Even though Ethiopia provides ample investment opportunity with various incentives, it also Suspends, Revokes, Cancels investment licenses it granted for failure to comply with the requirements of the country’s investment laws. On March 2013 alone Ethiopia has cancelled 330 foreign investment licenses, including various investors form the country’s main sources of investment like India, China, United Arab Emirates and Sudan, on the ground of failure to implement the planned projects.  The Ethiopian Investment Agency mentioned these investors had failed to carry out various projects they have undertaken in different parts of the country and most of these investors have had their licenses lying dormant for more than three years after the permits were awarded.

Grounds for Suspension, Revocation, Cancelation of Investment Permit

Any investor with investment permit shall submit progress reports on the implementation of his project to the appropriate investment organ at the end of every three months; and provide information concerning his investment activities whenever required by the appropriate investment organ.  Further any investor is required to comply with the applicable Investment laws of the country. Where an investor violates the provisions of the Investment Proclamation or regulations or directives issued to implement same, the appropriate investment organ may suspend the investment permit until the investor takes due corrective measures.

The appropriate investment organ may revoke an investment permit where it is ascertained that:

  1. The investor obtained the permit fraudulently or by submitting false information or statements;
  2. incentives granted are misused or illegally transferred to another person;
  3. The investor has failed, without good cause, to renew the permit in accordance with Article 17 of this Proclamation. In other words, if the investor did not annually renew his investment license until its products or services are supplied in the market or did not renew the license within a month of the expiry of the license.
  4. The investor fails to submit progress report of his project for two consecutive periods. In other words if the investor did not institute the project within 2 years of getting the investment license or did not present report on the execution of the project for two consecutive times.
  5. The project began and did not finish at the time expected time or if the agency believes that the project will not be finished within the time framed.

In such cases, the appropriate investment organ shall notify the concerned institutions as to the measures of revocation taken in accordance with the law. Upon revocation of an investment permit, the investor shall immediately lose entitlements to all benefits.

An investor whose investment permit is revoked shall return, within one month as of the day of revocation, all the benefits granted to him to the Ethiopian Revenue and Customs Authority and other appropriate organs.

An investment permit may not be suspended or revoked by any organ other than the appropriate investment organ having issued same.

An investor whose investment permit is revoked may not be issued with a new investment permit before the lapse of one year from the date of revocation.

If you have an additional question or comment or need to get a practical legal support in this regard please  Contact us.

“Copyright © 2003-2013 Fikadu Asfaw and Associate Law Office

Related notes

Note: This guide provides vital information on investment in Ethiopia and its practice, especially Foreign Direct Investment in Ethiopia. This note on the investment laws and policies of Ethiopia is not intended to substitute professional advice given with full knowledge of the specific circumstances of each case and proficiency in the law of Ethiopia. Such information about investment in Ethiopia can be available from an Ethiopian Lawyer, Ethiopian Investment Lawyer, Ethiopian Tax Attorney, Ethiopian, Ethiopian Employment Lawyer and Ethiopian Immigration Attorney.