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4. Barriers to investment
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4.1 Barriers to investment access

The 2003 Algerian Finance Act stipulated that as of January 1 2003, the minimum requirement for registered capital of an import trade company would increase from 100 thousand dinar to 10 million dinar. In July 2003, Algeria published a law governing the general principles of import and export business, which reintroduced the 100 thousand dinar minimum requirement for registered capital. In July 2005, Algeria published the 2005 Supplementary Finance Act, which again raised the requirement to 20 million dinar, effective from December 26 2005. According to the new act, if importers fail to meet the requirement, their business licenses will be invalidated. This policy has affected many Chinese trade companies in Algeria as most of them have a registered capital of 100 thousand dinar. Inconsistency of investment policy will affect operation of foreign investment and investment confidence. China hopes that Algeria can keep its laws and policies consistent so as to reduce risks for investors.

4.2 Barriers to investment operation

Algeria does not allow foreign nationals to remit their business profits unless they have been doing business trade for 5 years or above in Algeria. Any violation of the regulation will result in confiscation of the profits.

Foreign employees in Algeria can transfer a portion of their salaries abroad (generally about 50 percent). Foreign investors are allowed to remit their profits within a certain period of time if they obtain official permission from the General Directorate of Exchange of the Central Bank. It is reported by relevant enterprises that it may takes longer than the period required by the law to acquire the permission, which is caused by the lower efficiency of the General Directorate of Exchange. Therefore, the interests of the investors would be harmed.

To prevent arbitrage, the Algerian Customs require that banks shall not remit payments to exporters before receiving a notice from the Customs confirming that importers have gone through customs clearance. This requirement is applied to imports from certain countries including China, and can cause delay in payment. Coupled with the strict restriction on return and transshipment of goods, these rules have greatly increased business costs to Chinese enterprises.

Additionally, foreign workers in Algeria are required to pay a variety of fees such as social security, which amounts to 48 percent of the total salary. As Chinese workers usually return to China after working in Algeria for one or two years, they are unable to enjoy those benefits. Meanwhile, the fees above mentioned have burdened the enterprises and affected their competitive ability.

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