The latest amendment to the investment law will enhance investment activities in Ethiopia said the Ethiopian Investment Agency. The new code will offer one stop service for investors particularly engaged in the industrial sector noted the agency.
The amendments will also enable a conducive environment for the development of investment and allow for sophisticated follow up and evaluation processes.
It is to be remembered that the amended law sets the lowest investment capital for international investors at 200 thousand US dollars while joint ventures between Ethiopian nationals and international investors need to meet the minimum investment requirement of 150,000 US dollars.
The law makes an exception to the minimum capital for publishing and consultancy services reducing the required investment for foreigners to 100 thousand US dollars and just 50 thousand US dollars for joint ventures.
Under the new law, the Agency will expand its one stop shop services by incorporating services given by other government agencies such as, Ethiopian Revenues & Customs Authority (ERCA), and Urban Development & Construction (MoUDC). It also requires the agency to process service requests such as utilities, land, and bank loan from other government agencies on behalf of the investor by assigning an officer responsible for the follow up of the processes.
The new law is expected to clearly define the sectors that are open to foreign and domestic investors and the range of incentives for each sector according to the agency.
The amendment is expected to offer tax holidays and duty exemptions on the basis of the location of investment with longer exemptions offered the further the investment is from the center, Addis Ababa.
Therefore, the longest tax holidays and exemptions, extending to as long as ten years, would be enjoyed by investors in regions such as Afar, Somali and Gambella with currently slow economic activity.
Investment in the agricultural sector is offered the shortest tax break with investors getting as short as a year of tax exemption depending on what they produce.
Source: Ethiopian News Agency