Exporting to Afghanistan

There are many challenges to doing business in Afghanistan,

such as poor infrastructure and limited power.

The actual opportunities are immense.

The main challenge is the weak framework, regulatory

enforcement and dispute resolution mechanisms that make

it difficult to resolve business disagreements in the country.

Corruption is a serious challenge to doing business in

Afghanistan as foreign legal persons may not own land,

and securing a clear title to land is a long time consuming,

expensive process.

The Commercial Banking System provides limited

commercial financing.

Customs regulations and procedures are neither

transparent or consistent, as both the Government and the

Private Sector both face a shortage of skilled labour and

trained personnel.

Factors to consider in pricing as follows:

Corporate Income Tax of 20% low by regional standards

and Personal Income Tax ranges from 0-20%. Business

Receipt Tax ranges from 2-10% based on sector revenue and

billing. Import tariffs in the range of 0-25%.

High transport costs competition from cheap, low quality goods and

services from Pakistan, China, and Iran.

Marketing entry Strategy relies on strong local knowledge

is a vital part of business development in Afghanistan and

be familiar with key players both in business and in

Government. Visit the country and get to know your

potential partners and their capabilities to do business with

UK/US firms, and meet with local Chambers of Commerce

especially the American Chamber of Commerce (AMCHAM),

the Afghanistan Investment Support Agency (AISA) and the

Export Promotion Agency of Afghanistan (EPAA), as many

UK/US firms may find it beneficial to partner with a local

firm which knows the region and can advise on security

and other issues of doing business in the region.

Expect high costs associated with doing business in an

insecure and volatile region. Before travelling the UK/US

Citizens should review the Consular Information sheet

(country specific information) and travel warning for

Afghanistan.

Personal relationships are especially important in Afghanistan

and with the legal and regulatory framework still in a nascent

stage, businesses are built almost on the strength of the

business relationships.

To operate a business legally in Afghanistan requires a

business license . This license is awarded through the AISA

and is to be renewed annually. Certain industries, e.g., the

Health Sector, require an additional license from the

responsible Ministry, both need to be obtained prior to

starting business operations. AISA provides detailed

information on both the AISA license as well as all other

additional licenses. AISA’s Investment Support Department

will assist the investor in determining whether or not a

business requires an additional license and with the following

procedures which are necessary to obtain a business license.

Application form and an application form for Tax ID Number

and registration of the investment application form. Provision

of guidance on the requirements for submission of a business

plan and review of the project documents to ensure it is

within the country’s legal framework. Registration of

investment documents in Commercial Court and

announcements of investors’ business/commercial details in

a reputable Afghan newspaper. Payment of license fee an

issuance of investment license (fees are based on the type

of business and are commensurate with the amount

invested).

To register, a company must first proceed to the Ministry of

Foreign Affairs (MoFA) with an introductory letter from its

Embassy. The UK/US Embassy’s Commercial Section can

provide this letter upon provision of a Federal Tax ID Number

on HMCR/IRS letterhead.

Articles of Incorporation from the company it is registered with

and a one sentenced description of the business. Copy of

passport, which MoFa sends to AISA to license the entity