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~lot.A '1;JtT ;JUlI)FEDERAL NEGARIT GAZETA

OF 1HE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

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CONTENTS

Proclamation No. 37/1996

InvestmentProclamation " Page 175

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PROCLAMATION NO.37/1996INVESTMENT PROCLAMATION OF

1HE FEDERAL DEMOCRATIC REPUBLICOF ETHIOPIA

WHEREAS, the encouragement and promotion ofinvestment has become necessary so as to accelerate theeconomic development of the country and to improve theliving standardsof its peoples;

WHEREAS,in additionto that of domesticinvestors,itis deemed essential to widen the scope of participation offoreign investors and to facilitate conditions thereof with aview to enhancingthe country's investmentactivities;

WHEREAS, the system of administration of invest-ments needs to be transparentandefficient;

WHEREAS, to these ends, it has become necessary torevise the existing law on investments;

NOW,THEREFORE,in accordancewithArticle55 (1)of the Constitution of the Federal Democratic Republic ofEthiopia,it is herebyproclaimedas follows:

PARTONEGeneral

1. Short TideThis Proclamation may be cited as the "InvestmentProclamationNo. 37/1996."

2. DefinitionsIn this Proclamation, unless the context otherwiserequires:

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1) "in,y.estment" means expenditure of capital by an.. investor to establish a new enterpriseor to expand or

upgradeone that alreadyexists;

;' 2) "enterprise" means an undertaking establishedforpurposesof gainingprofit;

3) "capital" means local or foreign currency,negotiable instruments, machinery or equipment,buildings, initial working capital, property rights,patent rights or otherbusinessassets;

4) "investor" means a'domestic or a foreign,investorhaving investedin E9tiopia;

5) '~domestic investor" mt1\Ils an Ethiopian or aforeign national permanently residing in Ethiopiahavingmadean investment,and includesthe Gover-nment and public enterprises;

6) "foreign investor" means a foreign national or anenterprise, owned by foreign nationals, havinginvestedforeigncapital in Ethiopia,and includesanEthiopian permanently residing abroad andpreferringtreatmentas a foreign investor;

7) '.'foreign capital" means capital obtained fromforeign sources, and includes the reinvested profitsand dividendsof a foreigninvestor;

8) "expansion/upgrading" means increasing in value,by more than 25%, the full production or servicecapacity of an existing enterprise, be it in variety,volumeor bQth,throughadditionalinvestmentmadeto the extent determinedinregulati(;>DSto be issuedfQrthe implementationof this Proclamation;

9) "appropriate investment organ" means theEthiopian Investment Authority, (hereinafter "theAuthority"), establishedunder this Proclamationorthe executive organ of a Regional Governmentempoweredto issue investmentpermits;

10) "public enterprise" meansan undertaking,whollyowned by the Federal Government'or a RegionalGovernment, established to carry out for gainmanufacturing, distribution, service rendering orother economicand related activities;

11) "government" meansthe FederalGovernmentor aRegionalGovernment.

3. Scope of Application

The provisions of this Proclamation shall not be ap-plicable to investments in the prospecting, explorationand developmentof mineralsand petroleumresources.

PART TWO

Investment Objectives, Areas andIncentives

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The objectives of the investment policy of the FederalDemocraticRepublicof Ethiopiaaredesignedto improvethe livingstandardsof thepeoplesofEthiopiathroughtherealization of sustainable,economic and 'socialdevelop'"ment; their particularsbeing the following:1) to acceleratethe country's economicdevelopment;2) to exploitanddevelopthe immensenaturalresources

of the country;3) to develop the domesticmarket through the growth

of production,productivityand services;4) to increase foreigfi exchange earnings by en-

couraging expansion in volume and variety of thecountry's export products and. services and theimprovement of their quality as well as to saveforeign exchange through production of importsubstitutingproducts;

5) to encourage balanced development and integratedeconomicactivityamongthe Regionsand to streng-then the intersectorallinkagesof the economy;

6) to enhance the role of the private sector in theacceleration of the developtp.entof the country'seconomy;

7) to render foreign investmentplay its proper role inthe country's economicdevelopment;

8) to create wide employment opportunities forEthiopians and to foster the transfer of technicalknow-how, of managerial skills and of technologyrequiredfor the progressof the country.

5. Areas of Investment Reserved for the Government

The followinginvestmentareasare exclusivelyreservedfor the Government:1) defenceindustries;2) production and supply of electrical energy with

installedcapacityof above 25 megawatts;3) air transport services using aircraft with a seating

capacityof morethan 20 passengersor with a cargocapacityof more than 2,700kg;

4) rail transportservices;5) telecommunication and postal services with the

exceptionof courier services.

