Investment

Proclamation No.769/2012 Investment Proclamation

PART FOUR

INVESTMENT PERMIT

12. Requirement of Investment Permit

1/The following investors shall be required to obtain investment permits:

a)foreign investors;

b)domestic and foreign investors investing in partnership;

c)foreign nationals, not Ethiopian by origin, treated as a domestic investors pursuant to Article 2(5) of this Proclamation;

d)domestic investors investing in areas eligible for incentives and who are seeking to be beneficiaries of such incentives.

2/Notwithstanding the provision of sub-article (I) of this Article, domestic investors, excluding foreign nationals who are not of Ethiopian origin, shall have the right to invest, without having an investment permit, in conformity with the relevant laws of the country:

a)in areas not eligible for incentives; or

b)waiving their right of entitlement in those areas eligible for incentives.

3/ 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 shaU obtain prior approval from the Ministry of Trade.

4/ The Ministry of Trade shall, upon receipt of a request made in accordance with sub-article

(3) of this Article, ascertain, in both cases of transfer, that the enterprise is engaged in areas allowed for foreign investors, the minimum capital requirement provided for in this Proclamation and other requirements laid down in the Commercial Registration and Business Licensing Proclamation are fulfilled.

5/ The Ministry of Trade shall, after examining the request in accordance with sub-article (4) of this Article:

a) replace the business license or register the share transfer, 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.

13. Application for Investment Permit by a Domestic Investor

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 in one copy:

1/where the application is signed by an agent, a photocopy of his power of attorney;

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

3/where the investment is to be made by a business organization, a photocopy of its memorandum and articles of associations or where the business organization is to be newly established, in addition, it shall submit a photocopy of the shareholders identity cards or a photocopy of identity cards evidencing their domestic investor status;

4/where the investment is to be made by a public enterprise, a photocopy of the regulation under which it is established or a photocopy of its memorandum and articles of associations;

5/where the investment is to be made by a cooperative society, a photocopy of its articles of association.

14. Application for Investment Permit by a Foreign Investor

1/ Application for investment permit by a foreign investor shall be made in a form designed for such purpose and submitted to the Agency together with the following documents in one copy:

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 relevant pages of a valid passport showing his identity and his recent two passport size photographs;

c) where the investment is to be made by an Ethiopian permanently residing abroad, preferring treatment as a foreign investor, a photocopy of a document evidencing that he is residing abroad;

d) where the investment is to be made by a business organization incorporated in Ethiopia:

(1)a photocopy of its memorandum and articles of associations or where it is to be newly established, in addition, it shall submit a photocopy of the relevant pages of a valid passport of each shareholder showing his identity and recent two passport size photographs of the general manager;

(2) where there is a foreign national treated as a domestic investor in the business organization, a photocopy of the identity card evidencing the domestic investor status;

(3) where there is a juridical person or a branch of a foreign juridical person in the business organization, a photocopy of ill memorandum of association and article of association or similar documents of the parent company,

commercial registration certificate and a photocopy of the minutes of resolution passed by the authorized organ of the parent company authorizing the juridical person or the branch to invest in Ethiopia.

e) where the investment is to be made by an Ethiopian branch of a foreign business organization incorporated abroad:

(1) a photocopy of its memorandum and articles of associations or a similar document of the parent company;

(2) a photocopy of a document attesting the appointment of the branch manager and his two recent passport size photographs, a photocopy of the relevant pages of a valid passport or identity card of the branch agent and a photocopy of commercial ‘ registration certificate of the business organization;

(3)a photocopy of the minutes of resolution of the authorized organ of the parent company authorizing the establishment of a branch company in Ethiopia.

f)where it is a joint investment by domestic and foreign investors, in addition to the documents provided under sub-article (1 )(d) of this Article, a photocopy of the identity card or a photocopy of the identity card evidencing the domestic investor status of the domestic investor, as the case may be;

g)a document evidencing the financial position or, identity or profile of the investor, as deemed appropriate by the Agency.

2/All documents under sub-article (I) of this Article whose sources are outside of Ethiopia shall be authenticated by a foreign and domestic notary_

3/ Where the permit is requested by a person whose permit was cancelled due to deliance of project, the Agency shall ascertain that the causes of the deliance and cancellation are rectified.

15. Application for Investment Permit for Expansion or Upgrading

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 Agency together with the following documents in one copy:

1/where the application is signed by an agent, a photocopy of his power of attorney;

2/where the investment is made by a sole proprietor, a photocopy of the relevant pages of his valid passport or an identity card of his domestic investor status or a photocopy of his identity card and his two recent passport size photographs, as the case maybe;

3/where the investment is made by a business organization, a photocopy of the company’s memorandum and articles of associations and two recent passport size photographs of the general manager;

4/a photocopy of a valid business license of the existing enterprise; and

5/ a photocopy of project feasibility study.

