Ethiopia’s primary law concerning foreign investment is the Investment Proclamation. This page contains a guide to the existing investment proclamations and regulations. It is meant to serve as a quick guide to investment in Ethiopia. It also has descriptions of 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.
- Investment Proclamation No. 769/2012 (Download) and its amendment Proclamation No. 849/2014 (Download) .
- Council of Ministers Regulations No. 270/2012 Investment Incentives and Investment Areas Reserved for Domestic Investors Council of Ministers Regulation (Download) and its amendment Regulation No. 312/2014 (Download).
- The Commercial Code 1960 (provides the legal base for doing business in Ethiopia) (Download)
These documents can be purchased at Berhanena Selam Printing Enterprise Shop at Arat Killo.
Highlights of the Investment Proclamation and Regulation
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 investment regime of Ethiopia.
1. Areas of investment exclusively reserved for the government (Article 6.1 of the Proclamation)
- transmission and distribution of electrical energy through the integrated national grid system;
- postal services with the exception of courier services;
- air transport services using aircraft with a seating capacity of more than fifty passengers.
2. Areas of investment allowed for foreign investors in joint venture with the government (Article 6.2 of the Proclamation)
- Manufacturing of weapons and ammunition
- Telecom services
3. Areas of Investment Reserved for Ethiopian nationals: (Article 3.1 of the Regulation)
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;
- packing, forwarding and shipping agency services;
- broadcasting services;
- mass media services;
- attorney and legal consultancy services;
- preparation of indigenous traditional medicines;
- advertisement, promotion and translation works;
- air transport services using aircraft with a seating capacity of up to 50 passengers.
4. Areas of Investment Allowed for Foreign Investors: (Article 4 of the Regulation)
- All areas of investment shown in this schedule (download from here) except those areas provided for in number 1.3.3, 1.4.2, 1.7, 1.11.3, 1.11.4, 5.3, 6.2, 8.2, 9.2, 9.3, 12 are open for foreign investors.
- Please note that we mentioned areas those exclusively reserved under the Proclamation and Regulation for the Government or joint venture with the Government or for Ethiopian nationals in bullet numbers 1, 2 and 3 above.
4. Capital Requirement for Foreign Investors
- Any foreign investor, to be allowed to invest according to the Proclamation, is required to allocate a minimum capital of 200, 000 US dollars for a single investment project.
- The minimum capital requirement for a foreign investor investing jointly with domestic investors shall be 150,000 US dollars.
- The minimum capital required of a foreign investor investing in architectural or engineering works or related technical consultancy services, technical testing and analysis or in publishing shall be:
- 100,000 US dollars if the investment is made wholly on his own;
- 50,000 US dollars if the investment is made jointly with domestic investors.
5. Forms of Investment in Ethiopia
Foreign investor in Ethiopia are allowed to carry out there business in any of the following forms;
- Sole proprietorship;
- Business organizations incorporated in Ethiopia or abroad (shall be registered in accordance with the Commercial Code or any other relevant law);