6. Areas of Investment Reserved for Domestic Investors

1) The following investment areas are exclusivelyreservedfor Ethiopiannationals:(a) banking and insurancebusiness;.(b) pro4uctionand supplyof electricalenergywith

installedcapacityof up to 25 megawatts;(c) air transport services using aircraft with a

seatingcapacityof up to 20 passengersor with acargo capacity/ofup to'2,700 kg.

2) The investment a~as enumerated in the scheduleattachedheretoareexclusivelyreservedfordomesticinvestors.

3) Nothing in this Article.shallbe construedto excludedomestic investors from investing in other areas ofinvestment.

7. Areas Reserved for JointInvestment

1) Foreign investors shall be allowed to invest in thefollowing areas only in partnership with domestic

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investors where the investment exceeds 20 million USdollars.

(a) engineeringand metallmgical industries;(b) phannaceutical industries;(c) basic chemical and petrochemical industries;(d) fertilizerindustries.

2) The equity share of the domestic partners. in a jointinvestment, made pursuant to sub-Article (1) of thisArticle shall not be less than 27%.

3) Nothing ip this Article shall be construed to preventdomestic investorsfrom investingin said areas solely bythemselves. . .

. 4) The Supervising Authority of Public EnteIprises shallreceive and evaluateproject proposals submitted by anyforeign investor intending to invest in partnership withthe Government;it shall submit same to the Government

for decision and. upon approval, designate a publicenterprise to invest as partner in the joint investment

8. Areas of Investment Open for ForeignInvestors

1) All areas of.investment,other than those exclusivelyreservedunder this Proclamationfor the Government,Ethiopiannationalsor domesticinvestorsor for jointinvestments,shallbe openfor foreigninvestors.

2) Foreigninvestorsshallhavetheoptiontoinvesteitheron

ttpr own or in partnershipwith.do~tic investorsinareas of investmentunder sub-Article(1) of this Article;provided that in the case of joint investment, the equityshareof the domesticpartners shallnot be less than 27%.

9. Investment Incentives

1) Areas of investmentspecifiedby regulationsto be issuedby the Council of Ministers pursuant to the investmentobjectives stated under Article 4 of this Proclamationshall be eligiblefor investment incentives.

2) The regulations to be ~ued pursuant to sub-Article (1)of this Article shall detennine the type and extent ofentitlement to incentives.

PART 1HREE

Fonns of Investment and CapitalRequirement for ForeignInvestors

10. Fonns of Investment

1) Investments may be effected in one of the followingfonns:

(a) Sole proprietorships;(b) Business organizationsincorporatedin Ethiopia or

abroad;(c) Public Enterprises established in accordance with

the relevant law;(d) Cooperative Societies fanned in accordance with

the relevant law.

2) Any business organization under sub-Article (1) (b) ofthis Article shall be registered in accordance with theCommercial Code.

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11. Capital Requirements for Foreign InvestorsIl!' / AIJJ1I"IIAV-o:" f"tmf:" fit-C:J-A 0010')

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1) Any foreign investor, to be allowed to investpursuant to this Proclamation, shall be required toallocatea minimumcapitalof 500,000USdollarsfora singleinvestmentproject.

2) Notwithstandingthe provisionsof sub-Article(1) ofthis Article, the minimum capital required of aforeign investor investing jointly with domesticpartners shallbe 300,000US dollars.

3) The minimum capital to be required under sub-Article(1)of thisArticleshallbe 100,000US dollarsor its equivalent in Birr with respect to a foreigninvestor who re-investsprofits or dividends, drawnfrom an existing investment,in anothernew project.

4) The minimumcapital required of a foreign investorinvesting in engineering or other technical consul-tancy servicesshallbe 100,000US dollars.

5) Any' foreign investor having brought investmentcapital into the countryshallhave sameregisteredinaccordance with this Proclamation and obtain acertificateissuedby the Authority.

PART FOURInvestment Permit

12. Requirement of Permit

1) ,The followinginvestorsshall be required to obtainan investmentpermit:(a) foreign investors;(b) foreign nationals takenfor domestic investors

pursuant to Article 2(5) of this Proclamation;(c) domestic investors investing in areas eligible

for incentives;(d) domestic and foreign investors making joint

. investments'in partnerships.2) NotwithstandingArticle2(1) of this Proclamation,a

foreign investor intending to buy an existing enter-prisein orderto operateit as it standsor tobuy sharesin an existing enterprise shall have to obtain priorapproval from the Authority. A request for suchapproval shall be decided upon within 30 days ofreceipt of an applicationaccompaniedby completeinformation.

'3) The provisions of this Article shall not affect theright of a domestic investor intending to invest, inconformitywith the relevant laws of the.country, inareasnot eligiblefor inCentivesor, waivinghis rightof entitlementin those areaseligiblefor incentives.