16. Issuance of Investment Permit

1/ Upon receipt of an application made in accordance with Article 13, Article 14 or Article 15 of this Proclamation, the appropriate investment organ shall, after

examining the intended investment activity in light of this Proclamation, and regulations and directives issued hereunder:

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

b)notify the investor of 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 institutions so that the latter could conduct the necessary follow up.

3/ A holder of an investment permit may not be required to obtain a business license until the commencement of production or rendering of service upon completion of his project.

4/ An investment permit may not be transferred to another person without prior written approval of the appropriate investment organ.

5/ Where an investment permit is transferred to another person or where any change is made in its content, it shall be submitted to the appropriate investment organ for approval.

6/ No investor may, at any time, be allowed to invest by holding both a domestic and, a foreign investment permit.

17. Renewal of Investment Permit

1/An investment permit shall be renewed every year until the investor commences the marketing of his products or services.

2/An application for renewal of an investment permit shall be submitted and renewed within one month after the end of a period of one year for which the permit remains valid.

3/The appropriate investment organ shall renew the investment permit where satisfied, as to the existence of sufficient cause for the delay in the commencement or completion of his project implementation.

4/Notwithstanding the provision of sub-article (1) of this Article, any investor who has not commenced implementing his project within two years since the issuance of the investment permit, shall have his permit cancelled without any precondition.

18. Transfer of an Investment Project under Implementation Phase

1/Any investor wishing (0 transfer his project. which is under implementation phase and for which a business license is not yet issued, to another investor shall submit his request, by filling an application form designed for this purpose, to an appropriate investment organ and get the approval of same.

2/The investor shall submit, together with his application specified in sub-article (1) of this Article, the following documents:

a)a photocopy of renewed investment permit;

b)a photocopy of the sales agreement authenticated by a notary;

c)a photocopy of land lease agreement transferred to the buyer as the case may be.

19. Suspension or Revocation of Investment Permit

1/ Where an investor violates the provisions of this Proclamation or regulations or directives issued to implement this Proclamation, the appropriate investment organ may suspend the investment permit until the investor takes ‘due corrective measures,

2/ The appropriate investment organ may revoke an investment permit where it ascertains that:

a)the investor obtained the permit fraudulently or by submitting false information or statements;

b) incentives granted are misused or illegally transferred to another person;

c) the investor has failed, without good cause, to renew the permit in accordance with Article 17 of this Proclamation;

d)the investor fails to submit progress report of his project for two consecutive periods; or

e) the project can not commence operation with in the period and the Agency believes the project will not be operational.

31 The appropriate investment organ shall notify the concerned institutions as to the measures of revocation taken in accordance with this Article. Upon revocation of an investment permit, the investor shall immediately lose entitlements to all benefits.

41 An investor whose investment permit is revoked shall return, within one month as of the day of revocation, all the benefits granted to him to the Ethiopian Revenue and Customs Authority and other appropriate organs.

5/An investment permit may not be suspended or revoked by any organ other than the appropriate investment organ having issued same.

6/ An investor whose investment permit is revoked may not be issued with a new investment permit before the lapse of one year from the date of revocation.

20. Duty to Report and Cooperate

Any investor with investment permit shall:

1/submit progress reports on the implementation of his project to the appropriate investment organ at the end of every three months; and

2/provide information concerning his investment activities whenever required by the appropriate investment organ.

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10 replies »

  1. Hi sir, I am a consultant,& I asked to prepare feasibility study of investment projects. Hence,I need the current Ethiopian proclamations of investment and the current need of Ethiopia for economic development please can you send me your opinion with best regards

  2. Dear, first I very grateful for all your devotion to make laws ….. accessible.
    would mind please to send me federal and Oromia RNS proclamation, regulation, directives, if any, concerning Investment other than this proc. 769/2012.
    And please any literature, thesis, journal articles on Expropriation of Investment in general and Foreign investment in particular.

    with best regards,

  3. 1st of all i would like thanks for ur help . it is known that an invester is exmted from stamp duty charge when he get bank loan but am a little bit confiused i do have one coustomer how have investment license and retaile business the loan loan is used for both. my qustion is the customer can pay stampduty charge or not. if it is possible pls send me you reply on my email

  4. please send to me the newly issued or Draft -proclamation For Financial Statments Prepration- which was proclamed in June 2014. Thank you!

  5. Sir Abrham . I would like to wonder you for all your efforts, that you make known the current laws of Ethiopia to every one . Through this opportunity i will ask your contribution regarding the requirements of registration and license as you give me some explanation .

    • I was asked to deliver some speech on newly enacted proclamation of investment and the current need of ethiopia for economic development please can you send me your opinion with best regards

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