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This article covers what one needs to know regarding procedures on commercial registration and business licensing in Ethiopia. In doing so, it closely consults the following documents:

By virtue of the Proclamation, a person is required to obtain a business license in order to conduct a business. And to obtain a business license, a person should first register within the central register and trade name register.

The procedures of commercial registration, trade registration and business licensing are discussed below.

(The reader is advised to first read the article Regulations of Commercial Registration and Business Licensing in Ethiopia)

As of 2022, business registration and licensing service is being given online via the 'e-trade' portal - https://etrade.gov.et/. The documents and procedures required are given below; however, most of the procedures can be done through the portal.

Commercial Registration

A person cannot obtain any kind of business license without being registered in commercial register. A person should be registered in the commercial register at the place where the head office of his business is situated. Note that a person can be registered in the commercial register only once even though he conducts different kinds of business activities in different regions.

Any person who opens branch offices at various places is required to register these branch offices at his original registration before commencing business and immediately notify the registering office situated at the places where the branch offices are to be opened.

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Requirements for Commercial Registration

For Sole proprietors: 

1. Trade name registration (if the sole proprietor wishes to have a trade name)
2. TIN (Taxpayer's Identification Number)
3. Authenticated lease contract or title deed if the business office is owned by the applicant.
4. Two photographs of the sole proprietor

For Business Organizations:

1. Founders or members of a business organization should, before signing the memorandum and article of association, apply to the registering office and get verification that another business person has not occupied the name of the business organization. 
2. After getting the verification, the founders or members of a business organization must sign their memorandum and articles of association at the Document Authentication and Registration Office or the Ministry of Trade and Regional Integration, according to standardized samples of memorandum and articles of association.
3. TIN (Taxpayer's Identification Number)
4. Authenticated lease contract or title deed if the business office is owned by the applicant.
5. An application for commercial registration is, then, submitted before the commencement date of commercial activity by filling a prescribed form and attaching documents specified under the regulations and directives issued for the implementation of the Proclamation. 

Acceptance or Rejection of Application

Where an application submitted for commercial registration is found acceptable by the registering office, the registering office registers the application, upon payment of service fee, and issue a certificate of registration to the applicant.

If the application for registration is rejected, the registering office should immediately notify the applicant in writing by stating the reason for rejection.

An objection filed in accordance with the commercial law shall bar a sole proprietor or a business organization from registration in the commercial register.

Any commercial registration is valid as of the date of the applicant’s registration in the commercial register in accordance with the provisions of this Proclamation. A business organization attains legal personality upon registration. The registration of the business organization should be publicized on a newspaper having nationwide circulation at the time of their establishment.

Note that the commercial register is open to the public at large; third parties are also entitled to look into the register.

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Alterations or Amendments to a Commercial Registration

(Article 10 of the Proclamation)

Alternation or amendment on commercial organization registration is allowed, if it registered with the registering office within 60 days after its authentication by a notary. Where the application for registration of alternation or amendment on commercial registration is accepted, the registering office issues a confirmation of acceptance of the alteration or amendment to the commercial registration and notify the applicant and concerned entities in writing details of the alteration or amendment entered into the commercial register. Until written confirmation is issued, the application submitted for alteration or amendment is not recognized.

The registering office may cancel any alteration or amendment already entered in the commercial register if it believes that it was registered inappropriate and shall notify the applicant in writing the detail grounds of the cancellation.

Note that the above requirements on commercial registration are also applicable to apply for amendments to a commercial registration.

Cancellation of Commercial Registration

Without prejudice to the provisions of the Commercial Code, the registering office may cancel a commercial registration, without any precondition, where: 

1. the business person abandons his business activity for any reason; 
2. an administrative measure is taken or court decision is passed on the business person not to continue with his business;
3. the business person was registered by submitting false information or document;
4. the business person is found to have violated this Proclamation or regulations and directives issued for the implementation of this Proclamation;
5. the business person fails to obtain a business license within one year after being entered in the commercial register.

Cancellation of registration of business organization comes into force one month after publication of notice of cancellation on a newspaper having wider circulation at the expense of the applicant. In the case of sole proprietor, however, the cancellation becomes effective as of the date of its entry into the register and without the need to publicize.

If a business license of a business person is cancelled, his commercial registration shall also be cancelled, unless other additional business licenses are issued based on the same commercial registration.

