ALGERIA’S COMPLIANCE CHALLENGES THREATEN US BUSINESSES

Algeria has become a challenging market for U.S. companies, plagued by multiple obstacles that hinder their ability to operate effectively in the North African country.

Major Challenges Facing American Businesses in Algeria

• Tumultuous Political Landscape: Frequent changes in leadership have resulted in cabinet reshuffles, slowing down major economic initiatives and forcing U.S. companies to reinvest time and resources to rebuild relationships and reinitiate dialogues.
• Unstable Regulatory Framework: International firms have complained about the uneven application of laws and regulations, with business contracts subject to interpretation, revision, and retroactive changes.
• Dominance of State-Owned Enterprises (SOEs): SOEs dominate the economy and often prioritize politics or narrow interests over value creation and efficiency.

Additional Challenges for U.S. Companies

• Procurement Regulations Favoring Low-Cost Bidders: U.S. companies are at a disadvantage due to the preference for low-cost bidders, which can lead to more expensive long-term solutions.
• Large Bid Bonds: American businesses often require large bid bonds that exceed the risk appetite of small- and medium-sized enterprises (SMEs).
• Payment Delays: Financial regulations, currency controls, and slow-moving bureaucracy hinder international funds transfers, resulting in payment delays for U.S. companies.

Impact on Small- and Medium-Sized American Firms

These challenges are particularly damaging to SMEs, highlighting the need for improved regulatory clarity, increased transparency in business dealings, and more favorable procurement practices.

Addressing the Challenges

To succeed in Algeria’s complex market, U.S. businesses must address these issues by improving regulatory clarity, increasing transparency, and adopting more favorable procurement practices.