Until recently, the Eritrean Government was not overly keen to invite foreign investors to Eritrea because the infrastructure base necessary to support such investment was not available. Although inadequate for present-day needs, whatever infrastructure was inherited from the colonial past was totally destroyed or seriously damaged during the long liberation struggle. Under these circumstances the Eritrean Government considered the rehabilitation, expansion and the building of new infrastructure its primary economic task, a goal which it pursued so diligently that today Eritrea can boast adequate and reliable electric supply, a network of good roads, airports of international standard, reliable communications networks, increased municipal water supply, adequate port and cold storage facilities, administrative and residential buildings etc…The Government has also put in place institutions and laws that many consider to be business-friendly. That is why today the Eritrean Government feels confident to invite investors to consider the following sectors:
Eritrea is Africa’s youngest nation with a history as old as humanity. Its rich cultural heritage and its widely varying natural beauty, coupled with its friendly and honest people, make it a delightful place to visit. Asmara, with its old-Italian-style buildings, multiple churches and mosques, is one of the best-preserved colonial cities in Africa.
Seacoast & Islands: The coast north of Massawa and between Massawa and Assab offers vast stretches of unspoiled beach front for bathing, snorkeling, and a wide range of water sports. For the more intrepid traveler, the coastal plain offers an unusual habitat for humans and for wildlife.
The many offshore islands of the Dahlak Archipelago and those near Assab have some of the best scuba diving sites in the world, from the pristine reefs of Dissei, Dur Gaam and Madote to the numerous underwater shipwrecks from all periods of Eritrean history. Sport fishing is also popular and usually rewarding.
The largest of the islands, Dahlak Kebir, offers opportunities to visit Afar fishing villages or ancient Turkish and Islamic ruins after an afternoon safari to catch sight of whales, humpback dolphins, the endangered dugong or one of five turtle species found in Eritrean waters.The extended Red Sea coast and numerous offshore islands offer exquisite, unspoiled beaches and some of the best scuba diving sites in the world. Inland, Eritrea boasts magnificent mountain scenery, dotted with picturesque traditional villages and ancient archeological sites.
That is why the Eritrean Government feels that there exist ample opportunities for investors interested in any sector of the hospitality industry, e.g. hotels, motels, restaurants. The Ministry of Tourism welcomes investors in any of these sectors.
The Red Sea is home to more than 1,000 species of fish, including tuna, red snapper, kingfish, sardines and other prime food fish, and over 220 species of coral. There are also large stocks of high-value species, such as lobster, crab, oyster, and shrimp. Investors are therefore invited to exploit in a sustainable manner the opportunities offered by the fisheries sector.
Geological data indicate that Eritrea contains significant deposits of gold, base metals, ferromanganese and industrial and construction materials such as granite, marble and limestone. Marble deposits are of high quality and suitable for export to the Middle East and Europe. Commercially recoverable deposits of oil and natural gas along the Red Sea coast may be substantial.
Eritrea’s mining sector development strategy is focused on promoting domestic and foreign direct investment in prospecting, exploring and development. To facilitate this, the Ministry of Energy and Mines has conducted geological surveys of promising sites and indicated a willingness to share the risks associated with prospecting and exploration. Mining laws stipulate the terms and conditions that investors have to fulfill and the environmental requirements to which they are subject.
ERITREAN FREE ZONES
The Eritrean Government has started a free zone program in Eritrea. The objective of the program is to contribute to the development of an internationally competitive business sector in Eritrea by creating an environment in which domestic and foreign investors will be encouraged to invest in export-related business activities. The Government believes that the program will, inter alia,
(a) create employment opportunities,
(b) extend the technology base
(c) help develop the technical and managerial skill of the Eritrean Workforce,
(d) expand Eritrea’s external business and marketing contacts,
(e) help build industrial projects of all kinds and storage facilities for raw and processed materials, (excluding storage of drugs).
The first free zone has been set up at the port of Massawa and is ready to accept investments which contribute to the achievement of the above objectives. Investors will find that the Free Zone Program is extremely business-friendly as the following articles of the Eritrean Free Zones Proclamation indicate:
Article 31.Tax Exemption
1. Persons with a free Zone developer’s license granted under Article 24 shall be granted exemption from the payment of any or all taxes, including income tax from personal income, profit, income from rent, sales tax, service tax, excise tax, stamps duty, tax on dividends and withholding taxes for a period of 15 years from date of issue of the license.
2. Any investor engaged in trading or industry or storage or other activities in the free zone may not pay any tax including taxes on his or her profits or bank interests from accounts or bank business documents or shares.
Article 32.Repatriation of Income and Profits
Foreign investors may repatriate without restriction, income and profits arising from licensed activities in a free zone.
Article 34. The Operation of Foreign Currency Accounts:
1. Persons holding a free zone license under Article 24 shall be permitted to operate a foreign currency account with a bank in Eritrea.
2. Investors are permitted to deal in all currencies, i.e. to transfer, receive, pay open letters of credit and engage in all types of bank activity without any restriction.
3. The Bank of Eritrea shall be consulted by the Authority about the terms and conditions referred to in sub-Article (2) of this Article.
4. The Bank of Eritrea shall supervise the operation of the foreign currency accounts. It shall be empowered to request any information it considers necessary from the account holder or the concerned bank. For more information on free zones, please contact the Eritrean Embassy in New Delhi (Tel 011-26146336, 26140398)