Category Archives: Investment

New Proclamations and Regulations 2013/14


Proclamations

Proclamation No. 808/2013 Information Network Security Agency Re-establishment Proclamation DOWNLOAD

Proclamation No. 810/2013 Energy Proclamation DOWNLOAD

Proclamation No. 811/2013 Trucks Demurrage Proclamation DOWNLOAD

Proclamation No. 812/2013 Export – Import Bank of China Loan Agreement Periods Additional Loan for Addis Ababa Adama Toll Motorway Design and Build and a Loan for Addis Ababa Toll Motorway Phase II Project Ratification Proclamation DOWNLOAD

Proclamation No. 815/2013 Bilateral Air Service Agreement Between the Government of the Federal Democratic Republic of Ethiopia and the Government of the Republic of Senegal Ratification Proclamation DOWNLOAD

Proclamation No. 818/2014  Urban Land Registration Proclamation DOWNLOAD
Proclamation 823/2014 International Development Association Financing Agreement for Financing the Second General Education Improvement Project II, Ratification Proclamation DOWNLOAD

Proclamation 824/2014 International Development Association Financing Agreement for Financing the Sustainable Land Management Project II , Ratification Proclamation DOWNLOAD

 

Regulations

 

Regulation No. 298/2013 Public Service Employee’s Transport Service Enterprise Establishment Council of Ministers Regulation DOWNLOAD

Regulation No. 299/2013 Food, Medicine and Health Care Administration and Control Council of Ministers Regulation DOWNLOAD

Regulation No. 300/2013 Insurance Fund Administration Agency Establishment Council of Ministers Regulation DOWNLOAD

Regulation No. 301/20 13 Ethiopian Public Health Institute Establishment Council of Ministers Regulation DOWNLOAD

Regulation No. 302/2013 Ethiopian Electric Power Establishment Council of Ministers Regulation DOWNLOAD

Regulation No. 303/2013 Ethiopian Electric Utility Establishment Council of Ministers Regulation DOWNLOAD

 

Capital Goods Leasing Business (Amendment) Proclamation No. 807/2013


PROCLAMATION No. 807/2013

PROCLAMATION TO AMEND THE CAPITAL GOODS LEASING BUSINESS PROCLAMATION

WHEREAS, it has became necessary to amend the Capital Goods Leasing Business Proclamation No.103/ 1998;

NOW, THEREFORE, in accordance with Article55 (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 “Capital Goods Leasing Business (Amendment) Proclamation No. 807/2013″.

2. Amendment

The Capital Goods Leasing Business Proclamation No. 103/ 1998 is hereby amended as follows:

DOWNLOAD FULL TEXT

Following the issuance of the new amendment the National Bank of Ethiopia has issued two directives for its implementation.

Clink the links below to download.

  • LICENSING AND SUPERVISION OF THE BUSINESS OF CAPITAL GOODS FINANCE COMPANIES

Requirements for Licensing of Capital Goods Finance Business Directives No. CGFB /02/ 2013    DOWNLOAD

  • LICENSING AND SUPERVISION OF THE BUSINESS OF CAPITAL GOODS FINANCE COMPANIES

Minimum Paid Up Capital Requirement Directives No.CGFB /01/ 2013      DOWNLOAD

Investment Incentives and Investment Areas Reserved for Domestic Investors Council of Ministers Regulation No. 270-2012


COUNCIL OF MINISTERS REGULATION No. 270/2012         DOWNLOAD (.pdf)

COUNCIL OF MINISTERS REGULATION ON INVESTMENT INCENTIVES AND INVESTMENT AREAS RESERVED FOR DOMESTIC INVESTORS

This Regulation is issued by the Council of Ministers Pursuant to Article 5 of the Definition of Powers and Duties of the Executive Organs of the Federal Democratic Republic of Ethiopia Proclamation No. 691/2010 and Article 39 of the Investment Proclamation No.769/2012.

PART ONE GENERAL

1. Short Title

This Regulation may be cited as the “Investment Incentives and Investment Areas Reserved for Domestic Investors Council of Ministers Regulation No. 270/2012″.

2. Definitions
In this Regulation unless the context otherwise requires:

1/ “Proclamation” means the Investment Proclamation No. 769/2012;

2/ the definitions provided for in Article 2 of the Proclamation shall also apply to this Regulation;

3/ “Agency” means the Ethiopian Investment Agency re-established under the Council of Ministers Regulation No. 269/2012;

4/”Board” means the Investment Board referred to in

Article 6(1) of the Council of Ministers Regulation No. 269/2012;

5/”capital goods” means machinery, equipment and their accessories needed to produce goods or render services and include workshop and laboratory machinery and equipment necessary for same;

6/ “construction material” includes basic inputs necessary for the construction of investment projects;

7/ “customs duty” includes indirect taxes levied on imported goods;

8/ “income tax” means tax levied on profits from business and categorized as the revenue of the federal government, regional governments or as their joint revenue.

3. Investment Areas Reserved for Domestic Investors
1/ The following areas of investment are exclusively reserved for Ethiopian nationals:

a) banking, insurance and micro-credit and saving services;

b) packaging, forwarding and shipping agency services;

c) broadcasting service;

d) mass media services;

e) attorney and legal consultancy services;

f) preparation of indigenous traditional medicines;

g) advertisement, promotion and translation works;

h) air transport services using aircraft with a seating capacity up to 50 passengers.

2/ For the purpose of sub-article (1) of this Article, a business organization may have Ethiopian nationality, provided that its total capital is owned by Ethiopian nationals.