13. Application for Investment Permit

An applicationfor investmentpermitshallbe made in aform designed for such purpose and submitted to theappropriate investment organ together with thefollowinginformation:

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FederalNegaritGazeta- No. 25 18thJune 1996- Page I~O

1) the projectprofile;2) a list of the type and quantitYof machinery and

equipment.,intended to be exempted from importduties and taxes; ,.

3) in caseof a businessorganization,the memorandumandarticlesofassociation; ,

4) in the case of expansion or upgrading, a briefdescription of same an4 the implemenLationprogramme; .

5) in the case of planned employment of expatriatestaff, a statement on the time schedule for theirreplacement by Ethiopians and the trainingprogrammedesignedfor such replacement;

6) power of attorneyin the caseof an applicationmadethrough an agent;

7) otherrelevant informationrelatingto the particularsof the project.

14. Issuanceof InvestmentPeJ7l1it1) Upon receiving an applicationfor investment per-

mit made in full compliancewith the provisionsofArticle 13 of this Proclamation, and after ascer~taining within 10days that the intendedinvestmentactivitywould not be contraveningthe operationallaws of the country and that, in particular, itcomplieswithconditionsstipulatedin environmen-tal protection laws, the appropriate investmentorgan shall issue an investment permit to theapplicant.

2) An investmentpermitshall containthe following:(a) the name and nationalityof the investor;(b) the investmentactivity;(c) the Region or Administration intended for

carryingouttheinvestnlent; \(d) the amountof investmentcapital;and(e) other particularsas may be deemed necessary

by the appropriateinvest~ent organ.3) a holderof an investmentpermitshallnotbe required

to obtain a trade or an operating license until thecompletionof project implementationand the com-mencementof productionor of renderingof service.

4) an investment permit may not be transferred toanother person without the authorization of theappropriateinvestmentorgan.

5) wherean investmentpermit is transferredto anotherperson or where any change occurs in its content, itshallbe submittedtothe avpropriateinvestmentrganand amendedaccordingly.

15. Renewal of Investment Permit1) An investment permit shall be renewed annually

until the commencementof productionor renderingof service. However, the investor 'shall submitprogress reports on the implementation of theproject, to the appropriateinvestmentorgan, at theend of every six months.

2) An applicationfor renewal of an investmentpermitshallbe submittedat leasta monthbeforetheend of apenod of one yearfor.whichthe perinit remainsvalid.

3) The appropriate investment organ shall renew theinvestmentpermitwheresatisfiedas to theexistenceof sufficient cause for the delay in the commen-cement or completion of implementation of theproject.

16. Suspension orRevocation of InvestmentPermit1) Where an investor violates the provisions of this

Proclamationor regulationsor directives issued forits implementation,theappropriateinvestmentorganmaysuspendthe investmentpermituntil the investortakes due correctivemeasures.

/

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f"'(}~ Qt\Vi1"" ~..,).~ ~1.~(}~ O@ .,.r;..,. ~i\1':"t.:f'~1 h11.h..,Qo- A4..1..t.lt- oP1..,F"" fh.1iii\""oP1"" (1C.(o1Df,9" A"toPAh"'~ fhAA oPi\".J;.(oCht}A 0I/:"~i1 f,'T.AA ::

2) The appropriate investment organ may revoke aninvestmentpermit where it is ~certained that:(a) the investorob~ined the permitfraudulentlyor

by submittingfalse informationor statements;(b) the investor has transferred. the permit to

, anotherperson withoutthe authorizationof theapprop!iateinvestmentorgan; ,

(c) the investor has failed, withoutgood cause, torenewthe permit1naccordancewith Article 15of this Proclamation;or

(d) incentives granted are misused or illegally. transferredto anotherperson.

3) The appropriate investment organ shall, prior tosuspendingor revokinga permit,notify the investorin writingas to the causesfor taking such action andallowhim a periodof onemonthto presenthis viewsthereon.

4) The 'appropriateinvestmentorgan shall suspend orrevokethe permitwherethe investorfails to respondwithin the time limitprescribedili sub-Article(3) ofthis Articleor presentsunacceptablejustifications.

5) Upon revocationof an investmentpermit, the inves-tor shall immediatelylose entitlementto all benefitsand shall refund all financial benefits received byway of incentives.

(j) An investment permit may not be suspended orrevoked by any entity other than the appropriateinvestmentorganhaving issuedsame.

17. Investor's Right to Appeal

An investor who has a grievance'agairisfa decision ofthe appropriateinvestmentorganon issuesrelatingto aninvestment permit or incentives may, within 30 daysfrom receipt of the decision, appeal to themvestmentBoardor to the concernedorganof a RegionalGovern-ment as may be appropriate.