Issuance of Substitute Certificate of Commercial Registration

Any business person whose certificate of commercial registration is lost or damaged may obtain a substitute certificate of registration pursuant to the criteria set forth in the regulations issued for the implementation of this Proclamation.

Issuance of Copies of Entries

(Article 13 of the Proclamation)

Any person or business person requesting a copy of entry made in commercial register, a copy of an extract of entry, a certificate of no entry or a certificate of cancellation or registration shall submit a written application to the registering office. The registering office should, upon payment of the prescribed service fee, immediately provide the information if it is subject to disclosure.

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Business Licensing Procedures

As per article 22 of the Proclamation, no person can engage in a business activity without having a valid business license. A business person having a valid business license pursuance to the Proclamation is not required to obtain additional business license for branches he open for the same type of business activity.

A licensed importer is also not required to obtain a separate business license to wholesale products he import at his address of business registered at the time of commercial registration. Differently, no licensed importer shall retail goods he import; provided, however, based on type of business and national significance, types of products in respect of which retail sales is permitted under special condition as determined in a regulations to be issued by the Council of Minister (no regulation has been enacted).

Application for Business License

Any person desiring to engage in a commercial activity can submit to the appropriate authority an application for business license by completing application form prepared for this purpose accompanied with important documents prescribed in the regulations issued by the Council of Ministers. 

Issuance of Business license

A person/business organization is required to fulfill the following conditions to obtain a business license;

• Commercial registration and Trade registration;
• The business activity shouldn’t be prohibited by any law;
• Certificate of competence if it's required for the sector;
• Submit an application to the relevant authority in accordance to the law applicable;
• Payment of appropriate service fee; and
• Other requirements provided by the applicable law.

If the above requirements are fulfilled and the relevant authority ascertains thereof, then the relevant authority will issue a business license. Where the relevant authority ascertains that the application for business license is not submitted by fulfilling the requirements provided in the law, it will reject the application and notify the applicant in writing the reasons for rejecting the application.

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Renewal of Business License

A business license is renewed in six months period within the fiscal year between from Hamle 01 until Tahsas 30 or in his registered budget year. A business person desirous to renew his business license should fill the form prepared for the same purpose and submit documents, as required.

The holder of a business license who has failed to have it renewed within the time specified above shall have it renewed within the time from Tir 01 to Sene 30 by paying, in addition to renewal fee, Birr 2,500 (two thousand five hundred) for the month of Tir and Birr 1,500 (one thousand five hundred) for each subsequent month of delay. A business license not renewed within the period of renewal with penalty entails cancellation of the license unless the business person was prevented by forcemajure. Yet, the business person may obtain the same business license without penalty one year after cancellation of the business license.

Period of Validity of a Business License

A business license remains valid provided that it is renewed and is not cancelled pursuant to the provisions of the Proclamation. The business license becomes be invalid, if not renewed within six months after the expiry of the budget year in which it has been issued or renewed upon payment of the appropriate fee,.

Suspension of Business License

A relevant authority may suspend business license on the following grounds: 

1. Where the business person fails to meet occupational, health and sanitation, environmental protection, accident prevention standards and qualities of goods and services; 
2. Where the business person fails to discharge obligations of a business person clearly specified in this proclamation;
3. Where the business person fails to provide information accurately and timely upon the request of the relevant authority;
4. Where it is verified that the license was issued or renewed based on falsified document;
5. Where the license is used by the holder for an unauthorized purpose;
6. Where the business person is unavailable at the registered address; and
7. Where the business person is found to have violated the Commercial Code, the Proclamation, the regulations and directives, as well as other laws.

In the case of suspension of business license on the grounds of violation of the provisions of the Proclamation, regulations or directives; or when a relevant sector office verifies violation of provisions of the Commercial Code or a court of law passes an order of suspension, the business facility is immediately sealed. Further, the relevant authority must notify the holder of the business license in writing the cause of the suspension and measures that need to take within reasonable period of time to rectify the shortcomings that led to the suspension.

Where the defects that caused the suspension of the business license are rectified within the prescribed time, the suspension will be lifted and the business license becomes valid.

The suspension of certificates of competence by relevant competence assuring institutions also entails suspension of the corresponding business license without any precondition.

