Poland is looking to build ties with Algeria with a trade mission to the country in March led by Poland’s deputy prime minister Janusz Piechocińsk, who also took part in a Polish-Algerian economic forum.
“We would like to sell more products to Algeria while encouraging our companies to invest there and to create potential opportunities to find customers,” said Mr Paweł Tynel, Poland-based tax partner at EY. He added that Algeria is a prospective market for Poland since it has developed well in recent years and there is a significant potential demand for goods produced in Poland.
Investment promotion agency Invest in Poland reports that trade between the two countries doubled in 2014, amounting to about $736m.
“From the Polish perspective, it is an opportunity for our producers to go abroad and find new markets, while on the Algerian side, as the country’s society and economy is growing, our trade means for them access to goods and equipment that are high quality,” said Mr Tynel.
Both countries are taking steps to foster bilateral trade and spot further investment opportunities, but Polish investors still face challenges when investing in Algeria. “There are some limitations when it comes to ownership. The requirement to have an Algerian partner in the business amounting to at least the 51% of the company is an important issue. This makes the investment much more difficult and this is why Poland is concentrating on generating trade exchange rather than capital investments,” said Mr Tynel.
However, there has been a process targeted at easing these trade barriers. “There is a proposal to decrease the ownership to 30% in the case of trade companies, while the 51% ownership would remain for investment projects,” said Mr Tynel. “So if you were willing to buy or to sell products, the Algerian partner would have 30% but if you were to invest in capital expenditure in Algeria, you would need to find a partner which would have this particular [special purpose vehicle], a majority share of 51%.”
Other challenges to crossborder investment include cultural differences, while bureaucracy remains an important issue.