4. Investment Areas Allowed for Foreign Investors

1/A foreign investor shall be allowed to invest in areas of investment specified in the Schedule attached hereto, except those areas provided for in number 1.3.3, 1.4.2, 1.7, 1.11.3, 1.11.4, 5.3, 6.2, 8.2,9.2,9.3 and 12 of the Schedule.

2/ Notwithstanding the provisions of sub-article (1) of this Article, the Board may allow foreign investors to invest in areas other than those specified in the Schedule, except those areas provided for in Article 6 (1) and (2) of the Proclamation and Article 3(1) of this Regulation.

3/ A foreign investor who invests pursuant to sub-article (1) or (2) of this Article may acquire a private commercial road transport vehicle necessary for his business operations. Continue reading →

Proclamation No.769/2012 Investment Proclamation


Related posts

Advertisement Proclamation No. 759/2012

Proclamation No.760/2012 Registration of Vital Events and National Identity Card Proclamation

Proclamation No.769/2012 Investment Proclamation

DOWNLOAD (pdf)

Preamble

PART ONE GENERAL

PART TWO INVESTMENT OBJECTIVES AND AREAS OF INVESTMENT

PART THREE FORMS OF INVESTMENT AND CAPITAL REQUIREMENT FOR FOREIGN INVESTORS

PART FOUR INVESTMENT PERMIT

PART FIVE REGISTRATION OF TECHNOLOGY TRANSFER AND COLLABORATION AGREEMENTS WITH DOMESTIC INVESTORS

PART SIX INVESTMENT INCENTIVES GUARANTEES AND PROTECTION

PART SEVEN INVESTMENT ADMINISTRATION

PART EIGHT INDUSTRIAL DEVELOPMENT ZONE

PART NINE MISCELLANEOUS PROVISIONS

Pages: 1 2 3 4 5 6 7 8 9 10 11

The New Urban Lands Lease Holding Proclamation No. 721 /2011 (Published on Negarit Gazetta)


URBAN LAND LEASE PROCLAMATIONS No. 721 –2011 (DOWNLOAD  pdf)

New Land lease Proclamation No. 721 –2011

Federal Negarit Gazeta No.4 28th November, 2011

18th Year No.4

Addis Ababa 28th November, 2011

                            Proclamation No. 721/2011

A PROCLAMATION TO PROVIDE FOR LEASE HOLDING OF URBAN LANDS

Short title: Urban Lands Lease Holding Proclamation No. 721 /2011.

 

URBAN LAND LEASE PROCLAMATIONS No. 721 –2011 (DOWNLOAD  pdf)

Click on the above link, which will take you to the file attachment page

DRAFT PROCLAMATION TO PROVIDE FOR ADVERTISEMENT


The Ethiopian Broadcasting Authority has prepared a draft proclamation to govern the advertising business. The draft has been presented to stakeholders for discussion. The draft contains 38 articles. The draft requires any person who wants to engage in advertising activity to obtain an advertising business license. The contents of any advertisement must comply with the conditions laid down by the draft. Accordingly, any advertisement transmitted through the use of means of advertising dissemination or transmission shall be truthful, free from any unlawful, immoral, misleading and unfair content or presentation that may harm consumers. Advertisement which exposes the physical and mental health of the people to harm and which does not respect the social and traditional value of the society or does not protect the legitimate rights of the public is prohibited. Unlike most of the other proclamations issued by the parliament, violation of miscellaneous provisions of the draft proclamation does not entail severe penalty. Maximum penalty to be imposed for violation is fine not less than Birr 10,000 (ten thousand Birr)

The following is the text of the draft proclamation prepared by the Authority. Download the pdf file for full version.

DOWNLOAD Draft Advertisement proclamation (pdf)

PROCLAMATION No. ________/2011

Advertising Proclamation (Draft)

PROCLAMATION No._____/2011

A PROCLAMATION TO PROVIDE FOR ADVERTISEMENT

WHEREAS, advertisement plays a significant role in the political, economic and social development of the country by determining the activities of the public in marketing exchange and services rendering;

WHEREAS, advertisement plays a significant role in establishing healthy market competition in which it relates to the market-led economic system of the country;

WHEREAS, apart from protecting the development of the sector, the existence of advertisement law can help to protect the rights and benefits of the people and the dignity and benefits of the country;

WHEREAS, because of the advertising agent, advertisement publishers and advertisers are required to undertake their tasks in proper manner with respect to the principles of advertising, it has been found essential to clearly define the rights and obligations of persons who undertake advertisement services;

WHEREAS, to these ends, it has been found essential to issue a law that governs advertisement activities;

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

PART ONE

GENERAL PROVISIONS

1. Short Title

This Proclamation may be cited as the “Advertising Proclamation No._____/2011”.

2. Definition

In this Proclamation, unless the context requires otherwise:

1/ “Advertisement” means a message which is transmitted to publicize or promote sales of goods and services, name, logo, trademark, objectives or other related message.

2/ “The means of advertising dissemination or transmission” means that uses for advertising dissemination or transmission and that includes Advertisement through mass media, outdoor advertisement, telecommunication, postal, internet and fax services, cinema, film, video or any other related means of advertising dissemination or transmission.

3/ “Public Advertisement” means a message transmitted by a non-profitable organization or any institution that provides services to the public that transmits message for the purpose of charity, the benefit of the public, to educate or inform the public, or to request the cooperation of the public.

