Guarantees to Investors

Guarantees to Investors

Ethiopia provides the following guarantees to foreign investors

1.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.

2.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. Where such expropriations are made, the government guarantees to provide adequate compensation corresponding to the prevailing market value of property, and such payment shall be effected promptly.

3.Other Guarantees

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/

Market Access

Domestic Market

With a population of about 67 million, Ethiopia provides a steady and growing domestic market, which is one of the largest in Africa.

Regional Market

Ethiopia is a member of the Common Market for Eastern and Southern Africa (COMESA) agreement embracing 20 countries in Eastern and Southern Africa with a population of approximately 353 million. Exports and imports with member countries enjoy preferential tariff rates.

Everything but Arms of the European Union (EBA)

Ethiopia is a beneficiary of Everything but Arms (EBA) of the European Union. Hence, all Ethiopian export products, except arms, can enter the European Union market free of duty and without quota restriction.

African Growth and Opportunity Act (AGOA) and the Generalized System of Preference (GSP)

Under the African Growth and Opportunity Act (AGOA) program, Ethiopia is entitled to duty-free and quota-free U.S. market access. Ethiopia had already been eligible for duty and quota free treatment for its wide range of manufactured products in many countries including the U.S., Canada, Japan, Australia and most European Union countries under the Generalized System of Preference (GSP) program. Under the African Growth and Opportunity Act (AGOA), however, essentially all export products of Ethiopia are eligible for duty-free and quota-free U.S. market access.