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January 16, 2023

Karen Fulton, Tshepo Mokoana and Tarika Patel

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Signature of the Law on the status of the self-entrepreneur by the President of the Republic

The Law on the status of the self-entrepreneur (the “Law”), initiated by the Ministry of Economy, Knowledge, Start-ups, and Microenterprises, was approved by both houses of parliament, and signed by the Algerian President of the Republic on 19 December 2022. However, the Law has not yet been published in the Official Gazette.

This Law determines the rules and conditions applicable to the performance of the activity of self-entrepreneurs and aims to organize the "new economic activities" that have developed with the emergence of the digital economy, such as the development of web and mobile applications, digital marketing, use of vehicles with drivers (such as Uber, Yassir, Kareem, Temtem) and the administration of social network platforms or computer graphics.

The Law sets out the advantages granted to self-entrepreneurs, such as simplified accounting, exemption from registration in the trade register, preferential tax treatment, social security coverage and the possibility of opening commercial bank accounts. The Law also imposes obligations on the self-entrepreneurs, such as registration in the National self-entrepreneur Register, declaration to the National Social Security Fund for Non-Salaried Workers (“CASNOS”) and declaration of existence to the tax authorities in order to obtain the Tax Identification Number (“NIF”), within a maximum of 30 days, after obtaining the self-entrepreneur’s card.


Employee's right to request a leave of absence to start their own business

Law No. 22-16 of July 20, 2022, (“Law 22-16”) has supplemented Law No. 90-11 of April 21, 1990, on Labor Relations (“Law 90-11”), by introducing new provisions allowing workers to take unpaid leave once during their professional career to set up their own business.

The worker also has the right to work part-time in order to set up his business, in accordance with the provisions of the legislation and regulations in force. The duration of the unpaid leave or part-time work for the setting-up of his/her business by the employee is fixed for a maximum period of one year. This duration may be extended, exceptionally for a period not exceeding six months, upon justification provided by the concerned employee.

However, Law 22-16 also provides that the employer may, for reasons of service, decide, after consulting the Participation Committee, i.e., elected employees’ representatives, to postpone the date of departure of the employee on leave or the use of part-time work, for a period of six months at most, if the absence of the concerned employee is likely to have major effects prejudicial to the employing organization. In addition, if a worker is placed on leave for the purpose of setting up a business, his or her remuneration is suspended and his or her rights regarding seniority and promotion cease to apply.

However, the concerned worker preserves their acquired rights relating to their position at the date of their leave for the creation of a business. During the leave for the creation of a business, the worker continues to benefit from the social security coverage, according to the modalities fixed by regulation.

If the employee’s project is not implemented within the established timeframe, the employee may request reinstatement to their job, or re-employment on a full-time basis, at least one month prior to the expiry of the leave or period of part-time work for the purpose of setting up a business.

Finally, the employment relationship is terminated, without prejudice to the laws and regulations in force, when the employee sets up a business and, where applicable, does not apply for reinstatement within the time limits established by Law 22-16.


Global Income Tax (“IRG”)

The Finance Law for 2022 (“FL 2022”) has reinstated the principle of globality of personal income taxation. This principle consists in integrating, in the taxable base to be submitted to the IRG scale, attached to the tax residence, all the incomes made by a person, except for certain incomes for which the final taxation is maintained considering the nature of these incomes.

The applicable tax scale is the following:

Taxable income fraction (annual)

Tax rate

Not exceeding 240.000 DZD


From 240.001 to 480.000 DZD


From 480.001 to 960.000 DZD


From 960.001 to 1.920.000 DZD


From 1.920.001 to 3.840.000 DZD


More than 3.840.000 DZD


The segments of the annual scale were also revised, while the threshold of non-taxation from 10.000 DZD to 20.000 DZD was raised.

The FL 2022 has thus reinforced the progressiveness of the IRG, by revising the segments of the scale and the related marginal rates and aligning the upper limit of the first segment of the IRG scale on the updated national minimum wage (“SNMG”) amounting at 20.000 DZD per month, as a threshold for non-taxation.

