, both national citizens and foreign citizens, under equal equality of circumstances, under the terms of the Law.
Another change that is relevant it is article 7 of the new Law that widens the spectrum of activities that constitute the relative reserve of the State, taking into account that one of these activities were considered in the old Law as absolute reserve of the State.
Therefore, the activities that were added are:
• Exploration of environmental conservation areas;
• Exploration of tourism development poles; and
• Management and valorization of solid waste from public deposits;
The activity that was considered as absolute reserve of the State and now is considered a relative reserve is the production, distribution, and commercialization of war material. In this way, the Law no. 25/21 came to update this regime.
Article by Duarte Marques da Cruz
Duarte Marques da Cruz is partner of the Portuguese law firm MC&A, specialised in international business advisory, with a special focus in Lusophone markets. With extensive experience in the Energy sector (Renewables and Oil & Gas) and in International Taxation, he has supported international companies in major upstream, midstream transactions and projects, including in implementing, exploration and development programs. Duarte has also supported international clients in other areas of practice, namely, Mining, Transport & Logistics, Regulatory Compliance and Mergers & Acquisitions in Mozambique, Angola and Portugal.
Through this Simplification Project, Angola shows to investors and economic players that intends to maintain its bet on the internal and external investment; on other hand, it is important to note that this simplification procedure is only at its beginning and is expected a wider range of facilitation in multiple public administration proceedings and regarding more sectors of the economy.