Investing in Afghanistan

Dear Investor:

The Government of Afghanistan actively supports investment in the private sector as a means to creating a prosperous market economy in Afghanistan. Your decision to consider investing in Afghanistan is a smart one. There is no region in the world with greater untapped economic potential than Central Asia. As an area rich in human and natural resources, profitable investment opportunities abound.

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.

The Government of Afghanistan understands the critical role it must play to create a favorable environment for investment. The passage of the Private Investment Law in 2006 was an important milestone demonstrating the Government’s commitment to attracting new investment. The Investment Law allows for one hundred percent foreign ownership, easy repatriation of profits, and treats foreign investors in the same fashion as domestic investors, meaning a foreign investor can achieve 100% ownership of his or her investment.

With this in mind, the Government has adopted a pro-private sector stance and a liberal trade regime. In this environment, the economy has been growing at approximately 10% per year. Although real GDP growth is expected to close the fiscal year 2011-12 at 5.7%, down from 8.4% in 2010-11. However, this year (2012-13) GDP growth is projected to pick up again and is estimated to reach 7.1%.

Additionally, our Financial Management Law emphasizes fiscal discipline and management of public finances in line with the current international standard of best practice. The 100 % write-off of Afghanistan’s past debt, combined with the Government’s policy of maintaining a balanced budget, allows for Afghanistan to now be one of the least indebted governments in the world.

Afghanistan has a very liberal foreign exchange system that allows people to legally bring money to the country and easily take it out again. Therefore, individuals, companies, and banks are allowed to operate foreign exchange accounts in Afghanistan.

In 2005, the tax code was restructured and clarified with an emphasis on simplicity and low taxation with export taxes removed for almost all products. Afghanistan has the lowest tariffs in the region and its tariff categories are simple and few in number.

The Government of Afghanistan has created a highly pro-business investment administration and scores very highly when measured by the World Bank’s Doing Business Indicator. We rank 30 out of 183 countries in terms of ease in starting a business in Afghanistan.

For further information on trade and investment in Afghanistan, please do not hesitate to contact us.

Thank you,

Shakib Noori

Commercial Attaché
Embassy of Afghanistan
Direct line: (202) 292-4286 or (202) 483-6410 ext: 8029