4/ “Advertising Activity” means engagement in an activity related to choosing media or means of advertisement, planning, designing, by assess the market rendering sales and promotion services, produce and publish advertisements and undertaking any activity related to advertisement activities.

5/ “Advertising Agent” refers to a person who is assigned by advertiser or advertising publisher that is engaged in an activity related to choosing media or means of advertisement, planning, preparing, by assess of the market rendering sales and promotion services, disseminating promotional materials or undertaking any activity related to advertisement activities.

6/ “Advertisement Publisher” refers to a person that disseminate or transmit advertisement through the use of means of advertising dissemination or transmission by providing transmission time, printing coverage or other related services.

7/ “Advertiser” refers to a person to whom a message is transmitted to publicize and promote his sales of goods and services, name, logo, trademark, objectives or other related message through the use of means of advertising dissemination or transmission.

8/ “Mass Media” means printed matter that includes periodical and broadcasting services.

9/ “Periodical” means printed material which is scheduled to appear in regular sequences of at least twice a year, which has a fixed title and which has a general distribution aimed at the entire public or a section thereof, and includes newspapers and magazines; and for the purpose of the execution of this proclamation, it shall include advertisement book, yellow page and telephone directory.

10/ “Broadcasting Service” means a radio or television transmission program conducted to educate, inform, entertain the public and disseminate or transmit advertisement.

11/ “Outdoor Advertisement” means any advertisement transmitted by utilizing outdoor advertisement board hanged up on a pole or planted things or a stand, billboard, electronics screen, moving picture, written on a wall, advertisement either hanged, erected or affixed to on planted things, building or vehicle, banner, poster, sticker, plastic card, leaflets, brochure or flier, packaging, sound, audio cassette, microphone and other related means of advertising dissemination or transmission.

12/ “Outdoor Advertisement Service” means an advertisement which a person undertakes to announce products, services, name, logo, trademark, objectives or any related message by utilizing the advertisement media listed in Sub-Article (11) of Article 2 of this Proclamation.

13/ “Sponsored Program or Print” means a program or print the transmission cost of which is paid directly or indirectly or the payment of which is promised or the material, intellectual property or any service of which is provided as a support or cooperate.

14/ “Sponsor” means a person who supports or cooperates with an organizer of a program by providing financial, material, intellectual property or other service to a program or print of another person with the aim of promoting his own or another person’s product, services, name, logo, trademark, objectives or other related messages.

15/ “Infomercial”  means an advertisement enduring more than two minutes including teleshopping, home shopping, direct marketing and direct sales, which is transmitted through television broadcasting  service after being prepared as a program format to promote the products or services of the contracting party who agreed to pay to the broadcaster for such service and it does not include Public Advertisement.

16/ “Inserted Advertisement” means an advertisement inserted in a form of sound or image to promote the products or services of any person from whom the broadcaster has earned money or obtained benefit.

17/ “Split-Screen Advertisement” means an advertisement shown adjacent to a program disseminated by television, video or film screen.

18/ “Counter Advertisement” means an advertisement transmitted to correct wrong public opinion created by previously transmitted advertisement in contradiction to the law and ethics of the profession and thereof to protect and ensure the legal benefits of the victim of such violation.

19/ “Program” means voice or visual or audiovisual arrangement transmitted to inform, educate or entertain the public or an all inclusive transmission program and it includes news.

20/ “News and Current Affairs” means news, documentary, feature or analysis transmitted through mass media about any regional, national or international event which has current political, economical or social relevance.

21/ “Daily Transmission Time” means the broadcasting service transmission in the 24 hours starting from 6 hour in the morning.

22/ “Lottery” means any game or activity in which the prize winner is determined by chance, drawing of lots or by any other means and includes tombola or raffle, lotto, Toto, instant lottery, number lottery, multiple prize lottery, promotional lottery, bingo, sport betting lottery and other similar activities.

23/ “Appropriate Governmental Body” means federal or regional governmental body to which the responsibility is legally vested to execute the provisions of this proclamation.

24/ “Regional State” means any of the regional states specified under Sub Article 1 of Article 47 of the Constitution of the Federal Democratic Republic of Ethiopia, and shall, for the purpose of this Proclamation, includes the Addis Ababa and Dire Dawa City Administration.

25/ “Authority” means the Ethiopian Broadcasting Authority.

26/ “Person” means a physical or juridical person.

3. Scope of Application

This Proclamation shall be applicable to:

1/ Any advertising agent, advertisement publisher and advertisers engaged in advertising activities within the territory of Ethiopia; and

2/ Any advertisement prepared and transmitted in Ethiopia through mass media, outdoor advertisement, telecommunication,  postal and internet service, fax transmission, moving picture, sound, audio-cassette, film or video and advertisement transmitted by an organization established in Ethiopia or a person who reside in Ethiopia through the internet service which is designed in Ethiopia or internet website designed out of Ethiopia.

3/ A foreign mass media from abroad or transmitting in Ethiopia which focus primarily on domestic issues and which have been produced primarily for local audiences.