PART FIVE

Transfer of Technology, Loans,Utilization of Foreign Cummcy

htt:A h9"i\"" I and Remittance of Funds

lAi:h'iI\-:('1i..,..,c. ht\i1.(oc . i\t\~ Mlft hll1~"'9"r;11"i1 m1. ~ h1C i\t\OI/lfmc . ~18. Technology TransferAgreements

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v-).:f' fi:h'il\-:( 1i..,..,c i\"''''~'''' O"t!1.C..,O""1.ff. i\9"9"~i:1 AQAFAIIJ~ 00i/:"~11 OI/i\t."'.(or;0I/i\oP1J1i1 hAO"" II

If. QAFAIIJ~Otf.tJh1.,.,. 1o-i\ h1.,.,. (li) oPlP~""

fi: hli 1\-:( 1i..,..,C i\"'9"~"" 11."'Ci1t\"" 0"tti\

""r:'T 9"hc 0.""1.1i1 ct1'C liff)liIIiifif~ oPlP~""hi\LI\1.~1 "''''101/ h.(oC-) ~..,). f,(}IIJA I:

1) Wherean investorintendstoconcludea teChnologytransfer agreement related to.his investment, heshall submitsameto theAuthorityfor approvalandregistration.

2) Wherethe Authorityreceives.atechnologytransferagreement, pursuant to sub-Article (1) of thisArticle,it shallgive itsdecisionthereonsubsequentto the.necessaryevaluationin accordancewith theCouncilof MinistersRegualtionsNo. 121/1993.

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fO?I14.AID-'t i).., OtJJo1.l'Mtf~ 11"-"","*' ID-tif.bI\lI'/tflDC ,(',TI\A II

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oo't"" ;JC f"',," bchC(L~l} 0v.1\-I: ooi)I1A

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,(',1.l;JA II

19. Loans and Utilization of Foreign Currency'

1) An investor who acquires an external loan shallhave suchloanregisteredwiththe NationalBank ofEthiopia in accordancewith directivesof the Bank.

2) For transactionsrelated to their investment,foreigninvestors shall be allowed to open and operateforeigncurrencyaccountsin authorizedlocal banksin accordancewith directivesof the National Bankof Ethiopia.

20. Remittance of Funds

1) Any foreign investorshallhave the right, in respectof an approved investrnent,to make the followingremittances out.of Ethiopia in convertible foreigncurrency at the prevailingrate of exchange on thedate of remittance:

(a) profits and dividends accruing from invest-ment; ",

(b) principal and interest payments on externalloans;

(c) payments related to a technology transferagreement registered in accordance with thisProclamation;

(d) proceeds from the sale or liquidation of anenterprise;

(e) proceedsfromthetransferof sharesor of partialownership of an enterprise to a domesticinvestor.

2) Notwithstandingthe Paymentof Taxon GainsfromCapital Proclamation No. 108/1994, remittancesreferred to in sub-Articles (1) (d) and (e) of thisArticle shallbe exempt from such taxes.

3) Expatriatesemployedin an enterprisemayremit, inconvertible foreign currency, salaries and otherpaymentsaccruingfromtheiremploymentinaccor- -

dance with the foreign exchangeregulationsof thecountry.

PART SIXInvestment Guaranteesand Setdement of

Disputes21. Investment GuaranteesandProtections

1) No investmentmaybe expropriatedor nationalizedexcept when required by the public interest andthen, only in compliancewith the requirementsofthe law:

2) Adequate compensation, corresponding to theprevailingmarketvalue,shallbe paidwithoutdelayin case of expropriation or nationalization of aninvestmentfor public interest.

3) Any foreigniI}v~stormayremitcompensationpaidto him pursuant to this Article out of Ethiopia inconvertibleforeigncurrency.

22. Settlement of Disputes

1) Where any dispute arisesbetween a for~igninves-tor andthe Governmentin respectof an investment,all effort shall be made to reach an amicablesettlementthrough mutualdiscussions.

'IX' fff U.~A ~~~T ~11'" MC;~ (\1Iii +, IifTt ,.~. FederalNegaritvazeta - No. 25 18th,June1996- Page 183

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2) A disputenot amicablysettledmaybe submittedtothe competent court of the country or to inter-national arbitration within the framework of anybilateral or multilateral agreement;to which theGovernmentand the country of which the foreigninvestoris a nationalare contractingparties.

PART SEVENInvestment Administration

.

23. OrgansInvolved in Investment AdministrationThe administrationof investment shall be carried outthrough the followingorgans:1) The InvestmentBoard;2) The Authority;3) Regional investmentorgans to be definedby laws

of regionalgovernments.

24. Jurisdiction

1) The administrationof investmentin respect of thefollowing shall be under the jurisdiction of theAuthority:

(a) investmentsmadeby foreign investors;(b) investmentsmade by foreign nationals taken

for domesticinvestors; -

(c) investmentsmade, in areas eligible for incen-tives,bydomesticinvestorswhoarerequiredtoobtain trade and operating licenses from con-cerned federalorgans; ., .

