The Investment (Encouragement) Act, 1999
Be it hereby passed, by the National Assembly, and assented to, by the President of the Republic, in accordance with the provisions of the Constitution of the Republic of Sudan 1998, the following Act.
Chapter 1: Preliminary Provisions Title and Commencement
1. This Act may be cited as the, “Investment (Encouragement) Act, 1999,” and shall come into force as from the date of signature.
Repeal and saving
2. The investment (Encouragement) Act 1996, shall be repealed, provided that all the regulations and orders made and measures taken, thereunder, shall remain in force as if they were made or taken under the provisions of this Act, until repealed or amended.
Provisions of the Act to prevail
3. The provisions of this Act shall, in case of inconsistency with the provisions of any other law, prevail to the extent of removing the inconsistency between them.
4. The provisions of this Act shall apply, as to such extent as may achieve its objects thereof; provided that the Provisions of the same shall not prejudice such privileges, exemptions and otherwise of guarantees, prescribed to the projects existing at the time of coming into force of this Act .
Not-with-standing the provisions of sub- section (1) , all exemptions given to the imports of projects according to the previous investment laws shall be revoked, and the provisions of section 11 here-to shall apply there-to provided that the existing projects at the coming into force of this Act which are regulated by special Agreements concluded with the government of the Sudan, shall be exempted.
5. In this Act, unless the context otherwise requires, : “Competent Minister“, means any of the Federal ministers, ” Invested Money”, means: The local currency paid by the Investor to be used in the establishment, operation, modernization, rehabilitation or expansions of the project,
The foreign convertible currency transferred through one of the banks registered with the Bank of Sudan, to be used in the establishment, operation, modernization, rehabilitation or expansion of the project,
The local currency, by which satisfaction, upon the approval of the competent bodies, is made to meet obligations due for payment to the Investor, in foreign currency, where the same is used in the establishment , operation, modernization, rehabilitation or expansion of the project,
The Corporeal capital and any other rights, such as mortgages, debt securities and all the similar rights, dividends, shares and debentures pertaining to companies, and any form of participation therein, the machinery, equipment, apparatuses, materials and other requisites and the means of conveyance imported, from abroad, or the local ones , for the establishment, operation, modernization, rehabilitation or expansion of the project,
The incorporeal rights and intellectual property rights, trade marks, patents, industrial designs, which are used in the project; provided that such rights are registered, in accordance with the provisions of the law pertaining to each, and owned by the investor, or licensed to use the same, on the part of the proprietor thereof, profits as may be achieved by the project, where the capital of the project is completed therewith, or invested into any other project,
“Investor ” means the person who invests his money, in accordance with the provisions of this act, in any project whether he is a Sudanese or non-Sudanese,
“Project”, means any economic activity, whatever its legal form may be, which is included in to any of the investment fields, set out in this Act, and such project which may be prescribed by the Council of Ministers in accordance with the objects of encouragement of investment provided for by virtue of section 6, and the approval of such project shall take place in accordance with the provisions of this Act.
“The Ministry “ means the Ministry of National Industry and investment,
“The Minister ” means the Minister of National Industry and Investment.
“The Minister Concerned ” means any of the Federal Ministers.
“The State Minister ” means the state minister to be determined by the Council of Ministers of the state to be concerned with the investment.
Chapter 2: Encouragement of Investment
Objects of Encouragement of Investment
6. This Act aims at encouraging investment in such projects as may achieve the objects of the development plans policies and investment initiatives by the Sudanese and non-Sudanese private sector, co-operative, mixed and public sector: and without prejudice to the generality of the foregoing, it aims at the encouragement of investment in the projects of any of the fields set out in section 7, and the rehabilitation projects
Fields of Investment
7. This Act encourages, investment, in the fields of agricultural, animal and industrial activities, energy and mining , transport, communication, tourism and environment, storage, housing, contracting, infrastructure, economic, administrative and consultative services, information technology, education, health, water and culture and information services and any such other field , as the Council of Ministers may specify.
Prohibition of discrimination between projects
8. For the purposes of this Act, no discrimination shall be made between invested money, by reason of its being local, Arab or foreign or by reason of its being public, private, co-operative or mixed sector.
No Discrimination shall be made between such similar projects, as may be specified by the regulations, with respect to granting privileges or guarantees.
