Algeria has enacted sweeping reforms to its financial technology (fintech) and venture capital (VC) regulations, positioning itself to compete with regional leaders Morocco, Egypt, and Tunisia for startup investment and digital finance growth. The new laws, passed in early 2025, mark a significant shift for a country historically held back by restrictive financial policies and bureaucratic hurdles.
While Morocco, Egypt, and Tunisia have seen a surge in VC firms and fintech startups — attracting over $300 million in combined tech funding in 2024 — Algeria’s ecosystem has lagged. Now, with structured frameworks for payment services and investment funds, analysts suggest the country could begin closing the gap.
What Do the New Law Say?
I. Fintech Regulations
*(Bank of Algeria Regulation №25–02, 14 April 2025)*
1. Authorization & Licensing
- Eligible Entities: Only registered companies (not individuals) can operate as Payment Service Providers (PSPs).
- Minimum Capital: 160 million DZD (~$1.2M) required for PSPs.
- Local Presence: PSPs must:
- Establish their headquarters in Algeria.
- Host payment platforms domestically (no offshore servers).
2. Permitted Services
PSPs may offer:
- Digital wallets and account management.
- Domestic transfers and direct debits.
- Card-based payments (issuance/acquisition).
- Money remittance (including cross-border).
- Payment initiation services (e.g., merchant payments).
3. Compliance & Governance
- AML/CFT: Must adhere to Algeria’s anti-money laundering laws (Regulation №24–03, 2024).
- Fund Protection:
- Segregation of client funds (via dedicated “compte de cantonnement”).
- Guarantee requirement: PSPs must obtain a bank guarantee or insurance to cover liabilities.
- Data Localization: All transaction data must be stored in Algeria.
4. Operational Rules
- Interoperability: PSPs must ensure their systems connect with banks and other PSPs.
- Transparency: Fees and terms must be publicly disclosed (website/app).
- Consumer Protection:
- Mandatory complaint resolution mechanism.
- 10-day deadline to respond to customer grievances.
II. Venture Capital (VC) & Investment Funds
*(COSOB Regulation №24–02, 23 October 2024)*
1. Fund Structures
Two types of Organismes de Placement Collectif à Capital Risque (OPCR):
- SICAR (Société d’Investissement à Capital Risque): Traditional VC entity.
- FCPR (Fonds Commun de Placement à Capital Risque): Pooled fund without legal personality.
2. Key Requirements
Minimum Size:
- 50 million DZD (~$370K) for initial capital.
Investment Mandate:
- 50% of assets must be allocated to unlisted startups (equity/debt).
- Up to 20% can be invested in publicly traded SMEs (Algiers Stock Exchange).
Investor Eligibility:
- Institutional investors (banks, insurers, pension funds).
- Qualified individuals (net worth >2M DZD or financial expertise).
3. Fund Lifecycle & Exits
Duration: Funds must begin liquidation after 6 years (extendable to 10 years).
Exit Routes:
- Trade sales, IPOs, or secondary market transfers.
- Startups receiving VC funding must provide exit plans at investment.
4. Reporting & Transparency
- Annual/Semiannual Reports: Disclose portfolio performance, risks, and fees.
- Valuation Rules:
- Independent external valuers must assess startup holdings.
- Use market-based methodologies (e.g., discounted cash flow).
III. Cross-Cutting Provisions
Foreign Participation:
- Non-Algerian investors can join VC funds but must comply with foreign exchange rules.
- PSPs require prior approval for foreign ownership (>49%).
Tax Incentives:
- Capital gains tax exemptions for VC exits held >5 years.
- PSPs benefit from reduced VAT on digital transactions (pending fiscal reforms).
Sandbox Framework:
- Pilot testing allowed for innovative fintech products under regulatory supervision.
Regional Context: Can Algeria Catch Up?
Algeria’s reforms arrive as its neighbors solidify their positions:
- Egypt: Home to +100 fintechs and major VC players like Algebra Ventures.
- Morocco: $70M+ in 2024 startup deals, led by payment firms.
- Tunisia: Startup Act (2018) spurred growth in tech funding.
Yet Algeria’s large domestic market (45 million people) and untapped digital payment potential (56% unbanked) offer advantages.
Download the law HERE