(d) joint investments by domestic' and foreigninvestors. , '. .

2) Investments other than those referred to in sub-Article (1) of this Article shall fall under thejurisdictionof regional investmentorgans.

3) Notwithstandingthe provisionsof sub-Articles(1)and (2) of this Article,the grantingof incentivesbyway of exemptionsfrom importtaxes and customsduties shall fall under the exclusivejurisdiction ofthe Authority. . ..

4) Where an investor with a permit from a regionalinvestmentorgan applies for incentives of exemp-tion from imPQrttaxes and customsd~ties, the saidorgan shall, after examining and ascertaining itsacceptability within 15 days, transmit the ap-plication to the Authority, togetherwith the neces-sary information. The Authority shall give itsdecisionwithin 10days of receiptof suchcompleteinformation.

25. One-StopShop Service1) The issuance of trade and operating licenses, the

granting of work permits to expatriate employeesand the registration of business organizations asrequiredunder the ~levant laws shall,with respectto investorsholding investmentperm!ts,be carriedout by the Authority or by a regional investmentorgan as may be appropriate, representing thecompetent federal or regional executive bodiesrespectively.

'IX- IT!! 4J.~/.\ ~:M"" ,?fl.1IJcf:1'C.1t~ ll~!li +'J iIU-tt't.,... Eeder-... ~aritGazeta - No. 25 18thJune 1996 ~ Page 184

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2) The Authorityand regionalinvestmentorgans shallcarry.outtheirfunctionsunder sub-Article(1)of thisArticle;incompliancewiththerelevantlaws thereof.

3) The Authorityor a regional investmento!"ganshallissue a licensewithin 30 days where an applicationsubmitted to it purSuant to this Article is in fullconformity with the requirements of the relevantlaw.

26. Transmissionof Infonnation on Investment

Each regional investment organ .shall transmit to theAuthority informagon compiled,with respect to theresource potential and investment opportunitiesof theregion as well as periodic reports on investmentactivitiestherein.

PARTEIGHTTheInvestment Board

27. Members of theBoard

\ 1) The InvestmentBoard shall"haveseven members.2) The Prime Minister shall be the Chairman of the

InvestmentBoard.3) Five membersof the Board shallbe designatedby

the Prime Minister.4) . The GeneralManagerof the Authorityshallbe a

\. 'memberof the Board.

5) ~e/Board shallhave its own Secretariat.\

28. Powers,and Duties of the Board,The Board shallhave the followingpowers and duties:1) to supervise and follow up, as the superior

authority,the implementationof this Proclamationand the activitiesof the Authority;

2) to decide on policy issues arising in connectionwith the implementationof this Proclamation;

3) to issuedirectivesnecessaryfor the implementationof thisProclamationandregulationsissuedhereun-der;

4) to cause the revision, as necessary, of Investmentincentives'regulations; I

5) to decide on appeals submitted to it by investorsagainst decisionsOf the Authority with respect tothe issuanceof investmentpermitsand the grantingof incentives;

6) to determine service fees to be charged by theAuthority; .

7) to approvethe organizationalstructureand person-nel regulationsof the Authority;' .

8) to approvethe annualworkprogrammeandbudgetof the Authority;

9) to publiclynotifyinvestors of directivesissuedby itfroni time to time. .

f)u. ...~ (1C~ ",-o"q"":f 29. Meetings of the Board

Ii. (1C~ OIDC ,,'}Y: 1.1t. oo~n~ ",-o"q !~C;JA :: 1) The Board shall meet regularly once in a month.ITlflJ'""ilL"1. ITli l1.1~ OOlJ'iTI&IJ'"1.It."...:p;..~ However, it may hold extraordinary meetings attt-o"q l\.!~C'" ~":f"A :: anytimewhennecessary.

'IX' fl"~ u..~A. ~:M"" ;JtLlIJ 4I1'C'f~ (a~Ii +') IDfl"~ Ct.,...'. . ';;'

Federal Negarit Gazeta - No. 25 18thJune 1996 - Page 185

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i. I\."}ii"TOO"}:""} AOYla4-4-:"ftl~ A"di-c:.T"} .00..,l\191T1 f ;e.A'fPT"}~ foo,tlit-:""} lU,;J"jfA .lt1~1A! I

i. OILII"",~ ""}+A"tg OT~m~ FAtfI"}oolPl:"fl\. "}ii "TOO'J:" .t.:I"I: ".tltflA . OOYOl;J-;F~ 14:

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la:"oo"}:"Tt'Xh:" ".t.~~'" ".h;J-"."A ! fl\. "}iila:"OD"}:".t.:I"~' fl,,:f1D- "'1..;J-9I~ 1J-t.;J-9IT oohO~

:f1D-"}'~,;J 'lfJA!

j. hJ\."}iila :",;JCf"'"", f-l:h':"M(1i.,..,Cia'rr)"'T1 1~.(- A' ".oon..,flA!

