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Newsletter 10

Investment Opportunities and Incentives in Oromia

In the region divided into 14 zones, the average temperature ranges from 14⁰ c to 25⁰ c. the annual average rainfall is between 200 and 2600 m.m.  

Extensive ranges of mountains hills, plains and gorges are some of the features of this vast region.  

Oromia is endowed with all year round running surface and underground water. 

With all the diversity in relief, weather condition and mosaic settlement of population and better infrastructure the investment opportunity in Oromia is immense.   

 Conducive business environment at federal and regional levels has enabled a number of investors to exploit ample opportunities while contributing for the development of the country. 

According to the Oromia Investment Commission 2,468 investment projects are registered in the region up untill March 2005.   

The investors who are engaged in agriculture, industry, construction, trade, real state, mineral and energy sectors have created 132,000 permanent and 595,00 temporary jobs.

Investment Incentives 

Ø      100% exemption from payment of import duties and other taxes levied on all capital goods and spare parts that are worth up to 15% of the values of these goods,

Ø      An investor who exports at least 50% of his/her product or supplies 75% of his /her product as production input to an exporter is eligible to 5-7 years income tax exemption with possible extension of the tax-holiday under special circumstances. However, an investor who exports less than 50% of his/her products or supplies his/her products only to the domestic market shall be eligible to income tax exemption for two years,

Ø      An investor who plants coffee, tea, sugarcane, or any other perennial crops on an area of more than one hundred hectares shall not pay land rent for four years,

Ø      An investor who produces rain-fed cereals, pulses and oil seeds on a land left fallow for 5 and more consecutive years or on virgin land will be free of land rent payment for 1-3 years. An investor who cultivates fruits, vegetables and produces food crops or oil seeds under irrigation scheme will be free of land rent payment for 2-4 years.

Ø      An investor who cultivates flowers, medicinal herbs, spices and produces improved seeds shall be free of land rent payment for three years,

Ø      An investor who is granted to use land may mortgage or pledge his holding and properties on the land as a collateral to get loan from a bank or another source of finance,

Ø      An investor who plants indigenous trees excluding eucalyptus tree on a land that cannot be used for crop production or animal-rearing shall be given land free of charge.

The period of exemption from income tax shall begin from the date of commencement of production or the date of provision of services, as the case may be and an investor who has incurred loss within the period of income tax exemption shall be allowed to carry forward the loss for the income tax exemption period, after the expiry of such period.  

Investment by Sector from November 1992-December 9, 2005