Algeria - Country Commercial Guide
Market Challenges

Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.

Last published date: 2021-10-11

Algeria currently ranks 157 of 190 countries on the World Bank’s Ease of Doing Business index, making it one of the most challenging markets in North Africa and the Middle East, in league with Lebanon and Iraq.  Multiple challenges face U.S. companies, some of which Algeria shares with other markets in Africa (e.g., language barriers, customs delays, protectionist trade policies, complicated business start-up processes, etc.) and others that are more pronounced in Algeria.  The most significant issues for U.S. companies include:

  • Political Transition – Since President Abdelmadjid Tebboune came to power in 2019, political uncertainty, delayed parliamentary elections, and a series of cabinet reshuffles have slowed the launch of major economic initiatives and increased delays in securing routine meetings with decision-makers.
  • Unstable Regulatory Framework - International firms in Algeria complain that laws and regulations continually shift and are applied unevenly.  Likewise, business contracts are subject to interpretation and revision.  Since Algeria’s recent political transition, the regulatory environment has been volatile and amplified by leadership churn within state-owned enterprises.
  • Influence of State-Owned Enterprises (SOEs) – SOEs dominate the economy, and their procurements account for 20 percent of GDP.  Politics or narrow interests may govern SOEs rather than value creation and efficiency.  As a result, U.S. companies are often stunned by the time and effort needed to reach the most basic business decisions.
  • Procurement Regulations Favoring Low-Cost Bidders - Current procurement regulations favor the lowest cost bidder over the best value bidder.  This emphasis puts American companies with higher quality technology at a distinct disadvantage, vis-a-vis Chinese and European competitors that bid with lower up-front cost solutions that are often more expensive to operate and maintain in the long term.
  • Payment Delays Associated with International Funds Transfers and SOEs – Algeria’s financial regulations and currency controls, result in hurdles for international funds transfers.  These obstacles can result in significant payments and dividend repatriation delays.  Additionally, multiple U.S. companies report payment delays of a year or more with SOEs, seemingly related to liquidity problems. Both types of payment delays are particularly damaging to small- and medium-sized American firms.