FEDERAL NEGARIT GAZETA

OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

H/nStf la** 45TC AS * JVkmZJ^ «

9 Year No 34
WW ***** *«l<S.rt/t <nWUUl _ * February, 2oo3
^5 ABABA 7
at
l(D'6Ei, CONTENTS
1
fc.*} jf A***?* "Vfl^? ? AMC OhftT OAU'n-f-^ Council of Ministers Regulations No. 84/2003
AA*HlAA* f/"tf- <w»Al^fr fa»"i ftM**?* 9°hC Council of Ministers Regulations on
fl* Investement incentives and Investement Areas
Reserved for
tnxfocft r\\c n,* £7-0. *tc -g-6/x BO§ COUNCIL OF MINISTERS REGULATIONS No. 84/2003
AAh.*>?iA^^^ Ifm-Ffty: AMC ©-AT OAtf-fl-f^ COUNCIL OF MINISTERS REGULATIONS ON
aa*Miaa* f /"<?• ^At** ? fl>"i f "nfi*c* y»hc n,* INVESTMENT INCENTIVES AND INVESTMENT AREAS
RESERVED FOR DOMESTIC INVESTORS
A*>-n
These Regulations are issued by the Council of Ministers
<5T-nA.ll hteWX MA*? /"A^m A^CDA? pursuant to Article 5 of the Definition of Powers and
m3*AA Duties of the Executive Organs of the Federal Democratic
£• h&C Cdtl
Republic of Ethiopia Proclamation No. 4/1995 (as
fcU KM "fiV^SA**"?*' "intpPl AMC a>-AT amended) and Articles 6 and 9 of the Re-enactiment of
OAlMl** AA+hAA* f/"^ ""At** f?"liA*C* yhC Investment Proclamation No. 280/2002.
0.* Al-Cl *TC -g-g/T8|5g" A.m+A PART ONE General
f^-A* m«mi a.a *ci-r wAffl* *iau*» nA++c nrtu 1. Short Title
**mi ohat* These Regulations may be cited as the "Investment
g- "nAv*A«l*»M "VA* f fc.*f*,f A**'"'}* Incentives and Investment Areas Reserved for Domestic
OA /*,A«1'> Van Investors Council of Ministers Regulations No. 84/2003."
PC£- Van 2. Definitions
Unless the context requires otherwise, in these Regulations:
1) "Authority" means the Ethiopian Investment
Authority;
2) "Board" means the Federal Investment Board;
2.80 Negarit G.P.O.Box
Unit Price 80,001
 .31: <UUA ■TTC fig TC a+773136 ______________Federal Negarit Gazeta — No. 34 7th February, 2003—Page
2093

