As part of incentive packages to investors, the Ethiopian government offers various incentives for investors. Investors may benefit from the following investment incentives:
- Income tax exemption period:- An investor is eligible for income tax exemption period averaging 2 - 6 years, whereas Industrial Park Enterprises and Developers are entitled to income tax exemption period averaging 8 - 10 years and 15 years respectively.
- Exemption from customs duty: - Capital goods, construction materials, spare parts, vehicles, raw materials for export and personal effects (only for Industrial Park enterprises) can be imported free of customs duty
- Loss carry forward: -If an investor incurs a loss during the income tax exemption period they are allowed to carry the loss forward for half of the income tax exemption period after the period expires.
- Export tax exemption: With the exception of hides and skins all export products are exempted from export tax.
- Export credit guarantee scheme:Exporters can benefit from the export credit guarantee scheme, which is presently in place in order to ensure an exporter receives payment for goods shipped overseas in the event the customer defaults, reducing the risk of exporters’ business and allowing it to keep its price competitive.
- Foreign currency retention:Exporters are allowed to indefinitely retain and deposit in a bank account up to 30% of their foreign exchange earnings in foreign currency. They can also make use of the remaining 70% balance within 28 days as it is.
- No export price control:No export price control is imposed by the National Bank of Ethiopia.
- Franco valuta: Franco valuta import of raw materials is allowed to enterprises engaged in export processing.
- Streamlined and expedited procedures:Enterprises entering parks receive expedited procedures in terms of licensing, permits, registration certificates, tax identification number, customs clearance etc
- One-stop-shop government services
- Land lease term: 60-80 years at zero charge for factories and residential quarters