2) Thereshallbe a quorumwheremorethanhalfpf themembersare,presentat meetingsof the.Board. " "

3) Decisionsof the Board shall be passed by majoritY,vote; however, the Chairman shall have a castingvote in case of a tie.

4) Without prejudiceto the provisionsof this Article,the Board shalldraw up its own rules of procedure.

PART NINE

The Ethiopian Investment Aul1!o.rity

30. Establishment

I) The Ethiopian Investment Auth9rity is herebyestablished as an autonomous public institutionhaving legal personality.

2) The Authority shall be accountable to the Invest-ment Board.

31. Power.sandDuties of ~e AuthoriryThe Authority shall have the follo~ing powers andduties:1) to serveas a nucleusfor mattersof investmentand,

consequently, promote, coordinate and enhanceactivitiesthereon; f

2) to initiate .and submit to the Boar4;ipolicy andimplementationmeasuresneeded to create a con-ducive investment climate for bpth pomestic andforeign investors and to follow up the implemen-tation of sameupon approval;

3) to collect, compile,analyze'anddisseminate infor-mationon the resourcepotentialof the countryandon the investment opportunities it offers; topromote concrete investmentprojects; to provide,upon request, match-making serivce.of possiblejoint investmentpartners;

4) to organize, with a view .to helping promote.

investment, such activities as exhibitions, con-ferences,trainingand seminarslocallyor abroadasmay be appropriate; to give advisory,support toinvestors;

5) to rea1iseliaison and coordinationbetween inves-tors, public offices, Regional Governments andother relevant organs, with a view tOI.enhancinginv~tmem; .

6) to prepare and distribute pamphlets, brochures,films and other materialsthat help enhance invest-ment;

7) to issue investment permits and decide on ap-plications for incentivespursuant to Article 24 ofthis Proclamation; ,

.8) to monitor the implementation of investmentprojects for which it has iss~edpermits and ensurethat the tenns and conditions of the investmentpermitsare compliedwith;

9) to approve and register .technology transferagreementsrelatedto investments;

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10) to register capital imported into and invested inEthiopia by foreign investors and issue cer-tificatesevidencingsame; .

11) to negotiate bilateral investment promotion andprotection treaties, for conclusion betweenEthiopia and capital exporting countries and tosign same upon approval by the Council ofMinisters; ,

12) to give advice and technical support to regionalinvestment bureaux with a view to building uptheir capacity;

13) to perform such other functions as may help topromote and enhanceinvestment.

32. Organizationof the AuthorityThe Authorityshallhave:1) a GeneralManagerand a DeputyG~neralManager

to be appointedby the Government;and2) the necessarystaff. .

33. PowersandDuties of the GeneralManager1) The General Manager shall be the chief executive

officerof the Authorityand, as such shall, subjecttothe general directives of the Board, direct anqadministerthe activitiesof the Authority.

2) Without limitingthe generalityof sub-Article(1) ofthis Article, the GeneralManager shall:(a) exercisethe powersand dutiesof the Authority

specifiedin Article 31 of this Proclamation:(b) employ and administer the personnel of the

Authority in accordance with regulations ap-pt.;oved by the Board;

(c) prepare and submit to ~e Board the workprogramme and budget of, the' Authority andimplementsame'uponapproval;

(d) effect expenditure in accordance with thebudget approvedfor the Authority;

(e) represent the Authority in all its dealings withthird parties;

(f) prepare and submit to the Board reports on theperformance and financial operations of the.Authority.

3. The GeneralManagermay, to the extentnecessaryfor the efficientperformanceof the functionsof theAuthority,del,egatepart of his powersand duties toother officials as well as employees of theAuthority.

34. Source of FundsTheAuthorityshallreceiveits fundsfromthe followingsources:1). budgetaryallocationsmadeby the FederalGovern-

.ment; "

2) servicefees collectedby the FederalAuthority;3) income, assistance and grants obtained from any

other sources.

35. Transferof Rights and ObligationsThe rights and obligationsof the Investment Office ofEthiopia established under Proclamation No. 15/1992are hereby transferredto the Authority.

PART TENMiscellaneousProvisions

36. Allocation of Land1) Where a Regional Government receives an ap-

plicationfor the allocationof land for an approvedinvestment it shall, on the basis of Federal and itsown laws, deliver the required land to the investorwithin 60 days thereof.

