Notice No. 15/2019 of December 30 on Foreign Exchange Policy for External Investment by Non-Resident Currency Entities and Associated Capital and Income Operations

PUBLISHED IN THE OFFICIAL GAZETTE, FIRST SERIES, NO. 165, OF DECEMBER 30, 2019 NOTICE NO. 15/2019 SUBJECT: FOREIGN EXCHANGE POLICY

• External Investment Carried Out by Non-Resident Currency Entities
• Capital and Associated Income Operations

Given the need to adjust procedures for external investment operations to be carried out by non-resident currency entities in the Country, considering the provisions of Decree No. 23/98 of July 24 – approving the Regulation on Capital Operations, Decree No. 21/98 of July 24 – approving the Regulation on Current Invisible Operations, and Law No. 10/18 of June 26 – Private Investment Law; Under the combined provisions of paragraph 2 of Article 28 of Law No. 5/97 of June 27 – Foreign Exchange Law, and Article 40 of Law No. 16/10 of July 15 – National Bank of Angola Law. I DETERMINE:

Chapter I General Provisions Article 1. (Subject Matter) This Notice defines the procedures for carrying out foreign exchange operations by non-resident currency entities related to: a) External direct investment, as defined in this Notice; b) External investment in securities; c) Any divestment of the assets referred to in the preceding subparagraphs;

CONTINUED NOTICE NO. 15/2019 Page 2 of 11 d) Income derived from the investments referred to in subparagraphs a) and b) of this article.

Article 2. (Scope)

1. This Notice applies to all participants in the foreign exchange operations identified in the preceding article, namely: a) Natural or legal persons, non-resident currency entities, holding rights and obligations within the scope of said operations; b) Banking Financial Institutions acting as intermediaries in said operations; c) Other entities participating in the operations subject to this Notice.
2. This Notice also applies to foreign exchange operations concerning external investment projects that were registered at the National Bank of Angola prior to the date of its publication.
3. This Notice does not apply to investments carried out by non-resident currency entities in the oil sector, which are governed by specific legislation.

Article 3. (Definitions) For the purposes of this Notice, it is understood that: a) Portfolio Investment – portfolio investment refers to the acquisition of securities by non-resident currency entities, carried out under the terms of Article 8 of this Notice, and in the case of acquiring shares representing the share capital of a company, when the voting rights associated with that investment are less than 10%. b) External Direct Investment – external direct investment operations refer to those carried out by non-resident currency entities under the terms of Articles 7 and 8 of this Notice, as applicable, in the following modalities:

CONTINUED NOTICE NO. 15/2019 Page 3 of 11 i. Creation of new companies or other entities with legal personality, including but not limited to branches, subsidiaries, or other forms of social representation of foreign companies; ii. Acquisition of participations in existing Angolan law companies: a. Which are not listed on the stock exchange; b. Listed on the stock exchange when this investment grants them a voting right equal to or greater than 10%. c) Non-Resident Currency Entities – The entities referred to in paragraph 2 of Article 4 of Law No. 5/97 of June 27 – Foreign Exchange Law. d) Securities – securities are considered (i) shares; (ii) bonds; (iii) participation units in collective investment schemes and other documents representing homogeneous legal situations, admitted or whose prospectus provides for their admission to trading on a regulated market, including, in the case of shares, those sold through the state asset privatization process via Initial Public Offering or Stock Exchange Auction.

Article 4. (Licensing)

