Investing in Afghanistan for Foreigners

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Afghanistan has finally begun to see the fruits of the rebuilding efforts and development in major cities – largely in part of the initiative of the private sector.

The Afghanistan Investment Support Agency (AISA), as a “one-stop shop” for foreign and domestic investment licensing, reports that 754 foreign companies from 25 countries have registered investments valuing at USD 1.3 billion in various industrial sectors in including telecommunications, transportation and logistics, food processing, banking, tourism and trade. Of this, 70 have been registered from the U.S., totaling USD 75 million in investment.

Turkey is, by far, the largest foreign investor in Afghanistan followed by Germany, India and Pakistan. In terms of industrial sectors, telecommunication is the biggest success story, experiencing phenomenal growth and revolutionizing how business is done in Afghanistan.

Historically, Afghanistan has been at the heart of major trading routes, amongst them, the fabled Silk Road, which is one of many that have served the region throughout the centuries.

Over the past ten years, the Afghan people have steadily progressed towards peace and prosperity, and its economy has seen meteoric growth. Once again, Afghanistan is emerging as a central hub for trade as the economies of Central and South Asia continue to grow and become increasingly integrated into the global economy.

3 Major Reasons to Invest in Afghanistan

  1. 1. Afghanistan is an emerging market of strategic importance close to some of the largest and fastest-growing markets in the world.

Afghanistan is strategically located between the energy-rich republics of Central Asia and the major seaports in South Asia providing a key transit route for Central Asian oil and gas to markets in South Asia as well as overseas. Also Afghanistan has natural access to markets of neighboring countries including China, India and Pakistan.

  1. 2. Afghanistan offers a pro-business minded environment with legislation favorable to private investments.

The principles of a market economy are incorporated in the Constitution of Afghanistan. Considering the National Development Strategy, the growth of the private sector is a cornerstone of Afghan politics. Consequently President Hamid Karzai as well as the government has focused intensely on removing obstacles to private sector development.

  1. 3. Afghanistan is rich in natural resources.

In Afghanistan there are currently more than 1.400 identified mineral deposits. These include energy minerals such as oil, gas and coal as well as iron and copper deposits of world quality. Furthermore, the country has been blessed with a great variety of precious and semi-precious stones, including emerald, jade, amethyst, alabaster, berylo, lapsis, lazuli, tourmaline, ruby, quartz and sapphire. Following the national privatization programme most of the major state-owned enterprises have been slated for international tender, which has made the entry into all these sectors easier.

More Reasons to Invest in Afghanistan

As many companies who have already started projects in Afghanistan have discovered, there are many business opportunities in Afghanistan. Although there are many contracting opportunities, investing in Afghanistan and its people is highly encouraged and will lead to the creation of additional opportunities. You may ask yourself, why invest in Afghanistan?

Some of the major reasons include that Afghanistan provides:

– One of the lowest custom tariffs in the region
– Streamlined procedures for business registration through AISA
– Low tax rates
– Low labor costs
– A growing domestic consumer market
– An opportunity to create employment for women
– An eager and committed work force

Some of the key sectors for investment include:

– Agriculture and agro processing
– Architectural, construction and engineering services
– Building and construction materials
– Power generation and transmission
– Oil and gas exploration
– Telecommunications
– Food processing
– Manufacturing
– Textiles and carpets
– Education services
– Consumer electronics
– Transportation
– Equipment and machinery sales and leasing
– Irrigation technology
– Leather and leather processing
– Precious and semi-precious stones
– Marble and other industrial stones
– Chemical and pharmaceutical products

Financing Options

One of your pre-investment considerations should include how to finance your enterprise. If you require 3rd party funding there are several options available to both foreign and domestic investors.

We have compiled all currently available options below. Please contact our Investor Support Department for details.

For Domestic and Foreign Investors:

For Foreign Investors or Foreign-Domestic Joint ventures only:

Sources

http://www.embassyofafghanistan.org/page/investing-in-afghanistan

http://www.afghanistanembassy.no/afghanistan/investing-in-afghanistan