Chapter 3: Privileges and Guarantees
Branch1 Strategic Projects
9. (a) Investment, in the following fields, shall be deemed strategic investment, namely those:
relating to infrastructure, roads , ports, electricity, dams communications, energy, transport, contracting business, education, health ,tourism and information technology services and water projects;
relating to extraction of subterranean and deep seas’ wealth;
agricultural, animal and industrial production;
crossing more than one state;
Any other fields, as the Council of Ministers may prescribe.
(b) The regulations shall specify the strategic projects in the fields provided for in sub- section (1).
Branch2 Privileges Exemption from taxes
10. Subject to the provisions of section 19, such strategic project, as may be specified by the regulations , shall enjoy, after being registered in accordance with the provisions of the laws organizing the same the exemption, from the business profits tax for a period not less than ten years, which shall commence, as of the date of commencement of commercial production, or practice of the activity , and the Minister may increase the period, mentioned in this sub-section, as he may deem fit;
Subject to the provisions of section 19, the minister may grant the none strategic project as may be specified by the regulations, after being registered in accordance with the laws organizing the same, exemption from the business profits tax for a period not exceeding five years which shall commence as of the date of commencement of commercial production, or practice of the activity, and the minister may increase the period, mentioned in this sub-section for another period not exceeding five years.
Exemption from custom fees
11. Subject to the provisions of section 19, the strategic and none - strategic project specified by the regulations after being registered accordion to the laws organizing the same ; shall enjoy the customs privileges as may be decided by the Council of Ministers.
Notwithstanding the provisions of sub-section (1), the customs privileges, with regard to Vehicles, cars, Mini Buses and station cars, shall be granted as specified by the regulations.
The Council of Ministers on the recommendation of the minister may amend the specified customs privileges wherever he thinks fit.
Project granted the privileges of allocation of land and depreciation account
12. The Minister may grant the strategic and non-strategic project, in co-ordination with the bodies concerned, from such lands , as may have been planned by the competent bodies;
The privilege of depreciation account of the assets, as to such renewal value, as may be specified by the regulations and in accordance with the circuits of operational work;
Consider any such loss , as may have occurred, during the period of exemption, provided for in section 10 as if such loss have occurred during the last year of that period .
Grant of privileges to state projects
13. The state’s minister may grant the state’s project, as may be specified by the regulations, the following privileges:
total, or partial exemption, from taxes and fees, as may be levied by a state’s, or local law, for a period not exceeding five years; provided that he may, upon the approval of the state’s Council of Ministers, extend such exemption for anther similar period;
any other state’s taxes, or fees, as may later be levied on the project;
allocation of the land necessary for the state’s project, at the encouragement price, in co-ordination with the bodies concerned, from the lands allocated by the competent bodies.
Grant of federal privileges to state projects
14. The Minister, upon the recommendation of the state’s minister, may grant a state’s project the privileges provided for in section 10.
The state’s minister , upon delegation by the minister, may grant a state’s project the privileges, provided for in section 10, as to such condition and safeguards, as the minister may deem fit.
No taxes or fees to be levied on federal projects
15. No state, or locality shall levy any state’s, or local taxes, fees or rates, on any investment project federally licensed, during the period of the tax exemption , provided for in sections 10 and 11, save in consideration of such services, as may be of public nature, performed by the state or the locality.
16. The Minister may grant preferential privileges to such projects, as may satisfy any of the following features:
direct investment towards the less developed areas;
assist in the development of export capabilities of the country;
contribute to achievement of integrated rural development;
create great chances of work;
strive to develop scientific and technological research;
re-invest the profits thereof.
For the purposes of sub-section (1), privileges mean any of the privileges provided for in sub- section (1), privileges mean any of the privileges provided for in section 10, or 11, with respect to the size, extent, or term thereof, as the regulations may specify.
Branch 111 Guarantees Investment guarantees
17. An Investor shall enjoy the following guarantees:
he non-nationalization, or non- confiscation of his project, non-acquisition, of all, or part of the estates of the project thereof, or his investments, for public interest, save by law and in consideration of just compensation;
the non- attachment, non-confiscation , non-custody or non-sequestration of the property of his project; save under a judicial order.
the remission of the invested money , in case of the non-execution of the project, at the outset , liquidation, or disposal of the same, in any of the ways of disposal totally or partially in the currency in which it has been imported; on condition of satisfying all the obligations legally due thereon, and in the case of non-execution of the project, at the outset, machinery, equipment, apparatuses, means of conveyance and other requisites, which have been imported for the project, may be re-exported, whenever all the obligations, mentioned in this paragraph have been satisfied;
the remission of the profits and the cost of financing for the foreign capital, or loans, in the currency in which such capital or loan has been imported, at the date of accrual, after payment of the obligations legally due on the project;
the import of such raw materials, as the project may need, and export of the products thereof, after the automatic registration, of the investment project, on to the Exporters and Importers Register.
