Investment Procedures in Ethiopia

A foreign investor, domestic investor or a partnership of foreign and domestic investors who plans to engage in investment activities in Ethiopia are expected to follow the investment procedures in Ethiopia. This page presents investment procedures in Ethiopia as laid out in the proclamations and regulations that can be summarized as follows: commercial registration, acquisition of investment permit, and business licensing. Note that investment permit and commercial registration certificate are usually obtained simultaneously if the foreign investor invests the minimum capital requirement. (You may go straight to the last section of this page if you wish to see see the summary of the procedures to obtain an investment permit and a commercial registration certificate).

Investment Proclamation No. 1180/2020 DOWNLOAD
Council of Ministers Investment Regulation No. 474/2020 DOWNLOAD
Commercial Registration and Business Licensing Proclamation No. 980/2016 DOWNLOAD
Commercial Registration and Business Licensing (Amendment) Proclamation No. 1150/2019 DOWNLOAD
Commercial Registration and Business Licensing Regulation No. 392/2016 DOWNLOAD
Commercial Registration and Business Licensing (Amendment) Regulation No. 461/2020 DOWNLOAD
Industrial Parks Proclamation No. 886/2015 DOWNLOAD
Council of Ministers Regulation No. 417/2017 on Industrial Parks DOWNLOAD

1. Commercial Registration and Business Licensing

Any person who seeks to engage in any business activity is first required to register in the commercial register. Such registration of foreign investors or domestic investor who seek to acquire incentives is undertaken by the Ethiopian Investment Commission.

The requirements to obtain a commercial registration certificate for a new enterprise as enshrined in the laws stated above are outlined below based on the form of enterprise that you seek to establish.

Sole Proprietors:

An application for commercial registration for a sole proprietorship must be submitted by filling a prescribed application form prepared for this purpose and attaching documents specified and below:

  1. Trade name registration;
  2. Certificate of Taxpayer’s Identification Number of the sole proprietor (this is obtained from the tax authority);
  3. Original and necessary copies of valid identity card or passport;
  4. If the sole proprietor is a foreigner, a valid business visa;
  5. Two passport size photographs taken within six months, which shows the clear identity of the sole proprietor; and
  6. Lease agreement or a title deed which verifies the prospect business address.

For Partnership and Private Limited Company:

An application for commercial registration is made by filling a prescribed form and attaching documents specified below:

  1. Original and necessary copies of valid identity card or passport of the manager;
  2. If the manager is a foreigner and at the same time a shareholder or partner, a valid business visa; if the manager is a foreigner and not a shareholder or partner, a valid work visa and a work permit;
  3. Two passport size photographs taken within six months, which shows the clear identity of the manager;
  4. Where the application is made by an attorney, an original or attested copy of the power of attorney document signed by all founders that is duly authenticated, photocopies of valid identity card or passport of the attorney and the manager;
  5. Authenticated original and copies of the memorandum and articles of association establishing the partnership or private limited company by the appropriate organ;
  6. Minutes of shareholder’s resolution establishing the company;
  7. Where a foreign corporate body is a member of the prospect partnership or private limited company;
    1. Certificate of incorporation issued at the country of formation;
    2. Notarized minutes of resolution, letter or other similar decision passed pursuant to the laws of the country of formation to join the partnership or private limited company;
    3. Where the application is made to open branch offices, the branch office address where the partnership or private limited company is to be incorporated;
  8. Lease agreement or a title deed which verifies the prospect business address of applicant and branch offices;
  9. Where there is contribution in kind, a signed statement by the applicant showing that the contribution to be made is to be transferred to the partnership or private limited company within a year after registration is made;
  10. Where there is contribution of intellectual property, minute or similar document authenticated by a notary;
  11. Certificate of Trade Name Registration; and
  12. Certificate of Tax Identification Number (TIN) of the private limited company.

Note that all documents that originate from abroad must be authenticated and notarized by the relevant authority in the originating country and the Ethiopian Embassy that deals with that country. They will further be authenticated by the Ministry of Foreign Affairs and Document Authentication and Registration Office (in Ethiopia).