r. "fhx^A d?" "JA't re* Aa19°d.'t a>t,9° 4) "Customs Duty" includes taxes levied on imported
MA1A-* A^rtm* A* 1°19°d.^ MA goods;
5) "Income Tax" means tax levied on profits from
business and categorized as the revenue of the
P. "f^r^h +<CT" f°zAro- oil nm D^P* A£ £• "?7P, "j- Federal Government, Regional Governments or as
their joint revenue;
nc" "?A* t&^&tc m>-}<>\f»^ (D&r 6) "Proclamation" means Investment Proclamation No.
280/2002;
7) The definitions provided for under Article 2 of the
n*C¥ A£ f2."lA ^ h r t VflM
Proclamation shall apply to these Regulations.
Investment Areas Reserved for Domestic Investors Areas
of investment listed in the schedule attached to these
"SP?- AJLUr ^."J-n -f^-l £l/"TA-« Regulations are exclusively reserved for domestic
investors.
AMC QWlT OAU-n-f-?- AA^HlAA- f^ftfrfr hlLU y/f-n PART TWO Exemption from
,?C -f\P£H P^77a>- a^m^TT M-IMIK.* Income Tax
Investment Activities Eligible for Income Tax Exemption
£lf?A«
1) Where an investor engaged in manufacturing or
h^A u-Afr H7A °?'nc agro-industrial activities or the production of
AA^°tf v- agricultural products to be determined by directives
to be issued by the Board;
(a) exports at least 50% (fifty per cent) of his
Inn. °?'PC V9 "Tfl^y tlStnf- tKlnM -o0!* PC* products, or
(b) supplies at least 75% (seventy five per cent) of
his product to an exporter as a production input;
n<Xfm<na»- f?°C^ WB-V+^f 71CHC tf»tf»<S.P he shall be eligible for income tax exemption for 5
years.
OAy-il'l- h^^a* rc* aj">ft= 2) Notwithstanding the provisions of Sub Articles (1) of
s% /y^A n^-f-/ fifVa*? frc-fc*} awn,* this Article the Board may, under special circums-
a>& ro-'i* ?<T.Ah tllf'/I ro&SF' tances, grant income tax exemption for a period not
A) (AO fc9°fV> n«°^) Pli'Vfl>«'> f^C- longer than 7 years. However, the granting of income
ft? tax exemption for a period longer than 7 years
awn* m£ A'T.Ah HAM* nyc* requires the decision of the Council of Ministers.
3) An investor engaged in activities mentioned under
A£ V* hid °J'PC V? f^lf? tttlV Ki *K hl*X (§) sub Article (1) of this Article who exports less than
f •N"»Ah+ffl« n.TC9° 50% (fifty per cent) of his products or supplies his
PC* nAf- Z <*</»* ?°i?.c(\ hid i-nc
products only to the domestic market shall be eligible
V9 P<7"1/"} ^/\A: If??" llZ <*"D* for income tax exemption for 2 years.
PA£ ?7FI -HIC TFO-n* f^rtmw niwii-tff
4) Not withstanding the provision of sub article (3) of
this Article, the Board may, under special circums-
5»°hc a* o-Ai ^-r1 ^(f 9A« ? i i »°i4i- nAU'fl'i' tances, grant income tax exemption for a period not
longer than 5 years.
5) Notwithanding the provision of Sub Article (3) of this
h»°^+fl>- ?°c^ hv% (ys^A
Article, directives issued by the Board may prohibit
n^-f-) n^'T- f T L l f a » £ fl>•*I,• fTLAh exemption from income tax with respect,to an
s^,c-fc'> AU7C <O-AT in.? -n-^ f^+c-n hirv A| investor who supplies his products only to the
^^•LH H7A "/-nc f<W.if •> »«"n^ ^7?A« domestic market.
NTTU hl*K l(ht\ M+X" (f) f-^Ah-ffl>* (l?C9°
6) Notwithstanding the provision of Sub Articles (1) and
(3) of this Article, an investor who exports and hides
nAP XAh § fT.^cn h7ii «^-nc and skins after processing up to crust level may not be
entitled to incentives provided therewith.
(LNU (r) f ' t o -Ah-tah d¥C9° 7) Notwithstanding the foregoing provisions of this
raw Mic ©-AT m? wr- f^+c-n OA^-n-^ Article, where the investment is in relatively under
f^-n-f: tm*^ nc-?- n^fflfl]©- developed Regions such as Gambella, Benshangul
ao0»6? AjlAhA ^AA« and Gumuz, South Omo, in Afar Zones to be
(1H.U ">thrt M+JT (S) (P) P+o»Ah+ab determined by the Board, Somali and other Regions
(ITC90 *^JT A,rn"> X»Ah h<L7L^ Zd% n<^A4>^ to be determined by the Board, the invsetor shall be
f«TLAh OAl/'ll^ (\t(bt\ M+ffi P-h^Ah eligible for income tax exemption for an additional 1
year period.
8) The income tax exemption provided under the
provisions of Article 4 of these Regulations shall be
effective when the investor provides the information
^A-^ n^YAA: naifj-hAT T-^M n^n-n for the relevant revenue collecting institution and its
h1°i dh^C hAA OC^ A<J7.<DAT-R<D' p??-: NA ^A, validity is ascertained for each income tax period.
hAAT m^Al- PC^ M&ihWw Nf+«"Ah'f-
vnt: g-cg-fr? iiTM-i-fr in?>r (WOA AA^AT fin. -Hit: vf

