Ethiopia: Investing

FDI in Figures

The FDI inflow into the country has been increasing during the last few years and because of the low financialization of the Ethiopian economy, was only slightly affected by the financial crisis. The government has committed itself in a program of economic reforms and liberalization. However, it continues to control the services sector.
There are a number of restraints to foreign investment, namely the poor condition of infrastructures, the difficulties related to land acquisition, strict foreign exchange control, the very high transactions costs and the weakness of organizations.
The agriculture (particularly horticulture) and leather goods sectors are the ones attracting most FDI into the country. The main investor countries are Saudi Arabia, China, the United States and India.

	Ethiopia	Sub-Saharan Africa	الولايات المتحدة	Germany
Index of Investor Protection	4.3	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)	109	221	184
FDI Stock (million USD)	3,696.5	3,918.0	4,102.0
Performance Index*, Ranking on 141 Economies	131	132	-
Potential Index**, Ranking on 141 Economies	134	-	-
Number of Greenfield Investments***	10.0	8.0	-
FDI Inwards (in % of GFCF****)	2.0	30.9	-
FDI Stock (in % of GDP)	14.4	11.7	-

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

VAT: 15%. For more information, consult the description of the VAT system in Ethiopia.
Company Tax: 30%
Withholding Taxes: Dividends: 10%, Interests: 5%, Royalties: 5%.
Bilateral Agreement: Ethiopia and Egypt are not bound by a Double Taxation Agreement.
Social Security Contributions Paid By Employers: 6% (civilian) or 16% (military). The employer's contributions also finance work injury benefits.

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 Ethiopia.
Useful Resources: Ethiopian Investment Agency (EIA)
Economic Developments and Prospects in Ethiopia - African Economic Outlook
Egyptian Embassy in Ethiopia
SIDIST KILO, Gulele Sub-City, Kebele 02
1611 Addis Ababa
Phone: (+25111) - 1226422 -1226431
Fax: (+25111)1226432
Contact the Embassy via Email.
Embassy of Ethiopia in Egypt
Mesaha Square, Villa 11
Dokki-Cairo-Egypt
Phone: (00202) 3353693-3353696
Fax: (00202)- 3353699
Contact the Embassy via Email

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