Poland, 02-954 Warsaw
1, Goplańska Street
phone: +48 22 8855410
fax: +48 22 8856500
email:
warsaw@afghanembassy.com.pl

office hours: 9-16
visa section: 10-12, 13-15

Law on domestic and foreign private investment in Afghanistan

Chapter One
General Provisions

Article One:

This legislation has been adopted to encourage and protect domestic and foreign private investment. the goal of this legislation is to promote economic development, expand, the labor market, improve national prosperity, advance the people's standard of living and assist the process of Afghanistan's reconstruction.

Article Two:

The following terms are defined to mean:

'Investment': utilization of tangible and intangible capital in the form of cash, credit, material goods, services or other types (i.e. patent, intellectual property, trademark adn copyright) in an enetrprise approved by the High Commission on Investment.
'Approved Enterprise': Investment by a domestic or foreign real or legal entity as proscribed under this law.

Article Three:

Based on the provisions of this law and the Commercial Law, qualified domestic or foreign entities, real or legal, may invest in all sectors of the economy-whether producton or service-related.

Article Four:

Domestic, foreign or joint ventures may take any of the following forms:

One hundred percent domestic private equity.
One hundred percent foreign private equity.
Any combinaton of domestic and foreign private equity.
Joint venture between the Government of Afghanistan and the private sector, whether domestic or foreign.

In the last two categories, the parties shall determine the percentage of equity by mutual consent.

Article Five:

The Approved Enterprises shall prepare their accounts according to international standards and submit them to the relevant authorities for auditing.

Chapter Two
Coordination and Monitoring

Article Six:

The High Commission on investment will be the Government's focal points for policy-making on investment, it will aso coordinate and monitor the Office of Private Investment. this Commission is composed of:

Minister of Commerce
Minister of Justice
Minister of Foreign Affairs
Minister of Finance
Minister of Planning
Minister of Reconstruction

The Minister of Commerce will chair the High Commsission. When a proposed investment pertains to a particular sector, the relevant Minister(s) shall be invited to participate in the meeting of the High Commission.

If necessary, the President may modify the compostion of high Commission.

Article Seven:

The High Commission shall have two relating seats for the privte sector, with one year terms. For the first year, the Chamber of Commerce will elect these representatives. Subsequently, investors will propose to the High Commission a new modality of electing these representatives.

Article Eight:

To implement the articles of this law, the Office of Private Investment will be created within the framework of the Ministry of Commerce. The powers, responsibilities and the organizational chart of this Office will be specified in bylaws to be approved by the High Commission.

Article Nine:

The Director of the Office of Private Investment in Article Eight shall serve the Secretary of High Commission.

Article Ten:

The High Commission shall establish a Secretariat Office.

Chapter Three

Benefits, Waivers and Obligations of Approved Enterprises.

Article Eleven - Taxes:

The Government shall grant the following tax waivers:

Short-term: Tax waivers shall be granted for four years from the date of licensing, or three years from the start of production-whichever comes first.
Medium-term: Tax waivers shall be granted for six years from the date of licensing, or seven years from the start of production-whichever comes first.
Long-term: Tax waivers shall be granted for eight years from the date of licensing, or seven years from the start of production-whichever comes first.

Under special circumstances for investments requiring a longer period of maturation, the High Commission, with due consideration of universal norms, may agree to extend the duration of exemption.

Article Twelve:

With due considartion to universal norms, the Office of Private Investment shall determinate as to which of the three categories of Article Eleven a particular investment falls under.

Article Thirteen - Custom duties:

Products of the Approved Enterprises shall be exempt from any export tariffs and duties for four years from the start of production.

Renting of land Article Fourteen:

Foreign investors, based on the classification of their Approved Enterprises as short-term, medium-term or long term (as described in Article Eleven), may lease real estate for ten, twnety of thirty years, respectively. Lease of land is conditional to implementation of the project.

The Hight Commission, based on need and justifiable cause, can extand the period of implementation of the project.

Article Fifteen - Transfer of capital and profits:

Private investors have the right to transfer their capital and profits (out of Afhganistan).

Article Sixteen - Sale:

Private investors have the right to sell ther approved enterprises after settling their legal accounts and obtaining the agreement of the High Commission.

Article Seventeen:

The capital and proceedings of the sale can be transferred outside the country.

Article Eighteen - Purchase and sale of shares:

An Aproved Enterprise with forign ownership can sell its shares to Afghan citizens or the Government of Afghanistan.

Article Nineteen:

Purchase, sale and use of patents and trademarks, and properiety information by the investor in the Approved Enterprise will executed according to the legal agreement.

Article Twenty - Access to banking:

All investors, wheather foreign or domestic, have the right to avail themselves of the banking facilities in Afghanistan, including opening of accounts in foreign currency and the receipt of loans and credits to advance investment in the country.

Article Twenty-One:

Whenever possible, private investors are encouraged to employ Afghan personnel who posses the revelant skills and thus assist in furthering their technical and professional development.

Chapter Four
Miscellaneous Articles

Article Twenty-Two - Seizure and confiscation:

The State not have the right to confiscate or seize domestic or foreign investment without due process of law and the order of a court with the appropriate level of jurisdiction.

Article Twnety-Three:

Coniscation of foreign and domestic investment is only authorized for the purpose of safegurding the public interest. In such, prior to coniscation, the State shall pay the just comesation for sale investment on the basis of an assessment of any internationally respected form .

Article Twnety-Four:

Private investors may transfer any funds received from the Government as result of confiscation out of Afghan without the payment of taxes..

Article Twenty-Five - Sectors not covered by this law:

Investments in construction of piplelines, telecomunications, oil and gas, mines and minerals and heavy industries are exempt from provisions of this legislation.

Investment in these sectors shall also be regulated under seperate legislation.

Article Twenty-Six - Dispute resolution<:

Disputes between foreign and domestic investors versus versus the Office of Investment and Government officials may be directly resolved in an amicable manner by understanding and observing the rules of this legislation and documentation of the Enterprise, including whatever specialized contracts have been signed and agreed upon.

Should the disputes not be resolved in this manner, the parties shall settle their dispute according to the provisions of the Washington Arbitration regulations of March 18, 1965 of in accordance with the United Nation's Judiciary Law for International Commerce.

Article Twenty-Seven:

The decision based on these international agreements for dispute settelment and/or their rendered judgmets shall be final and both parties are obliged to accept such a final decision.

Article Twenty-Eight:

Upon execution of this law, the Office of Investment created within the framework of Investment Legislation dated 8/2/1422 H.Q. is considered abloshed. The High Commission will adopt measures concerning projects under submission to the current Office.

Article Twenty-Nine:

In the case of discrepancy between provisions of this legislation with any provisions of existing laws relating to national and foregin investment, the provisions of this legislation shall prevail.

Article Thirty:

Upon the execution by the Head of State, this legislation will be published in the Official Gazette and will thereby be excecuted; private foreign and domestic legislation that was published in the Official Gazette number 797 (dated 8/2/1422 H.Q.) will be null an void.

Signed by: