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Mining: Ethiopia offers excellent opportunities for mineral prospecting and development. The country is blessed with large deposit of:
• Gold;
• Precious and metallic minerals like tantalum, iron ore, platinum;
• Coal, oil shale and natural gas
• Diatomite, potash, phosphate, soda ash, salt, limestone, marble.
Ethiopia's investment priority areas:
• Horticulture;
• Floriculture;
• Agro-processing;
• Livestock;
• Textile and garment;
• Leather and leather products.
Government support to priority areas:
• Access to long term credit with low interest rate;
• Export incentives;
• Customs duty privileges;
• Income task holiday;
• Provision of land at competitive lease price;
• Technical support.
Investment incentive:
• 100% exemption from the payment of customs duty:
• Duty free importation of machinery and equipment for investment projects;
• Duty free importation of spare parts whose value is not greater than 15% of the total of capital goods to be imported;
• Income tax exemption for periods ranging from 2-7 years depending upon the area of investment, the volume of export and the location of investment;
• Loss carry forward for half of the tax holiday period.
Export incentives:
• Duty drawback scheme;
• Voucher system;
• Bonded manufacturing warehouse scheme.
Privatization:
As part of the government commitment to privatize state owned enterprises, so far a total of 233 enterprises were successfully privatized. Currently about 113 state owned enterprises are in the pipe line to be privatized in different modalities. These include:
• Food processing factories;
• Leather industries;
• Garment factories
• Beverage and breweries;
• Textile factories;
• Chemical industries
• Construction films, etc.
Guarantees and protection:
• Foreign investors can repatriate capital and remit dividends and interest;
• The constitution of Ethiopia and the investment proclamation protect private property rights;
• Ethiopia is also a member of multilateral investment guarantee agency (MIGA), a world bank affiliate, which issues guarantee against non- commercial risk;
• Ethiopia has signed bilateral investment promotion & protection treaties with several countries of Europe, Africa and Asia.
Taxation:
Principal taxes currently in effect
No. |
Type of tax |
Rate |
1 |
Corporate income tax |
30% |
2 |
Turn over tax |
2% and 10% |
3 |
Excise tax |
10% up to 100% |
4 |
Custom duties |
0% up to 35% |
5 |
Income tax from employment |
0% up to 35% |
6 |
Withholding tax |
2% |
7 |
Value added tax |
15% |
8 |
Export tax |
Nil |
9 |
Royalty tax |
5% |
10 |
Dividend tax |
10% |
Requirements to obtain investment permit
A properly filled application form should be submitted to the Agency together with the following document, where:
• The application is signed by an agent, a photocopy of attorney;
• The investment is to be made by an individual person, a photocopy of the page of a valid passport size photographs;
• The investment is to be made by a newly established business organization, photocopies of Memorandum of Association and Articles of Association and photocopies of the pages of valid passport of each shareholder, if any;
• The investment is to be made by a branch of a foreign business organization in Ethiopia, photocopies of Memorandum of Association and articles of association or similar document of the parent company;
• An investor concludes a technology transfer agreement related to his investment, he is required to submit the same to the Agency for approval and registration.
Source: Ethiopian Investment Agency
For more information please visit the website: Invest In Ethiopia
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