This Part II is follow-up of the first part of the legal brief that deals with the subject matter at hand. This Part deals with right to own immovable property, work permits, visa services, and one stop services, grievance and investment disputes, powers and duties of the investment administration organs and the provision of land.
1. Right to own Immovable Property: - The provision of Article 18 of the Investment Proclamation has elaborated the right to own immovable property by foreign investor or foreign national treated as domestic investor. Accordingly, a foreign investor or foreign national treated as domestic investor have the right to own immovable property necessary for his investment. Immovable property is defined as excluding land. In addition, a foreign investor or foreign national treated as domestic investor who owns “large investment” can be allowed to own one dwelling house, the details of such permission will be determined by Regulations to be enacted in the future.
2. Work Permit for Foreigners:- The provision of Article 22 of the Investment Proclamation has elaborated the employment of expats and work permits. Accordingly, an investor is allowed to employ qualified foreigners necessary for his investment in positions of higher management, supervision, trainers and other technical profession and foreigners can be engaged on these positions only “when it can be ascertained that Ethiopians possessing similar qualification or experience required by the sector are not available”. However, Article 22 (2) exempts these requirements for top management positions including chief executive officer, chief operation officer and chief finance officer. An investor is allowed to engage top management foreign workers, whose work permit will be renewed without being required to comply with the conditions specified by the Investment Proclamation. The provision of Article 22 (3) envisages the possibility of issuing a work permit to a cohabiting spouse of any investor and a foreign worker employed by the foreign investor.
The provision of Article 22 (5) of the Investment Proclamation provides that a work permit can be issued for up to three years and renewable every year, “subject to the verification, as appropriate, that the investor has ascertained the non-availability of Ethiopian workers with similar qualification and of the concrete measures taken by the investor to train Ethiopian replacements”.
The provision of Article 22 (6) of the Investment Proclamation empowers the Investment Commission not to renew or cancel the work permit “where it is ascertained that a foreign worker is no longer required for the position he is employed.” Articles 22 (7) and (8) also empowers the Commission to prepare and implement a working guideline regulating the work permit of foreign employees and the duty of investors to design and provide training programs, transfer of skills and knowledge, in collaboration with the Ministry of Trade and Industry and the Ministry of Labour and Social Affairs.
3. Visa Services: - The provision of Article 23 of the Investment Proclamation has introduced a new detailed provision dealing with “visa services”. This provision has mandated the Commission or its delegatee to facilitate the processing of visa applications of foreigners coming into Ethiopia for investment purposes and that of the families (spouse, children and parents) of investors undertaking investments in Ethiopia. In addition, on the duration of the visa to be issued an owner or shareholder of an investment undertaking may be issued a five-year multiple visa, while general manager, board member and top management of the investing enterprise or its parent or its holding company may be issued a three-year multiple entry visa. Holder of multiple entry visa cannot stay in Ethiopia for more than 90 days for his/her single stay. The Commission is also empowered to offer support letter to foreigners who seeks visa from third county. Finally, the Commission is required to cooperate with the Immigration, Nationality and Vital Events Agency and other appropriate government body for the implementation of the visa services.
4. One Stop Services: - The provision of Article 24 of the Investment Proclamation has extended its one stop services to include all investments as opposed to the repealed Investment Proclamation which envisaged such services for the investors investing in the manufacturing area. The Commission and the Regional State Investment Organs are required to provide such services in accordance with the applicable Federal and Regional State Laws and in coordination with the and in synchronization of the functions of the relevant Agencies. The details of the one stop services are not outlined in the Investment Proclamation, as opposed to the repealed Investment Proclamation. It seems that such details will be provided in the Council of Ministers Regulation to be issued in the future.
5. Grievance Procedures: - The Investment Proclamation has introduced Part Seven that details grievance handling and investment dispute settlement. Articles 25 to 27 deals with grievances while Article 28 deals with investment disputes. Article 25 entitles any investor to lodge complaint against a grievance on his application to engage in investment or against any grievance he has in respect of his investment. Any of the complaint submitted by an investor against a final administrative decision is required to be “resolved using speedy, equitable and efficient procedures.”
Article 26 entitles the investor to escalate his grievance to the Investment Board (‘Board’), which is the highest Investment Administration Organ, where the investor is not satisfied by the final administrative decision of the Commission, which should be issued in writing to the investor within 7 (seven) working days from the date of the decision. The application to the Board should be done within 30 (thirty) working days from the receipt of the final decision of the Commission by the investor. Although the provision of Article 26 (4) requires the Board to give its decision within 90 (ninety) working days from the date of submission of the compliant, it is not clear on whether the investor can appeal against such decisions of the Board or not and if appealable, to whom, when and under what conditions.
