Ethiopian Business Development Services Network (EBDSN)

 Investment Procedures

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Investment Policy   I   Investment Opportunities

 

Investment Procedures  top

The Ethiopian Investment Commission (EIC) top
The Ethiopian Investment Commission (EIC) is the principal government organ responsible for promoting, coordinating and facilitating foreign investment in Ethiopia. EIC is accountable to the Board of Investment ( BOI). BOI has 7 members and a secretariat. The Commissioner of EIC is a member of the Board.
Regional Investment Offices (RIOs) have also been established to promote and handle local investments in their respective regions. There is a strong linkage between EIC and RIOs with respect to technical assistance, the exchange of information and provision of investment facilities. EIC is a truly one-stop-shop for all foreign investment in Ethiopia. It :

  • provides the necessary information required by investors:

  • receives investment applications;

  • approves and issues investment permits to foreign investors;

  • provides registration services to newly incorporated business organizations;

  • issues trade and operating licenses to approved foreign investments;

  • notarizes memorandum of association and articles of association;

  • grades construction contractors;

  • approves and register technology transfer agreements;

  • registers export-oriented non-equity based foreign enterprise collaborations;

  • provides advisory and aftercare services to investors;

  • approves expatriate posts and issues work permits to foreign employees;

  • facilitates the acquisition of land by foreign investors in accordance with the relevant laws of the Federal and Regional Governments; and

  • renders other pre-and post investment approval services.

As part of the Governmentís commitment to insure efficient service delivery and create an enabling investment environment:

  • the cumbersome bureaucratic procedures have been significantly simplified;

  • the EIC has been organized as a true one-stop-shop that renders all services in a single window system.
     

Investment Approval Procedures  top
Under the Investment Proclamation No.280/2002, Article 12, foreign investors, foreign nationals (excluding Ethiopians by birth) taken for domestic investors, domestic investors investing in areas eligible for incentives and domestic and foreign investors making investments in partnerships are required to obtain investment permits from the Ethiopian Investment Commission.
 

Documents to be submitted  top
To obtain an investment permit, an investor is required to submit the following documents to the EIC:

  • a completed application form obtained from EIC;

  • a draft memorandum of association and articles of association, in the case of a business organization;

  • in case of planned employment of expatriate staff, with the exception of top management positions, a statement on the time and schedule for their replacement by Ethiopians and the training program designed for such replacement;

  • a photocopy of power of attorney, in case the application is signed by an agent and other relevant information relating to the particulars of the project.

  • a foreign investor who intends to conclude a technology transfer agreement related to his investment is required to submit a draft agreement together with completed application form, prepared for this purpose, to the Commission for approval and registration together with the application for investment permit.

  • EIC approves and gives an investment permit in five days if the above stated documents are received in full.
     

How to do business in Ethiopia  top
Investment in Ethiopia can be effected in one of the following forms:

  • sole proprietorship;

  • business organizations incorporated in Ethiopia or abroad;

  • public enterprises established in accordance with the relevant law;

  • co-operative societies formed in accordance with the relevant law.
     

Joint Ventures  top
A foreign investor may team up with a domestic investor or company for a joint investment, usually in the form of a partnership, or private limited company or share company. Under the Investment Proclamation No.280/2002, a minimum capital of USD 60,000, except in consultancy services and publishing, is required from a foreign investor who intends to enter into a joint venture partnership with a domestic investor. There is no restriction at all in share ownership in a joint venture. A foreign investor who wishes to invest in partnership with domestic investor/s in areas of engineering, architecture, accounting and auditing services, project studies or business and management consultancy services or publishing is required to invest only USD 25,000 per project. The foreign partner can satisfy this minimum equity capital either in cash and/or in kind.
 

Company Registration  top
All foreign companies intending to invest in Ethiopia must be registered in accordance with the Commercial Code of Ethiopia. The EIC, representing the Ministry of Trade and Industry, carries out such company registration. Companies are required to submit draft memorandum and articles of association to the Commission. The Commission, after examining these documents, notarizes the memorandum and articles of association and subsequently issues a certificate of incorporation evidencing the registration of the company.

