1. Value for you UK - Angola Investment Forum www.pwc.com/ao

2. PwC Contents 1.Background information 2.Pre investment phase 3.Restricted sectors 4.Investing 5.Critical success factors 6.Conclusion 2 UK Angola Investment ForumMay 2012

3. PwC Background information Some relevant data 1 3 UK Angola Investment ForumMay 2012

4. PwC Background information Some relevant data Angola Area1,246,700 Km2 War 1961 - 2002 Still poor infrastructure and education Annual expenses on infraestructure: USD 4.300 Millions Economy still based on oil sector (63% Angolan Budget revenues) 4 UK Angola Investment ForumMay 2012

5. PwC Background information Some relevant data 5 UK Angola Investment ForumMay 2012

6. PwC Pre investment phase 2 6 UK Angola Investment ForumMay 2012

7. PwC Pre investment phase Knowing the marketplace 7 UK Angola Investment Forum Scarce information about the market Meet local key-players Central bank (BNA) Investment agency (ANIP) Relevant Ministry/ies Commercial banks Potential clients and partners May 2012

8. PwC Pre investment phase Acknowledging high cost environment 8 UK Angola Investment Forum 4 bedroom houseleaseUSD 10 to 15,000 Office space lease/m2 from USD 70 /month Flights to Europe (Econ)USD 1,300 Expatriates … …… but 1 liter of petrol USD 0.60 PwC fees due to strong Pound May 2012

9. PwC Pre investment phase Partnering with Angolans? 9 UK Angola Investment Forum For regulatory reasons? For commercial reasons? May 2012

10. PwC Restricted sectors 3 10 UK Angola Investment ForumMay 2012

11. PwC Restricted sectors Fully restricted War material Central bank Property rights over ports and airports Property over primary telecommunications infrastructure Postal services 11 UK Angola Investment ForumMay 2012

12. PwC Restricted sectors (cont) Concessions may be granted Basic sanitation Production, transport and distribution of electricity Treatment and distribution of water Exploration of ports and airport services Railways Regular domestic air transportation Urban collective transportation Complementary telecommunication and postal services Telecommunication infrastructures Oil & gas and diamonds (in association with private entities) 12 UK Angola Investment ForumMay 2012

13. PwC Investing 4 13 UK Angola Investment ForumMay 2012

14. Investing Profit margins Commercial regulations ForEx regime Accounting & statutory audit Taxes Immigration and ‘Angolanisation’ Investment regulations siess Vehicle The process

15. PwC Investing Profit Margins Producers & wholesalers 25% * (Product cost + 20% overheads) Retailers 25% * (Acquisition to producer + transport + 14% overheads) 15 UK Angola Investment ForumMay 2012

16. PwC Investing Commercial regulations Commercial Code & Company Law (Portuguese) Typical business vehicles - SA(joint stock company)USD 20,000 - Lda (private company)USD 1,000 - Branch Rep Office - If no commercial activity in loco) 16 UK Angola Investment ForumMay 2012

17. PwC Investing ForEx regime Angolan ForEx residents cannot remit funds overseas Exceptions, cleared by BNA -To pay for importations -Approved contracts (loans included) -No prior approval for Up to USD 300,000/yr/beneficiary Local disclosed salary for expatriates (approved investments) Profits/dividends/proceeds of sale and gains Only for approved investments 17 UK Angola Investment ForumMay 2012

18. PwC Investing Accounting & statutory audit Angolan Chart of Accounts (PGC) must be complied with -Accounts numbering and coding predefined -In Kwanza (AKZ) -In Portuguese -Predefined financial statements Accounting packages allow accounts conversion Statutory audit required by law… … but the tax authorities have not been enforcing 18 UK Angola Investment ForumMay 2012

19. PwC Investing Taxes Exemptions for private investors Profits Dividends Import duties and Excise Real estate transfer tax 19 UK Angola Investment Forum Profits35% Dividends10% Royalties10% PAY up to17% Stamp duty1% Interest15% Withholding tax5.25% or 3.5% Soc Security3% e 8% May 2012

20. PwC Investing Immigration and ‘Angolanisation’ Expatriates Work visa Employment contract Visa applied for and obtained overseas Special, facilitated regime for oil & gas service companies Usually takes 1 to 3 months ‘Angolanisation’ Quota of maximum of 30% expatriates Training programs to be strictly followed 20 UK Angola Investment ForumMay 2012

21. PwC Investing Investment regulations Objectives of the investment law Grow the economy in all provinces Increase national productive capacity and efficiency Promote partnerships with Angolans Increase employment and capacity of Angolans Increase exports and reduce imports Rehabilitate, expand and modernise infrastructures 21 UK Angola Investment Forum

22. PwC Investing Investment regulations Sectors entitled to incentives Agriculture and “Animal husbundry” Transforming industry Fishing industry Building construction Health and education Infrastructures Turism 22 UK Angola Investment Forum

23. PwC Investing The process 23 UK Angola Investment Forum

24. PwC Critical Success Factors 5 24 UK Angola Investment ForumMay 2012

25. PwC Critical Success Factors Cultural aspects Preference to Angolan executives If not, should be senior, flexible and able to understand differences and its causes; must inspire confidence International experience = great value Time and patience Not less than 4 to 6 months to start a business … shortcuts can, and will, be very expensive 25 UK Angola Investment ForumMay 2012

26. PwC Critical Success Factors Strict compliance Investment project must be realistic Programs to train Angolans must be carried out Expatriates do require work visas (some flexibility) Strict adherence to Angolan GAAP (issue in Oil & Gas) Taxes should be paid on time (in addition to endangering incentives investment license, fines and interest are very severe) 26 UK Angola Investment ForumMay 2012

27. PwC Investing Conclusions UK Angola Investment Forum 27 May 2012 Investing in Angola takes time and money Short term investment is a myth Local (appropriate) partners may be very valuable or even key Investment incentives may be very attractive Complying with obligations allows Attractive return on investment Risks tend to reduce Get appropriate professional advice

28. Angola is moving forward… … Do not loose the opportunity … This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, [insert legal name of the PwC firm], its members, employe<es and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2012 PricewaterhouseCoopers (Angola), Limitada. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers (Angola), Limitada, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. Thank you pedro.calixto@ao.pwc.com