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One needs to know the existing proclamations and regulations on investment in Ethiopia before start investing in Ethiopia. This page contains a guide to the existing proclamations and regulations and their highlights meant to serve as a quick guide to investment in Ethiopia. It also has descriptions on Areas of Investment Reserved for the Government or Joint Investment with Government; Areas of Investment Reserved for Domestic Investors; Areas of investment exclusively reserved for Ethiopian nationals; Areas of Investment Open for Foreign Investors; Capital Requirement for Foreign Investors and Forms of Investments in Ethiopia.

These documents can be purchased at Berhanena Selam Printing Enterprise Shop at Arat Killo.

Highlights of the Investment Proclamations, Regulations and their amendments

The highlights of the above mentioned proclamation and regulations are listed below; however, it’s advisable that a reader gets the documents for a comprehensive understanding of the existing proclamations and regulations.

1. Areas of Investment Reserved for the Government or Joint Investment with Government:

• Transmission and supply of electrical energy through the Integrated National Grid System and Postal services with the exception of courier services are reserved exclusively for the government.
• Manufacturing of weapons and ammunition and Telecommunication services: Investors shall be allowed to invest in these areas only in joint venture with the Government.
• Air transport services using aircraft with a seating capacity of more than 20 passengers

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2. Areas of Investment Reserved for Domestic Investors:

• retail trade and brokerage;
• wholesale trade (excluding supply of petroleum and its by-products as well as wholesale by foreign investors of their products locally produced);
• import trade (excluding LPG, bitumen and up on the approval of the Council of Ministers;
• materials used as inputs for export products);
• export trade of raw coffee, chat, oil seeds, pulses, hides and skins bought from the market and live sheep, goats and cattle not raised or fattened by the investor;
• construction companies excluding those designated as grade 1;
• tanning of hides and skins up to crust level;
• hotels other than those star-designated, motels, pensions, tea rooms, coffee shops, bars, night clubs and restaurants excluding international and specialized restaurants;
• travel agency, trade auxiliary and ticket selling services;
• car-hire and taxi-cabs transport services;
• commercial road transport and inland water transport services;
• bakery products and pastries for the domestic market;
• grinding mills;
• barber shops, beauty saloons, and provision of smith workshops and tailoring services except garment factories;
• building maintenance and repair and maintenance of vehicles;
• saw milling and timber making products;
• customs clearance services;
• museums, theaters and cinema hall operations;
• printing industries

Without prejudice to the provisions mentioned above, the following areas of investment are exclusively reserved for Ethiopian nationals:

• banking, insurance and micro credit and saving services;
• travel and shipping agency services;
• broadcasting services; and
• air transport services using aircraft with a seating capacity of up to 20 passengers.

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All areas of investment, other than those exclusively reserved, under the Proclamation and Regulation, for the Government or joint venture with the Government or for Ethiopian nationals or other domestic investors, shall be open for foreign investors.

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4. Capital Requirement for Foreign Investors

• Any foreign investor, to be allowed to invest according to the Proclamation, shall be required to allocate a minimum capital of 100, 000 US dollars for a single investment project.
• Notwithstanding the provisions of above point, the minimum capital required of a foreign investor investing jointly with domestic investors shall be 60,000 US dollars.
• The minimum capital required of a foreign investor investing in areas of engineering, architectural, accounting and audit services, project studies or business and management consultancy services or publishing shall be:
  • 50,000 US dollars if the investment is made wholly on his own;
  • 25,000 US dollars if the investment is made jointly with domestic investors.
• A foreign investor:
  • re-investing his profits or dividends; or
  • exporting at least 75% of his outputs shall not be required to allocate a minimum capital.

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5. Forms of Investments in Ethiopia

• Sole proprietorship;
• Business organizations incorporated in Ethiopia or abroad (shall be registered in accordance with the Commercial Code or any other relevant law);
• Public Enterprise established in accordance with the relevant law;
• Cooperative Societies formed in accordance with the relevant law.

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