1. The National Bank of Angola, under the terms of paragraph 1 of Article 2 of Decree No. 23/98 of July 24 – approving the Regulation on Capital Operations, delegates competence to authorized Banking Financial Institutions empowered to conduct foreign exchange trade so that, in the case of non-resident currency entities, without the need for prior licensing and after carrying out the procedures referred to in Article 6 of this Notice: a) Receive funds from abroad related to the realization of external direct investment or in securities within the Country and credit their respective bank accounts; b) Transfer funds abroad: i. Funds related to the reimbursement of advances/supplies; ii. The proceeds from the sale of securities, regardless of whether it is external direct investment or portfolio; iii. The proceeds from the sale of an external direct investment, when (i) the entity is not listed on the stock exchange and (ii) the acquiring investor is also a non-resident currency entity and (iii) the value to be exported by the selling investor is the value imported by the acquiring investor in foreign currency.
2. The National Bank of Angola, under the terms of Article 3 of Decree No. 21/98 of July 24 – approving the Regulation on Current Invisible Operations, exempts from licensing the exportation of income associated with external direct investments not listed on the stock exchange or in securities, after carrying out the procedures referred to in Article 6 of this Notice.
3. Operations by non-resident currency entities involving the following are subject to prior licensing by the National Bank of Angola: a) Purchase of public debt securities; b) Exportation of capital requiring the purchase of foreign currency, when it concerns external direct investment resulting from: i. The transfer, in part or in full, of an unlisted investment, regardless of the modality; ii. The dissolution of the participating entity; iii. Any other corporate action resulting in a reduction of the capital of an unlisted entity.
4. Banking Financial Institutions, in cases subject to licensing, must send supporting documentation to the National Bank of Angola, including, as applicable: a) For the purchase of public debt securities: i. Identification of the interested investor and information on its nature, namely natural or legal person, as well as its form of incorporation and corporate purpose, if a legal entity; ii. Value of the intended investment; iii. Identification of the issuance to which the intended investment relates; iv. Investor's intention, namely, to hold the investment until maturity or to sell it early. b) For the exportation of capital resulting from divestment, regardless of modality, of an external direct investment not listed on the stock exchange: i. Certificate of registration of external direct investment issued by the competent authority, when the investment was carried out under the Private Investment Law, or other documentary proof, if not; ii. Latest financial statements of the participating entity, audited by an independent external auditor with recognized personal and professional competence and integrity; iii. In case of sale of the investment, copy of the alienation contract concluded with the acquiring investor; iv. In case of dissolution of the participating entity, document proving said dissolution and confirmation from the tax authority of no outstanding taxes; v. In case of any other corporate action, documents proving the same.

Article 5. (Registration and Reporting)

1. Banking Financial Institutions must report to the National Bank of Angola, at the time of registration in their non-resident currency clients' accounts, operations for transferring values to and from abroad related to the importation and exportation of capital and associated income.
2. The format for reporting information by Banking Financial Institutions to the National Bank of Angola is defined in specific regulations.

CONTINUED NOTICE NO. 15/2019 Page 6 of 11 Article 6. (Fund Movements)

1. Non-resident currency entities intending to carry out investments in the Country must hold non-resident currency accounts, opened with a Banking Financial Institution domiciled in the Country, under the provisions in force regarding the opening and movement of deposit accounts held by non-resident currency entities.
2. Banking Financial Institutions must ensure strict application of account opening and maintenance procedures, in accordance with current legislation and regulations, guaranteeing full identification and customer knowledge, as well as confirmation of their status as non-resident currency entities.
3. Financial resources designated for carrying out the investment must be transferred to a specific sub-account created for this purpose, and shall be used solely for the intended purpose.
4. Payments to resident currency entities, including for the purchase of listed stock exchange shares, with the exception of the purchase of securities denominated in foreign currency traded on a regulated market in the Country, may only be executed in national currency, for which purpose the non-resident currency investor must sell foreign currency to the Banking Financial Institution acting as intermediary in the investment operation.
5. Banking Financial Institutions must ensure that movements in bank accounts held by non-resident currency entities in national and foreign currencies are supported by documents allowing clear identification of the origin or destination of funds, as well as justification of the movement, so as to guarantee the legitimacy of all movements registered in these accounts, the need for licensing, and whether the values are eligible for transfer abroad, under this Notice.
6. For assessing the legitimacy of transfers abroad of advances/supplies, Banking Financial Institutions must obtain a copy of the concluded contract and verify that requested transfers comply with the terms of said contract, as well as verify the registration of supplies in financial statements that must comply with paragraph 7(b) of this article, and further, in the case of investments carried out under the Private Investment Law, ensure compliance with said law, namely that supplies are limited to a value equal to or less than 30% of the value of the investment made in the constituted company, and are only reimbursable after three years from the date of registration in the company's accounts.
7. For assessing the legitimacy of transfers abroad of income from external direct investments not listed on the stock exchange, Banking Financial Institutions must, as applicable: a) Certify the realization of the investment through a copy of the Private Investment Registration Certificate (PIRC) issued by the competent government entity, when the investment was carried out under the Private Investment Law, or through other documentary proof, if not; b) Obtain financial statements from the last financial year, audited by an independent external auditor with recognized personal and professional competence and integrity, and verify that the registration of the investment, including advances/supplies when applicable, is as established in the PIRC or other supporting document delivered under the preceding subparagraph; c) Obtain a copy of the partners'/shareholders' resolution on profit or dividend distribution; d) Obtain a copy of the advance/supply contract and ensure that interest rates are market rates; e) Certify: i. Full compliance with tax obligations related to the payment of profits or dividends; ii. The absence of debts by the ordering entity in irregular status, registered in the Credit Risk Information Central (CRIC).

