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Investments in securities by foreign exchange non-residents

Notice no. 1/2007 was published in the Official Gazette of Angola on 3 February 2017, which, in view of the need to define the procedures for applying the funds coming from outside Angola, sets forth the procedures for investments, transfer of funds, interests, dividends and other income by non-resident foreign exchange entities related to securities transactions admitted to trading on the Angola Debt and Securities Exchange Market (Bolsa da Dívida e de Valores de Angola - BODIVA) and other regulated markets supervised by management companies registered with the Capital Markets Commission (Comissão do Mercado de Capitais - CMC).

We will hereinafter highlight the main aspects of this legal act. 

Limitations

This notice establishes the limitations regarding the securities operations involving non-resident foreign exchange entities, as follows:

(i)      non-resident foreign exchange individuals or legal persons may only invest, by using funds from abroad, in securities without maturity or which maturity is equal to or greater than one year;

(ii)     the transfer, disposal or assignment of the ownership of the securities by non-resident foreign exchange entities may only be made to non-resident foreign exchange entities, except in the case of transfers arising from merger, incorporation, spin-off and other corporate changes, as well as in the event of inheritance, having as beneficiaries resident foreign exchange entities, as well as the payment of the securities or the transfers arising from takeover bids. 

Foreign Exchange Operations

The foreign exchange operations related to the investments referred to in the previous section shall be carried out through Banking Financial Institutions authorized to operate in Angola and registered in a regulated market or in a centralized securities system. These operations do not require prior authorization from the National Bank of Angola (Banco Nacional de Angola - BNA) but must be registered within 48 hours.

For such purpose, the Banking Financial Institutions must ensure that they have information that allows the precise identification of the investor or of the non-resident intermediary as well as of the underlying transactions, notably:

a)   Full name or company name of the investor;

b)  Tax identification number in the country of origin;

c)  Full address in the country of residence or registered office (country, city, place);

d) Confirmation of transfer of funds to abroad, namely SWIFT number of the operation and country of origin or destination of the funds;

e) Amount and currency of the transaction, with the relevant specifications (importation of funds, transfer of invested funds, interests or dividends).

The handling of foreign currency related to the investments provided for in this Notice must be recorded in specific accounts in the name of the non-resident foreign exchange investor or its non-resident intermediary, and such accounts shall be used only to carry out transactions in the securities market. 

The transfer to abroad of funds invested under this Notice may be carried out by the Banking Financial Institutions, upon submission of the following documents:

a)  Copy of the Tax Revenue Collection Document (Documento de Arrecadação de Receitas - DAR) or document evidencing the withholding of the tax arising from the transaction;

b) Evidence of sale of the securities, in accordance with the rules in force on the regulated market.

For the transfer of interests, dividends and other income resulting from the funds invested, the following documents must be presented to the Banking Financial Institutions:

a) Copy of the Tax Revenue Collection Document (Documento de Arrecadação de Receitas - DAR) or document evidencing the withholding of the tax arising from the transaction;

b) Certificate of the amount to be transferred, notably a coupon, extract or receipt issued by the Angola Securities Central Department (Central de Valores Mobiliários de Angola) or by the Banking Financial Institution.

Supervision and Control 

Before carrying out any operation, Banking Financial Institutions and other entities involved must ensure compliance with the applicable legislation in force and the Banking Financial Institutions are particularly responsible to verify compliance with all the material and formal requirements related to such operations.

In addition to the prior control of the operations, the Banking Financial Institutions are required to create a file with all the information related to the operations they carry out on behalf of non-resident entities.