Foreign investors can invest alone or in partnership with domestic investors in areas open for foreign direct investment. A company incorporated outside Ethiopia may do business in Ethiopia in either of the following forms:
- through wholly foreign owned enterprises or subsidiaries
- through establishment of branches.
The minimum capital requirement is:
- US$200,000 for a single investment project
- US$50,000 for joint with a domestic investor
- US$100,000 for technical consultancy if wholly owned or
- US$50,000 if jointly owned with a domestic investor through locally incorporated enterprises.
The Commercial Code of Ethiopia governs foreign investor business guidelines. All foreign investors are required to register the proposed company with the Ethiopian Investment Authority. Prospective investors are required to submit a draft memorandum and articles of association. After the authority examines these documents, the founders are required to appear in person or by proxy before the notary public at the high court and finalise the signing of statutes of the company.
Following the signing of the documents, the authority will announce the formation of the company through the official gazette in less than five days. The Ethiopian Investment Authority will subsequently issue a certificate of incorporation as evidence to the registration of the company.
Foreign companies wishing to open liaison offices must submit their application to the Ministry of Trade and Industry.
Setting up in Ethiopia
Banking and finance
The banking system is dominated by state-owned banks, mainly the Commercial Bank of Ethiopia (CBE) whose assets represent about 70 per cent of the sector. The financial sector has a limited range of services, limited foreign participation and no capital markets.
Obtaining foreign exchange can be challenging as the National Bank of Ethiopia controls foreign currency payments and depending on their payment priorities, delays may be experienced.
Links and resources
Government, business and trade
CIA World Factbook
World Bank Doing Business Index
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