A foreign company operating in Algeria: liaison office, branch or subsidiary
The question lands at bid stage, months before visas and work permits matter. Here are the three vehicles, what each one lets you do, and the text that says so.
This page covers one case only: a company headquartered outside Algeria that has to operate on Algerian territory. It is not about Algerian nationals working abroad, and not about postings out of Algeria into a third country. Algerian law opens three doors to a foreign company that wants a presence here: the liaison office, the branch and the Algerian-law subsidiary.
The choice is operational, not administrative. It decides whether you can issue an invoice in dinars, whether you can clear equipment through customs in your own name, whether you can bring your expatriates in, and which tax regime your profits fall under. Picking the wrong vehicle at bid stage costs months, because the vehicle gates the rest of the chain and not the other way round.
An Algerian client will not ask which vehicle you set up. They will ask you for a compliant invoice, and that is the moment the vehicle asks for you.
Describe the contract, the schedule and the headcount to mobilise. We come back with the recommended vehicle and the matching chain of formalities.
The decision rule in three lines
If you take one thing from this page, take this. The detail and the sources follow.
Liaison office
You are prospecting, bidding and representing the parent company.
No Algerian invoice will ever come out of it. It is an observation post, not an execution tool.
Branch
You have one Algerian contract to execute and no plan to settle here.
It invoices and it employs, but it has no separate legal personality: the parent stays exposed.
Subsidiary
You intend to bid repeatedly, to import, or to build a local balance sheet.
A full Algerian company with ring-fenced liability, but the slowest of the three to open and to close.
The comparison on the six points that decide
Six questions are enough to settle it. Every cell points at the text behind it. Where no text answers, the cell says so.
Scroll the table sideways
The comparison on the six points that decide
What you need to be able to do
Liaison office
Branch
Subsidiary
Invoice in AlgeriaIssue a dinar invoice to a local client.
No
Forbidden. The liaison office has no legal personality and may not carry out economic activities (art. 4). Carrying out commercial activities is strictly prohibited and triggers withdrawal of the approval (art. 9).
Import goodsClear equipment or inputs through customs in your own name.
No
Forbidden, including indirectly. The undertaking required at opening covers not carrying out direct or indirect economic activities on Algerian territory (art. 7, point 6).
For the purposes of its activity, yes, subject to the prior authorisation required before any trade register entry for regulated activities (art. 26). Import for resale in the same state is a separate case: see the 51/49 section.
Yes, with the same prior authorisation for regulated activities (art. 26). If the activity is import for resale in the same state, it has to sit in a company whose resident national shareholding reaches 51 %.
Employ staff in AlgeriaHave declared employees, local or expatriate.
Yes
Yes, and the text organises it. Employees of the foreign company represented by the liaison office are subject to Algerian labour law (art. 12). Staff remuneration and the related social and tax charges are borne by the parent company and payable from the CEDAC account (art. 10, point 1).
Yes. An Algerian-law employer, carrying its own social affiliations and filings.
Yes
Yes. An Algerian-law employer, carrying its own social affiliations and filings.
Sponsor a work permitFile and hold the work permits of your expatriates.
Conditional
To be checked case by case. The office employs staff subject to Algerian labour law (art. 12) and its closure requires a CNAS clearance certificate (art. 13). But neither the 2015 arrêté nor decree 82-510 addresses a work permit application filed by a liaison office. We do not publish an answer we have not read.
Yes. The application is filed by the employing entity, and a registered branch is one. The work permit or the temporary work authorisation allows a defined salaried activity, valid for a given period, with one single employing organisation (loi 81-10, art. 4).
Yes, on the same terms. Watch the practical consequence: an employee holding a permit at your entity A cannot be moved to your entity B without running the procedure again.
Opening: cost and lead timeWhat the text charges, and what we observe in execution.
Conditional
Approval from the Ministry of Trade, valid for two years and renewable (art. 5). On acceptance: a registration duty for the convertible-currency equivalent of DZD 1,500,000, a bond of USD 30,000 with a primary bank, and a CEDAC account opened with a payment of at least USD 5,000 (art. 7). The same DZD 1,500,000 duty falls due at every renewal, the application being made within a maximum period of two months before the approval expires (art. 8). The text sets no processing deadline.
Documents required: proof of premises, one copy of the parent company's articles authenticated by the Algerian consular services, and the minutes of the decision to open the establishment in Algeria authenticated by the foreign consular services based in Algeria, both translated into Arabic where applicable (art. 10). This text requires no capital. Our observed execution time: 6 to 10 weeks.
Investment registration with AAPI, notarised articles, publication, trade register entry, tax identifiers and social affiliations. Our observed execution time: 8 to 12 weeks without a sectoral approval, 12 to 20 weeks with one, because the authorisation has to exist before the register entry (art. 26).
Closing: cost and exitThe exit, which almost nobody costs before entering.
Conditional
Releasing the bond requires a discharge issued by the Ministry of Trade, itself conditional on four documents: the application signed by the legal representative, the closure decision issued by the foreign company, the tax roll extract certifying the company is up to date with the tax authority, and the CNAS clearance certificate (art. 13). Until all four exist, the USD 30,000 stays blocked.