For the purposes of paragraph ( c ) of sub-section (1), the money invested, in foreign currency, into the project, shall be specified, and the elements thereof shall be valued, upon the approval of the Minister, and shall be registered, with the Bank of Sudan.
Protection of the privileges and guarantees
18. Notwithstanding the provisions of any other law, no administrative body shall refrain from implementing the privileges and guarantees, granted under the provisions of this Act
Chapter 4: Requirements of Investment Issue of license to the Investor to establish a project
19. Subject to the provisions of section 4, no person shall establish any project in the Sudan save after obtaining a license therefore from the minister or the state minister as the case may be in accordance with the provisions of this Act.
Subject to the provisions of subsection (1), no license shall be granted for foreign or mixed investments by the states save after approval of the Minister.
Presentation of Feasibility study of the project
20. No project shall be granted license, nor shall it be granted any such privileges and guarantees, as may be set out in this Act, save after presenting a technical and economic feasibility study of the project.
Request of grant of license and privileges
21. The application for the grant of license to any project , or of any of the privileges provided for in this Act, shall be presented, on the prescribed form as follows:
strategic and non-strategic federal projects, to the ministry;
strategic and non- strategic state’s project, to the state minister.
Grant of license
22. The Ministry or the state ministry shall , upon receipt of a complete license application, for any project, transfer the application to the federal competent minister, or the state’s minister, as the case may be, within one week, to obtain the preliminary approval of establishing the project.
The federal competent, or state minister, as the case may be, shall determine on the application for preliminary approval, and send the same , to the Ministry, or state ministry, as the case may be, within seven days of the date of receipt of such application.
In case of not sending the preliminary approval in the period provided for in sub-section (2), the minister, or the sate minister shall determine on the application after lapse of such period.
In all cases, the minister, or the state minister, as the case may be, shall determine on the license application within a period not exceeding thirty days, of the date of receipt of the complete application from the investor.
Every applicant, for license, shall be entitled to submit complaint to the Federal, or state Council of Ministers, as the case may be against the non-determination of his application in accordance with the provisions of sub-section(1) , to determine his grievance , within a period of one month, of the receipt of the complete complaint
Delivery of the land allocated to the project
23. The Federal or state competent authority shall deliver the land to the project within a maximum period of one month of the date of granting the license.
Conditions to continue enjoyment of the license and privileges
24. No investor shall take any of the following measures, during the period of validity of the license and privileges, granted under the provisions of this Act, without obtaining a written approval, from the minister , or the state minster, as the case may be, the measures being to:
conduct any amendment or alteration of the size of the project, or the object for which the license has been granted , or transfer the project from the place thereof as prescribed in the license;
use or sell any of the equipment, machinery, apparatuses, materials or spare parts, with respect to which privileges have been granted, for any other purpose other than the purpose for which the the license has been granted;
change the purpose of use of the land allotted to the project, sell, mortgage or hire the same totally or partially.
Not –with-standing the provisions of sub-section (1), an investor may dispose of the existing project, without changing the purpose licensed thereto totally or partially, whether by sale, gift, mortagage, hire or partnership such disposal shall take place in accordance with the provisions of the laws in force.
Duties of the investor
25. The Investor shall:
commence executing the project within a maximum period of twelve months of the date of receipt of the land unless such period has been extended on the part of the minister or state minister for any such period as he may deem fit;
submit to the Minister , the competent minister and the state minister periodical reports every six moths during the period of validity of the privileges on the progress of the operation of executing the project up to the date of commencement of production, or practice of activity;
keep regular books, and maintain records, where in the assets of the project exempted from customs duties, and the exempted imported materials shall be recorded.
present to the minister , the competent minister and the state minister annually during the period of validity of the privileges a copy of the annual accounts of the project approved by a certified auditor.
Contravention of the provisions of this Act by the investor
26. The investor shall be deemed to have committed a contravention to the provisions of this act where he:
contravenes the provisions of section 19,24 and 25.
unlawful methods as may result in obtaining any benefit in accordance with the provisions of this Act, for himself or any other person; gives false or misleading information, or uses such
suspends the project, without reasonable cause.
contravenes the laws of the country, in such manner as may endanger the security and safety thereof .
