EY-Global-oil-and-gas-tax-guide-2014

18 Angola
State interest should be greater than 50% (although the percentage may be
lower upon receiving Government authorization).
The partnership must be pre-approved by the Government. The operator, which
may or may not be a partner, must be stated in the concession agreement
following a proposal by the NOC. The operator or the partner must be a
commercial company.
The investment risk during the exploration phase is taken by the parties that
have contracted with the NOC, with no recovery of their investment if no
economic discovery is made.
Borrowings for investments from third parties by the NOC or its partners must
be authorized by the Government if oil production is used as security.
An exploration license or an oil concession is required to carry out the activity.
Hiring of contractors by oil and gas companies
Local regulations provide for the following three regimes:
• Limited free trade regime — certain services should only be provided by local
companies (foreign contractors are excluded)
• Semi-free trading regime — certain services may only be provided by local
companies or foreign contractors when associated with local partners
• Free trade regime — all services related to oil and gas activity (onshore and
offshore) that are not within either of the two previous regimes, and that
require a high level of industry expertise, may be freely provided by local
companies or by foreign contractors, although joint ventures with local
partners are possible
To be considered as a local company, the majority of the share capital must be
owned by Angolan investors, and the company must be registered with the
Ministry of Petroleum or the Angolan Chamber of Commerce and Industry.
Licensed entities, the state concessionaire and its partners, as well as all
entities that participate in oil operations, must:
• Acquire materials, equipment, machinery and consumption goods produced
locally, provided they are of equivalent quality and are available in
reasonable time, at prices no more than 10% above the cost of imported
items (including transportation, insurance and customs costs)
• Contract with local service providers if the services rendered are identical to
those available in the international market and if the price, when liable to
the same level of tax, does not exceed the prices charged by foreign service
providers for similar services by more than 10%
• Recruit local nationals, unless there are no locals with the required
qualifications and experience
Foreign exchange controls
Legislation was approved in January 2012 to introduce new foreign-exchange
control regulations applicable only to the oil and gas sector.
The new rules aim primarily to establish a uniform treatment in this sector by
replacing the multiple exchange regimes that have been applied to the oil and
gas upstream companies operating in Angola, providing fair treatment to all
investors.
These foreign-exchange control rules cover the trade of goods and services and
capital movements arising from the prospecting, exploration, evaluation,
development and production of crude oil and natural gas.
For the purpose of the rules, exchange operations will encompass (i) the
purchase and sale of foreign currency, (ii) the opening of foreign currency bank
accounts in Angola by resident or nonresident entities and the transactions
carried out through these bank accounts, (iii) the opening of national currency
bank accounts in Angola by nonresident entities and the transactions carried
out through these bank accounts, and (iv) the settlement of all transactions of
goods, services and capital movements.