DOWNLOAD Draft Advertisement proclamation (pdf)

Ethiopian Investment Laws


Investment Proclamations
Proc No. 37-1996 Investment  Proclamation

Proc No. 116-1998 Investment Proclamation (Amendment) 
Proc No. 168-1999 Investment Proclamation (Amendment)   

Proc No. 280-2002 Investment  Proclamation

Proc No. 375-2003 Investment Proclamation (Amendment

Export trade and capital goods leasing business

Proc No 543 2007 The Revised Export Trade  Duty Incentive Scheme Establishing  Proclamation 
Proc No. 103-1998 Capital Goods Leasing Business Proclamation

Bilateral agreements
Proc No. 70-1997 The Investment Promotion and Protection Agreement with the State of Kuwait Ratification

proclamationProc No. 324-2003 A Proclamation to Ratify the Investment Incentive Agreement between the Government of theFederal Democratic Republic of Ethiopia and the Government of the United States of America

Proc No. 404-2004Investment Encouragement and Reciprocal Protection Treaty with the Federal Republic of Germany Ratification
Proc No. 405-2004 Investment Reciprocal Encouragement and Protection Agreement with the Government of the Republic of  France Ratification
Proc No. 406-2004 Investment Encouragement and Reciprocal  Protection Treaty with  the Great Socialist People’s Libyan Arm, Jamahiriya Ratification
Proc No. 417-2004 Investment Reciprocal Promotion and Protection Agreement with  the Republic of Tunisia Ratification
Proc No. 436-2005 European Investment Bank Finance Contract  for financing small and medium sized private sector enterprises Ratification
Proc No. 460-2005 Investment Promotion and Protection Agreement with the Republic of Austria Ratification
Proc No. 461-2005 Investment Promotion and Reciprocal Protection Agreement with the Kingdom of Sweden Ratification
Proc No. 69-1997 The Investment Promotion and Protection Agreement with the Government of the Republic of Italy Ratification Proclamation

Investment incentives and investment areas reserved for domestic investors

Reg No. 7-1996 Investment Incentives Council of Ministers Regulations No. 7/1996]

Reg No. 9-1996 Investment Incentives (Amendment)

Reg No. 35-1998 Investment Areas Reserved for Domestic investors  
Reg No. 36-1998 Investment Incentives Council of Ministers (Amendment)
Reg No. 84-2003 Investment Incentives and Investment Areas Reserved for Domestic Investors 

Reg 146 Investment Incentives and Investment Areas Reserved for Domestic Investors

Ethiopian Tax and Customs Laws


ETHIOPIAN TAX and CUSTOMS LAWS

Ethiopian tax and customs laws is characterized by frequent repeal and amendments. The number of proclamations, regulations and directives makes it to some extent difficult to understand this area of law. In order to make it easy for researchers, business persons and others interested in knowing Ethiopian tax and customs laws I have prepared this compilation. It contains a subject index and a guide to repealed laws. Fortunately, I was able to obtain some statutes enacted before 1995.

Currently, the administration and enforcement of tax and customs laws is centralized under a single agency i.e. Ethiopian Revenue and Customs Authority. The establishment act of the Authority has been amended 4 times and lastly the recent proclamation establishing the Authority, Proc 587 Ethiopia Revenues and Customs Authority  has repealed all previous legislations.

Compared to other administrative agencies in Ethiopia, the Ethiopian Revenue and Customs Authority has a unique (or may be odd) features. This unique feature could be best understood from the constitutional principle of separation of powers perspective. According to article 6 of the establishment proclamation, the Authority is responsible to establish and implement modern revenue assessment and collection system.  It is also empowered to examine goods and means of transport entering into or departing from Ethiopia through customs ports, frontier posts and other customs stations, and ensure that customs formalities are complied with. In addition to such administrative powers it is also given prosecution and investigative powers over tax and customs offenses. The proclamations also instructs the Federal police to organize and deploy police force to prevent criminal offences committed in violation of customs and tax laws. Federal courts are also instructed organize customs and tax divisions that enable efficient enforcement of customs and tax laws. Irrespective of the civil servants proclamation no 515 that regulates employment conditions of civil servants; employees, prosecutors and investigators of the authority are governed by a separate regulation of the Council of Ministers ans Directive of the Authority.  Irrespective of the legal analysis, the real implications of the cumulative powers of the authority in light of the constitutional principle of separation of powers, requires practical research.

Below you will find Ethiopian tax and custom laws arranged in topics and sub-topics. I have made a lot of efforts to make this a complete guide. Please do leave me a message if there is any law not included here.

ETHIOPIAN TAX  and CUSTOMS LAWS

RepealedTax and Customs Laws

DIRECTIVES

ALL DIRECTIVES of ETHIOPIAN REVENUE and CUSTOMS AUTHORITY

TAX DIRECTIVES of MINISTRY of FINANCE and ECONOMIC DEVELOPMENT

pre-1995 STATUTES

(SOURCE:  Foreign Tax Law, Inc. Website: http://www.foreignlaw.com)

AGRICULTURAL INCOME TAX PROCLAMATION NO. 77 of 1976

CAPITAL GAINS TAX PROCLAMATION NO. 108 of1994

INCOME TAX Law Proclamation No. 173 of 1961

MINING TAX PROCLAMATION NO. 53 of 1993

PETROLEUM TAX PROCLAMATION NO.296 of 1986

SALES AND EXCISE TAX PROCLAMATION No.68o of 1993

STAMP TAX PROCLAMATION NO. 334 of 1987

CUSTOMS LAWS

PROCLAMATIONS

Proc No. 622- 2009 Customs Proclamation

Proc No. 249-2001 Export Trade Duty Incentive Scheme Establishment

Proc No. 173-1999 Pre-Shipment Inspection Scheme Establishment

Proc No. 60-1997 The Re-Establishment and Modernization of Customs Authority

Reg No. 108-2004 Customs Clearing Agents

BILATERAL AGREEMENTS

Procl No 540 Agreement on Customs Cooperation

REGULATIONS

Reg No. 2-1996 Customs Tariffs (Amendment)

