LAW ON DOMESTIC AND FOREIGN PRIVATE INVESTMENT IN AFGHANISTAN Purpose of law The purposes of this Law are to promote the role of private investment, both domestic and foreign, in the economy of the country, and to create a legal regime together with an administrative structure that will encourage, support and protect foreign and domestic private Investors in order to promote economic development, expand the labor market, increase. Non Permitted areas of Investment Private sector is not allowed to invest in those areas which is restricted by Islam and government of Afghanistan. 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.

1. In the Name of Allah, the most Gracious and
Merciful
LAW ON DOMESTIC AND FOREIGN
PRIVATE INVESTMENT INAFGHANISTAN
Mohammad ‘Samim Faizy’
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2. General Provisions
• Purpose of law
• The purposes of this Law are to promote the role of private
investment, both domestic and foreign, in the economy of the
country, and to create a legal regime together with an
administrative structure that will encourage, support and protect
foreign and domestic private Investors in order to promote
economic development, expand the labor market, increase.
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3. Cont…
• production and export earnings, promote technology transfer,
improve national prosperity and advance the standard of living.
• material goods and services in an enterprise approved by the
High Commission on Investment.
• “Investment”: Utilization of tangible and intangible capital in the
form of cash, credit,
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4. Permitted areas of investment
•
According to provisions of this law and the Commercial Law, qualified
domestic or foreign entities legally can invest in all sectors of the economy—
whether production or service-related.
• Non Permitted areas of Investment
• Private sector is not allowed to invest in those areas which is
restricted by Islam and government of Afghanistan.
• Ex; narcotics, wine, casinos, exploration of natural resources.
•
Domestic, foreign, or joint ventures may take any of the following forms:
•
One hundred percent domestic private equity.
•
One hundred percent foreign private equity.
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5. Cont…
•
Any combination 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.
•
Company should prepare and provide their accounts
according to international standard to relevant authority for
auditing.
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6. Coordination and Monitoring
•
•
•
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The high commission which is composed of
1. Minister of Commerce
2. Minister of Justice
3. Minister of Foreign Affairs
4. Minister of Finance
5. Minister of Planning
6. Minister of Reconstruction
• Will coordinate and monitor the office of private investment.
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7. Cont…
• 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.
• The Office of Private Investment (roles, responsibilities and
organizational chart) will be created within the framework of
the Ministry of Commerce.
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8. Cont…
• The Director of the Office of Private Investment
mentioned shall serve as the Secretary of the High
Commission.
Thanks from your attention
Azamt Khan will Continue…….
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9. Registration
(1) An
enterprise shall be deemed approved when it is accepted by the
Commission or the Office
The office shall be obliged to keep and maintain records of approved
enterprises.
(2) Approved Enterprises may operate either as:
1- Business entities organized under Afghan law, [or] 2- Business
entities organized under the laws of another nation, but registered
and approved to do business in Afghanistan in accordance with the
laws of Afghanistan.
(3) Approved Enterprises may have ownership in any of the following
forms:
• - One hundred percent (100%) ownership by Investors.
• - A joint venture between the Government of Afghanistan and
private Investors.

10. Applying for Registration
(1) The application for approval of an enterprise shall be
submitted to the Office. The application shall contain the
details required by the Commission in accordance with
this law, and the relevant Regulations, Rules and
Procedures.
(2) A Person may register an existing enterprise or an
enterprise that is in the process of formation.

11. procedures for registration of an
enterprise or denial of registration
(1)
Within a fixed time period, the Commission and the
Office,shall make a decision regarding the registration of an
entity’s application that meets the terms established by this
Law, and shall inform the applicant.
(2) An application for registration can only be denied when it is
not submitted in accordance with this Law. [If] the
Commission or Office [has denied an application, it] shall
give an explanation in writing for the denial.
(3)When the applicant amends the application according to
paragraph (2) of this Article, the applicant may re-apply.
4) If the Commission or Office does not send the reply for denial
within the fixed period, the entity shall be deemed to be an
approved enterprise.
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12. Cont...
(5) If the Commission or Office has accepted the registration
of an existing entity, it shall immediately register such
entity and provide a certificate of registration to the entity
evidencing its status as an Approved Enterprise.
(6) If the Commission or Office has accepted the application
for registration of an entity that has not yet been formed, it
shall register such entity without delay and provide a
certificate of registration to the entity. Thereafter, the entity
must establish its legal form within a fixed time period as
determined by the Commission
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13. Reporting
(1) An Approved Enterprise must immediately notify the
Office if there has been a change in its ownership,
capital structure, or contribution of additional capital.
(2) An Approved Enterprises shall annually file an
update with the Office within ninety (90) days of the
end of the fiscal year, which shall include the
information referred to in Article 11 (registration) of
this Law, along with such other information as the
Commission or the Office deems appropriate.

14. Loss of Approved Enterprise Status
(1) The Status of an Approved Enterprise shall be revoked
when:
• - The Approved Enterprise entity is dissolved;
• - The Approved Enterprise can not continue to operate;
[or]
• - The Approved Enterprise violates the provisions of this
Law.
(2) The Commission or the Office shall grant the Approved
Enterprise a period of three (3) months to remedy the
violation.

15. Benefits, Waivers and Obligations of Approved
Enterprises
TAXES
The Government shall grant the short term, medium
term and long term tax form the private investment.
CUSTOMS DUTIES
There will be no export charges on the products of the
approved enterprises on export for four years from the
start of production.
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16. RENTING OF LAND
Foreign investors, based on the classification of their
Approved Enterprise as short-term, medium-term or longterm, may lease real estate for ten, twenty or thirty years,
respectively. However the high commission can extend the
period of the lease.

17. ACCESS TO BANKING
all the investors have the right to open banking account in
Afghanistan both in afghan or in foreign currency.
labor and employment
• An approved enterprise can hire foreign person in order to
conduct its business activities.
• 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.

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