Investment guarantee and protection

Investment guarantee and protection

Guarantee against expropriation

The Constitution of the Federal Democratic Republic of Ethiopia protects private property. The Investment Proclamation also provides investment guarantee against measures of expropriation and nationalization that may only occur for public interest and in compliance with the requirement of the law. Where such expropriations are made, the Government provides adequate compensation corresponding to the prevailing market value of property and such payment is effected in advance.

Ethiopia is a member of the World Bank-affiliated Multilateral Investment Guarantee Agency which issues guarantees against non-commercial risks to enterprises that invest in signatory countries. The country has also concluded bilateral investment promotion and protection agreements with a number of developed and developing countries.

Remittance of funds

Foreign investors are guaranteed to make the following remittances out of Ethiopia in convertible foreign currency at the prevailing exchange rate on the time of remittance:

  • Profits and dividends accruing from investment
  • Principal and interest payments of external loans
  • Payments related to technology transfer agreements
  • Proceeds from the sale or liquidation of an enterprise
  • Proceeds from the transfer of shares or of partial ownership of an enterprise to a domestic investor

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