Investment Friendly Ethiopia

Ethiopia has implemented a market-oriented economic development strategy. In order to encourage, promote and expand private investment, the Government has adopted a liberalized investment code and established the Ethiopian Investment Authority (EIA). The EIA is established as a one-stop shop to provide efficient and effective services for private investors, particularly foreign private investors.

With the objective of promoting private investment and the inflow of foreign capital and technology in the country the investment code provides fiscal incentives and guarantees to foreign and domestic investors engaged in new enterprises and expansions.

The investment code provides the following:

• Full payment of profit and dividends to the foreign investor
• Payment of interest and principal on foreign lending
• Royalty of other payments for technology transfer and management contracts
• Full payment upon sale of an investment in Ethiopia
• Full exemption of import tariffs on machinery and equipment for investment
• An income tax holiday ranging from one to five years is guaranteed to investors engaged in new enterprises
• Choice of straight-line or accelerated depreciation of capital assets
• Research, development, training and other costs may be deducted from income tax
• All above payments are payable to foreign parties in hard currency.

In addition to these advantages, the US African Growth & Opportunity Act (AGOA) provides US investors with several significant benefits.