The Afghan Embassy’s economic and business team are aiming at promoting trade and investment between Afghanistan and United Kingdom. Afghanistan is the land of rising opportunities for investment, trade and transit with one of the most flexible investment law in the region for any kind of foreign investment.
Afghanistan’s hidden treasuries are availing countless promising investment opportunities for investors and companies from all over the world. Afghanistan has a long history of trade and transit. For instance the country was considered as an important bridge of the ancient Silk Road. The revitalisation of the Ancient Silk Road, called, “New Silk Road” decided upon at the UN General Assembly in 2011 will place Afghanistan at the heart of lucrative trade routes between Asia and the West. In addition the Lapis Lazuli Corridor that pave the way for shortest, cheapest and safest route.
- Encouraging and promoting bilateral trade and enhancing the prospect for a sustainable development in trade and investment between the two countries
- Exploring and providing access to the high value business opportunities in both countries through enhanced communication and information dissemination among the key private sector players (exporters/importers, investors, SMEs)
- Organising Business to Business Matchmaking events for traders and investors
- Facilitating participation of Afghan exporters in trade exhibitions in the UK
- Facilitating Afghan business delegations’ visit to the UK market
- Providing data on trade and investment volume in Afghanistan
- Providing information on customs tariff and customs requirements to interested traders
- Branding Afghan products in the UK
Economic outlook of Afghanistan:
The Government of Afghanistan understands the critical role it must play to create a favourable 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.
Additionally, our Financial Management Law emphasises 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.
Business Opportunities in Afghanistan:
- 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 emerging consumers in South Asia providing a key transit route for Central Asian oil and gas to markets in South Asia as well as overseas.
- Afghanistan offers a pro-business minded environment with legislation favourable 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 the government of Afghanistan has focused intensely on removing obstacles to private sector development.
- 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, lapis lazuli, tourmaline, ruby, quartz and sapphire. Following the national privatisation program most of the major state-owned enterprises have been slated for international tender, which has made the entry into all these sectors easier.
Afghanistan Investment Priority Sectors:
Agriculture remains fundamental to the livelihood in Afghanistan, generating one third of the country’s GDP and supporting nearly 80 per cent of its people. The climate of Afghanistan is well suited for the cultivation of horticultural crops. That’s why the country is the origin of many high-end crops like raisins, pomegranates, pistachios and almonds.
One industry related to the agricultural sector is packaging, which provides great opportunities for investors. Although demand for Afghan agricultural goods is high, current packaging procedures are outdated and prevent trade and commerce. Processing is another great investment opportunity. Due to the growing markets for fruits and vegetables, the potential for processed agricultural products is enormous, including snack foods, fruit concentrates as well as fresh fruit jams.
2. Construction Materials
Creating a competitive national construction industry is a prerequisite for the reconstruction of Afghanistan. Currently, the sector is one of the fastest growing in the country. That’s why, the demand for construction materials is rising rapidly in Afghanistan, making the market more attractive for foreign investors. For example, urban planners and government officials develop a new urban area in the north of Kabul, which will be home to estimate 1.5 million people.
Core telecommunication service providers supply the Afghan market already in a sufficient manner with increased competition and price pressures. While there are still opportunities for mobile service providers, the other supply and service areas of the telecommunication sector represent a far more virgin market. Examples are: Data processing, basic business-processing operations, information and communication technologies, data transfer, process control and call centres.
4. Transport and Logistics
Afghanistan shares borders with six neighbours – Iran, Turkmenistan, Uzbekistan, Tajikistan, China and Pakistan – and is considered as a land bridge connecting emerging markets in Middle East, Central and Southern Asia. The country’s large and growing market for transportation and logistics services presents a ground floor opportunity for new providers. Early investors report modest start-up costs and low overheads, and even smaller operators are moving large volumes of freight. Investments in the transportation and logistics sector are vital to the overall economic development, as it will enable the transportation and distribution of products throughout the country and to overseas destinations.
- Afghanistan Investment Support Agency: Research and Policy Department: Main Investment Opportunities in Afghanistan
Important Links – Trade and Investment Organisation of Afghanistan
- Afghanistan Chamber of Commerce & Industries
- Afghanistan Investment Support Agency
- Afghanistan Ministry of Commerce and Industries
- Afghanistan Export Promotion Agency
- Afghanistan Ministry of Finance
- Central Statistics Organization of Afghanistan
- Afghanistan Ministry of Foreign Affairs
- Afghanistan Ministry of Economy
- Afghanistan Ministry of Mines