Notice No. 11/21 of December 23 on Procedures for Foreign Exchange Operations by Non-Resident Foreign Exchange Entities for External Investment, Divestment, and Income

Subject
Defines the procedures for carrying out foreign exchange operations by non-resident foreign exchange entities, related to foreign investment in entities without shares admitted to trading on regulated markets, foreign investment in securities and derivative instruments, any divestment of the aforementioned assets, and income from the mentioned investments. - Revokes Notice No. 15/19, of December 30, on Foreign Investment and all regulations that contradict the provisions of this Notice. Index
Article 1 (Object).....................................................................................................................1
Article 2 (Scope)......................................................................................................................2
Article 3 (Definitions).................................................................................................................2
Article 4 (Licensing) ..........................................................................................................3
Article 5 (Forms of Foreign Investment) ......................................................................3
Article 6 (Specific Conditions Applicable to Foreign Investment in Securities and Derivative Instruments)..........................................................................................................4
Article 7 (Divestment, Reimbursement and Income) .........................................................4
Article 8 (Bank Accounts) ......................................................................................................5
Article 9 (Validation Procedures for Transfers to Investors)....................................5
Article 10 (Reporting to the National Bank of Angola) ...................................................7
Article 11 (Archiving) ...............................................................................................................7
Article 12 (Sanctions) ..........................................................................................................7
Article 13 (Doubts and Omissions)................................................................................7
Article 14 (Revocation) ..............................................................................................................7
Article 15 (Entry into Force)................................................................................................7
Content of the Diploma
Given the need to adapt the procedures for foreign investment operations to be carried out by Non-Resident Foreign Exchange Entities in the Country; Considering the provisions of Decree No. 23/98, of July 24 - which approves the Regulation on Capital Operations, Decree No. 21/98, of July 24 - which approves the Regulation on Current Invisible Operations, and Law No. 10/18, of June 26 - Private Investment Law; Pursuant to 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. 24/21, of October 18 - Law of the National Bank of Angola, I determine:
Article 1 (Object)
This Notice defines the procedures for carrying out foreign exchange operations by Non-Resident Foreign Exchange Entities related to:
a)- Foreign investment in entities without shares admitted to trading on regulated markets; b)- Foreign investment in Securities and Derivative Instruments; c)- Any divestment of the assets referred to in the preceding paragraphs; d)- Income from the investments referred to in paragraphs 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)- Individuals or legal entities, Non-Resident Foreign Exchange Entities, holders of rights and obligations, within the scope of the referred operations; b)- Intermediary Banking Financial Institutions in the referred operations; c)- Intermediation Agents and other entities involved in the operations covered by this Notice.
2. This Notice also applies to foreign exchange operations related to foreign investment projects that have been registered with the National Bank of Angola prior to the date of its publication.
3. This Notice does not apply to investments made by Non-Resident Foreign Exchange Entities in the Oil Sector, which are governed by specific legislation.
   Article 3 (Definitions)
   For the purposes of this Notice, the following definitions apply:
   a)- Intermediation Agents - Financial Institutions that are authorized to carry out one or more investment services and activities in Securities and Derivative Instruments in Angola and that are registered with the Securities Market Supervision Body; b)- Divestment - acts that have the effect of divesting or result in the reduction or cessation of a foreign investment, namely:
   i. Total or partial sale of a stake in the share capital of a company without shares admitted to trading on a regulated market or its dissolution;
   ii. Maturity of an investment in Securities and Derivative Instruments.
   c)- Investors - individuals or legal entities, Non-Resident Foreign Exchange Entities, that carry out the foreign exchange operations provided for in Article 1; d)- Non-Resident Foreign Exchange Entities - the entities referred to in paragraph 2 of article 4 of Law No. 5/97, of June 27 - Foreign Exchange Law; e)- Securities:
   i. Shares;
   ii. Bonds;
   iii. Units of participation in collective investment undertakings;
   iv. Rights detached from the Securities referred to in items i. to iii., provided that the detachment covers the entire issue or series or is provided for in the act of issue;
   v. Other documents representing homogeneous legal situations, if they are capable of being traded on the market;
   f)- Derivative Instruments:
   i. Options;
   ii. Futures;
   iii. Swaps;
   iv. Forward contracts; and
   v. Any other instruments or contracts with analogous characteristics.

