Methods of Payment
Open account, international bank to bank transfers, letters of credit, cash in advance, automated machine payments, documentary collections, and factoring are the most common methods of payment in Angola. The use of checks has vanished for safety reasons and the use of cash in official commercial transactions widely discouraged. The loss of correspondent banking relations since 2016 poses significant challenges for payments in Angola. On June 20, 2018, the Angolan Central Bank announced that letters of credit would be the preferred financial instrument for import and export transactions and proposed that letters of credit be mandatory for all international trade transactions above 100,000 euros. However, letters of credit have not yet gone into widespread usage.
Angola approved a new law regarding the Angolan Payments System, Law no. 40/20, of December 16, 2020, which revoked Law no. 5/05 of July 29, 2005. The purpose of the new legislation is to adapt the legal framework to the actual volume of transactions in the Angolan market and between Angola and international markets, and to the evolution of the financial products, which forced a modernization of the Payments System, promoting greater safety, effectiveness, and reliability. Law no. 40/20 also defines the proceeding which permits the establishment of the entities that intervene in the Payments System and rules related with their activity, intervention, supervision, and control.
The National Bank of Angola published the Instruction 17/20, of October 15, 2020, which established that importers can freely negotiate the methods of payment in the import of goods. This instruction revoked Instruction 18/19, of October 25, 2019, which established limits per operation in all methods of payment.
The Instruction also establishes that, with the exception of the method of advance payments - which is limited to US$ 50,000 per operation or up to 10percent of the total amount of an operation under a Letter of Credit - there are no annual or per operation limits in the methods of payment.
The most common and secure method of payment in Angola is an electronic funds transfer between banks. Most foreign exchange transfers are currently processed in euros and dollars.
Western Union will resume remittance operations from Angola. The announcement was made in June 2022, by the international money transfer operator, which returns to the Angolan market about eight years after the suspension of these operations in 2014, coinciding with the loss of correspondent banking relations. For additional information on methods of payments view the Trade Finance Guide
Banking Systems
Of the 26 commercial banks registered to operate in Angola, five of these - Banco Angolano de Investimentos (BAI), Banco Economico, Banco de Fomento Angola (BFA), Banco BIC Angola (BIC) and Banco de Poupança e Crédito S.A.R.L. (BPC) - control over 80 percent of total banking assets, deposits, and loans. No U.S. banks operate in Angola. Commercial banks in Angola are predominately Angolan, Portuguese, and South African. Most traditionally concentrate on short-term commission-related activities, such as foreign exchange operations and trade financing. All major banks offer ATM services. Internationally issued credit cards acceptance is limited to Visa, American Express and Mastercard, and only accepted by business hotels and a limited number of service providers.
International and London based bank Standard Chartered plans to withdraw from seven countries in the Africa and Middle East region including Angola where it is sub-scale. It seeks to improve profits by narrowing its focus to faster-growing markets in the region.
The Central Bank of Angola (BNA) created the mobile money transfer services by cell phone in 2021 to reduce crowds in commercial banks and at ATMs, at the country level. The service is currently operated by mobile phone companies.
Foreign Exchange Controls
Since July 2013, all companies operating in Angola have been required to operate in local currency (kwanza) and use local banks to make all payments, including payments to suppliers and contractors located outside of Angola. The law aims to strengthen demand for the kwanza, thereby building up the capacity of Angola’s financial sector.
For travel into and out of Angola, the government has tightened regulations on currency movement. Since April 15, 2016, Angolan citizens are permitted to carry up to US$ 10,000 into or out of the country with Angolan residents subject to a US$ 5,000 limitation. The limit on transit of local currency is 50,000 kwanzas (approximately US$ 100). Officials at the Luanda airport regularly search departing passengers for currency and will confiscate amounts over these limits.
The 2018 investment law grants foreign investors “the right and guarantee to transfer abroad” dividends or distributed profits, the proceeds of the liquidation of their investments, capital gains, the proceeds of indemnities and royalties, or other income from remuneration of indirect investments related to technology transfer after proof of implementation of the project and payment of all taxes due. Under the 2018 investment law tax on dividends starts at 15 percent and can rise to as high as 50 percent depending on the value and how early repatriation occurs. For details on remittances for foreign investors in Angola, please review the Investment Climate Statement link in this report.
US Banks & Local Correspondent Banks
There are no U.S. banks operating in Angola, nor do any U.S. banks have direct correspondent relationships with Angolan-based banks. U.S. dollar transaction clearing services have not been available in Angola since November 2016 when Deutsche Bank, the last bank to offer this service, left the market. International transactions are handled in euros or other convertible currencies through European and South African correspondent banks. A number of Angolan banks including BFA (Banco de Fomento Angolano), Banco BIC, Caixa Angola, and Millennium–Atlantico Bank have ownership ties with Portuguese banks. Standard Chartered (UK) has restricted its correspondent banking services to a limited client base including the Central Bank, Sonangol, and some of the international oil companies operating in Angola.