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Cancellation of Business License

A relevant authority may cancel business license on the following grounds: 

1. Where the business person terminates his business activity by his own choice;
2. Where it is verified that the business license was issued or renewed based on falsified document;
3. Where the business person has utilized the business license for an unauthorized purpose;
4. Where the business person fails to rectify defects that resulted in the suspension of his business license within the time given;
5. Where the business person is declared bankrupt;
6. Where the business person fails to have his license renewed under the provisions of this Proclamation;
7. Where the commercial registration of the business person is cancelled under the Proclamation.

Obtainment of a Substitute Business License

A business person who has his business license lost or damaged may obtain a substitute business license when he meets with the requirements provided by the Ministry. A business person whose license is damaged must return such damaged when he applies for a substitute.

The relevant authority to which the application is made shall require presentation of evidence from appropriate body or police and upon payment of appropriate fee issue the substitute business license.

Issuance of Business License Upon Transfer of a Business

A business may be transferred to another person through sale, donation, and inheritance or in a similar manner. There are some requirements that must be fulfilled for the issuance of business license upon transfer of a business; 

1. The transfer of business must be published on a newspaper having nationwide circulation and no objection is lodged against after one month of publication.
2. The business shouldn’t be subjected to any suspension order.
3. Tax clearance evidence from the tax collecting authority for the period the license had been in use is presented before the transfer of a business.
4. The former business license should be returned.
5. The relevant authority verifies that the above requirements are fulfilled.

The relevant authority, upon the satisfaction of the above conditions, will issue a business license to the business person to whom the business is transferred. Where the relevant authority rejects the application, it must notify the applicant in writing and the reasons thereof.

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This article is a general guideline on how to set up an office in Ethiopia (particularly in Addis Ababa). Regulations on Licensing/Registration/Investment permit etc are found separately on our Starting A Business and Investment pages.

Office Building

There are numerous new buildings coming up in Addis Ababa. You can rent offices on these buildings. The buildings can be found in almost all areas and you can choose as per your need, location of your clients, etc. Villas that can be turned to offices are available as well. The rent lease has to be authenticated by the Documents Authentication and Registration Office.

What you have to check when renting offices on buildings or Villas

• Is deposit required? How many months advance rent have to be paid?
• Is regular Generator service available in case of power outage? (This is important!!)
• Are there sufficient phone lines in the building? This is very crucial for your work.
• Are there sufficient parking spaces?

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Furnishing Your Office

You can buy imported or locally made furniture. Almost all the main furniture sellers will agree to deliver the material to your office. The main office furniture sellers are found on Bole Road, at Hayuhlet Area and at Piazza. Technostyle (located in Bambis area, near Enat Bank building); Waryt (located on Waryt Building on Haile Gebreselassie Avenue); 3F (in Piazza, Before Bambis on Dil Building); Deluxe Furniture (Located at Olympia and also on the back of Bole Road and in CMC Micahel); GM Furniture (located on Kerra - Sarbet road, on the road from Olympia to Bambis and in Alem Gena) are the biggest that provide quality material; Technostyle is known for their quality yet cheap priced office furniture.

But it's good to take a tour of Bole Road, Ethio China Friendship Road, Debrezeyit Road, Hayahulet area, Urael Area and Piazza to check every possibility. You may also check our business directory.

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Communication

Fixed Phone Lines

The best thing is to have a fixed land line. You can apply to the local Ethio Telecom sales office and it takes 1-2 weeks to get the lines depending on availability, etc. You can have the phone numbers with you when you move your office provided your new office is located in the same sub city/region.

For more you can visit Ethio Telecom's website.

Mobile Phones

You can buy prepaid SIM cards from Ethio Telecom sales offices. But when you buy credit to charge your account, the shopkeepers usually give you local receipts that may be rejected by the tax auditors. Therefore, the best thing is to apply for post paid SIM CARDS. For more on this, you can check Ethio Telecom's website. Ethio Telecom has announced in May 2019 new ways to pay your bills. You may also check Safaricom's page here.

Internet

Ethio Telcom is making access to internet much easier than it was a few years ago. Buinesses can apply for ADSL or broadband, 4G LTE. They can even use their phone's 4G and 4G LTE internet connections via tethering or hotspot, or mobile wifi. Ethio Telcom has brought down the rate significantly too. The only issue businesses may face is the quality of the service, as the internet connection speed may slow down at any time of the day. For application process and rates, you may check Ethio Telecom's website. You may also check Safaricom's page here.