For Share Company:

An application for commercial registration is made by filling a prescribed form and attaching the documents specified below:

  1. original and necessary copies of valid identity card or passport of the manager, and Tax Identification Card of the manager;
  2. If the manager is a foreigner and at the same time a shareholder or partner, a valid business visa; if the manager is a foreigner and not a shareholder or partner, a valid work visa and a work permit;
  3. two passport size photographs taken within six months, which shows the clear identity of the manager;
  4. where the share company is under the process of formation, an original and attested copy of the power of attorney document signed by all founders;
  5. duly authenticated original and copies of memorandum and articles of associations of the share company;
  6. where a foreign individual is member of the share company, an original and necessary copies of his/her valid passport and business visa;
  7. where a foreign corporate body is a member of the prospect share company;
    1. Certificate of incorporation issued at the country of formation;
    2. Notarized minutes of resolution, letter or other similar decision passed pursuant to the laws of the country of formation to join the business organization;
    3. Where the application is made to open branch offices, the branch office address where the share company is to be incorporated;
  8. lease agreement or a title deed which verifies the prospect business address of applicant and branch offices;
  9. a bank statement showing that at least one fourth of the par value of the subscribed shares of the company is deposited in a blocked account;
  10. where there is contribution of intellectual property, a minute or other similar document authenticated by a notary;
  11. certificate of trade name; and
  12. certificate of Tax Identification Number of the share company. 

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2. Investment Permit

The Ethiopian investment commission is obliged to receive an application for an investment permit and issue the permit upon examination of the intended investment activity in light of the proclamation, regulation and directives, and receipt of the appropriate fee. The commission is required to duly notify the applicant where the application is found unacceptable.

The following investors are required to obtain investment permits:

  1. foreign investors;
  2. domestic and foreign investors investing jointly;
  3. a foreign national or foreign enterprise treated as domestic investor as per the relevant law or international treaty ratified by Ethiopia;
  4. an enterprise incorporated in Ethiopia jointly between two or more of the following investors, an Ethiopian national, enterprise incorporated in Ethiopia and wholly owned by Ethiopian nationals, the government, a public enterprise in which a foreign national has no ownership stake, a cooperative society established as per the relevant law and/or a foreign national or foreign enterprise treated as domestic investor as per the relevant law or international treaty ratified by Ethiopia and a foreign national or foreign enterprise accorded a domestic investor investment permit prior to the enactment of the new Investment Proclamation and descendants of such foreign national;
  5. domestic investors who seek to invest in areas eligible for incentives and seek to be beneficiaries of such incentives; and
  6. an investor seeking to expand or upgrade an existing investment, provided that the investment is eligible for incentives and the investor seeks to be beneficiary of such incentives.

Application for Investment Permit

By a domestic investor:

The application shall be made in a form designed for such purpose (can be obtained from the Ethiopian Investment Agency) and submitted together with the following documents (the application form the documents have to be submitted in two copies, where they are submitted to the Agency, or in one copy, where they are submitted to Regional Investment Organs).

  • Where the application is signed by an agent, a photocopy of his/her power of attorney;
  • Where the investment is to be made by an individual person, a photocopy of his/her identity card, or a photocopy of the certificate evidencing his/her domestic investor status and his/her recent two passport size photographs;
  • Where the investment is to be made by a business organization, photocopies of its memorandum of association and articles of association; or where the business organization is newly established, in addition, it should submit photocopies of the shareholders’ identity cards, or photocopies of the certificates evidencing their domestic investor status;
  • Where the investment is to be made by a public enterprise, a photocopy of the Regulation under which it is established or a photocopy of its memorandum of association and articles of association;
  • Where the investment is to be made by a cooperative society, a photocopy of its Articles of Association; and
  • A bank statement showing the capital allotted for the business.

By a foreign investor:

The application shall be made in a form designed for such purpose (can be obtained from the Ethiopian Investment Agency) and submitted together with the following documents: (the application form the documents have to be submitted in two copies to the Agency).

  • where the application is filed by an agent, photocopy of a valid authorization document;
  • where the investment is to be made by a sole proprietor, photocopy of the bio-pages of a valid passport showing his/her identity and two recent passport-size photographs;
  • where the investment is to be made by an Ethiopian national permanently residing abroad who prefers treatment as a foreign investor, photocopy of document evidencing his permanent residence abroad;
  • where the investment is to be made by a business organization incorporated in Ethiopia:
    1. memorandum of association and articles of association for the business organization, photocopy of the bio-pages of a valid passport of each shareholder showing his/her identity, and two recent passport size photographs of the general manager;
    2. where the business organization has a foreign national considered as domestic investor as its member, photocopy of the identity card evidencing the domestic investor status of the member;
    3. where there is a business organization or a branch of a foreign-incorporated business organization in the business organization, photocopy of its memorandum of association and articles of association or similar constitutive document, commercial registration certificate and photocopy of minutes of resolution passed by the authorized organ of the parent business organization resolving to invest in Ethiopia.
  • where the investment is to be made by an Ethiopian branch of a business organization incorporated abroad:
    1. photocopy of memorandum of association and articles of associations or similar constitutive document as well as commercial registration certificate of the parent business organization;
    2. photocopy of document attesting the appointment of the branch manager and his two recent passport size photographs, and photocopy of the bio-pages of a valid passport or identity card of the manager, and
    3. photocopy of the minutes of resolution of authorized organ of the parent business organization resolving to establish a branch business organization in Ethiopia, and
  • document evidencing the financial position or profile of the investor, when deemed appropriate by the Commission; and
  • a bank statement showing that the minimum capital requirement specified below is deposited in a blocked bank account.