h j ^+^.fl>- F7A °HIC H<W> n-i-tn,°y^ AI liu-jii*

Jna "MIC V9 f<^lf7 ov-ll* ^7?A« [\M+ X o ' t o d M+ft* (A) iW-m+rt-* /*'^?,:LF- P-J-rt
PILO ^"J'P 5 n-^Ah-fc^ F7A 1'flC V9 "7/,V l)°7..P"»fMa>- n„f>rt 7% iiVt\
"vn^JJ'W 0AY-(H: i m ? 0 ? . f^irvw- Wim'i atf.ahHf P°7.Ah OA'Atl-l- rc -Wi Kh% i f f
<^<iS'fl,'7 h°/n'(l AAOJ- "J'PC rt'PAA ^/"<5^ ( I f Ma(\> a ^-t-.i 11A& tthfct- Aj? tnfl -MIC
h$CP M-tPimA* AWWH P7fL ")'P.C VJ P"»[l"} TFU-n-V
3) ' 'Capital Goods" means machinery, equipment and
accessories, needed to produce goods or render inn. -Mit: fgttry H^? fy.ffyt:nfr /.it
services;
 .31: <UUA ■TTC fig TC a+773136 ______________Federal Negarit Gazeta — No. 34 7th February, 2003—Page
2093

An investor engaged in activities mentioned under

Sub Article (1) of Article 4 who exports at least 50%
ln(l "MIC V*? P""^? H""? ff"*mC f t K 9 °dah AA°7ft (fifty per cent) of his products and increases, in value,
his production by 25% shall be eligble for income tax
exemption for 2 years.
t A A <b 6. Commencement o f Period o f
Exemption
inn. -MU: P^I/"} w-n-l- iw-rtmn* H»"7 OJ-AT n."/<{-
from Income Tax
^m«»fl»« "7'>?a>-5>D HAIMM- pin. i-nc V9
The period of exemption from income tax shall begin
from the date of commencement of production or the
date of provision of services, a> the case may be.
<*MMJ H</U'} h'WM' A")°77i P79 «U'(H: ll""? f^^rt mfrAA 7. Carry Forward o f Losses
An investor who has incurred loss within the period
g- «W'<D-0U OAtHl-l- A^W'tf-a* h^.A #cft*
of
V'lt: XrCfrV) A"7A4.4 LH A^W A
income tax exemption shall be allowd to carry
P"7..Pfl£Al- A-YCfln-U V/O-flV* yA f ffl--> Ph'C
; :
forward
^AV P*7?0;J- ln-R4-h V*
his loss for half of the income tax exemption period,
A.J'ATl
after
£?"AA«
g- M-tWl69° fMPS-h +£T V9
the expiry of such period.
.PA PART THREE
W Exemption from the
OAtf-fl* AV'lC JfrCfc* WAiAim^ firn^A Payment o f Customs
Duty
r- Jl/LU 70-A (A) \V (g) P'/^AlHw
8. General
n.*fcy° nc^ hflj-*^ p°7.in;f ph-n^-A? P-JW-
1) An investor shall be allowed to import duty-free
capital goods and construction materials
V? WHO- VM£in* (tf'UUO- l\«W<Dft)ah necessary for the establishment of a new
enterprise or for the expansion or upgrading of
<nxn>6? A.<nn? &f-AA«
an existing enterprise.
o- nn.u £"Mi «w»i»»<:* P*IT;J-A h.*^- h-n^h +<iT 2) In addition, an investor granted with a customs
duty exemption privilege shall be allowed to
hhx^-A ^JP;/.: m*AA 'P.? (>iA^ hrrt^ import dutyfree capital goods necessary for his
enterprise.
3) Notwithstanding the provisions of Sub Articles
V9 JI'J^U 'A'IN /2.^+frA;JA«
(1) and (2) of this Article the Board may, by its
directives, bar the duty-free importation of
capital goods and construction materials where it
finds that they are locally produced with
competitive price, quality and quantity.
y.-dV r>Ji;*- OC^- n°7.^a)i]a)' f/«tf»^,e ^.a)AVA« ifT?" 4) An investor eligible for duty-free importation of
«7'>?a>-r NA(/*fl'LHS capital goods pursuant to these Regulations shall
be given the same privilege for spare parts
W) Ai »"<!-I-?T PX^.-J I I I X l A "?A-> P^.ro-A- whose value is not greater than 15% (fifteen
percent) of the total value of the capital goods to
h9°n*A be imported.
9. Conditions for Importing Vehicles Duty-Free
A) AM -WP/>7- X7A-7A-7- P°7.a>-A- fcm-F-
The Board shall determine, by its directives,
n- conditions for importing vehicles duty-free
depending on the type and nature of the project.
However, any investor may import duty-free:
(a) ambulances for employees that are needed for
emergency cases;
«• hILU (1A^ nh->+}\- :>; P I -lAX<»- n.Tcrs (b) buses for tour operation services.

