Investment Incentives
Ethiopia provides a comprehensive set of fiscal and non-fiscal incentives to investors in order to encourage investment in strategic sectors, including:
Customs duty exemption on capital goods and construction materials, as well as spare parts whose value does not exceed 15% of the total value of imported capital goods. Income tax exemption for manufacturing, agro-processing, and agricultural investments ranging from two to seven years. Losses can be carried forward for half of the tax holiday period. Several export incentives, such as the Duty Draw-Back, Voucher, Bonded Factory and Manufacturing Warehouse, and Export Credit Guarantee schemes, are available. The government guarantees the payment of profit, dividends, principal, and interest on external loans, and Provision of land at reasonable lease rates.
Sectoral Incentive
- Manufacturing:0-6 years income tax exemption
- Agriculture: 0-9 years income tax exemption
- ICT development: 4-5 years income tax exemption
- Electricity Generation, transmission and distribution: 4-5 years income tax exemption
- Industrial Park development: 10-15 years income tax exemption
If investment with in Industrial parks and 80% export or supply input to producer exporter
- Additional 2 years income tax exemption if industrial park is in Addis Ababa or special zones of Oromia surrounding Addis Ababa, or
- Additional 4 years income tax exemption if industrial park is in other areas
If 60% export or supply input to producer exporter
- Additional 2 years income tax exemption
If Investment in the states of Gambella people, Benishangul/Gumuz, Afar except with in 15km right and left of Awash River, Oromia Zones of Guji or Borena, or Southern Nations Nationalities and people’s zones of South Omo, Segen area, Bench Maji, Shaka, Dawro, Kaffa or Konta and basketo
- Additional 30% income tax deduction for 3 consecutive years
The following attractive investment incentives are given by the investment board in Tourism Investment for seven potential destinations; Abijatta-Shalla National Park, Bale Mountain National Park, Semien Mountains National Park, Gheralta Mountains, Erta Ale, Abaya and Chamo lakes, Arba Minch and Wenchi Crater Lake.
- 5 years of income tax exemption for those who invest on the five specified regions.
- Duty free privileges on Capital good and spare-parts.
- Duty free privileges on finishing construction materials (if they’re going to build the hotel themselves).
- Duty free import of the following vehicles. [ Station wagons (NEW), A bus (minimum capacity of 30 passengers excluding the foldable seats)]