Deregistration from the trade register, which requires among other things the tax standing certificate (art. 22 to 24). On top of that comes the tax cost of taking the profits out: see the tax section below.
The longest of the three. Dissolution first, then deregistration against the deed of dissolution, the notice published in the official bulletin of legal announcements and the tax standing certificate (art. 23). Deregistering the company also deregisters its secondary activities (art. 24).
The opening durations are our own observed execution times, not legal deadlines. No text fixes them. They depend on the legalisation of your documents at home and on the bank's compliance review.
The three vehicles, one by one
01
The liaison office
A temporary representation structure, with no legal personality.
The arrêté of 9 November 2015 defines it as a temporary representation structure (art. 2). Its remit is listed exhaustively: prospecting the market, establishing contacts, gathering information, promoting products and carrying out administrative formalities on behalf of foreign commercial companies (art. 3).
It has no legal personality and may not carry out economic activities. It acts in the name of the company it represents and by delegation from it (art. 4). Carrying out commercial activities for the account of the foreign company is strictly prohibited, and it triggers withdrawal of the approval without prejudice to the penalties provided by law (art. 9).
Two details people discover too late. No other approval may be issued to a liaison office (art. 11): you will not be able to grow it into something else, you will have to open a different vehicle. And a visible sign carrying the foreign company's name followed by the words liaison office has to be displayed in the building that hosts it (art. 10, point 2).
Who cannot open one (art. 14)
Natural persons.
Agencies, branches, commercial representations or any other establishment belonging to a company based abroad.
Companies carrying out, in particular, consulting and customs broking activities, except services whose presence in Algeria is deemed indispensable.
Legal persons whose activities are not subject to trade register registration.
The right tool if your goal this year is to understand the market and become known. The wrong tool the moment a contract has to be signed and invoiced.
02
The branch
An establishment of the parent company, registered in the trade register.
Any commercial enterprise headquartered abroad that opens an agency, a branch or any other establishment in Algeria must be registered in the trade register. The National Trade Register Centre puts it in those terms, and Executive Decree 15-111 sets out how.
The file is short but heavy to assemble, because it crosses two opposite consular chains. You need one copy of the parent company's articles authenticated by the Algerian consular services, and the minutes of the decision to open the establishment in Algeria authenticated by the foreign consular services based in Algeria, both translated into Arabic where applicable, plus proof of premises fit for commercial activity (art. 10). That text requires no capital.
A branch has no legal personality separate from the parent. That is its advantage on the balance sheet and its risk in litigation: it invoices and employs without incorporating anything, but liability does not stop at the border. For tax purposes it constitutes a permanent professional installation, which moves it into the common-law regime.
The right tool to execute one identified contract without settling in. The wrong tool if you plan to chain contracts or to shield the parent.
03
The Algerian-law subsidiary
An Algerian SARL, EURL or SPA owned by your group.
This is a full Algerian company, registered in its own name as a legal person (art. 9 of decree 15-111). It has its own capital, its own accounts and ring-fenced liability, and it can bid, import, employ and pay a dividend without the parent standing in the front line.
Ownership can be entirely foreign. The so-called 51/49 rule now survives in two cases only: the strategic sectors of Executive Decree 21-145 and import for resale in the same state, both of which require a 51 % resident national shareholding. Everywhere else, in manufacturing, engineering, technology, services and consulting, ownership is free.
It is also the most demanding vehicle at both ends. On the way in, if your activity is regulated, the authorisation or provisional approval has to exist before the trade register entry (art. 26), which moves the critical path to the sector regulator. On the way out, you have to dissolve before you can deregister, and produce the deed of dissolution, the notice in the official bulletin of legal announcements and the tax standing certificate (art. 23).
The right tool if Algeria is a position and not a mission. The wrong tool if you have one eighteen-month contract and nothing after it.
51/49: what it actually targets, and what it does not
The rule is misquoted constantly. It no longer applies to foreign investment across the board. A 51 % resident national shareholding is still required in two cases only: activities of a strategic character, listed by Executive Decree 21-145 of 17 April 2021, and import for resale in the same state.
The point most comparisons miss: the rule bears on CAPITAL, so structurally it targets the subsidiary. A liaison office has no capital and in any case may carry out no economic activity. A branch has no capital of its own either. Our reading is therefore that an activity caught by the 51 % threshold cannot sit in a branch and calls for an Algerian-law company with conforming shareholding. That reasoning is a reading, not a quotation: have your counsel confirm it before you carry it into a bid.
The practical corollary at bid stage: the drafting of the corporate purpose decides as much as the choice of vehicle. An operation that genuinely transforms goods in Algeria is not an import-for-resale operation, and it should not be drafted as one.
What the choice changes before the first dinar of profit
This is the part legal comparisons leave out, and it is the part that prices your bid. The Directorate General of Taxes splits foreign companies by whether or not they have a permanent professional installation in Algeria.
With a permanent professional installation
Common-law regime, like an Algerian company: corporate income tax, professional activity tax, VAT and property tax. You are taxed on a net result, with your costs deductible. A branch and a subsidiary are both in this position.