Reg No. 6-1996 Customs Tariffs Council of Ministers (Amendment)

Reg No. 11- 1996 Customs Tariffs Council of Ministers (Amendment)

Reg No. 24-1997 Customs warehouse License Issuance

Reg No, 25-1997 Customs Tariffs Council of Ministers (Amendment)

Reg No. 37-1998 Freight Forwarding and Ship Agency License

Reg No. 48-1998 Customs Tariffs Council of Ministers (Amendment)

Reg No. 56-1999 Pre-shipment Inspection Service Fees

Reg No. 55-1999 Customs Tariffs Council of Ministers (Amendment)

Reg No. 89-2003 Customs Tariffs Council of Ministers (Amendment)

Reg No. 80-2003 Customs Tariffs Council of Ministers (Amendment)

Reg. 153 Customs Tariffs (Amendment)

TAX LAWS

Reg No 139 Obligatory Use of Sales Register

Reg No. 75-2001 Tax Withholding Scheme Application

SUR- TAX

Reg No. 59-1999 Payment of Sur- Tax on Import Goods

Reg No. 69-2001 Repeal of Sur-Tax on Imported Goods

Reg No. 133 Import Sur-Tax

STAMP DUTY

Proc No. 110-1998 Stamp Duty

Proc No. 612-2008 Stamp Duty (Amendment)

SALES and EXCISE TAX

ProcNo. 610-2008 Excise Tax (Amendment)

Proc 570 Excise Tax (Amendment)

Proc No. 307-2002 Excise Tax Proclamation

Proc No. 228-2001 Sales and Excise Tax (Amendment)

Proc No. 77-1997 Sales and Excise Tax (Amendment)

Proc No. 237-2001 Sales and Excise Tax (Amendment)

Proc No. 149-1999 Sales and Excise Tax (Amendment)

INCOME TAX

Proc No. 608-2008 Income Tax (Amendment)

Proc NO. 286-2002 Income Tax Proclamation

Proc No. 227-2001 Income Tax (Amendment)

Proc No. 36-1996 Income Tax (Amendment)

Reg No. 43-1998 Income Tax (Amendment)

Reg No. 78-2002 Income Tax

TAX ON EXPORT GOODS AND MINING OPERATIONS

Proc No. 23-1996 Mining Income Tax (Amendment)

Proc No. 287-2002 Tax on Coffee Exported from Ethiopia (Amendment)

Proc No. 99-1998 Tax on Coffee Exported from Ethiopia

Proc No. 226-2000 Petroleum Operations Income Tax (Amendment)

Proc 567 Raw and Semi Processed Hides Skins Export Tax

Proc No 543 the revised Export Trade

Reg No. 73-2001 Tax Amendment on Exported Coffee

TURNOVER TAX

Proc No. 308-2002 Turnover Tax

Proc No. 611-2008 Turnover tax (Amendment)

VALUE ADDED TAX

Proc No. 285-2002 Value Added Tax

Proc No.609-2008 Value Added Tax (Amendment)

Reg No. 79-2002 Value Added Tax

TAX ADMINISTRATION , AGENCY STRUCTURE, POWERS, FUNCTIONS and DUTIES

Proc No. 233-2001 Federal Tax Appeal Tribunal Establishment

Proc No. 368-2003 Re-Establishment and modernization of customs Authority

Proc No. 125-1998 The Customs Authority (Amendment)

Proc No. 60-1997 The Re-Establishment and Modernization of Ethiopian Customs Authority

Proc No. 5-1995 Federal Government Revenues Board Establishment

Proc 587 Ethiopia Revenues and Customs Authority

BILATERAL AGREEMENTS

Proc No 508-2006 Agreement between the government of the

Proc No 507-2006 Agreement between the government of Ethiopia and Peoples’ Democratic Republic of Algeria for the Avoidance of Double Taxation

Proc No.479 Agreement between the Government of the Federal Democratic Republic of Ethiopia and the Government of the Republic of South Africa for the Avoidance of Double Taxation

Proc No. 505 Convention between the Government of the Federal Democratic Republic of Ethiopia and the State of Israel for the Avoidance of Double Taxation and Prevention of Fiscal Evasion

Proc No. 480 Agreement between the Government of the Federal Democratic Republic of Ethiopia and the Government of the Republic of Turkey for the Avoidance of Double Taxation

Proc No. 296-2002 Agreement for the Avoidance of Double Tax

Proc No. 249-2001 Export Trade Duty Incentive Scheme Establishment

Proc No. 223-2000 Agreement with the Government of the Russia

Proc No. 95-1998 Convention for the Avoidance of Double Tax

Proc 585 Agreement between the Federal Democratic Republic of Ethiopia and the Czech Republic for the Avoidance of Double Taxation

584 Agreement between the Governments of the Federal Democratic Republic of Ethiopia and the Government of French Republic for the Avoidance of Double Taxation

PROCLAMATION NO. 376/2003 A PROCLAMATION TO AMEND THE COMMERCIAL REGISTRATION AND BUSINESS LICENSING PROCLAMATION


PROCLAMATION NO. 376/2003

A PROCLAMATION TO AMEND THE COMMERCIAL REGISTRATION AND BUSINESS LICENSING

 PROCLAMATION

 

 

WHEREAS, it has been necessary to amend some provisions of the commercial Registration and Business licensing Proclamation No 67/1997 and to include some additional provisions to encourage 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 as the “Commercial Registration and Business Licensing (Amendment) Proclamation No. 376/2003.”

