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.

The following terms are defined to mean:

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 production or service-related.

1. One hundred percent domestic private equity.
2. One hundred percent foreign private equity.
3. Any combination of domestic and foreign private equity.
4. Joint venture between the Government of Afghanistan and the private sector, whether domestic or foreign.
   

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

The High Commission on Investment will be the Government’s focal point for policy-making on investment; it will also coordinate and monitor the Office of Private Investment. This Commission is composed of:

The High Commission shall have two rotating seats for the private 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.

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.

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

The High Commission shall establish a Secretariat Office.

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 five 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.

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

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

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

Private investors have the right to transfer their capital and profits [out of Afghanistan].

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

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

An Approved Enterprise with foreign ownership can sell its shares to Afghans citizens or the Government of Afghanistan.

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

All investors, whether 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 credit to advance investment in the country.

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

The State does 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.

Confiscation of foreign and domestic investment is only authorized for the purpose of safeguarding the public interest. In such a case, prior to confiscation, the State shall pay the just compensation for said investment on the basis of the prevailing market price or on the basis of an assessment of an internationally respected firm.

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

Should the affected enterprises have any complaints, they have the right to approach the High Commission, which may adopt the appropriate measures for resolution of their grievances.

Investments in construction of pipelines, telecommunications infrastructure, oil and gas, mines and minerals, and heavy industries are exempt from provisions of this legislation.

Investment in these sectors shall be regulated under separate legislation.

Disputes between foreign and domestic investors 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 or in accordance with the United Nation’s Judiciary Laws for International Commerce.

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

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

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

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

1 – Hedayat Amin Arsala, Vice President

2 – Dr. Ashraf Ghani “Ahmadzai”, Minister of Finance

3 – Dr. Abdullah, Minister of Foreign Affairs

4 – Abdul Rahim Karimi, Minister of Justice

5 – Mir Mohammad Amin “Farhang”, Minister of Reconstruction

6 – Sayed Mustafa “Kazemi”, Minister of Commerce

7 – Engineer Joma Mohammad Mohammadi, Minister of Mines & Industry

8 – Professor Asghar Peyman, Deputy Minister of Planning

9 – Prof. Dr. Qasem Fazili, Legal Affairs Advisor

Office of the President