By Luis Roquette Geraldes
Angola has enacted a new law on private investment that will substantially impact future foreign private investment. The principle of caveat emptor applies, and prospective foreign private investors should be well aware of the potential pitfalls and shortcomings this law encompasses. Interpretational doubts are already being raised, some of which commentators and practitioners are hoping to see worked out via further regulation.The New LawAngola is abundant in natural resources. Its rich subsoil along with a rising population and post-civil war economic development combine to generate a burgeoning economy with impressive growth potential.The Angolan government particularly wishes to foster and channel foreign private investment to certain strategic areas. The ability for a developing country to control foreign private investment is paramount in order: (a) not to give away strategic positions in crucial industries and sectors; (b) not to deplete the national economy; (c) to maintain the balance of payments; and (d) to improve sustainability and enhance the living standard of its population.
On May 20, 2011, Law No. 20/11 (the New Law) was published in Angola's Official Gazette. It was enacted and became effective on the same date. Comprised of 98 articles, the New Law regulates private investment in general (both internal and external) and the incentives for foreign private investments which, upon satisfaction of certain criteria (e.g., monetary and geographic), are deemed to bear a beneficial and substantial economic impact. According to its preamble, the New Law aims to balance the general interests of the country with those of private investors. This article deals mainly with the provisions and matters which carry substantial implications for foreign private investment.
Luis Roquette Geraldes currently works at Morais Leitao, Galvao Teles, Soares da Silva & Associados in Lisbon, Portugal. He holds a law degree from Portuguese Catholic University, an LLM from University College London (specialization in Banking and Financial Regulation), and has worked with national and international clients on complex international transactions, mainly in the areas of banking, finance, and private equity. Mr. Geraldes has submitted his LL.M. dissertation on International Energy Law, under the topic "The Bilateral Investment Treaty between Portugal and Angola," yet to be published.
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