2.         Amendment

The Commercial Registration and Business Licensing Proclamation No 67/1997 (as amended) is hereby amended as follows.

1/         The following new Sub-Articles (9), (10), (11) and (12) are added to Article 5 of the proclamation.

8.      Founders or members of a Business Organization shall sign their memorandum or Article of association at the office of the registration of Acts and documents, according to standardized samples of memoranda and Articles of Associations sent to same office by the appropriate Authority, before applying for commercial registration, except any amendments to these signed and registered memoranda and Articles of Association.

 

9.      Before signing their memoranda and Articles of Association, Founders or members of a Business organization shall get the verification of the appropriate Authority that the name of the Business Organization has not been occupied by another business person.

 

10.  Where, the successors of a sole Business person, who engaged in transport business, do not want to form a business organization, one of the successors can be registered in the commercial register according to the power of attorney given to him by the other successors.

 

11.  The agreement of founders or members of a Business organization on the valuation of contribution in kind shall be stipulated in the memorandum of association.

 

2/         Article 8 of the proclamation is being canceled and replaced by the following new Article 8.

 

8.                  Legal Personality of business Organization

 

1.                  Business Organizations shall acquire legal personality by registering in the commercial register with out being publicized in a newspaper as provided for under Article 87. 219, 220, 223, and 224 of the commercial code for their establishment and amendments to their memoranda of Associations.

 

2.                  The commercial Register of Business organizations shall be made open for the reference of third parties.

 

3/         Article 9 of the proclamation is being canceled and replaced by the following New Article 9.

 

9.                  Effective date of Registration

 

Any commercial Registration shall be effective from the date of the Registration of the applicant in the commercial register.

 

4/         Sub-Article (5) of Article 20 of the proclamation is being canceled.

 

5/         Sub-Article (2) and (3) of Article 22 of the proclamation are being canceled and replaced by the following new Sub-Article (2)            and (3) a new Sub-Article (4) is added.

 

2.      The applicant shall submit a signed verification that the requirements determined by directive issued by the appropriate Government institution, for the license applied for, are fulfilled. The appropriate authority shall inform the concerned government institution about the implementation of the directive.

 

3.      Without prejudice to the provision of Sub-Article (2) above, the Council of Ministers may be Regulations determine Businesses for which certificate of competence or ownership is needed and the Government offices which have to issue the same.

 

6/         The following new Sub-Article (3) is added to Article 23 of the proclamation.

3.      Where, the successors of a sole Business person, who was engaged                    in transport Business, do not want to form a business organization, a business license can be given in the name of one of the successors in accordance with the power of attorney given to him by the other successors, after being registered in the commercial register pursuant to Article 5 Sub-Article (11) of this proclamation.

 

7/         Sub-Article (3) of Article 25 is being canceled and replaced by the following new Sub Articel (3).

 

3.       The holder of a business license who has failed to have it renewed within the time specified under Sub Article (2) of this Article, shall have it renewed with in the next six months i.e. from ‘Tir’ 1 to ‘Sene’ 30, by paying in addition to the renewal fee, a penalty of Birr 2,500 (two thousand five hundred) for the month ‘Tir and Birr 1,500 (one thousand five hundred), for the next each month of delay.

 

8/         Sub-Article (4) and (6) of Article 28 are being canceled and replaced by the following new Sub Article (4) and (6).

 

4.      A business person whose business license is canceled for any reason other than that under Sub Article (1) (e) of this Article obtains the same business license as new, after one Year.

 

6.   A business person who returns his Business license to the appropriate Authority pursuant to Sub-Article (5) of this Article or who wants to obtain the same business license as new, after being canceled pursuant to Sub-Article (4) of this Article or a business person who demands the issuance of a substitute Business license Pursuant to Article 29 of this proclamation, shall submit a tax clearance for the duration he used the returned or the canceled or the substituted business license.

9/         Sub-Article (3) of Article 29 is being canceled and replaced by the following new Sub Articel (3).

3.         The appropriate Authority, to which application for a substitute business License is submitted under Sub-Article (1) of this Article, shall issue to the applicant a substitute upon payment of the fee prescribed by the Regulations and signing a liability undertaking for the lost business License.

10/       The following new Sub-Article (3) is added to Article 35 of the proclamation.

 

3.         The appropriate sectorial Government organ shall in form the appropriate authority, as to the Administrative measure to be taken, when the Business person acts other wise than the criteria on which the Business License was issued or when he commits a fault.

3.         Effective Date

          This Proclamation shall enter in to force as of the 13th day of November, 2003.

 

Done at Addis Ababa, 13th day of November, 2003

GIRMA WOLDEGIORGIS

PRESIDENT OF THE FEDERAL

DEMOCRATIC REPUBLIC OF ETHIOPIA

Proclamation No.103/1998 Capital Goods Leasing Business Proclamation


Proclamation No.103/1998

Capital Goods Leasing Business Proclamation

WHEREAS, for those investors who have the desire, knowledge and profession to participate in various investment activities but could not act due to lack of capital it is necessary to create an enabling environment for the establishment of alternative sources of financing;

WHEREAS, it is believed that lessors of capital goods can fill the existing gap which is not addressed by the existing financial institutions;

WHEREAS, the existing laws concerning capital goods leasing business are found incomplete;

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

 

PART ONE

General

1. Short Title

This Proclamation may be cited as the “Capital Goods Leasing Business Proclamation No.103/1998.”

