General FAQ

  • Investment Climate of Ethiopia
  • Responsible Government Organizations
  • Requirements for Registration
  • Required Time Length, Renewals & Cost of Registration
  • Joint Venture
  • Visa Application Procedures
  • Hiring Foreign Expats & Local Labor
  • Trade Agreements of Ethiopia
  • Ethiopia's Infrastructure Projects
  • Local Taxations
  • Banks & Insurances
  • Bank Account Establishment
  • Loan Availability
  • Tax Incentives
  • Duty Free Privilages
  • Logistics & Maritime Transportation
  • Customs Duty Fee on Imports
  • Land Acquisition/Acquiring

The Ethiopian Government is committed towards improving the investment climate and attracting investments by ensuring a favourable environment and providing attractive incentive packages to all investors. With its attractive socio-economic environmental factors and a government with the willingness to develop the sector indicators have shown Ethiopia’s appeal to investors. Frequently asked questions by interested investors have been summarized below:  

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1, Which Government Organizations are involves in the registering a new company?

The Ethiopian Investment Commission and the Ministry of Industry are involved in the process. 

Address: Ethiopian Investment Commission

              Bole Road Infront of Dembel City Center

              P.O.Box 2313

              Tel: +251-11-551-00-33

              Fax: +251-11-551-43-96

              Email: This email address is being protected from spambots. You need JavaScript enabled to view it.


              Addis Ababa, Ethiopia

Address: Ministry of Industry

              P.o.Box 5641

              Tel: +251-11-551-80-25


              Fax: +251-11-551-42-88

              Addis Ababa, Ethiopia


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1, What are the different requiremens set to register a Company?

Registering company in Ethiopia vary’s depending on the mode of the business. Foreign investors are allowed to register a branch company, sole proprietorship and business organization to be incorporated in Ethiopia. The requirements and processes are outlined below.

  • An Investment Application form filled and signed (available on or in EIC Office) by  the investor or  general manager or legal authorized person
  • Company name registration :- 
    • An application signed by the general manager/agent; where the application is signed  by an agent, a photocopy of his power of attorney is required;
    • Draft Memorandum of Association.   

1.1, Branch Company

    • Certificate of incorporation of parent company in the country of origin and an appointment of legal authorized general manager;
    • Notarized memorandum and articles of associations or similar documents of the parent company;
    • Notarized minutes of resolution of the authorized organ of the parent company authorizing the establishment of a branch company in Ethiopia and the amount of capital allocated for the purpose;
    • Photocopy of the relevant pages of a valid passport or identity card of the branch agent;
    • Duly filled and signed application form (available on www. or in Commission);
    • Letter from bank showing USD200,000 (USD100,000 if it is architectural or engineering works or related technical consultancy  services,  technical testing and analysis or in  publishing)  transferred to Ethiopian bank after registration of the company you intend to establish;
    • An authenticated office lease agreement; 
    • Tax identification number.

1.2, Business Organization to be Incorporated in Ethiopia

    • Photocopy of  Its memorandum and articles of associations or where it is to be newly established;
    • Photocopy of relevant pages of passport and business visa of each shareholders;
    • Five recent passport size photographs of the general manager;
    • Duly filled and signed application form  (available on or at EIC) by general manager or legal authorized person;
    • In case a foreign company is in the business organization,
      • Notarized document of its memorandum  and articles of associations or similar documents of the parent company;
      • Notarized legal certificate of  incorporation; 
      • Notarized  minutes of resolution passed by authorized organ of the parent company authorizing to invest in Ethiopia; and
      • Notarized Power of attorney of the agent.
    • Letter from bank showing USD200,000 (USD100,000 if it is architectural or engineering works or related technical consultancy  services,  technical testing and analysis or in  publishing)  transferred to Ethiopian bank in the case of wholly foreign owned investment, and USD150,000 (USD50,000 if it is  in architectural or engineering works or related technical consultancy  services, technical testing and analysis or in  publishing) in the case of partnership with a local partner after registration of the company intended for establish;
    • An authenticated office lease agreement;
    • Tax Identification Number (TIN). 

1.3, Sole Proprietorship

    • Photocopy of relevant pages of passport and business visa of the investor or legal authorized agent;
    • Duly filled and signed application form (available on www. or in Commission);
    • Letter from bank showing USD200,000 (USD100,000 if it is architectural or engineering works or related technical consultancy  services,  technical testing and analysis or in  publishing)  transferred to Ethiopian bank;
    • Two Recent Passport size photographs;
    • An authenticated office lease agreement;
    • Tax Identification Number (TIN). 

Note:  All documents whose sources are outside of Ethiopia shall be

  • Authenticated by the concerned notary office and Ethiopian Embassy in the foreign country; and
  • Authenticated and registered by the Ministry of Foreign Affairs of Ethiopia.
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1, How Long does it take to get an Investment License, How often does it have to be Renewed and How much does it cost?

  • It takes a minimum of 5 days. However, it takes half a day (5 hours) to get an investment license if the investor has fulfilled all of the requirements (Refer above sub-section for requirements details).
  • The license has to be renewed annually at the end of every fiscal year (July).
  • EIC charges only 600 birr (USD 26.28) for this service.
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1, Does a Foreign Investor need a Local Partner to ser up a company in Ethiopia? 