Without prejudice to any penalty provided for in any other law, the minister, or the state minister, as the case may be, may in case of commission by the investor of any of the contravention provided for in sub-section (1), impose any of the following sanctions in accordance with the size of the contravention, the circumstances of commission thereof, and the extent of such damages which affect the national economy namely:
warn him to remove the reasons of the contravention if the same is necessary within such period, as he may specify;.
decrease the period of any privileges granted to the project or the size thereof;
deprive him from any of the privileges and guarantees provided for in this Act;
revoke totally or partially the privileges and such revocation shall result in binding the investor to restitute the value of the material benefit gained in obtaining any previous privileges, where gaining such benefit results from occurrence of the reason which led to the issue of the decision of revocation;
cancel the license, and such conciliation shall result in acquisition of the land granted thereto under the provisions of this Act.
An Investor in respect of whom a decision under the provisions of subsection (2), has been passed , may complain ,to the Federal, or state council of ministers, as the case may be, within one month of the date of being notified of the decision, and the decision, there-after in this respect, shall be final; provided that this provision shall not prevent the Investor from access to courts.
Chapter 5: Investment Organs Constitution of the committee of commissioners
27. The Minister shall constitute the committee of commissioners from a chairman and number of members representing the competent bodies having relation to investment form the ministries and Competent government units; provided that the post of any of them shall not be less than head of the unit, or whoever may deputize him and shall be fully and officially authorized by the body which he represents, and the committee shall include representative of the private sector.
Functions of the committee
28. The Committee of Commissioners shall have the following functions, to:
consider the extent of compatibility of the project with the priorities of investment in the strategic fields;
consider the needs of the strategic projects as regards infrastructure and basic services needed and the extent of availability or possibility of providing the same;
consider the needs of the project of manpower and the specialized one to be procured from abroad in accordance with the prevailing laws;
achieve the sector investment plans through the approved and proposed investment projects;
co-ordinate between the Ministry and the competent Ministries and the states in every thing, as may concern investment projects especially as regards the map of investment lands.
The committee may call any competent person or body upon discussing any matter as may fall within the competence of such committee , and he shall not have the right to vote.
Functions of the federal ministries
29. The federal ministries concerned with investment, shall have the following functions:
specify priorities and lay down investment policies, at their ministries;
prepare sector investment maps;
approve on principle the establishment of the project upon such preliminary feasibility study as may be transferred thereto, by the ministry ; provided that the final feasibility study of the project shall be presented to the Ministry.
follow up the execution of the projects concerning the Competent ministry and submit periodical reports, as the Minister may require.
The state investment
30. An investment Act shall be promulgated, by a state law in the states, as to the form of the Federal Investment (Encouragement) Act,1999.
Chapter 6: Final provisions Investment Maps
31. The Ministry shall lay down the national investment map in accordance with the policies and directives of the National Economic Planning Council; provided that the same shall include specified percentages for the federal projects in the states, and submit the same to the Council of Ministers for approval thereof provided further that the investment map shall include sector of investment maps as may be prepared by the federal ministries and ministries of investment in the states.
Settlement of investment disputes
32. Save settlement of such disputes, as may be governed by the provisions of agreement set in subsection (2), where a legal dispute relating to investment arises,the same shall be submitted to conciliation or arbitration.
The provisions of the Investment of Arabic Capitals in Arab States, Consolidated Agreement 1980, the Settlement of Investment Disputes, between Arab States Agreement 1974, The Settlement of Investment Disputes between States and citizens of other states Agreement 1965, the Economic, Technical and Trade Co-operation between states parties to the Islamic conference organization general agreement 1977 and any such other agreement in this respect as the Sudan may be a party thereto, shall apply to every legal dispute as may directly arise out of any of such agreements.
Power To make regulations
33. The Council of Ministers, upon the recommendation of the Minister, may make the necessary regulations for the implementation of the provisions of this Act. Without prejudice to the generality of the foregoing, such regulations may include the following matters:
specification of the type and size of the projects, as may be granted preferential privileges.
Laying down requirements for the prevention of overlapping between federal, state and local investments.
Specification of the strategic and non- strategic; projects.
The procedure of applying for the grant of license and privileges and specifying the type and size thereof;
Specifying the service fees.
The requirements and bases pertaining to control and follow- up of the projects licensed, under the provisions of this Act.