Without a permanent professional installation
A temporary service is hit by a withholding that the DGI publishes at 30 % of gross turnover for corporate income tax, a withholding that also covers the professional activity tax and VAT. The base is gross, not net. That is the difference that turns a contract profitable on paper into a loss once it is executed from abroad.
Temporary construction works
A special case flagged by the DGI: the common-law regime applies, with instalments computed at 0.5 % on amounts received and due within the first twenty days of the following month.
Taking profits out of a branch
Profits transferred by a branch to the foreign head office are treated as distributed profits and bear a 15 % withholding, which the DGI attributes to article 6 of the 2009 Finance Law. That rate is treaty-reducible, subject to holding and beneficial-ownership conditions checked file by file.
One point to have confirmed before you price. The DGI page states that foreign companies without a permanent professional installation in Algeria may elect the real-profit regime provided for by article 148. We have not re-read the later finance laws in the Official Journal, so we will not assert here that the option is still open. Have your counsel check that specific point: between a withholding on gross and taxation on a net result, the gap decides the price of your bid.
What we could not source, and therefore will not publish
An honest comparison is judged as much on what it refuses to assert as on what it asserts. These are the points still open.
The processing time for a liaison office approval application. The 2015 arrêté sets none, and we have no published administrative source to put in its place.
The trade register formality fees and stamp duties. Decree 15-111 refers to them at article 25 without stating amounts.
Whether a work permit application filed by a liaison office is admissible. The office employs staff subject to Algerian labour law, but none of the texts we read addresses that filing.
What happens to the USD 30,000 bond if the approval is withdrawn for carrying out a commercial activity. Article 9 provides for withdrawal, article 13 only provides for release against a closure decision issued by the company.
The exact legal basis and perimeter of the import-for-resale restriction. The rule is consistent in practice and across our other pages, but we have not re-read the instrument carrying it in the Official Journal.
Sources
Every legal or numeric statement on this page comes from one of these documents. The first five are Official Journal scans.
Official Journal of 28 December 1982, page 1917. Cited on this page for what it does not say: it does not address a work permit application filed by a liaison office.
Official Journal of 14 July 1981, page 683. Article cited on this page: 4. This is the text that ties the work title to one single employing organisation.
Directorate General of Taxes. Draws the line between foreign companies with and without a permanent professional installation, and publishes the withholding rates and the treatment of profits transferred to the head office.
National Trade Register Centre. Confirms that any commercial enterprise headquartered abroad which opens an agency, a branch or any other establishment in Algeria must be registered.
Frequently asked questions
Can a liaison office sign a contract or issue an invoice in Algeria?
No. The liaison office has no legal personality and may not carry out economic activities (arrêté of 9 November 2015, art. 4). Carrying out commercial activities in the name and for the account of the foreign commercial company is strictly prohibited and triggers withdrawal of the approval (art. 9). The undertaking signed at opening in fact covers not carrying out direct or indirect economic activities on Algerian territory (art. 7).
What does it cost to open a liaison office in Algeria?
The text sets three amounts. A registration duty for the convertible-currency equivalent of DZD 1,500,000, a bond of USD 30,000 with a primary bank, and the opening of a foreign account in convertible Algerian dinars with a payment corresponding to a minimum of USD 5,000 (arrêté of 9 November 2015, art. 7). The approval runs for two years and the same registration duty falls due at every renewal (art. 5 and 8).
What is the difference between a branch and a subsidiary in Algeria?
A branch is an establishment of the foreign company registered in the trade register: it invoices and it employs, but it has no separate legal personality, so the parent stays exposed, and its profits transferred to the head office bear a 15 % withholding. A subsidiary is an Algerian-law company with its own capital and ring-fenced liability. It takes longer to open and to close, but it is the only one that builds a durable local position.
Can a foreign company own 100 % of its Algerian subsidiary?
Yes, except in two cases. A 51 % resident national shareholding is still required in activities of a strategic character, listed by Executive Decree 21-145 of 17 April 2021, and in import for resale in the same state. Everywhere else, in manufacturing, engineering, technology, services and consulting, foreign ownership can be total.
What happens if we execute the contract with no local vehicle at all?
You remain a foreign company without a permanent professional installation. For that case the Directorate General of Taxes publishes a withholding of 30 % of gross turnover for corporate income tax, a withholding that also covers the professional activity tax and VAT. The base is gross rather than net profit, which changes the economics of the contract. The DGI also mentions an option to elect the real-profit regime provided for by article 148: have your counsel confirm it is still open before you build a bid on it.
Can a liaison office be converted into a branch or a subsidiary?
Not by conversion. The 2015 arrêté provides that no other approval may be issued to a liaison office (art. 11). In practice you open the new vehicle and close the office, and closure is conditional on a discharge from the Ministry of Trade issued against an up-to-date tax roll extract and a CNAS clearance certificate (art. 13).
A written answer, with the recommended vehicle, the documents to prepare on your side and the critical path. This page is a public comparison: it does not replace your counsel's advice.