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Office Equipment

Computers, Laptops, Networking equipment and accessories

Computer Dealers are found in almost every corner of the city. While buying a computer, you can go for brand new PC’s, brand laptops, and second hand brand PC’s. Dell and HP brands are widely available for desktop PC’s and Dell, Lenovo and HP are available for laptops. All these brands have their own authorized dealers. SNAP Computer (on Bole Road), ALTA CompuTEC (Bole Road) and ETComp (on Bole Road) are among the best known dealers in the city. You may find accessories in these shops as well. But it’s worthwhile to take a tour of the city (especially Bole Road, Bole Medhanialem area, Piazza) and compare prices. You can also check the Computer & Accessories Importers section and Computers/ Accessories Sales and Maintenance Service Providers section of our Ethiopian business directory.

Photocopy Machines

You may check the Office Machines Importers section and of Office Machines Sales & Repair our Ethiopian business directory.

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Private Limited Company is a popular incorporated business form in Ethiopia that can be established by a minimum of 2 and maximum of 50 persons. We give a brief account of what one needs to do to start a PLC in Addis Ababa. We focus on Addis Ababa, as the bulk of commercial activity in Ethiopia is done here.

STEP 1: Preparing memorandum of association and articles of Association 

Prepare a memorandum of association (MOA) and articles of association (AOA). This can be done in Amharic or English. One can get samples from the Ministry of Trade and Industry, Ethiopian Investment Commission or from the business centers located around the Documents Authentication and Registration Office. Please try to find out where your office will be located so that you can include the right address in the documents. If you have not yet leased an office, state in the MOA and AOA that your head office will be in _____ (e.g. Addis Ababa). You will be required to furnish a lease contract when you apply for a tax identification number (TIN).

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STEP 2: Checking the proposed name of the PLC 

Take the draft copies of the memorandum of association and articles of association to the Ministry of Trade and Regional Integration or Ethiopian Investment Commission, as appropriate. They have an office on the ground floor of their building where they can check names. The proposed name as shown on the documents will be checked and if it’s not taken, you will be given a letter addressed to the Documents Authentication and Registration Office and another copy addressed to Ministry of Revenues. If it’s taken, you will be advised to change it.

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STEP 3: Process at the Documents Authentication and Registration Office or Ministry of Trade and Regional Integration or Ethiopian Investment Commission. 

You can find the documents authentication and registration offices at the Ministry of Trade and Regional Integration or Ethiopian Investment Commission. These organs have a one-stop service that includes the document authentication and registration office.

Nonetheless, the Main office is located on the second floor of Chelelek ALSAM Tower (the twin tower of the building where Ethiopian Commodity Exchange is located). It’s a one minute drive from Mexico Square on the way to Lideta. There are also other branches of the office whose address can be found at the website of the Document Authentication and Registration Office.

You will submit the draft copies at one of the aforementioned offices. You can get more information from there too. You will be sent to the appropriate desk and at this desk, the officer will go through your drafts. The drafts will either be approved or you will be asked to correct them. Finally, if the officer is satisfied with your documents and all the shareholders are present with their ids or passports, you will be asked to sign the paper. (You have to have copies of your VALID identity cards and passports along with the documents - expired ID’s or passports are not acceptable). Then you will be asked to pay. After payment, you have your PLC!

COST: The total cost you have to pay for the name checking is Br. Twenty Seven (ETB 27.00) and Br. Five hundred and fifty two (ETB 552) at the Documents Authentication and Registration Office. Of course, you may have to pay some money at the business centers and the copy shops. That may take anything between Br. 10 to Br. 200.

ADDITIONAL POINTS:

You can mention as many types of business as possible in the documents as your intended areas of business. You may not immediately get registration and license for these businesses. You can get registration and license for the types of businesses you want to engage immediately (provided you have fulfilled the requirements). For further info on business registration and license regulation and procedures, pls check this page.

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STEP 4: Application for a Tax Identification Number

Once you have signed and authenticated the MOA and AOA, you are required to apply for and obtain a tax identification number. As indicated earlier, the tax authority has an office at Ministry of Trade and Industry/Ethiopian Investment Commission. Alternatively, you can apply in one of the branches of the tax authority (check the Ministry of Revenues website for the addresses of the branches).

