FACT SHEET

Ethiopia Ethiopia is formally known as the Federal Democratic Republic of Ethiopia. Ethiopia is in the north-eastern

part of Africa, at the crossroads between Africa, the Middle East and Asia. The country has a constant

political and economic environment. The Ethiopian Investment Agency (EIA) is a government agency

established to promote private investment, foreign direct investment (FDI). The entire activities of the

Agency are monitored and observed by an Investment Board, chaired by the Minister of Industry. The

Ethiopian Government has made efforts, through procedural and legislative reforms, to enhance the

investment climate of the country and thereby encourage more foreign direct investment.

Company Incorporation in Ethiopia

Private Limited Company can be started with the minimum capital of ETB 15,000 and the company

must have at least 2 shareholders and one manager. The company shall not undertake banking,

insurance and any business of such nature.

An overseas company wishing to invest through a branch office is required to submit the essential

documents to the Ethiopian Investment Commission. Foreign companies want to open liaison offices

should submit their application to the Ministry Of Trade And Industry.

Licensing in Ethiopia:

An investment permit is issued to an investor to establish a new company or to expand or upgrade

one that already exists. As per the Investment Proclamation, a foreign investor or a domestic

investor who wants to get incentives is required to obtain an investment permit to invest in Ethiopia.

The business license issued by the Ethiopian Investment Agency

Accounting and Tax:

100% exemption from the payment of import customs duties

Any income derived from an approved investment in new manufacturing, agro-industry and

Information and Communication Technology (ICT) development or agriculture is exempted from the

payment of income tax for the periods (depend upon the activity)

The VAT rate is 15% of the value of every taxable transaction by a registered person and all imports

of goods and services other than those exempted

The corporate tax rate is 30%, the capital gain tax rate is 30% and dividend tax rate is 10%

FACT SHEET Ethiopia

Type: Private Limited Company (PLC)

Under Ethiopian law, foreigners can own 100%

Share Capital USD 200,000

Manager Minimum One

Shareholders Minimum two

Memorandum and Articles of Association Yes

Can the entity hire expatriate staff in Ethiopia Yes

Secretary No

How long to open Corporate Bank Account One week

Timeframe for Incorporation 3 -4 weeks

Tax Registration Certificate Required Yes

Statutory audit required Yes

Annual Return Yes

Annual Tax Yes

Access to Ethiopia double tax treaties There is no Double Taxation Treaty signed yet

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