Article 27 entitles the investor to lodge his complaints not only against the decision of the Commission but also against the decisions of other federal government executive bodies. This provision requires the federal government executive organ to issue its decision in writing to the investor within 7 (seven) working days from the date of the decision. The investor is entitled to lodge its complaint against this decision to the Commission within 30 (thirty) working days from the receipt of the final decision of the federal government executive organ. The Commission is required to engage with the federal government executive organ that rendered the decision which is subject to the complaint and propose a recommended solution in writing within 30 (thirty) working days from the date of the submission of the compliant by the investor; and such recommended solution should be given to the investor in writing within 7 (seven) working days from the date the recommended solution is tabled. The investor is entitled to file his compliant to the Board, within 30 (thirty) working days from the date of notification, against such recommended solution or where the Commission’s recommended solution is not accepted by the concerned federal government executive organ. Although the provision of Article 27 (8) requires the Board to give its decision within 90 (ninety) working days from the date of submission of the compliant, it is not clear on whether the investor can appeal against such decisions of the Board or not and if appealable, to whom, when and under what conditions. However, the provision of Article 27 (9) requires any federal executive government body to comply and execute the decision of the Board.
6. Settlement of Investment Dispute: - Article 28 of the Investment Proclamation lays the foundation for the settlement of investment disputes between the investor and the Government, without defining what it means by “investment disputes”. As per this provision any dispute between an investor and the Government involving investments made as per the Investment Proclamation will be resolved through consultation or negotiation. This is without prejudice to the right of the investors [both domestic and foreign investors] to lodge their complaint to “a competent body with juridical power”. In case of foreign investors, the Federal Government may agree to resolve the investment dispute through arbitration. However, the foreign investor should choose to submit his dispute either to a competent body with judicial power or to an arbitration; such choice will be deemed as final and excludes the other.
7. Powers of the Board: - Article 31 of the Investment Proclamation has added two additional mandates to the Board. The first relates to exercising of powers and duties specified under the Investment Proclamation, Regulations issued based on the Proclamation, and other laws enacted to regulate the designation, operation and supervision of industrial park. The second relates to deciding, in consultation with relevant public and private sector stakeholders, to open to foreign investors those investment areas reserved for joint investment with the government, or to domestic investors, or for joint investment between domestic and foreign investor, as well as restrict foreign investment in areas open to foreign investors where such decision is justified by public interest considerations. The decision of the Board on this latter mandate of its take immediate effect and will be communicated to the public within one month through publications or other forms.
8. Members of the Board from the Private Sector: - As per Article 32 of the Investment Proclamation, although they are non-voting two representatives to be designated from the private sector are included as members of the Board. The private sector representatives designated to be members of the Board serves in the Board for a term of two years and may be reappointed for one more term. They are required to participate in the Board’s proceedings and discharge their responsibility free from any direct or indirect situations creating conflict of interest and they shall also rescue themselves from deliberations of the Board in respect of matters which involve their personal interest or give rise to any form of conflict of interest.
9. Additional Powers and Duties of the Commission: - Article 38 of the Investment Proclamation, gave detailed powers and duties to the Commission. Some of which includes leading investment promotion activities, compilation of a list of potential investors, and implementation of the targeted investor recruitment work; rebranding and building the country’s image as a preferred investment location; making industrial parks promotion as one of its core undertakings; establishing core agency, whose system should be cost effective; provide a coordinated, accessible and accurate information to investors and other concerned bodies; and establishing an information exchange system that enables current and accurate information flow between the Commission, investors and other government agencies.
10. Establishment of the Federal Government and Regional State Administrations Investment Council: - As per Article 44 of the Investment Proclamation, a Council whose function is creating cooperative and coordinated administration of investment between the Federal Government and Regional State Administration, which is to be chaired by the Prime Minister, is established. The details of the powers of this Council, its members, the modality as per which it conducts its meetings, and the identity of its secretariat are provided under Articles 45 to 48. Article 50 also required the Commission to work in close cooperation with Regional State Investment Administration Organs by engaging with appropriate investment organs of the Regions and by establishing Standing Regional State Investment Desk within the Commission.
11. Provision of Investment Land: - As per Article 51 of the Investment Proclamation, Regions are mandated to handle land requests for investments in the manufacturing, agriculture, and other sectors in an efficient manner, and shall establish a transparent and predictable system for handling such requests, which shall be in accord with the pertinent Federal Land Administration Laws. Regions are also required to identify and classify land to be used for investment projects, organize such land centrally and communicate the same information to the appropriate investment organ. The Commission is also required to coordinate with Regional State Bodies so as holders of investment permit who requests for land gets land required for their investment. Finally, Regions are required to establish a Special Procedure as per which they will give land to investors who hold investment permit within 60 (sixty) days where the investment is in the manufacturing sector and within 90 (ninety) days where the investment is in other sectors.
Published on April 28th 2020
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 INVESTMENT-PROCLAMATION PROCLAMATION NO. 1180_2020.pdf | 1131 kB |