Saifaddin Galal
Research Expert North Africa
Companies in Algeria are registered under two main types of legal statuses. A juridical person (personne morale) refers to a single legal entity constituted by a group of people, such as corporations and organizations. On the other hand, a company registered as a sole proprietorship (personne physique) is a business owned and managed by only one person without juridical legal status. As of 2021, the total number of companies in Algeria amounted to around 2.2 million. Over 1.9 million were sole proprietorship businesses, while corporations added up to 215,300. Small firms dominate Algeria’s business environment. In 2019, there were over one million SMEs in the country, mainly operating in the service and handicraft sectors.
Obstacles to conducting business activities
According to the ease of doing business ranking, Algeria does not offer a particularly favorable environment for enterprises. In 2020, the country ranked below the African average, obtaining a score close to that of Guinea and Ethiopia. The main obstacles to conducting business activities in Algeria were obtaining credit, protecting minority investors, trading across borders, and registering property. On the other hand, starting a business and getting electricity in the country were smoother processes, which increased Algeria’s attractiveness to business enterprises. Concerning taxation, the standard corporate income tax (CIT) in Algeria stood at 26 percent of the income as of 2021, while some businesses could have higher or lower tax rates mainly depending on their field of activity.Largest companies in oil and gas
As Algeria’s main economic contributor, the oil and gas industry also accounts for the biggest enterprises in the country. The state-owned oil company Sonatrach is by far the leading enterprise in Algeria, and among the main companies in Africa. Sonatrach has control over the major oil fields and distribution channels in Algeria. In 2020, its net income declined to around 140 million U.S. dollars, compared to 2.4 billion U.S. dollars in the previous year. Other prominent companies in the oil and gas industry are Sonatrach’s subsidiary Naftal, which had the second-highest revenue in the country as of 2019, and Sonelgaz, the government-owned company operating in the electricity and natural gas sectors. Outside the hydrocarbon and energy industries, some major players are the agri-food conglomerate Cevital and the construction enterprise Cosider.A slowly-growing startup environment
Algeria’s startup environment is relatively undeveloped, especially compared to other African countries such as Nigeria, Egypt, Kenya, and South Africa. In fact, the general hurdles to conducting business activities in Algeria also hinder startup creations. However, partly due to the recent introduction of startup-friendly legislation, the country’s startup ecosystem is progressing. As in other parts of the world, the tech sector inspired Algerian entrepreneurs. The leading startup in the country is Yassir, which raised a total of almost 70 million U.S. dollars in funding as of 2021. Yassir's app has provided on-demand transport services to Maghreb customers since 2016. TemTem is another key startup in Algeria that operates in the transport sector, offering ridesharing solutions.
