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Proclamation No. 280/2002
Re-Enactment of the
Investment Proclamation

  WHEREAS, the encouragement and promotion of investment has become necessary so as to accelerate the economic development of the country and to improve the living standards of its people;

WHEREAS, in addition to that of domestic investors, it is deemed essential to widen the scope of participation of foreign investors and to facilitate conditions thereof with a view to enhancing the country's investment activities;

WHEREAS, the system of administration of investment needs to be transparent and efficient;

WHEREAS, to these ends, it has become necessary to revise the existing law on investment;

NOW, THEREFORE, in accordance with Article 55 (1) of the Constitution of the Federal Democratic Republic of Ethiopia, it is hereby proclaimed as follows:


1. Short Title
This Proclamation may be cited a the "Investment Proclamation No. 280/2002."
2. Definitions
In this Proclamation, unless the context requires otherwise:
1) "Investment" means expenditure of capital by an investor to
establish a new enterprise or to expand or upgrade one that already
2) "Enterprise" means an undertaking established for purposes of
gaining profit;
3) "Capital" means local or foreign currency, negotiable instruments, machinery or equipment, buildings, initial working capital, property rights, patent rights, or other business assets;
4) "Investor" means a domestic or foreign investor having invested in
5) "Domestic Investor" means an Ethiopian or a foreign national
permanently residing in Ethiopia having made an investment, and
includes the Government, public enterprises as well as a foreign,
national, Ethiopian by birth and desiring to be considered as a
domestic investor;
6) "Foreign Investor" means a foreign or an enterprise owned by foreign nationals, having invested foreign capital in Ethiopia, and includes an Ethiopian permanently residing abroad and preferring treatment as a foreign investor;
7) "Foreign Capital" means capital obtained from foreign sources, and includes the re-invested profits and dividends of a foreign investor;
8) "Expansion/upgrading" means increasing in value, by more than 25%, the full production or service capacity of an existing enterprise, be it in variety, volume, or both, through additional investment made to the extent determined in regulations to be issued for the implementation of this Proclamation;
9) "Appropriate Investment Organ" means the Ethiopian Investment Authority, (hereafter referred to as the "Authority"), established under this Proclamation or the executive organ of a Region empowered to issue investment permits;
10) "Public Enterprise" means an undertaking, wholly owned by the Federal
or Regional government established to carry out manufacturing,
distribution, service rendering or other economic and related activities for
11) "Government" means the Federal Government or a Regional
12) "Region" means any of those specified under Article 47 (1) of the
Constitution of the Federal Democratic Republic of Ethiopia and for the
purpose of this Proclamation, includes Addis Ababa City Administration
and the Dire Dawa Administrative Council;
13) The phrase "export-oriented non-equity based foreign enterprise
collaboration" means a 100% export-oriented contractual arrangement
between a domestic investor and foreign enterprise in which the foreign
enterprise provides, among others, all or some of the following:
(a) guaranteed external market access;
(b) export product and production know-how;
(c) export marketing know-how;
(d) export business management know-how;
(e) raw materials and intermediate inputs needed for export

3. Scope of Application
The provisions of this Proclamation shall not be applicable to investments
in the prospecting, exploration and development of minerals and petroleum

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