2. Definitions

In this Proclamation, unless the context requires otherwise:

  1. “Leasing” means a financing in kind for production and service purpose by which a lessor provides a lessee with the use of specified capital goods on financial or operating lease or hire-purchase agreement basis, without requirement of collateral, for a specified period of time and collects in turn a certain amount of installment in periodical payments over the specified period;
  1. “Lease agreement” or “agreement” means financial lease, operating lease or hire-purchase agreement as defined in this Proclamation;
  1. “Financial lease” means a type of leasing by which a lessor provides a lessee against payment of mutually agreed installments over a specified period with the use of specified capital goods which is:

a.       either already acquired by the lessor; or

b.      purchased by the lessor from a third party, known as the supplier, chosen and specified by the lessee;

and under which the lessor shall retain full ownership right on the capital goods during the period of the lease agreement, and, subject to agreement between the two parties, the lessee may have an option to purchase the capital good outright after the termination of the lease period at an agreed price.

 

  1. “Hire-purchase” means a type of leasing by which a lessor provides a lessee with the use of a specified capital goods, against payment of mutually agreed installments over a specified period under which, with each lease payment, an equal percentage of the ownership is transferred to the lessee and, upon effecting of the last payment, the ownership of the capital goods shall automatically be transferred to the lessee;
  1. “Operating lease” means a type of leasing for a period of time not exceeding two years, by which a lessor provides a lessee against payment of mutually agreed rent with the use of specified capital goods that the lessor has at hand;
  1. “Lessee” means a person who, under a lease agreement, obtains capital goods from a lessor and has the right to use the capital goods, against payment of rent for an agreed period of time;
  1. “Lessor” means a person who, under a lease agreement, provides to a lessee the right to use the capital goods in return for rent for an agreed period of time;
  1. “Capital goods” means goods designated as such under the Investment law and directives issued by the Investment Board pursuant to the powers vested in it by the Investment Law;
  1. “Supplier” means a person, other than the lessor or the lessee, who is in the business of selling goods;
  1. “Investment Law” means either the Investment Proclamation No.37/1996, or the Investment Incentives Council of Ministers Regulations No.7/1996, or both;
  1. “Non-cancelable Agreement” means a lease agreement that is cancelable only by the operation of the law or by mutual agreement;
  1. “Person” means any natural or juridical person;
  1. “Ministry” means Ministry of Trade and Industry.

 

 

 

 

PART TWO

Licensing, Features of Lease Agreements and Rights and

Obligations of the Contracting Parties

3. Issuance of License

  1. capital goods leasing business shall be operated only by a lessor licensed by the Ministry.
  1. The Ministry shall issue directives concerning the criteria to be fulfilled to obtain leasing license.

4. General Features of Lease Agreements

Any lease agreement shall, among other things, contain:-

  1. a statement of the type of leasing;
  1. a description of the capital goods, sufficient to identify it, a statement of the full price of the capital good and the total lease rent payable under the lease agreement;
  1. the amount of each rent, the period within which the total rent is to be paid, the date or the mode of determining the date on which each installment is payable and a statement that the lessee shall pay the rent on the agreed date;
  2. a provision showing the responsibility of the lessee for repairing damages caused to the capital goods by third parties during the time the agreement is in force;
  3. a provision showing the right of the lessee to terminate the agreement and return the leased capital goods to the lessor, where, at the time of its transfer to him, the capital goods is found to have a defect which diminishes its usefulness to the lessee;
  4. a statement that the lessor undertakes to transfer to the lessee the rights and benefits deriving from the sales contract between the lessor and the supplier of the capital goods;
  5. a statement that the lessee shall have the right to enjoy quiet possession of the leased capital goods during the entire period of the lease as provided in the agreement;
  6. a statement that the lessor may not, in his capacity as a lessor, be liable for death, personal injury or damage to the property of third parties caused during the use of the capital goods by the lessee.

5. Specific Features of Lease Agreements

  1. In the case of a financial lease agreement:

a.       the lessee shall hold the capital goods as a mere bailee of the lessor and he shall not have any ownership right on the capital goods during the entire period of the lease;

a.       the agreement shall be a full pay-out and non-cancelable agreement;

a.       the lessee may, by mutual agreement, have an option to buy or return the capital goods to the lessor on the termination of the lease agreement;

a.       a statement that the lessee undertakes to insure and maintain the capital goods.

  1. In the case of an operating lease agreement:

a.       the capital goods leased shall remain the property of the lessor to whom the lessee shall return on the termination of the agreement, unless otherwise the parties agree that the lease be further renewed or the leased capital good be purchased by the lessee;

a.       the lessee or the lessor shall have the right to cancel the agreement provided that the party causing damage to the other by early termination of the agreement shall pay compensation;

a.       a statement that the lessor undertakes to insure and maintain the capital goods.

  1. In the case of a hire-purchase agreement:

a.       an equal percentage of the ownership, with each installment payment, shall be transferred to the lessee and, upon effecting of the last payment, the ownership of the capital goods shall automatically be transferred to the lessee;

a.       the parties shall provide, in the agreement, for the manner by which ownership rights and claims arising form the agreement shall be settled between the lessor and the lessee in case of early termination of the lease agreement by either party;

a.       a statement that the lessee undertakes to insure and maintain the capital goods.