P'T.h " l i U W - P"7.A«);l:fl>- hjS-if*-*- ■ 10. Areas o f Investment Not Eligible for Customs Duty
Exemption
5. Income Tax Exemption for Expansion or Upgrading
1) Notwithstanding the provision of Article 8 of
of
these Regulations, the following areas of
an Existing Enterprise
investment are not eligible for exemption from
the payment of customs duty:
 .31: <UUA ■TTC fig TC a+773136 ______________Federal Negarit Gazeta — No. 34 7th February, 2003—Page
2093

u ) OAhtHl r.iXPf'} p"7,&6uyo<. ir-frA*?-!

•>e^- ^hc n.-7- r.i4\ *«pc oik xpo hilu **mi
^m-r af*f-: f r'ri V hdn'Tf'-: IAI»" X+V

y.*yf o»ov6? niLu o»-AT f+ttw inttfi n i v

Ahh hX.X"7.V'7- h^'^m-y.'.
A) rw.- °7A-7j>° fjfj^Ai
(a) hotels (excluding star-designated hotels),
r'feV:v motels, tea rooms, cofTee shops, bars, night
^AcnxpV'?' clubs and restaurants which do not have
international standards:
(b) wholesale, retail and import trade;
(c) maintenance services;
(d) commercial road transport and car-hire
services;
PT? IPC* °7h<5f■"K (e) postal and courier services;
<^ffT: A) f}«7£S' X A -f'tf.C (ft real estate development;
fc*7*UJV* ff) P"7A;ifl)«fe.e
(g) business and management consultancy
t»&. MAIA-'lh
services;
U.M«i «"»AA r&^'t (1) ftMLM"
(h) advertisement services;
•fcA.n/l'r'} /"C*P* MA«7A»* J) PA. W fc,P-7c
(i) cinematography and similar activities;
ll-f'-l' MA^A-* '>"!£• Z**^.:
(j) radio and television broadcasting services; (k)
m°<.h XA-JAAAV'l- 'W.'
>) MAIA-l- ^^X' theatre and cinema hall operations; (I) customs
V) f-M' fflJl.AVl" P?*7£- ^i-K P"Hl.* «"ff"% clearance services; (m) laundry services;
MA*7A-> 7) fA-1V.V f <»*f i»»A' f i ^ * (n) travel agency, trade auxiliary and ticket-selling
(1ILU h^'ft- ? 0 A M+JP (A ) /"C h'MAX-'l" services;
P/"<i- (o) lottery and games of a similar nature;
^At^- d'jtu."7<i nc^ x-io-n itt A..P7'»'W
2) Notwitstadng the provision of Sub-Article (1) of

