PROCLAMATION NO. 375/2003 A PROCLAMATION TO AMEND THE INVESTMENT REENACTMENT PROCLAMATION NO. 280/2002


PROCLAMATION NO. 375/2003

A PROCLAMATION TO AMEND THE INVESTMENT

REENACTMENT PROCLAMATION NO. 280/2002

 

 

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

 

            WHEREAS, to this end, it has become necessary to amend the existing law on investments;

 

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 as the “Investment (Amendment) Proclamation No. 375/2003.”

 

2.                  Renaming

 

The Ethiopian Investment Authority, which has been re-established under Proclamation No.280/2002, is hereby renamed as the Ethiopian Investment Commission.

 

3.                  Amendment

 

The Investment Proclamation No.280/2002, is hereby amended as follows:

 

1/   Article 2 Sub-Articles (8) and (9)of the Proclamation are deleted and replaced by the following new Sub-Article (8) and (9).

 

“8. “Expansion /upgrading” means increasing in value, by more than 25%, the full production of service capacity of an existing enterprise, be it in variety, volume, or both.

 

“9. “Appropriate Investment Organ” means the Ethiopian Investment commission, (hereinafter referred to as the “Commission”), or the executive organ of a region empowered to issue investment permits.”

 

2/   The following new Sub-Article (14) is added under Article 2 of the proclamation.

 

“14.     “Transfer of technology” means the transfer of systematic knowledge for the manufacture of a product, for the application of improvement of a process or for the rendering of a service, including management and marketing technologies, but shall not extend to transactions involving the mere sale or lease of goods.”

 

3/   The following new item (c) is added under Article 5 Sub-Article (1) of the Proclamation.

 

“c.        Air transport services using aircraft with a seating capacity of more than 20 passengers.”

 

4/   Article 12 Sub-Article (2) of the Proclamation is deleted and replaced by the following new Sub-Article (2).

 

“2.       Notwithstanding the provision of Sub-Article (1) of this Article, a foreign investor intending to buy an existing enterprise in order to operate it as it stands or to buy shares of an existing enterprise shall obtain prior approval from the Ministry of Trade and Industry.”

 

5/   The following new Sub-Article (3) is added under Article 12 of the Proclamation and the previous Sub-Article (3) is renumbered as Sub-Article (4)

 

“3        Upon receipt of an application made in accordance with sub-Article (2) of this Article, the Ministry of Trade and Industry shall, after examining the matter in light of the relevant laws within two working days:

 

a)      register the share transfer or replace the business license upon receipt of the appropriate fee, where the application is found acceptable; or

 

b)      notify to the investor its decision and the reason thereof in writing, where the application is found unacceptable.”

 

6/   Article 13 of the Proclamation is deleted and replaced by the following new Articles 13,14 and 15. Accordingly, Articles 14-38 of the Proclamation are renumbered as Articles 16-40, respectively.

 

 

 

“13.  Application for Investment Permit by a Domestic Investor.

 

1/     An application for investment permit by a domestic investor shall be made in a form designed for such purpose and submitted to the appropriate investment organ together with the following documents:

 

a)      Where the application is signed by an agent, a photocopy of his power of attorney;

 

b)      Where the investment is to be made by an individual person, a photocopy of his identity card, or a photocopy of the certificate evidencing his domestic investor status and his recent two passport size photographs;

 

c)      Where the investment is to be made by a business organization, photocopies of its memorandum of association and articles of association; or where the business organization is to be newly established, in addition, it shall submit photocopies of the shareholders’ identity cards or photocopies of certificates evidencing there domestic investor status;

 

d)     Where the investment is to be made by a public enterprise, a photocopy of the Regulations under which it is established or a photocopy of its memorandum of association and Articles of association; and

 

e)      Where the investment is to be made by a cooperative society, a photocopy of its Articles of association.

 

2/         The application form and documents stipulate under sub-Article (1) of this Article shall be made:

 

a)      in two copies, where they are to be submitted to the Commission; or

 

b)      in one copy, where they are to be submitted to Regional Investment Organs.”

