Can Foreigners Buy Angola Government Bonds?

Can Foreigners Buy Angola Government Bonds?

Yes. Since the introduction of BNA’s Aviso No. 15/2019, non-resident investors can legally purchase Angola’s domestic government securities — including Bilhetes do Tesouro (BTs), Obrigacoes do Tesouro Nao Reajustaveis (OTNRs), and Obrigacoes do Tesouro Indexadas (OTX) bonds. However, the process requires specific regulatory compliance, local partnerships, and careful attention to capital repatriation rules.

The Aviso 15/19 Regulatory Framework

Aviso No. 15/2019, issued by the Banco Nacional de Angola (BNA), is the foundational regulation governing foreign participation in the domestic bond market. It replaced earlier, more restrictive rules and marked a significant liberalization of Angola’s capital markets.

Core provisions:

• Non-resident natural persons and legal entities may invest in domestic government securities
• All investments must be channeled through the official foreign exchange market (not the parallel market)
• A licensed Angolan custodian bank must be appointed to hold securities on behalf of the foreign investor
• Income and principal repatriation is permitted, subject to documentation requirements
• All applicable taxes (IAC) apply equally to foreign and domestic investors

Step-by-Step Process for Foreign Investors

1. Select a custodian bank — Choose from licensed Angolan commercial banks authorized to provide custodial services for non-resident investors. Major banks operating in Luanda offer this service.

2. Open a non-resident investment account — The custodian bank will open a dedicated account under the non-resident investor regime. Required documentation includes:

   • Valid passport
   • Proof of non-resident status
   • Tax identification from country of residence
   • Proof of source of funds
   • Completed KYC/AML documentation per Angolan banking regulations

3. Appoint a fiscal representative — Foreign investors must designate a local fiscal representative for tax purposes. This is typically arranged through the custodian bank or a local law firm.

4. Fund the account via official FX market — Transfer funds in foreign currency (USD, EUR) to the custodian bank, which converts to kwanza at the official exchange rate. The conversion documentation is critical for future repatriation of capital and income.

5. Place investment orders — The custodian bank submits bids on behalf of the foreign investor at primary market auctions or executes purchases on the BODIVA secondary market.

6. Settlement and custody — Securities are held in the investor’s name at CEVAMA (the central securities depository), with the custodian bank managing operational processes.

Capital Repatriation

The ability to repatriate investment income and principal is a critical concern for foreign investors. Under Aviso 15/19:

• Coupon and maturity proceeds can be converted back to foreign currency and transferred abroad
• Documentation required — The investor must demonstrate that the original investment was funded through the official FX market (hence the importance of retaining conversion records)
• BNA processing — Repatriation requests are processed through the BNA, which may take time during periods of tight FX supply
• No formal restrictions on amounts — There is no cap on repatriation, but practical FX availability is the binding constraint

Tax Treatment for Foreign Investors

Foreign investors are subject to the same Imposto sobre Aplicacao de Capitais (IAC) as domestic investors:

IAC is withheld at source. Angola has a limited network of bilateral tax treaties, so foreign investors should consult with tax advisors in their home jurisdiction regarding credit for Angolan withholding tax. See the tax guide for full details.

Practical Considerations

• Preferred instruments — Most foreign investors gravitate toward OTX USD-indexed bonds (7-9% yield), which provide currency protection against kwanza depreciation. See the FX play strategy.
• Liquidity planning — Given limited secondary market depth, foreign investors should plan to hold positions to maturity or accept the possibility of delays in exiting positions.
• Legal counsel — Engaging an Angolan law firm with capital markets expertise is advisable for navigating regulatory requirements and structuring the custodial arrangement.
• Eurobond alternative — Foreign investors who prefer not to navigate the domestic market framework can access Angola sovereign risk through USD-denominated Eurobonds, which trade on international exchanges and settle through Euroclear/Clearstream.

For the full foreign holder analysis, including trends in non-resident participation, see our dedicated research page.