fl-PX-h «IY.T ^"(M- f"7^A«l;/:fl»-7 A.A-* A.t»A'> this Article, the Board may, where it finds
appropriate, issue directives providing for
£*AA" additional areas of investment which may not be
eligible for exemption from the payment of
>;$• hi-ir<-h 4V.T v? ifvo>- fin- w-a 6;»y>?,> aa^a
customs duty.
11. Transfer o f Capital Goods Imported Free o f Customs
\\V9°+\l Vf P70 all,':l'ah9a f»l'C;JA
Duty
AjiAAltf- £10 P VO^rn- P7-JT^h +dT/.A+AV* 0£ll<*.
Capital goods imported free of customs duty shall not be
A(H- 'r<*»AA£ f7-4»01h •t'dT V9 «*n«> AA.AW
transferred to third parties not entitled to similar duty
Aa»-
free privileges, unless prior payment of the customs
duty is effected thereon.

hyA h^7-
AP- AP- gftpW'tf- PART FOUR
Miscellaneous
Provisions
0II.U £"H1 V£ Pf"»All/a>-'> f-MAA •Ma**-
12. Penalty
HAlMl* fl-jr*h aA/"A«m X?£l<T A"?**?0'; hi»t<iT>
A^mA? (lfl»«Ja)-*TCS/XBH'Rh*>+X* Any investor who acts contrary to Article 11 of these
Regulations shall be punishable in accordance with
Article 73 of the Re-establishment and Modernization
'!: AA >vt<v •i-rf.xgy.v-> AA °7^y />'7:<p- £'>n'-K
of Customs Authority Proclamation No. 60/1997.
^'^'V.
13. Repealed and Non-effecti ve Regulations and Direct!
i- fV>iiA->fl"1-1l' °7nd;J? f-ttA^tfT- ?"hc a-7-
: ves
A'.'}^ *TC l/YgjE-S-g tA) XT AX7C 1) Investment Incentives Council of Ministers
<D*AT Regulations No. 7/1996 (as amended) and Invest-
OAtf-fl+^f AA-i'hAA* P/"<{- o»AJ>^ ffl»«ia>- ment Areas Reserved for Domestic Investors
P^.JrA
 .31: <UUA ■TTC fig TC a+773136 ______________Federal Negarit Gazeta — No. 34 7th February, 2003—Page
2093

Council of Ministers Regulations No. 35/1998 are

hereby repealed.
2) Any Regulations or directives inconsistent with
these Regulations shall not have effect with respect
to matters provided for in these Regulations
 W- Mttgg 4MA **4**tc M
'rc#+<H»m+** — Federal
Negarit Gazeta — No. 34 7*February,
2003-Page 2096
C
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o»i*>6-1- 14.

Transitory
Provision
Y
1) Not
with
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\*l<\4\
the
prov
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n of
AAW
Arti
cle
13
of
M'M-ov^'
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e
Reg
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ince
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04.JU-A
to
the
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ent
Ince
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es
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Cou
ncil
of
Min
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Reg
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No.
7/19
96
J.*A (as
* ame
n nde
n d)
and
T
W- Mttgg 4MA **4**tc M
'rc#+<H»m+** — Federal
Negarit Gazeta — No. 34 7*February,
2003-Page 2096
the vide
dir d
ecti for
ves in
iss thes
ued >
the Reg
reu ulati
nde ons,
r, he
sha may
ll noti
con fy
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ue appr
to opri
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eff st
ect. men
2) Wh t
ere orga
an n
inv and,
est be
or entit
gra led
nte ther
d eby.
wit
15. Effective
h Date
inc
These
ent
Regulati
ive ons shall
s come
un into
der force on
Re the date
gul c f their
ati publicati
ons on in the
No Federal
. Negarit
7/1 Gazeta.
99
6 Done at Addis
(as Ababa,
am this 7th
day of
end
February,
ed) 2003.
opt
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W- Mttgg 4MA **4**tc M
'rc#+<H»m+** — Federal
Negarit Gazeta — No. 34 7*February,
2003-Page 2096
D AT
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A PU
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E OF
M ET
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■ncm Mr n-tnjf rxW-