 

“14.  Application for Investment Permit by a Foreign Investor

 

Application for Investment Permit by a Foreign Investor shall be made in a form designed for such purpose and submitted to the commission together with the following documents in two copies:

 

a)          Where the application is signed by an agent, a photocopy of his power of attorney;

 

b)          Where the investment is to be made by an individual person, a photocopy of the pages of a valid passport showing his identity and his recent two passport size photographs;

 

c)          Where the investment is to be made by a business organization incorporated in Ethiopia, photocopies of its memorandum of association and Articles of association; or where it is to be newly established, in addition, it shall submit photocopies of the pages of a valid passport of each shareholder showing his identity;

d)         Where the investment is to be made by a branch of a foreign business organization in Ethiopia, photocopies of its memorandum of association and Articles of association or a similar document of the parent company; and

 

e)          Where it is a joint investment by domestic and foreign investors, in addition to the documents provided under (c) above, photocopies of identity cards or photocopies of certificates evidencing the domestic investor status of the domestic investors, as the case may be.”

 

“15.  Application for Investment Permit for Expansion of Upgrading.

 

1/         An application for investment permit to expand or upgrade an existing enterprise shall be made in a form designed for such purpose and submitted to the appropriate Investment Organ together with the following documents:

 

a)      Where the application is signed by an agent, a photocopy of his power of attorney;

 

b)      Where the investment is made by a business organization, photocopies of its memorandum of association and Articles of association; and

 

c)      Photocopy of a valid business license of the existing enterprise.

 

2/         The application form and documents stipulated under sub-Article (1) of this Article shall be made:

 

a)      in two copies, where they are to be submitted to the Commission; or

 

b)      in one copy, where they are to be submitted to Regional Investment Organs.”

 

7/         Article 14 Sub-Article (1) of the Proclamation is deleted and replaced by the following new sub-Article (1). Besides, the following new Sub-Article (2) is added and Sub-Articles (2) up to (5) are renumbered as Sub –Articles (3) up to (6) respectively.

 

“1.       Upon receipt of an application made in accordance with Article 13, 14 or 15 of this Proclamation, the appropriate investment organ shall, after examining the intended investment activity in light of the Proclamation, Regulations and directives issued thereunder within five working days:

 

a)      issue the investment permit upon receipt of the appropriate fee, where the application is found acceptable; or

 

b)      notify to the investor its decision and the reason thereof in writing, where the application is found unacceptable.

 

2/   The appropriate Investment Organ shall, after issuing the investment permit, notify the concerned government institutions so that the latter could conduct the necessary follow up.”

 

8/         The following new item (e) is added under Article 16 Sub-Article (2) of the Proclamation.

 

“e. If the investor is found engaged in a commercial activity without obtaining a business license.”

 

9/         Article 18 of the Proclamation is deleted and replaced by the following new Article 20.

 

“20.  Technology Transfer Agreement

 

1/         Where an investor concludes a technology transfer agreement related to his investment, he shall submit the same to the commission for approval and registration.

 

2/         Upon receipt of an application for registration as per sub-Article (1) of this Article, the Commission shall issue the registration certificate within two working days.

 

3/         A technology transfer agreement which is not registered in accordance with this Article shall have no legal effect.”

 

10/       Article 23 Sub-Article 1(b) of the Proclamation is deleted and replaced by the following new item (b)

 

“b.       Investment made by a foreign national permanently residing in Ethiopia taken for a domestic investor”

 

11/       The following new Sub-Article (2) is added under Article 23 of the Proclamation and the previous Sub-Articles (2) and (3) are renumbered as Sub-Articles (3) and (4) respectively. In addition, the previous sub-Article (4) of this Article is deleted.

 

“2.       Notwithstanding the provision of Sub-Article (1) of this Article, the issuance, renewal and cancellation of investment permits for air transport services and for generation or transmission or supply of electrical energy shall be carried out by the Ethiopian Civil Aviation Authority and the Ethiopian Electric Agency respectively, representing the Commission.”

 

12/       Article 24 Sub-Articles (1) and (4) of the Proclamation are deleted and replaced by the following new Sub-Article (1) and (4) respectively.

