How to Register as a Sole Proprietorship in Algeria

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Located in North Africa and on the Mediterranean coast, Algeria is the 10th largest country in the world and the largest in the African Union and the Arab world. Algeria currently has a very favorable macroeconomic situation. The good performance of crude oil prices and the efficacious management of the external debt has helped to fill the State's coffers.

In this context, the government is making an effort to give a boost to activity, to diversify and liberalize the economy and call upon private investment. Recently enacted laws encourage foreign investments and various incentives for foreign investors.

Disclaimer: This article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.

Registering a sole proprietorship in Algeria

To open a company, a sole proprietor has to register in the Trade register. The registration consists of assigning a Trade Registry number for the entire life of an individual or a legal entity's social life according to the principle of uniqueness of the trade register.

Business name registration

To register a business name, you can either contact or go in person to the CNRC office (Department of Prior Rights Search).

If you are going to CNRC in person, you will be issued the certificate on the same day.

Sole proprietorship registration process in Algeria

To register a sole proprietorship, you need the following:

• Fill out a form on which you can specify four name options, in order of preference
• Pay the search fee of DZA 576 (EUR 3,77) at the CNRC directly
• The Department of Prior Rights Search will perform a check and establish a registration certificate of the business name

The registration process in case you submit the sole proprietorship application by mail:

• Either send the filled out CNRC form or write an application containing your identity and address or business name, the manager's full name, the address of the business premises, telephone and fax numbers, and four names, in order of preference.
• Enclose a payment receipt for research costs.
• The Department of Prior Rights Search will perform a check and establish a registration certificate of the name which will be forwarded to you by post.

The taxation system of sole proprietorships in Algeria

As a registered sole proprietor in Algeria, you are obliged to pay TAP, VAT, and IRG taxes.

Tax on business activity (TAP)

Tax on business activity (TAP) is calculated at a 1% rate for manufacturing activities, without possible reductions.

However, for other activities, the TAP has a fixed 2% rate for all other activities, with a reduction of 25% for building and public works and hydraulic activities, and computed based on the invoiced turnover.

VAT

Value Added Tax (VAT) is applied to the supply of goods or services in Algeria. It includes all economic activities conducted in Algeria.

The standard VAT rate is 19%. The reduced rate is 9%, applying to various basic items listed by law.

Global income tax (IRG)

At the end of the year, residents are taxed on global income (IRG) while non-residents are only taxed on income received in Algeria. IRG has a progressive rate from 0-35%. 

If your annual revenue doesn’t exceed DZA 10,000, you don’t have an obligation to pay the IRG. 

In addition, a sole proprietor has to cover a social security contribution as a quality of a trader (having his trade register).

For more information about taxpayer registration in Algeria, visit the Ministry of Finance Algeria website.