Foreign Financed Special Investments Proclamation, No. 159 of 2007 Country/Territory Eritrea Document type Legislation Date 2007 Source FAO, FAOLEX Subject Agricultural & rural development, General Keyword Agricultural development Business/industry/corporations Capacity building Fiscal and market measures Governance Subsidy/incentive Institution Public participation Geographical area Africa, Eastern Africa, Least Developed Countries, Red Sea & Gulf of Aden Abstract This Proclamation applies to all Foreign Financed Special Investments (FFSI) of more than 20,000,000.00 USD or its equivalent in other convertible currency. The objectives of this Proclamation include; to achieve self-sustaining economic growth and thereby ensure steady improvement in the standard of living of the population of Eritrea; to facilitate the rapid expansion of Eritrea’s export potential and acceleration of social development; to create and expand employment opportunities; and to promote, encourage, safeguard and protect FFSIs. The Proclamation makes all investment areas available, with the exception of the financial sector, domestic wholesale and retail trade and commission agencies. Investors shall require a license and the Business Licensing Office of the Ministry of Trade and Industry shall coordinate with relevant institutions to issue the relevant license. The Proclamation provides for instances where an FFSI located outside the Eritrean Free Zone area can benefit from customs duty and sales tax relief, including; its initial foreign capital investment or expansion is more than 20,000,000.00 USD or its equivalent in a convertible currency; it is engaged in sectors or activities that have already been recommended or approved by the government; it has bank accounts in foreign exchange in an Eritrean bank; it is a source of employment, directly or indirectly, for Eritreans, among others. Similarly, the are provisions for draw-back reliefs and rebate options for FFSIs in certain specified circumstances. Investors may also remit foreign exchange out of Eritrea, this can be done in the following ways; through net profits and dividends accrued from investment capital; debt-servicing payment for a foreign loan, provided that the debt was contracted with prior knowledge of the Bank of Eritrea and in accordance with regulations issued; proceeds received from liquidation of investment; and payments received from the sale or transfer of shares. The Proclamations lays down certain investment guarantees for FFSIs; an investment shall not be nationalized or confiscated; an investment shall not be attached, seized, frozen, expropriated or put under custody by the government except for public purposes and with the due process of law; and where there is expropriation, prompt, full and fair compensation shall be paid by the government in a convertible currency. Full text English