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STEP 5: Fill an Application form for Commercial Registration of the  PLC

Once you have obtained the tax identification number certificate, you can file an application form for commercial registration of a PLC with the Ministry of Trade and Industry or Ethiopian Investment Commission, as appropriate. Usually, you will be required the following documents:

1. Two photographs of the general manager;
2. Authenticated memorandum and articles of association;
3. Tax identification number;
4. Minutes of the shareholder’s meetings (this minutes should clearly indicate that the shareholder’s have agreed to form the PLC);
5. Lease contract (this may not be necessary if the title deed of the business office is under your name); and
6. If the application is being filled by an agent, an authenticated power of attorney.

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Any domestic investor can engage in import/ export business in Ethiopia. Check our Import/Export page.

REGISTRATION AND LICENSE

A person is only required to have a business license and/or to export goods. A person should have a business license to engage in export trade. However, there are some goods which require a special permit for exportation. For instance a person who wants to export coffee should have a special permit from the Coffee and Tea Development centre which is under the Ministry of Agriculture.

In order to get a business license, all exporters in Ethiopia should, first, be registered in the commercial registration which is administered by the Ministry of Tradeion and Regional Integrat located in Addis Ababa. Exporters in the regional states may be registered in the respective regional trade bureaus. Foreign investors (and domestic investor who want to benefit from the investment incentives) must be registered in the Ethiopia Investment Commission.

After commercial registration, a person must obtain a business license and a special export permit for selected goods from the relevant government organ (i.e. Ministry of Trade and Industry, regional trade bureaus, Ethiopian investment commission or any other government organ vested with such powers).

What documents one has to provide is mentioned on our Business Registration and License page.

COST

• A total amount of 101 birr is paid to the Ministry of Trade and Regional Integration, the Regional Bureaus, etc.

One can register to export all types of goods allowed for import provided that such good is not prohibited or restricted by an administrative decision. For further information Check our Import/Export page.

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Any domestic investor can engage in import/ export business in Ethiopia. Check our Import/Export Page for more.

Registration and License

A minimum capital of Br. 5,001.00 is needed to register and get business license.

According to the commercial registration and business license proclamation No. 980/2016, a sole person cannot be importer or distributor i.e. that a person should either form a partnership or business organization to engage in an import trade. However, the Ministry of Trade and Industry may allow sole importation or distribution based on the type of business and its national significance.

All importers in Ethiopia should, first, be registered in the commercial registration which is administered by the Ministry of Trade and Industry located near Hilton Hotel or beside Casanchis super market, located in Addis Ababa. Importers in the regional states may be registered in the respective regional trade bureaus. Foreign investors (and domestic investor who want to benefit from the investment incentives) must be registered in the Ethiopia Investment Commission.

After commercial registration, a person must obtain a business license and import permit from the relevant government organ (i.e. Ministry of Trade and Industry, regional trade bureaus, Ethiopian investment commission or any other government organ vested with such powers). However, an investment permit obtained from the Ethiopian Investment Commission serves as an import permit.

What documents one has to provide is mentioned on our Business Registration and License page.

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Cost

• A total amount of 101 birr is paid to the Ministry of Trade and Industry

Special Import Permits

One can register to import all types of goods allowed for import provided that such good is not prohibited or restricted by an administrative decision. For importing restricted goods, a special import permit is required from the relevant government organ. In a notable manner, the subcategory has to be specified for all kinds of imports on the business license as per the Ethiopian Standard Industrial Classification (a new version is on the verge of publication).

Here are some of the relevant government organs who issue import permit and special import permit:

• Medical Appliances (lab equipment, hospital equipment, etc): special permit/approval is needed from Ethiopian Food and Drug Authority.
• Chemicals (precursor and related chemicals, pesticides, herbicides): special permit/approval is needed fromfrom Ethiopian Food and Drug Authority.)
• Pharmaceutical and Medicines: special permit/approval is needed from from Ethiopian Food and Drug Authority.
• Fertilizer: special permit is needed from the Rural Development Animal and Plant Health Regulatory Department of the Ministry of Agriculture. Its location is on Lam Beret in Addis Ababa.
• Food products, such as food supplement, and infant foods: special permit/approval is needed from from Ethiopian Food and Drug Authority.

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