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.
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