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, which approves the Regulation on Capital Operations and article 3 of Decree No. 21/98, of July 24, which approves the Regulation on Current Invisible Operations, delegates competence to Banking Financial Institutions authorized to carry out foreign exchange trade to, without the need for licensing and after carrying out the validation procedures referred to in this Notice:
   a)- Receive funds from abroad for the purpose of making an investment in the Country and credit the respective bank accounts; b)- Transfer to the investor:
   i. Income from their foreign investments;
   ii. Reimbursements of shareholder loans and payment of respective interest;
   iii. The proceeds from the sale or dissolution of a foreign investment in a company without shares admitted to trading on a regulated market;
   iv. The proceeds from the sale or maturity related to investment in Securities and Derivative Instruments;
   v. Amounts received from abroad for the eventual realization of an investment in the Country, which have not been used.
2. Investments by Non-Resident Foreign Exchange Entities in public debt securities or Derivative Instruments are subject to prior licensing by the National Bank of Angola, with the exceptions and under the terms referred to in Article 6 of this Notice.
   Article 5 (Forms of Foreign Investment)
3. Foreign investment can be made, individually or cumulatively, in the following forms, depending on the nature of the investment:
   a)- Transfer of funds from abroad directly to an account domiciled in a Banking Financial Institution located in the Country, held by:
   i. The company, when it comes to the issuance of shares in the incorporation of a company without shares admitted to trading on a regulated market, an increase in its capital or shareholder loans;
   ii. The seller, when it comes to the purchase and sale of a stake in the share capital of an already established company without shares admitted to trading on a regulated market;
   iii. The Intermediation Agent, when it comes to an investment in Securities and Derivative Instruments;
   iv. The investor themselves, when they hold a bank account in the Country and intend to use this alternative.
   b)- Application of national or foreign currency, deposited in bank accounts opened in Banking Financial Institutions domiciled in the Country, held by Non-Resident Foreign Exchange Entities, capable of repatriation, under the terms of the applicable foreign exchange legislation and regulation; c)- Import of machinery, equipment, accessories and other tangible fixed assets; d)- Incorporation of technologies and knowledge, provided that they represent added value to the investment and are capable of monetary valuation; e)- Realization of supplementary capital contributions or shareholder loans from partners or shareholders, under the terms of item i or iv of paragraph a) or paragraph b), both of this number; f)- Application, in national territory, of funds within the scope of reinvestment; and

g)- Conversion of credits arising from the execution of contracts for the supply of machinery, equipment and goods, provided that they are demonstrably eligible for payment abroad.
2. The forms of foreign investment set out in paragraphs c) and d) of the preceding number, when carried out under Law No. 10/18, of June 26 - Private Investment Law, must always be complemented by the transfer of funds from abroad, namely, to cover incorporation, installation and current expenses, as provided for in the said Law.
Article 6 (Specific Conditions Applicable to Foreign Investment in Securities and Derivative Instruments)

1. Operations on Securities and Derivative Instruments can only be executed through Intermediation Agents registered with the Securities Market Supervision Body.
2. Investments by Non-Resident Foreign Exchange Entities in public debt securities or Derivative Instruments traded on the national Securities market are subject to prior licensing by the National Bank of Angola.
3. An exception to the provisions of the preceding paragraph is investment in public debt securities whose terms of issue include authorization from the National Bank of Angola for their sale to Non-Resident Foreign Exchange Entities.
4. Intermediation Agents must ensure that:
   a)- They comply with the provisions of paragraphs 2 and 3 of this article before executing orders from Non-Resident Foreign Exchange Entities for the purchase of Derivative Instruments or public debt securities; b)- Operations by Non-Resident Foreign Exchange Entities are identified and registered as such.
5. For the purposes of obtaining prior authorization, Intermediation Agents must submit information to the National Bank of Angola that includes the full identification of the investor and the value of the investment.
6. The National Bank of Angola must respond within 4 working days from the receipt of the complete information referred to in the preceding paragraph.
   Article 7 (Divestment, Reimbursement and Income)
7. Amounts resulting from a divestment, reimbursement of shareholder loans or the distribution of profits, dividends or interest associated with investments may be transferred directly by the resident foreign exchange payer, namely the company, the buyer or the Intermediation Agent, as the case may be, domiciled abroad or in Angola, as indicated by the investor.
8. If the investor wishes to receive the amount in their bank account domiciled in a Banking Financial Institution in the Country, they must indicate to the payer whether they wish to receive national or foreign currency.
9. Banking Financial Institutions may, after validating the movement under the terms of this Notice, sell foreign currency to their resident foreign exchange clients, payers of the amounts, for the purpose of making transfers to the investors' bank accounts, under the terms of the preceding paragraphs.
10. The investor may freely and at any time:
    a)- Convert amounts from their national currency account to foreign currency; b)- Transfer amounts from their accounts to any bank account abroad; c)- Keep amounts in national or foreign currency deposited in their accounts in Angola for subsequent investment in the Country or transfer abroad.