,,.. fft lJ.U\ )~~+ ~u.tfJ fl'C f?; il1!li +'} Ii!fT~ ,.,.. . Federal Neg~t Gazeta - No. 25' 18111June 1996'- Page 187

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0) fhM h.'}iiilTOD'J"'"Jt;"'~T o..,."f'}~lAtIJ'}Cj.,...,QC f"tooAbi:T fh'P~ ck1'C !~/!jifit!!(~,}~"'ifirA) 1:1,;J1."T OhAIA ooil"'J;1:~TO"ttDm- ;,.-)T ~ilh"t .,.b-Cj httO h cP~ ,;JC~il"IA"':I"I.)'1:l.il.,.a"t~;t-=ftDo .e.+1'I\1A :;

2) Regional Govemwents ,;shall allocate land forc investment,actiyities~c:l.~~mit infonnation on

such all~ations to the ~ppt6'priafuinvestmentorgan. -

3) Regional GovernmentSshall, in ~theallOCationofland;"givepriority to,;ap\>rovedinvestInents.

4) The appropriatemvestment organ shall, incooperationwiqt the concerpedReg~onalGovern-

~.ment entt!ies, ~acil~~te and fqlJgw up .!heallocationof land for approved mvestmen~. '. ,

37. Employment of Expatriates' '~'.1) Any inye,stormay employ, in accordancewith the

law, duly qualified Seniorexpatriate experts andmanagersrequiredfor theoperationof hisbusiness;provided,however,thatbeforeexercisingthis righthe shall ascertain, by way of making ~ properannouncement, that Ethiopians with comparablequalificationsare not availabJ~..

2) An investor who employs expatriates,pursuant tosub-Article(1) of this Article, shall be responsiblefor replacing, within a limited period, such ex-patriatepersonnelby Ethi9piansand for arrangingthe necessarytrainingthereof.

38. ForeignNationalsTaken for Domestic Investors

1) Rights and privileges as well as restrictionssolelyrelatingto foreign investorsshall riot'beapplicableto a foreign nationalwho invests in Ethiopiabeingtaken for a domestic investor.

2) A foreign national intending to be taken for adomestic investorshall declaresameby filling in afonn designed for such purpose,by the Authority,and submit it together with his I:lpplicationforinvestmentpennit.

39. Duty to ProvideInfonnationAny executive organ of the Federal or of a RegionalGovernmentshallhave the duty to provide informationrelating to investment whenever so requested by theappropriateinvestmentorgan.

40. Repeal

1) The Encouragement,Expansion and CoordinationofInvestment ProclamationNo. 15/1992(as amen-ded) is hereby repealed.

2) No laws, regulations,directivesor practices incon-sistentwith this Proclamationshan have effectwithrespectto mattersprovidedfor inthis Proclamation.

41. TransitoryProvisions

1) Notwithstandingtheprovisionsof Article40 of thisProclamation:(a) The provisions of ProclamationNo. 15/1992

(as amended) pertaining to the powers andduties of regional investment offices shallremain in force, insofar as they are notinconsistent with this Proclamation, untilreplaced by laws to be issued by RegionalGovernments;

'A" ttt ~ '.,7~:" .,7""" +rc II aUIi +1 111ft -t.,.. FederalNegaritGazeta- No. 2S 18111June 1996 - Page 188

A) "., "..~ h-ri." O~+A"'~+JJ.A.'iin+-,.." O""~ +Pc 1~/IIII"'.Jt'i ,,~,AfIIJlWoA,.OGJm----~/",","""~+'f-r.;"'"""70l.?J="" "'U-I'i+ ~A .

I. O"'''~ +rc 11/11111".-",~+ "'o~;J-;P f-u'1'SqAUoft+RIf..,,,,,'!-'i "." ".,~ A"7taU.,.R-IGJlIJfDa~'oft -",~+ O-llamfDa "7R~;J-J="'10'+1. A-an hl.A1".,,). ".,qoft~AfDafA.'iin+""+-"'~1 0.+ R"7n;J-lD;r.f-oft." "'10.+-1A-.,., ,,"f'tA ..

(b) incentives provided for in Proclamation No.15/1992 and in directives issued thereundershalLremain.applicable.inrespect..of inv.est-ments approvedprior to the effective date ofthis Proclamation.

2) Where an investor, eligible for incentives underProclamation No. 15/1992, opts instead to be abeneficiary of incentives provided for in- thisProclamation and in regulations. to be issuedhereunder,he may so notifythe appropriateinvest-ment organ andbecome entitled thereby.

'1. ~ f"'U'iO+ 1.JI.

1

42. EffectiveDate"., "'.,~ hla~!J +1-11111"1't.,..,.,...: fA'i "1I''iA. ThisProclamationshallcomeintoforceas of the 18*

I dayofJune,1996."...n 1\Oqla~Ii +11il...1 't.,..

p./C 'i;Jt\ 1..-s.-s

fA.+r-1t1 ~'£ "''''h~f8.1'£ ~ToftA.hT~M'+

Done at Addis Ababa, this 18*day of June, 1996.

