Eritrea: Investing

FDI in Figures

No official data on FDI is available from the country’s Central bank. After its return to political stability, Eritrea has started to attract foreign investment during the last few years. Many American and European companies are considering investing in some sectors such as tourism, cement, mining and off-shore oil drilling. In order to attract new investment, the government has created the Eritrea Free Zone Authority in Massawa. The perspectives of an economic growth have improved thanks to the progress accomplished by the creation of a mining joint venture in Bisha (deposits of gold and copper). The feasibility study of Bisha has shown that the project is financially viable and gold extraction is expected to start on 2010.
There are numerous factors impeding investment: corruption, foreign currency control, legal insecurity, arbitrariness of the judicial system, unskilled labor and a disrepair characteristic of a country which has just undergone a period of war.

The main investing countries are the USA, Canada, Italy and Malaysia.

	Eritrea	Sub-Saharan Africa	الولايات المتحدة	Germany
Index of Investor Protection	4.7	4.4	8.3	5.0

Source: Doing Business

Note: The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	-0	0	56
FDI Stock (million USD)	382.7	382.7	438.3
FDI Inwards (in % of GFCF****)	-0.1	-	-
FDI Stock (in % of GDP)	25.9	19.1	-

Source: UNCTAD - Last Available Data

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

Tax Rates

Sales tax: 5%
Company Tax: 30%
Withholding Taxes: Dividends: 0%, Interests: 0%, Royalties: 10%.
Bilateral Agreement: Eritrea and Egypt are not bound by a Double Taxation Agreement.
Social Security Contributions Paid By Employers: No contribution payed.

Investment Opportunities

Tenders, Projects and Public Procurement: Tradeinvest Africa, Tenders in Africa
African Tenders
DgMarket, Tenders Worldwide
Setting Up a Company: Consult Doing Business Website, to know about procedures to start a Business in Eritrea.
Useful Resources: Egyptian Embassy in Eritrea
5.Marsa Fatma STREET
5570 Asmara
Phone: (002911)-124935-123294
Fax: (002911)123294
Contact the Embassy via Email.
Embassy of the State of Eritrea in Egypt
PO Box 2624
6 El-Fallah St.
Al Mohandesin
Phone: +20-2-303-3504
Fax: +20-2-303-0516

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