CONTINUED NOTICE NO. 15/2019 Page 8 of 11 8. In the case of investments carried out under the Private Investment Law, Banking Financial Institutions must take into account the provisions of said law, namely that non-resident currency investors may only transfer income related to an external direct investment after the complete execution of the project, duly proven by competent authorities, and after payment of due taxes and constitution of mandatory reserves. 9. For validating the exportation of proceeds from the sale of securities and associated income, Banking Financial Institutions must validate the source of credit in the bank accounts of their non-resident clients. 10. In the case of transferring proceeds from the sale of an external direct investment, in the case referred to subpoint ii., subparagraph b) of paragraph 1 of Article 4 of this Notice, Banking Financial Institutions must obtain a copy of the investment sale contract and ensure the entry of foreign currency funds from abroad in the name of the acquiring investor, using exclusively these funds to execute the transfer of sale proceeds abroad. 11. Upon verification of the validity and legitimacy of movements for repatriation, and obtaining licensing from the National Bank of Angola, as applicable, under Article 4 of this Notice, Banking Financial Institutions may freely sell to their clients foreign currency equivalent to the exportable value, at the exchange rate in force at the institution, and clients may opt for immediate exportation of capital or income, or its retention in their bank accounts domiciled at Banking Financial Institutions in the Country for subsequent movement. 12. The non-resident currency investor may also retain values related to income, reimbursement of advances/supplies, or proceeds from investment sales, in national currency for: a) Carrying out new investments at a future date; or b) Conversion to foreign currency at a future date.

CONTINUED NOTICE NO. 15/2019 Page 9 of 11 Chapter II Forms of Realization of External Investment Article 7. (Forms of Realization of External Direct Investment in Unlisted Entities)

1. External direct investment may be carried out, individually or cumulatively, in the following forms: a) Transfer of own funds from abroad; b) Application of available national and foreign currency in bank accounts opened at Banking Financial Institutions domiciled in the Country, held by non-resident currency entities, eligible for repatriation, under applicable foreign exchange legislation; c) Importation of machinery, equipment, accessories, and other tangible fixed assets; d) Incorporation of technologies and know-how, provided they represent an added value to the investment and are susceptible to monetary valuation; e) Realization of supplementary capital contributions or advances/supplies by partners or shareholders; f) Application, within national territory, of funds under reinvestment; and g) Conversion of credits arising from the execution of contracts for supply of machinery, equipment, and goods, provided they are demonstrably eligible for payments abroad.
2. The forms of realization of external direct investment set out in subparagraphs c) and d) of the preceding paragraph must always be complemented by the transfer of funds from abroad, namely to cover incorporation, installation, and current expenses.

CONTINUED NOTICE NO. 15/2019 Page 10 of 11 Article 8. (Forms of Realization of External Investment in Securities)

1. External investment in securities may be carried out, individually or cumulatively, in the following forms: a) Transfer of own funds from abroad; and b) Application of available national or foreign currency in bank accounts opened at Banking Financial Institutions domiciled in the Country and held by non-resident currency entities, eligible for repatriation, under applicable foreign exchange legislation and regulations.
2. Securities transactions by non-resident currency entities must be executed through Banking Financial Institutions registered in a Regulated Market Management Company (RMGC) and as Intermediation Agents before the Capital Markets Commission.
3. Banking Financial Institutions must ensure they only execute purchase orders for public debt securities from their non-resident currency clients, after respective licensing by the National Bank of Angola.
4. Banking Financial Institutions participating in external investment operations in securities and the entity responsible for their custody must ensure that operations ordered by non-resident currency entities are identified and registered as such.

Chapter III Final Provisions Article 9. (Archiving)

1. Banking Financial Institutions must ensure adequate archiving of all documents delivered by their clients regarding operations covered by this Notice.
2. Documents must be maintained in archive for the period defined in Law No. 12/2015 of June 17, Basic Law of Financial Institutions.

CONTINUED NOTICE NO. 15/2019 Page 11 of 11 Article 10. (Infringements) Infringements of the provisions of this Notice are punishable under Law No. 5/97 of June 27, Foreign Exchange Law, and Law No. 12/2015 of June 17, Basic Law of Financial Institutions.

Article 11. (Doubts and Omissions) Doubts and omissions resulting from the interpretation and application of this Notice are resolved by the National Bank of Angola.

Article 12. (Revocation) Notice No. 13/2014, Notice No. 14/2014, both of December 24, Notice No. 1/2017 of February 3, and all provisions of Instrutivo No. 1/2003 of February 7 that contradict the provisions of this Notice are revoked.

Article 13. (Entry into Force) This Notice enters into force on the date of its publication. PUBLISHED. Luanda, December 23, 2019. THE GOVERNOR JOSÉ DE LIMA MASSANO