Africa’s fourth-largest economy and third-largest natural gas exporter to Europe, Algeria has been engaged since 2020 in a deliberate reorientation of its investment policy. Abolition of the 51/49 rule outside strategic sectors, a new investment law, a one-stop shop and an overhaul of the hydrocarbons framework: the message sent to foreign investors, and in particular to the French diaspora, is a call to produce locally rather than import. Here is what the 2025 and 2026 figures say, and what an investor based in France needs to know before committing.
Why Algeria attracts investors
Algeria is the largest country in Africa, with 2.38 million km², and one of the four major economies on the continent alongside Nigeria, Egypt and South Africa. According to the International Monetary Fund (IMF), its GDP measured in purchasing power parity is expected to reach 915 billion dollars in 2026, placing it 39th in the world.
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The economy remains driven by hydrocarbons, which account for approximately 95% of exports and the majority of budget revenues. Oil and gas exports totalled 45.2 billion dollars in 2024. This revenue funds foreign exchange reserves estimated at around 70 billion dollars at end-2024 and a very low external debt, of the order of 1.5% of GDP.
The domestic market is a second asset. With nearly 48 million inhabitants, a young population — the median age is 28.8 years — and an urbanisation rate of 74.8%, domestic demand is growing. The Algerian diaspora in France, one of the largest in Europe, plays a driving role: remittances, business creation and commercial partnerships with the home country.
The Agence algérienne de promotion de l’investissement (AAPI) has recorded 21,157 projects since November 2022, for a declared amount of 629 billion dinars, or nearly 70 billion dollars. However, only a portion materialises into actual transfers. Diversification is progressing, but slowly. Non-hydrocarbon growth reached 5.3% in the second quarter of 2025, driven by industry (+6.4%), trade (+6.7%) and agriculture (+4.5%), according to the Office national des statistiques (ONS).
Key figures for 2026
| Indicator | Value | Year / source |
|---|---|---|
| Nominal GDP | Around 270 to 300 billion dollars | 2025-2026 (IMF, finance law) |
| GDP growth | 3.0 to 3.7% in 2025; 2.5 to 3% expected in 2026 | IMF, World Bank |
| FDI flows | 1.43 billion dollars (2024); around 1.5 billion in 2025 | UNCTAD, Banque d’Algérie |
| Population | 47.4 million (2025); 48 million (2026) | UN, Worldometer |
| Currency | Algerian dinar (DZD), approximately 130 DZD to 1 dollar at the official rate | Banque d’Algérie |
| 51/49 rule | Abolished outside strategic sectors; maintained for strategic sectors and import for resale | Law 22-18, decree 21-145 |
Nominal GDP varies depending on the source: the IMF estimates it at around 269 billion dollars in 2025 and above 285 billion in 2026, while the Algerian finance law projects 279 billion in 2025 and then 301 billion in 2026. Real growth, revised to 3.7% by the IMF for 2025, would remain solid but slightly slower in 2026. Inflation, back below 4%, and unemployment, at around 9.7%, complete a macroeconomic picture that is respectable but dependent on the oil price.
Key sectors
Energy and hydrocarbons
Hydrocarbons remain the core of the economy. Sonatrach plans to invest 40 billion dollars between 2022 and 2026 in exploration, production and refining. The 2019 hydrocarbons law eased fiscal and contractual conditions to attract international companies: memoranda of understanding have been signed with Eni, TotalEnergies and Equinor. Algeria exported 9.4 million tonnes of LNG in 2024, of which 87% went to Europe.
Renewable energy
Algeria aims for 15 GW of solar and wind capacity by 2035. A first tranche of 3.2 GW is being deployed in the South and the Hauts-Plateaux, and the second phase (11.8 GW) represents an estimated investment requirement of nearly 9.8 billion dollars by 2035. The country still generates more than 99% of its electricity from gas: the market is opening up to solar developers, often through consortiums involving Chinese, European and Sonelgaz groups.
Agriculture and agri-food
Agriculture grew by 4.5% in the second quarter of 2025. The state wants to reduce a still-heavy food import bill and encourages local processing — cereals, dairy, meat, fruit and vegetables. Investments in irrigation, agricultural machinery and agro-industry benefit from the incentives under law 22-18, including tax exemptions and land concessions.