BERHANENA SELAM PRINTING
ENTERPRISE
•ix M i s f t QU-A V.V.fr ,M"I «ftTC AS TC +7 FEDERAL NEGARIT GAZETA — NO. 34 7* FEBRUARY,
2003—PAGE 2097

SCHEDULE
AMC at'toT 'lAtHlf-fr f-HlAA- t/»"d- o-Mtf- Areas of Investment Reserved for Domestic Investors
A- fr*iiw- A "l' ffc.rriA**/"-}* ^Al^ row: <D-AT I The following areas are exclusively reserved for
domestic investors:
1) retail trade and brokerage;
2) wholesale trade (excluding supply of petroleum
MZ.D-9 Vm-'B- 0 AlMlfT (IMC aWlT
0
and its by-products as well as wholesale by foreign
investors of their products locally produced);
j;- fin. (hn-^v>ii> n.^*> flXti+Cf <r\\c a* 3) import trade (excluding LPG, bitumen and upon
n^mrtvoj- Aoiaa, ?°c* «7«n«v approval from the Council of Ministers, material
inputs for export products);
o- T£ n T: f*n"i- MM-?'* T^T^ A»rn 4) export trade of raw coffee, chat, oil seeds, pulses,
hides and skins bought from the market and live
sheep, goats and cattle not rased or fattened by the
investor;
5) construction companies excluding those designated
iiin.e n^uH- Mf^o-r KVfiM't- <?A« hdO-'fco* as grade 1;
6) tanning of hides and skins up to crust level;
7) hotels (excluding star-designated hotels), motels,
pensions, tea rooms, coffee shops, bars, night clubs
and restaurants excluding international and
;i- «M9 A,m XAh h^A* *<yf "fA**? specialized restaurants,
8) travel agency, trade auxiliary and ticket selling
fiAMi-n t.i$9*fr} vn&ajbrt- UH-A-**
services;
9) car-hire and taxi-cabs transport services;
art hnn^j **A9° h +4ve hA ^anr n-j-ttiAv
10) commercial road transport and inland water trans-
hie r-Mi M7/?£ * h^ffl** nA-f*+c A-A-^T- f
port services;
9°i-n a* ?n
11) bakery products and pastries for the domestic
market;
12) grinding mills;
U- tf-tLT Fftuf-f f^'hA. MA«7A-*i 13) barber shops, beauty saloons, and provision of
smith, workshops and tailoring services except by
garment factories;
A W I C ©-ATin/fi+cn/MP*?fh.hrc+ti 14) building maintenance and repair and maintenance
ij- t<D<ze* a* MAIA-IHF of vehicles;
15) saw milling and timber making;
n-Mv.h fWiws- f A-nA AO 16) customs clearance services;
T8- VA79 M'.A*? F^LL? T79 MA«7A-*I
17) museums, theaters and cinema hall operations;
18) printing industries.
Without prejudice to the provisions of sub-Article (1)
of this schedule, the following areas of investment are
exclusively reserved for Ethiopian nationals:
1) banking, insurance and microcredit and saving
services;
2) forwarding and shipping agency services;
3) broadcasting services; and
A f 0717: f A /*VJ- W ^VA-^ f-n^-cv *m0 4) air transport services using aircraft with a seating
capacity of upto 20 passengers.
G.f«7A-IAA«t:T f^Ch-fl a>-hAT
h7A*7A-*F F • NlC^-hA-T?'? /i7A°?A-;hl