 

“1.       The Commission or Regional Investment Organs shall provide the following services, as required under the relevant laws, to investors they have given investment permits, representing the competent Federal or Regional executive bodies, as appropriate:

 

a)      notarization of memorandum of association and Articles of association;

 

b)      effecting commercial registration;

 

c)      issuance of work permits to expatriate employees;

 

d)     grading of construction contractors; and

 

e)      issuance of business licenses.”

 

“4. Upon receipt of an application for a business license in accordance with sub-Article (1) (e) of this Article, the appropriate investment organ shall, after examining the mater in light of the relevant laws within five working days:

 

a)      issue the business license upon receipt of the application fee, where the application is found acceptable; or

 

b)      notify to the investor its decision and the reason thereof in writing,

 

Where the application is found unacceptable.”

 

13/       The following new sub-Articles (5),(6),(7) and (8) are added under Article 24 of the Proclamation.

 

“5.       Notwithstanding the provision of Article 22 Sub-Article (2) (a) of Commercial Registration and Business Licensing Proclamation No. 67/1997, the appropriate investment organ shall issue the business license upon signing, by the investor, of an undertaking to respect the relevant laws of the land.

 

6.         Notwithstanding the provision of Sub-Article (1) of this Article, the Commission shall issue business licenses representing only the Ministry of Trade and Industry.

 

7.         Notwithstanding the provision of Sub-Article (1) of this Article, amendments, renewal, replacement or cancellation to be made in relation to documents stated therein shall be effected by the relevant Federal or Regional executive bodies.

 

8.         The appropriate Investment Organ shall, after rendering the services listed under Sub-Article (1) of this Article, notify the concerned government institutions so that the later could conduct the necessary follow up.”

 

14/       Article 30 item number (9) of the Proclamation is deleted and replaced by the following new item number (9).

 

“9. approve and register technology transfer agreements related to investments;”

 

15/       Article 31 of the Proclamation is deleted and replaced by the following new Article 33.

“33.  Organization of the commission

 

The Commission shall have:

 

a)                  a Commissioner to be appointed by the Government; and

 

b)                  the necessary staff.”

 

16/       Article 37 Sub-Article (2) of the Proclamation is deleted and replaced by the following new Sub-Article (2)

 

“2. A foreign national permanently residing in Ethiopia to be taken for a domestic investor shall fill a form designed for such purpose and submit it together with the following documents to the commission:

 

a)                  where the application is signed by an agent, his power of attorney;

 

b)                  a photocopy of his valid business license;

 

c)                  a photocopy of his principal registration certificate;

 

d)                 a photocopy of his valid residence permit;

 

e)                  where the business license is that of a business organization,  photocopies of its memorandum of association and Articles of association;

 

f)                   where the applicant is dependent or heir of a person taken for a domestic investor or otherwise eligible for the status, in addition to the above mentioned documents pertaining to the supporting person or the deceased, a  photocopy of the dependent’s valid residence permit or a court decision declaring his status as an heir; and

 

g)                  his recent three passport size photographs.”

 

17/       The following new Article 41 is added. Accordingly, Articles 39-42 of the Proclamation are renumbered as Articles 42-45, respectively.

 

“41. Power Delegated to the Ethiopian Civil Aviation Authority and the Ethiopian Electric Agency.

 

The Ethiopian Civil Aviation Authority and the Ethiopian Electric Agency shall:

 

a)      carry out functions pertaining to issuance of investment permits delegated to them under Article 25 Sub-Article (2) in compliance with this Proclamation and Regulations and directives issued thereunder.

 

b)      forward to the Commission photocopies of the investment permits they issued and the relevant documents.”

 

4.                  Power to Issue Regulations

 

The Council of Ministers may issue Regulations to amend the list documents stipulated under Articles 13,14,15 and 37 of this Proclamation.

 

5.                  Repealed Law

 

Transfer of Technology Council of Ministers Regulations No. 121/1993 is hereby repealed.

 

 

 

 

6.                  Effective Date

 

                  This Proclamation shall enter into force as of the 28th day of October, 2003.

 

Done at Addis Ababa, this 28th day of October, 2003.

 

GIRMA WOLDEGIORGIS

 

PRESIDENT OF THE FEDERAL

DEMOCRATIC REPUBLIC OF ETHIOPIA

 

 

 

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One response

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