Industry, pharmaceuticals and technology
The industrial sector grew by 6.4% in the second quarter of 2025. Local pharmaceutical production is a stated priority, with a growing requirement to manufacture on-site. In tech, startups and digital services are developing in Alger and Oran, driven by a skilled diaspora and investments in data centres.
How to invest from France
The reference text is law n° 22-18 of 24 July 2022 on investment. Outside strategic sectors, a foreign investor may hold up to 100% of an Algerian-law company, with no obligation to have a local partner.
The 51/49 rule in 2026
The 51%/49% rule is no longer the general rule for foreign investment. It only remains in two cases: strategic sectors — energy, mining, defence, transport, infrastructure, pharmaceuticals and fertilisers — and the import of goods intended for resale as-is. Introduced by the supplementary finance law of 2009, the rule was abolished in 2020 for all new non-strategic projects. In cases where it remains, a resident national shareholder must hold 51% of the capital. A transfer of shares to a foreigner in a strategic sector is also subject to prior authorisation, governed by executive decree 25-304 of 16 November 2025.
Company formation and foreign currency contributions
A French investor may set up a SARL, a joint-stock company (SPA) or a branch. Foreign currency contributions must be declared and registered with the Banque d’Algérie: this is the condition for benefiting from the guarantee of capital and income transfer (article 8 of law 22-18). Foreign-origin financing must represent at least 25% of the total project cost in order to qualify for this guarantee.
Capital repatriation and taxation
Transferring dividends to France is legal but governed by regulation 05-03 of the Banque d’Algérie. Dividends paid to a non-resident are subject to a final withholding tax of 15%, after payment of corporate income tax (IBS), whose rate varies from 19% to 26% depending on the activity. Reinvested profits declared as transferable are admitted as external contributions.
Import-export and real estate
Importing for resale as-is requires compliance with the 51/49 rule and is excluded from the transfer guarantee, unless a significant investment effort is validated by the Banque d’Algérie. Residential real estate investment remains largely restricted, but the acquisition of productive assets — factories, warehouses, industrial land — is possible through concessions from the Agence algérienne de promotion de l’investissement (AAPI) and industrial zones.
Risks to be aware of
Changing regulations and bureaucracy
Operators report frequently evolving laws and regulations, complex customs procedures and heavy bureaucracy. The US State Department notes that the opacity of public decision-making and the slowness of processes raise commercial risk, and that disputes can last for years.
Exchange controls and the parallel market
The dinar is not freely convertible. The Banque d’Algérie strictly controls currency flows and applies strict thresholds (minimum participation, equity contributions, reinvestments). A significant parallel market coexists with the official rate, and any outflow of funds must be duly justified, under penalty of being blocked.
51/49 rule in strategic sectors
In energy, mining or infrastructure, the obligation to hold a maximum of 49% deters some groups, for reasons of financial control and intellectual property protection. The draft mining law raising foreign participation from 49% to 80% was not yet in force in mid-2025.
Dependence on hydrocarbons and access to global trade
The economy remains exposed to oil and gas prices: a fall in the barrel price directly reduces budget revenues. Algeria is not a member of the World Trade Organization and applies import restrictions, which complicates integration into international supply chains.
Frequently asked questions
Can a French investor hold 100% of a company in Algeria?
Yes, in non-strategic sectors, since the abolition of the 51/49 rule in 2020 and law 22-18 of 2022. In strategic sectors and import for resale, an Algerian partner must hold 51% of the capital.
Can profits be repatriated from Algeria to France?
Yes, if the investment was financed by foreign currency contributions declared to the Banque d’Algérie and if the foreign share represents at least 25% of the project cost. Dividends are subject to a withholding tax of 15%.
What is the exchange rate of the Algerian dinar?
Approximately 130 dinars to 1 dollar at the official rate in 2026, but a parallel market applies a significantly less favourable rate. All legal repatriation transactions are carried out at the official rate.
To go further: discover our complete guide to investing in Africa (6 countries compared).
