To encourage private investment and promote the inflow of foreign capital and technology into Ethiopia, the following incentives are granted to investors (both domestic and foreign) engaged in new enterprise and expansion in areas qualified for investment incentives.
Ethiopia provides the following guarantees to foreign investors
Repatriation of Capital and Profits
Capital repatriation and remittance of dividends and interest is guaranteed to foreign investors under the investment proclamation.
Any foreign investor has the right, in respect of an approved investment, to make the following remittances out of Ethiopia in convertible currency at the prevailing rate of exchange on the date of remittance.
- Profit and dividends accruing from investment
- Principal and interest payments on external loans
- Payments related to technology transfer agreements
- Proceeds from the sale or liquidation of an enterprise;
- Proceeds from the sale or transfer of shares or of partial ownership of an enterprise to a domestic investor;
- Compensation paid to a foreign investor
- Expatriates employed in an enterprise may remit in convertible foreign currency, salaries and other payment accruing from their employment in accordance with its foreign exchange regulation or directives of the country.
Investment Guarantees and Protections
The constitution of the Federal Democratic Republic of Ethiopia protects private property. The investment proclamation also provides investment guarantees against measures of expropriation and nationalization that only may occur when required for public interest and in compliance with the requirements of the law.
Ethiopia is a member of the World Bank affiliated Multilateral Investment Guarantee Agency /MIGA/ which issues guarantees to investors against non-commercial risks such as expropriation. Moreover, Ethiopia is at any time ready to conclude bilateral investment promotion and protection agreements with any country. Ethiopia has recently concluded such agreements with a number of developed countries. Ethiopia has also signed the World Bank treaty, ''the Convention on Settlement of Investment Disputes between States and nationals of other states /ICSID/