Opening a Branch Office of an overseas Company
An overseas company wishing to invest through a branch office is required to submit the following documents to the Ethiopian Investment Commission:

  • certificate of incorporation in the country of establishment;

  • a certified and notarized copy of the statutes or memorandum of association of the company;

  • a resolution passed by the owners of the mother company, authorizing the establishment of a branch office in Ethiopia. The authorized capital of the branch, the activity to be undertaken, and the branch manager vested with the authority to become the legal representative in Ethiopia, should be indicated in the resolution;

  • a certified and notarized three specimen signatures of the legal representative;

  • the Ethiopian Investment Commission shall, upon receipt of the above documents, issue a certificate of registration evidencing the formation of a branch of an overseas company;

  • foreign companies wishing to open liaison offices must submit their application to the Ministry of Trade and Industry.
     

Access to Land  top
In Ethiopia, land is public property. Both rural and urban lands are made available to investors at competitive price on a lease-hold basis. Leaseholders have the right of use over urban land for periods ranging from 50 to 99 years. Lease right over land can be transferred together with on built facilities.
Each Regional Government delivers, based on the Federal Law and its own laws, the required land to an investor within 60 days after receiving an application for allocation of land for an approved investment. The Ethiopian Investment Commission, in cooperation with the concerned Regional Government entities, facilitates and follows up the allocation of land for approved foreign investments. Investors who intend to invest in export-oriented projects are given priority to acquire land at reduced lease price.
 

Other Business Information  top
Visa Requirements

Visas are required for all foreign visitors to Ethiopia, with the exception of nationals of Kenya and the Sudan. Visa applications may be obtained at Ethiopiaís diplomatic missions overseas. However, nationals of 33 countries are now allowed to receive their tourist visas on arrival in Ethiopia at the regular charge. The list includes Argentina, Australia, Austria, Belgium, Brazil, Canada, China, Denmark, Finland, France, Germany, Greece, Ireland, Israel, Italy, Japan, Republic of Korea, Kuwait, Luxembourg, Mexico, The Netherlands, New Zealand, Norway, Poland, Portugal, Russian Federation, South Africa, Spain, Sweden, Switzerland, Taiwan, United Kingdom and United States. However visas are readily available at Ethiopianís diplomatic missions abroad.

Residence Permit
The Main Department for Immigration and Nationality Affairs issues a residence permit to a foreign investor, upon submission of an Investment Permit issued in his/her name. A foreign investor, who is a share holder of a company or branch company and an expatriate staff who has a work permit, is also entitled to a residence permit.

Currency (2003)
The currency of Ethiopia is based on the decimal system. The units of currency are the Birr and cents. The Birr is divided into 100 cents. The average exchange rate at the time of publication is: Birr 8.61= USD 1.00

Time
Ethiopia is in the GMT =3 time zone. It follows the Julian calendar, which consists of twelve months of 30 days each, and a thirteenth month of five or six days (on a leap year).

Working Hours
The government offices have 39 working hours a week. The office hours are 8:30 a.m. to 12:30 p.m. and 1:30 p.m.to 5:30pm. from Monday through Thursday. Working hours on Friday are 8:30 a.m. to 11:30 a.m. and 1:30p.m. to 5:30 p.m. Private and public businesses are often open on Saturdays, too.

Customs
Personal effects, unexposed film, cameras and accessories may be imported free of duty. Duty free items include 250 grams of tobacco or 200 cigarettes or 50 cigars, two litters of alcohol and half a litter of perfume. Visitors may export souvenirs with a value not exceeding Birr 500.

Airport Service Charge
An embarkation fee of USD 20 per person is payable when leaving Ethiopia. The embarkation fee can be paid either at the Exit Airport or any Airline Ticket Office.

For more details refer to the web site of the
Ethiopian Investment Commission:
www.investinethiopia.org

 

Investment Policy   I   Investment Opportunities

 

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