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Investment Policy I
Investment Opportunities
| Investment Procedures
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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 :
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provides
the necessary information required by investors:
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receives
investment applications;
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approves
and issues investment permits to foreign investors;
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provides
registration services to newly incorporated business organizations;
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issues
trade and operating licenses to approved foreign investments;
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notarizes
memorandum of association and articles of association;
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grades
construction contractors;
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approves
and register technology transfer agreements;
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registers
export-oriented non-equity based foreign enterprise collaborations;
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provides
advisory and aftercare services to investors;
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approves
expatriate posts and issues work permits to foreign employees;
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facilitates the acquisition of land by foreign investors in accordance
with the relevant laws of the Federal and Regional Governments; and
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renders
other pre-and post investment approval services.
As part of the Government’s
commitment to insure efficient service delivery and create an enabling
investment environment:
Investment Approval Procedures
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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
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To obtain an investment permit, an investor is required to submit the
following documents to the EIC:
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a
completed application form obtained from EIC;
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a draft
memorandum of association and articles of association, in the case of a
business organization;
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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;
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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.
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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.
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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
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Investment in Ethiopia can be effected in one of the following forms:
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sole
proprietorship;
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business
organizations incorporated in Ethiopia or abroad;
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public
enterprises established in accordance with the relevant law;
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co-operative societies formed in accordance with the relevant law.
Joint
Ventures
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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
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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:
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certificate of incorporation in the country of establishment;
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a
certified and notarized copy of the statutes or memorandum of association
of the company;
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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;
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a
certified and notarized three specimen signatures of the legal
representative;
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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;
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foreign
companies wishing to open liaison offices must submit their application to
the Ministry of Trade and Industry.
Access to
Land
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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
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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
Ethiopia’s 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 Ethiopian’s 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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