Article 8 (Bank Accounts)

1. In cases where the investor intends to open a bank account in Angola, Banking Financial Institutions must ensure the strict application of account opening and maintenance procedures, in accordance with current legislation and regulation, guaranteeing full identification and knowledge of their client, as well as the movement of the account under the terms defined in the regulation governing Non-Resident Foreign Exchange accounts.
2. Banking Financial Institutions must ensure that movements in bank accounts held by investors in national and foreign currency are supported by documents that allow clear identification of the origin or destination of the funds, as well as the justification for the movement, in order to guarantee the legitimacy of all movements registered in these accounts and whether the amounts are eligible for transfer abroad, under the terms of this Notice.
   Article 9 (Validation Procedures for Transfers to Investors)
   For the purposes of assessing the legitimacy of transfers to an investor's bank account, regardless of whether it is domiciled abroad or in Angola, Banking Financial Institutions must apply the procedures they deem necessary for this purpose, including, but not limited to, the following, as applicable:
   a)- Shareholder loans:
   i. Verify that the requested transfers, whether for capital reimbursement or interest payment, are in accordance with the terms of the contract entered into between the parties and that the interest rates are market rates;
   ii. Verify the registration of shareholder loans in the audited financial statements;
   iii. In the case of investments made under the Private Investment Law, ensure compliance with the said law, namely, that shareholder loans are limited to a value equal to or less than 30% of the value of the investment made in the incorporated company, being only reimbursable after 3 (three) years, counting from the date of registration in the company's accounts.
   b)- Income from foreign investments in companies without shares admitted to trading on a regulated market:
   i. Certify the realization of the investment through a supporting document, which must be the Private Investment Registration Certificate (CRIP), issued by the competent governmental entity for the investments made under the Private Investment Law;
   ii. Obtain the audited financial statements for the last financial year and verify that the investment, including, where applicable, shareholder loans, is registered in accordance with the CRIP or other supporting document submitted under the preceding paragraph;
   iii. Obtain a copy of the partners'/shareholders' resolution on the distribution of profits or dividends;
   iv. Certify:
   a. Full compliance with tax obligations related to the payment of profits, dividends or interest on shareholder loans; b. The absence of irregular debts of the paying entity, registered in the Credit Risk Information Center (CIRC); c)- Income from investments made under the Private Investment Law: ensure compliance with the provisions of the said Law, namely that investors can only transfer income related to a direct foreign investment after the complete execution of the project, duly proven by the competent authorities and, after payment of due taxes and the constitution of mandatory reserves;

d)- Proceeds from the sale of a stake or dissolution of the investee entity without shares admitted to trading on a regulated market:
i. Certify the realization of the investment through a supporting document, which must be the CRIP in the case of investments made under the Private Investment Law;
ii. Verify that the value of the sale or dissolution is reasonable considering the book value reflected in the latest audited financial statements, when it comes to a dissolution, and also considering other factors that may determine the price, when it comes to the sale of a stake;
iii. In the case of sale of the investment, a copy of the alienation contract, entered into with the acquiring investor, whether resident or non-resident foreign exchange entity;
iv. In the case of the dissolution of the investee entity, a supporting document for the said dissolution and confirmation from the tax authority of the absence of outstanding taxes;
v. In the case of any other corporate action, the documents that prove it.
e)- Proceeds from the sale of securities, Derivative Instruments and associated income:
i. Obtain supporting documents from the Intermediation Agent regarding the nature of the operation.
Article 10 (Reporting to the National Bank of Angola)

1. Banking Financial Institutions must report to the National Bank of Angola transfer operations of amounts to and from abroad related to the import and export of capital and associated income, at the time of their registration in their clients' bank accounts.
2. The format for reporting information by Banking Financial Institutions to the National Bank of Angola is defined in a specific normative act.
   Article 11 (Archiving)
3. Banking Financial Institutions must ensure the adequate archiving of all documents submitted by their clients related to the operations covered by this Notice.
4. Documents must be kept on file for the period defined in Law No. 14/21, of May 19 - Law on the General Regime of Financial Institutions.
   Article 12 (Sanctions)
   Violation of the provisions of this Notice constitutes an infraction punishable under the terms of Law No. 5/97, of June 27 - Foreign Exchange Law, and Law No. 14/21, of May 19 - Law on the General Regime of Financial Institutions.
   Article 13 (Doubts and Omissions)
   Doubts and omissions resulting from the interpretation and application of this Notice are resolved by the National Bank of Angola.
   Article 14 (Revocation)
   Notice No. 15/19, of December 30 - on Foreign Investment and all regulations that contradict the provisions of this Notice are hereby revoked.
   Article 15 (Entry into Force)
   This Notice enters into force on the day following its publication.

Publish.
Luanda, December 2, 2021.
The Governor, José de Lima Massano.