NEGASO GIDADA (DR.)

PRESIDENT OF THE FEDERAL DEMOCRATICREPUBUC OF ETHIOPIA

1K"f'i"DU.t-A ~;J~+ ;J1111J4cTCI?; .u Ili"" IDffl't.,... FederalNegarit Gazeta-No. 25 18th1une1996-Page 189

~m~YIW1C ID-h.,f1AV"""'~ f.,.hAI\- fJP~ ouhta~

I i. f~f"i f-l:"'ii.Y1 JPC1.I'~A1A1A-~ II I- f~C'=~ 't1Y:ti f~Ae\ JP~ i

f- f~e\ 't1~ (VID-1.I'f1AV"""'~ Oll1C ID-h., 1-~1:~'t 1) Radio and television broadcastipg services;

ouNfl it~lafDC) I 2) Retail trade and brokerage;i- f1n. 't1~ i 3) Wholesaletrade (excludingthe saleby foreign investors~- ...~ n-'i' V;r.f1~MJA-~' ...~...~. "4'i "'II' "'tJl.,U.fD of their products produced locally)

A.'to'h«- ~ "~f1:fcD- lIJ~fD itMf1:fcD- Oh.,.".C 4) Import trade;Oo)~. ~fA-~'i f"''t~ h"""'~ O'llfD 1IJf-ID-1.I' 5) Export trade of raw coffee, oilseeds, pulses, hides and-e\hI skins and live sheep, goats and cattle not raised or

I- Of-a A't~ hDIJ.OUf-n-~Oh.,.".C Vta'th""~h1i't JP~ fattenedon own farm;.

- .,.:1:~1.1'~"" I 6) ConstnJction companies excluding grade 1 contractors;1-- "4'i "'II' "hh h~h~ f-~)I'"7A~"" I 7) Tanning of hides and skins up to crust level.~- ff1Atah"" U)l'9'~ f'07~Q.1.fD~1f-l:A-~ f ""-I:A-~ f ..' .

nlt.f"'r~ . 7(~ n..,.~ f n-'i n..,.~ OUm" n..,.~ f 8) Hotels other than star desIgnated, motels, pensIOnsffD1i~ hOfl~ . ~AfDA"'~'e ~If~ "e\:fcD-'iO"'1IJ8U tearooms,coffee shops,bars, night clubs and restaurantsA1C, , AIf1)1'~""h"t;J-IIJ'II~ Oh.,.".C"'A-~""""" excludingintemaionaland specializedrestaurants;n..,.~ I 9) Tour operation, travel agency, commissionagency and

Ii- Mho) ,."" A1A1A-~ . ,...,. IIJh.A-;~ . t'taDIJ.lt.M ticket offices;IIJh.A-;~'i f1:h.~ ouN19'~ I 10) Car hire and taxi-cabtransport;

1- ooh.'i Mh~f~'i V;l-hlt.A1A1A-~ I 11) Commercialroad transport and inland water transportIli- f0D't1Y: n1Y: ~~'ti8rC~- A1A?A-~'i fV1C ID-h., service.s;

ID-'/e\~ ~~'ti8rC~ A1A1A-~ i i12) ;JJakeryproductsandpastriesexclusivelyfor thedomes-II- AlI1C ID-h., 101 ,= VDIJ."'Cn-f4f1'it'h.h 0.+ (~ . ticmarket;

fDC"'~i \ 13) Grinding mills for grains;

If- IIJ~~ n..,.~ I 14) Barber shops, beauty saloons, goldsmith shops andIi- ilK ",h.,."hA f f'll")~'i itA-") f fA't...~~-;~ JP~'i tailoring excluding garmentfactories;

04o-fM"f-a M~"~Y: fA h h4t.~ i 15) B ild. .

te. .

d.

teu mg mam nanceservIces repatran mam nanceI?;- Va.'t, l.Y:it~'i fOUh.'i'r1'i A1A1A-~I . . '11. f7-'tQ.1.~ ou{t'tm-tI'i ftIJlD-e\JP~9'~ f l.'tJl.,U.fD of vehicles;- AlI1C ID-h., 101 ,= f"7."'Cn- f7-'t"'-T JP~ 16) Sawmilling, slicing,pealingandchoppingoflogs, and

ID-m."'~ "7fD~""I manufactureof wood products exclusivelyfor theIi- f"'fD~h Ah"'e\e\4L-;~ JP~ I domestic market;I~. ftJOellffDf f1:1:J:oC'if8\t"7 "7"f~ A1A1d-~ I 17) Customsclearanceservice;Iu- fihTOU~ JP~ s: 18) Museums, theatresand cinemahalls operation;

19) Printing industry.

SCHEDULEAreas of InvestmentReserved

for DomesticInvestors