Industrial Park Facilities

  • One-Stop Service: Processing & issuance of investment permits | Issuance of business licenses | Commercial registration certificates | Issuance of work permits | Registration of trade or firm name | Agreements | Issuance of tax identification number | Notarization of MoU and AoA | Issuance of customs duty exemptions | Customs clearance in IPs | Banking services, etc
  • Dedicated power sub-station
  • Waste treatment facilities
  • Commercial buildings and Housing facilities
  • Health stations | Fire brigade  
  • 24 x 7 security service
KOR 56599
  • Industrial Park Investment Incentives
  • Industrial Park Investment Applications
  • HR Management Guideline

Industrial park developers and enterprises benefit from a special tax and other financial incentives package that is coupled with efficiency-enhancing facilitation support and investment protections.

1. Fiscal Incentives

  • Income tax exemption period

Any industrial park enterprise is eligible for an income tax exemption period averaging 8-10 years, where IP developers will receive up to 15 years.

  • Loss carry forward

If an investor incurs a loss during the income tax exemption period, he/she is allowed to carry the loss forward for half of the income tax exemption period after the period expires.

  • Export tax exemption

With the exception of hides and skins all export products are exempt from export tax

  • Exemption from customs duty

Capital goods, construction materials, spare parts, vehicles, raw materials for export and personal effects can be imported free of customs duty.

  • Export credit guarantee scheme

Exporters can benefit from the export credit guarantee scheme, which is presently in place in order to ensure an exporter receives payment for goods shipped overseas in the event the customer defaults, reducing the risk of exporters’ business and allowing it to keep its price competitive.

  • Franco valuta

Franco valuta import of raw materials is allowed to enterprises engaged in export processing.

 2. Non-Fiscal Incentives

  • Guarantee against Expropriation

Guarantee against measures of expropriation or nationalization. Payment of compensation corresponding to the prevailing market value of investment property in case of expropriation or nationalization for public interest.

  • Repatriation

A foreign investor can freely repatriate in convertible foreign currency profits and dividends, principals and interest payments on external loans, proceeds from the sale or liquidation of an enterprise as well as compensation paid.

  • Foreign currency retention

Exporters are allowed to indefinitely retain and deposit in a bank account up to 30% of their foreign exchange earnings. They can also make use of the remaining 70% balance within 27 days as it is.

  • No export price control

No export price control is imposed by the National Bank of Ethiopia.

  • Right to Own immovable property

Foreign investors have right to own a dwelling house and other immovable property required for the investment.

  • Streamlined and expedited procedures

Enterprises entering parks receive expedited procedures in terms of licensing, permits, registration certificates, tax identification number, customs clearance etc

1. Procedures to apply for an investment permit to get into an Industrial Park

Any foreign or domestic investor that would like to set up a company which will be engaged in an eligible investment activity must meet the following requirements:

  • Company profile
  • Investment application form filled and signed by the general manager, if it is an agent, authenticated copy of power of attorney.
  • Draft memorandum and articles of association.
  • Copy of passport
  • Detailed project proposal
  • Export or Import substitution plan depending on the type of the project
  • Declaration of a financial standing and a ten-year forecast; and
  • Impact assessment report

N.B: The person in charge of completing and signing the application form must have an investment/Business visa.

2. Investment Process for a developer, operator, and enterprise

  • For an IP Developer
    • Application to EIC
    • Approval by the Ethiopian Investment Board
    • Sign an MoU with EIC
    • Registration and licensing at EIC
  • For an IP Operator
    • Application to EIC
    • Sign a tripartite MoU with IP Developer and EIC
    • Registration and licensing at EIC
    • Sign operations management agreement with IP Develop
  • For an IP Enterprise
    • Application to EIC
    • Sign an MoU with EIC
    • A deposit commitment fee of USD 200,000 in IP Developer’s account (To be accounted as part of initial capital on licensing)
    • Registration and licensing at EIC
    • Shed rental/sub-lease agreement with IP Developer
    • Handover by IP developer

3. Investment application to develop an Industrial Park

Any domestic or foreign investor shall apply to the Commission and secure an investment permit in order to become an Industrial park developer. An investment permit to develop an Industrial park shall be issued where:

  • An undertaking is made to develop a park for use by industrial park enterprises that will engage in the sectors identified by the government as priority sectors.
  • The applicant shows the availability of sufficient capital for the project and
  • Other requirements stipulated in the investment law

4. Investment application to operate an Industrial Park

Any foreign or domestic investor shall apply to be an industrial park operator to the Commission and secure a permit to be an IP operator when the investor meets the following requirements:

  • Submission of detailed declaration demonstrating the availability of professionals and possession of experience in rendering similar or related service;
  • Submission of administrative and financial plan revealing availability of funds and capacity to set up sufficient experienced professionals and
  • Other requirements for the issuance of investment permit stated under the investment law.

The manufacturing sector is amongst the priority sectors identified under the Second Growth and Transformation Plan (GTP II) of Ethiopia. The development of Industrial Parks is amongst the strategic directions identified to enable sustained growth of the manufacturing sector. The Government has set a number of objectives for Industrial Parks, of which the creation of decent job opportunities, increased export, ensuring social and environmental sustainability, the creation of industrial linkages, and the transfer of skills and technology are prioritized.

As with other countries that have undergone industrialisation, one of the challenges affecting the manufacturing industry in the country is the need to develop a highly motivated and skilled workforce in a short amount of time. This challenge is inevitable considering the speedy introduction of manufacturing to an economy that has traditionally been agrarian. The development of robust human resource management practices within the manufacturing sector plays a big role in facilitating this transition and building an industrial workforce that can reach competitive levels of productivity the industry requires.

This human resource management guideline was commissioned by the Ethiopian Investment Commission to help factories in Ethiopian industrial parks to address their most pressing HR challenges effectively. The guidelines are based on the Ethiopian labour proclamation, international best practices and provides contextual recommendations for human resource management.

Factories are encouraged and guided to develop effective HR structures and policies in order to achieve high levels of retention, motivation, and productivity of workers. The HR Guideline helps factories to comply with country laws and industry standards; enhance competitiveness and meet the expectations of international clients. Some of the main instructions and recommendations in the Guideline developed for key areas of the HR function include:

  • Developing and enforcing of an HR manual that establishes a uniform system to manage all HR matters

  • Setting up a fair, transparent, ethical and effective recruitment and selection practice that allows to find and hire the best candidates aligned to production needs

  • Establishing an onboarding programme that properly integrates employees to their new role and work environment and sets up clear expectations and responsibilities

  • Developing effective, legitimate, transparent and safe grievance handling procedures, to address employee concerns before they lead to more serious employee relations issues.

The contents of the HRM guideline has been validated in three Industrial Park in different regions. Please download the file below. HUMAN RESOURCE GUIDELINES For Ethiopian Industrial Parks