N.B. All documents specified above originating from outside of Ethiopia must be authenticated by foreign and domestic bodies authorized to authenticate documents (the domestic authorities are the Ministry of Foreign Affairs and Document Authentication and Registration Agency).

For expansion or upgrading of an existing enterprise:

The application shall be made in a form designed for such purpose (can be obtained from the Ethiopian Investment Commission) and submitted together with the following documents (the application form the documents have to be submitted in two copies, where they are submitted to the Investment Commission), or in one copy, where they are submitted to Regional Investment Organs).

  • where the application is filed by agent, photocopy of valid authorization document;
  • where the investment is made by a sole proprietor, a photocopy of the bio-pages of his valid passport or identity card evidencing his domestic investor status or photocopy of his identity card, as the case may be, and his two recent passport size photographs;
  • where the investment is made by a business organization, photocopy of its memorandum of association and articles of association and two recent passport size photographs of the general manager;
  • photocopy of a valid business license of the existing enterprise; and
  • expansion or upgrading project feasibility study.

Renewal of Investment Permit

An investment permit is renewed every year until the investor commences marketing of his product or service. However, if the investor has sufficient cause for the delay in the commencement or completion of his project implementation, the commission shall renew the permit.

Investment permits to carry out activities in industrial parks

Investment permit in an industrial park is a permit issued by the Commission for industrial park developer, industrial park operator, industrial park enterprise to carry out industrial park related activities as an investor.

An investor is required to submit, an application form duly signed by the investor or his agent, notarized memorandum and articles of association and if it is a branch, documents ascertaining the registration and legal personality of the parent company in the country of origin. The investor is also required to comply with specific requirements (other than those stipulated above) based on the activity he wishes to engage in.

Investors who desire to engage as an industrial park developer are required to present, their undertakings to develop a park for industrial park enterprises that engage in prioritized manufacturing sectors, and declaration demonstrating the availability of sufficient capital for implementing the project. Where the commission finds the application legitimate it concludes a memorandum of understanding with the applicant and issue an investment permit within seven days.

An investor who wishes to become an industrial park operator must submit a detailed declaration demonstrating availability of professional and possession of experience as well as administrative and financial plan. In a different manner an application to establish industrial park enterprise should include; a detailed project proposal, export/import substitution plan contingent upon the type of proposal, declaration of financial standing and a ten year forecast, and environmental impact assessment report.

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3. Business Licensing

After obtaining the commercial registration certificate and investment permit, the investor is required to obtain a business license.
Usually, a foreign investor is required to fulfill the following conditions to obtain a business license;

  • Commercial registration;
  • Investment permit;
  • he business activity shouldn’t be prohibited by any law;
  • Certificate of competence issued by the appropriate organ;
  • Payment of appropriate service fee; and
  • Submit an application to the relevant authority in accordance with the applicable law.

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4. Summary of the Procedures to Obtain an Investment Permit and a Commercial Registration Certificate

The investment procedure for foreign investors usually involves the following steps:

  1. Prepare a business proposal;
  2. Prepare a draft memorandum of association and articles of association;
  3. Verify the business proposal and draft memorandum of association and articles of association from the Business Registration and Licensing Office at the Ethiopian Investment Commission;
  4. Fill out the investment application form that can be obtained from the same office;
  5. Obtain a trade name certificate from the same office;
  6. Sign and authenticate the memorandum of association and articles of association (four copies each);
  7. Lease an office for the business and authenticate the lease contract at the Document Authentication and Registration Office (if the business office is in a building that is under your name, you can skip this step and just present the title deed of the building);
  8. Obtain a tax identification number from the Ministry of Revenue office that is located in the Ethiopian Investment Commission or other branch offices;
  9. Furnish the above documents and obtain two support letters from the Business Registration and Licensing Office at the Ethiopian Investment Commission so that you can open a bank account (one of the support letter is to be submitted to the National Bank of Ethiopia and the other to any commercial bank of your choice);
  10. Submit the relevant support letter to the National Bank of Ethiopia and get a letter approving the opening of the bank account;
  11. Submit the relevant documents and get a bank account from the commercial bank;
  12. Deposit the minimum capital requirement at the opened bank account;
  13. Get a letter from the bank confirming that the capital has been deposited;
  14. Submit the confirmation letter to the Ethiopian Investment Commission;
  15. Finalize the registration and application by paying the appropriate service fee to the Ethiopian Investment Commission; and
  16. Obtain the commercial registration certificate and investment permit.

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