Technology Transfer Agreement on Investment: the Requirement of Registration

By DMLF

The Investment Proclamations of Ethiopia from the old to the new incorporate technology transfer agreement as one form of growing the quality and quantity of investment in the country. From that of Investment Proclamation 37/1996, 280/2002, 769/2012 up to the recent one i.e. Investment Proclamation No 1180/2020, all allow any investor in Ethiopia to conclude technology transfer agreements. The option to conclude technology transfer agreement is available for any investor. Investment Proclamation No 1180/2020 defines “Investor” as a Domestic or Foreign investor who has invested capital in Ethiopia. Both foreign and domestic investors can conclude the technology transfer agreement relating to their investment. The aim is to enable the investor to acquire know-how and better compete in the world market.

Under Investment Proclamation No 1180/2020, “Transfer of Technology” is defined as the transfer of systematic knowledge for the manufacture of a product, the application or improvement of a process or for rendering service, including management and technical know-how as well as marketing technologies, but may not extend to transactions involving mere sale or lease of goods.

The only requirement for the investor who wishes to conclude a technology transfer agreement in relation to his investment is to have the agreement registered with the Ethiopian Investment Commission(EIC). The reason being a technology transfer agreement that is not registered  shall not have legal recognition. The fact that the technology transfer agreement is made known or for that matter registered  by  EIC will enable the investor to remit the payment related to technology transfer agreement  out of Ethiopia in convertible foreign currency at the prevailing exchange rate on the date of transfer. EIC shall notify the relevant Federal Executive Organs and copy the National Bank of Ethiopia the registration of a technology transfer agreement to facilitate the transfer of payments in convertible currency.

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