 

 

6. Defaults in Payment of Rent and Others

  1. Where the lessee defaults in the payment of the rent, or commits another fault which may breach the agreement, the lessor shall grant him a period of 30 days for remedying the default so far as the default may be remedied.
  1. Where the lessee does not remedy the default within the period specified in sub-Article (1) of this Article, the lessor may rescind the agreement, repossess the leased capital goods and claim related damages.
  1. Where the lessee defaults in the payment of the rent, the lessor may recover accrued unpaid rent together with interest and damages, whether the default is remedied or not.

7. Defects on the Leased Capital Good

  1. The lessor may not warrant against a defect which was made known to the lessee on the making of the agreement.
  1. The lessor shall make good any damage which the lessee has suffered owing to the defect of the capital goods where the lessor knew or should have known of the defect on delivering the capital goods to the lessee and failed to inform the latter accordingly.
  1. Unless otherwise provided in the lease agreement, the lessor shall not be liable for defects in and for unfitness for intended use of the capital goods he purchases in conformity with the specifications given by the lessee.
  1. The lessor has the right to rescind the agreement, with prior notice, and to repossess the leased capital goods, where the lessee does not make use of the capital goods in accordance with the lease agreement or accepted norm or usage and such use entails risk of irreparable damage to the capital goods leased.

8. Bankruptcy

  1. The obligations and conditions of the agreement shall continue with an organ legally subrogated to the judicially bankrupt lessor as long as the lessee performs his obligations in accordance with the terms of the lease agreement.
  2. The lessor shall not lose his ownership right on the capital goods leased eventhough the lessee is judicially bankrupt.
  1. Damages
  1. Where the agreement is rescinded by the lessee, and the lessee does not deliver the capital goods after having been given due notice to surrender the capital goods to the lessor, the lessor has the right to repossess the leased capital goods immediately and claim damages.
  1. Where the lessor suffers any damage owing to default on the part of the lessee prior to the transfer of the leased capital goods from the lessor to the lessee, the latter shall make goods such damage to the former so long as the lessor acted in goods faith and costs were incurred by him for purchase of the capital goods at the request of the lessee.
  1. Where, in the case of financial lease or operating lease agreement, the lessee fails to return the capital goods on the expiry of the agreement, the lessor has the right to repossess the leased capital goods and claim related damages unless otherwise provided in the agreement.
  1. Transfer of Right

The lessor has the unilateral right to assign his rights under the lease agreement to third parties, but without infringement of the lessee’s right to the quiet enjoyment of the capital goods leased.

  1. Claim by Third Parties
  1. Any action by a third party claiming a right on the capital goods shall be brought against the lessor.
  1. The ownership right of the lessor on the capital goods leased under the lease agreement shall prevail at all times over claims by third parties including creditors of the lessee.
  1. The lessee shall inform the lessor of any impediments or disturbances by third parties to his quiet enjoyment of the capital goods.
  1. Where the lessee fails or delays to inform the lessor as provided under sub-Article (3) of this Article, he shall be responsible for any expenses or damages incurred by the lessor.
  1. Where the value of the capital goods has decreased as a result of legal proceedings instituted by a third party against the lessor, the lessee shall have the right to demand the reduction of the rent according to the new value or the cancellation of the agreement.
  1. Termination of Lease Agreement
  1. Any lease agreement shall terminate on the date agreed upon by the parties.
  1. Unless otherwise provided in the lease agreement, the agreement shall not be terminated by the death or incapacity of the lessee.
  1. Where, on the expiration of an operating lease, the lessee remains in possession of the capital goods leased and the lessor does not claim its return, the agreement shall be deemed to have extended until such time as one of the parties demand the termination of the agreement.
  1. Lessee not to Create Charges On Capital Goods
  1. The lessee shall not create any charge or encumbrance on the capital goods leased.
  1. Any charge or encumbrance created on the capital goods by the lessee shall be void.
  1. Encumbrances created by the lessor and taxes claimed on the leased capital goods shall be borne by the lessor.
  1. Custody and Preservation of the Capital Goods
  1. The lessee shall take care of and preserve the capital goods as long as it is in his custody.
  1. The lessee may not change the manner of utilization of the capital goods without the consent of the lessor.

 

PART THREE

Miscellaneous Provisions

  1. Incentives

The lessor shall be exempted from customs duties on capital goods he imports in accordance with the Investment Law and the directives issued by the Investment Board pursuant to the powers vested in it by the Investment Law.

 

  1. Depreciation Allowance and Income Tax
  1. In case of financial lease or operating lease, depreciation allowance for capital goods shall be deductible from the rental income received by the lessor, as legal owner of the leased capital goods. However, depreciation allowance shall be for the benefit of the lessee in case of a hire-purchase agreement.
  1. The rent received by the lessor through the lease agreement shall be treated as income.
  1. Rent paid by the lessee shall be treated as an operating expense of the lessee and is deductible from his income for the purpose of taxation.
  1. Powers and Duties of the Ministry

The Ministry shall:

  1. register lease agreements.
  1. take appropriate measures in order to ensure the return of the leased capital goods to the lessor, where the lessee has the obligation to return the leased capital goods to the lessor but fails to return it and may order the police to facilitate the execution.
  1. issue other directives required for the implementation of this Proclamation.
  1. Application of Other Laws

Unless otherwise expressly provided by this Proclamation, the relevant provisions of the Civil Code and the Commercial Code shall apply to lease agreement.

  1. Effective Date

This Proclamation shall come into force as of the 5th day of March, 1998.

Done at Addis Ababa, this 5th day of March, 1998.

 

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