With thanks to Karen Fulton, Tshepo Mokoana and Tarika Patel of Bowmans for their invaluable collaboration on this update.




Reduction to global income tax

Due to inflation and loss of purchasing power, there has been a reduction to global income tax (“IRG”). It is anticipated that this will have the following impact for employees and employers: (i) for the employee, if the agreed salary in the employee’s employment contract is stated in its gross amount, the employee will receive a higher take-home payment, and (ii) for the employer, if the agreed salary in the employee’s employment contract is stated in its net amount, the employer will pay less IRG.




Overhaul of Algerian legislation

Since 1988, Algerian legislation has undergone a total overhaul in areas affecting economic and social life, particularly with regard to labour law.

These changes were implemented with a view to opening up the Algerian market to the international market and to potential national and foreign investors. Thus, labour relations have been redefined in relation to the old texts, which gave a great deal of power to structures and bodies representing workers, or the provisions relating to labour discipline and the powers of trade unions in private enterprises.

Under the influence of the old texts, it was difficult to separate from a worker, for both disciplinary and economic reasons, without incurring the wrath of the single union. There was a so‑called "managerial" trade unionism in the sense of the socialist ideas in vogue at a certain time. "Reinstatement of the worker" was the sentence most often pronounced by the social courts.

This legislation has therefore undergone a major overhaul and several texts have therefore been adopted, which are more liberal and more flexible for the employer. For example, Algeria adopted new regulatory texts and laws on occupational hygiene, safety, and medicine; on prevention and settlement of collective labour disputes and the exercise of the right to strike and in particular Law 90‑11 on labour relations which is fully in line with the process of overhauling the labour legislation resulting from the political and economic reforms and marks a decisive turning point in the management of employment and working conditions for several decades and therefore heralding a new era in the evolution of labour law accompanying the end of the socialist economy and participating in the implementation of the economic reform to move to a market economy.

The legislative framework enshrined in this new legislative corpus replaces the law on the general status of workers and the ordinance on the socialist management of enterprises and draws its main foundations from the Constitution of February 1989, the ILO Conventions ratified by Algeria and the laws on the autonomy of enterprises.

In particular, Law 90‑11 of 21 April 1990 on labour relations reaffirms the fundamental rights of workers and sets out their obligations, enhances the economic content of the employment relationship and encourages the promotion of qualifications, effort and merit. It also introduces flexibility in the use of fixed‑term and part‑time work, facilitates the integration of the disabled into the world of work, sets a maximum rate of authorized overtime, makes the preservation of employment an essential element of consultation and ensures the protection of workers' rights in the event of changes in the legal status of the employing body.


New Labour Code being drafted

A new Labour Code is being drafted which strengthens and enshrines workers' rights and trade union freedoms and includes proposals for the consolidation of social dialogue at all levels and others on the consecration and preservation of the freedom to exercise the right to organize. It also includes new articles on combating and preventing illegal work, proposing the establishment of a national commission composed of representatives of several sectors and ministerial departments and wilaya sub‑commissions, responsible for combating this and monitoring the activities of the world of work. The draft labour law will also finally introduce: (i) a new case of recourse to fixed‑term employment contracts, which will be limited, to avoid abuse; and (ii) specific provisions relating to the protection of workers in the workplace, particularly against sexual harassment.

There is nothing precise as to the final content of the draft law nor the final provisions provided therein nor the date of its entry into force. However, we believe that the year will expedite the process of its adoption given the pressure exercised by the unions and the OIT, as well as the consequences of the pandemic that require —the implementation of new measures for force majeure situations.

With thanks to Karen Fulton, Bulela Mungeka and Sian Gaffney of Bowmans for their invaluable collaboration on this update.

For More Information

Image: Suzanne Horne
Suzanne Horne

Partner, Employment Law Department

Image: Kirsty Devine
Kirsty Devine

Associate, Employment Law Department

Image: Aashna Parekh
Aashna Parekh

Associate, Employment Law Department

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