The two categories of investment incentives available are those granted at the federal level and those bestowed regionally. Based on the proclamations of the Federal Government, the following incentives may be offered.

• 100 percent exemption from the payment of import duties and other taxes levied on all capital goods such as plant machinery, equipment as well as spare parts worth up to 15% of the value of the imported investment capital goods. So far, a number of investors benefited from this incentive.
• An investor who exports 50% of his/her product or supplies 75% of his/her product as production input to an exporter is eligible to 2-7 years income tax exemption. The period may exceed beyond this, under special circumstances.
• Exemption from export duty except coffee.

• Any investor who is granted to use rural 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.
• An investor shall have a right to transfer his holding to another person or invest in partnership in accordance with the law.
• An investor who plants coffee, tea, sugarcane, or any other perennial crops on an area of more than one hundred hectares shall not pay a land rent for four years.
• Land for forestry development will be issued free of charge.

The investment proclamation enacted at the Federal level guarantees that no investment may be expropriated or nationalized except when required by the public interest and then only in compliance with the requirements of the law where adequate and prompt compensation corresponding to the prevailing market value shall be paid in case of public interest.
Moreover, Ethiopia has concluded multilateral and bilateral investment promotion and protection agreements with many countries and is ready to expanding this to other countries. Recently, Ethiopia is a member and signatory of the World Bank -affiliated Multilateral Investment Guarantee Agency (MIGA) and a signatory of the International Convention on settlement of Investment Dispute.( ICSID).

• Land rent holding of up to 4 years for production of cash crops and other perennial crops; >
• Land is granted free of charge for forestry development;
• Right to transfer land holding to another person or inset in partnership with a third party;
• Right to mortgage and/or pledge land holding and properties on the land as a collateral to secure loan from banks or other sources;
• Opportunity to acquire hand at a reasonable price for fertilizer manufacturing, agro-chemicals, agro-processing, agricultural equipment manufacturing, etc.
• Extended land lease payment period (over 40 years);
• Low marginal land lease rate (0.37-2.33 Birr/m2/ year);
• Exemption from land rent payment for a period of up to 4 years up on developing a land left fallow for five years or visgin land or an irrigation seheme or up on producing improved seeds,
• Access to better infrastructure and local and international markets,
• Abundant labour and large market, and more.