A foreign investors is not required to have a local partner as a shareholder in order to set up a business in Ethiopia. Foreign investors have the right to fully own their own business (100% equity). But If a Foreign Investor can also make a Partner ship with a Local Investor to have a Joint Venture

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1, What are the different Procedures for processing and/or receiving Visa?

EIC will process all Visa requests for investors visiting Ethiopia. Investors will send all the required documentation to the EIC and the EIC will process the visa request with the Ethiopian Immigration Office. Visa processing takes 3 – 5 working days. These different documentations listed below are requested by all investors intending to travel to Ethiopia:  

  • Passport Scan/Copy;   
  • Residence Permit if the visitor is living/working in a country other than the origin of the passport;
  • Travel Information (Arrival and departure date and airlines);  
  • Brief company profile and purpose of visit description.    

With the above documentation two types of visas will be issued.

  • Visa at Ethiopian Embassy/Consulate: For those countries with Ethiopian Embassy/Consulate, the Ethiopian Immigration Office will send a letter directly to the Immigration and receive approval letter for Visit. The Immigration office will directly send the letter to the Embassy/Consulate where the investor will receive their Visa. At the same time the EIC will forward to the visitor the received slip. The investors can then go with passport and slip in hand and process the visa at the Ethiopian Embassy/Consulate.

  • Visa on Arrival: Whereas for those countries that do not have Ethiopian Embassy/Consulate a Business Visa on arrival will be requested and provided for the investors. The EIC will request for a letter from the Immigration office. This letter will be shared with the investor and is to be presented at the Airport alongside the passport for Visa. A fee of 50 - 75 USD will be required for the Visa.       
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1, What are the Rules & Requirements in Hiring of Expats and Locals?

The Ethiopian labor law governs all hiring (contract), wage and working hours of both expats and local staffs. Below are some of the summary points of the labor law:

  • Wage:
    • There is no minimum wage set. Wage is set by negotiation between the company and employee (negotiable);
    • Overtime pay ranges from 1.25x hourly wage (on work days) to 2.5x hourly wage (on public holidays).

Ethiopia’s labor cost is 20% of China and lower than other East African countries. Ethiopia average labor cost for manufacturing stands at 0.6 USD per hour where Kenya, Nigeria, China, Bangladesh and South Africa stand at 2.2, 2.4, 3.2, 4.2 and 7.8 USD per hour respectively.

  • Working hours: The working hours is set at  48 hours per week;

  • Expatriates:  
    • Expatriates can be employed in Ethiopia and they are anticipated to develop the local capacity. Therefore, these expatriates are offered a competitive income tax package for a minimum of 2 years. Furthermore, if the proposed investment is out of Addis Ababa, the incentive package increases

    • There is no limitation on the number of expatriates that can be recruited. However, this also depends on the availability of local professionals, the complexity of the investment and the need for high skilled professionals
  • Work Permit: EIC will assist in processing work permit for investors. It takes approximately 3 - 5 days to process and receive a work permit for expat hires. Expats will receive income tax exemption for 2 years starting from the issuance of the business license of the company.  

For detailed breakdown please review the labour law in the following link

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1, What are the Major Trade Agreements of Ethiopia with other Countries?

Ethiopia has signed different trade agreements which have been summarized below:

  • Bilateral Investment Treaties (BITs): with ~30 countries including: Algeria, Germany, Libya, Switzerland, Austria, India, Malaysia, Tunisia, Belgium, Iran, Netherlands, Turkey, China, Israel, Russia, United Kingdom, Egypt, Italy, South Africa, Yemen, Equatorial Guinea, Djibouti, Spain, USA, Finland, Qatar, Sudan, France, Kuwait and Sweden.
  • Double Taxation Avoidance Treaties (DTTs): with ~12 countries including countries like Czech Republic, Russia, Italy, Turkey, France, South Africa, Kuwait, Yemen, Israel, Tunisia and Romania
  • Generalized System Preferences (GSP): extended to LDCs by most developed and developing countries including; Australia, Canada, European Union, Japan, New Zealand, Norway, Russia, Switzerland, Turkey, USA, India, Chain and South Korea
  • AGOA (African Growth and Opportunity Act ): is a market opportunity provided by US Government to eligible sub-Saharan African countries (Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Cape Verde, Chad, Cote d’Ivorie, Comoros, Congo, Djibouti, Gabonese, Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Malawi, Madagascar, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Sao Tome & Principa, Seychelles, Sierra Leone, South Africa, South Sudan, Swaziland, Tanzania, Uganda and Zambia) to export their qualified products free from tariff and quota
    • Ethiopia’s export has been growing by 80% since the introduction of AGOA
    • Ethiopia earned ~$33 million from AGOA benefit in 2014
    • The average U.S. applied tariff on apparel is 11.4% compared to an average for all products of 3.5%. But AGOA has avoided this tariff.
  • Everything but Arms (EBA): is market opportunity that is given to all LDCs full duty free and quota-free access to the EU markets  for all their exports with the exception of arms and armaments
  • Common Market for Eastern and Southern Africa (COMESA): is a free trade area with twenty member states stretching from Libya to Swaziland and Ethiopia is a member. 
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  1. What are the major infrastructure projects in the country?

1, What are the Major Infrastructure Projects in the Country?

Ethiopia is currently undertaking numerous massive infrastructure projects aiming to become a favorable investment destination. Some of the examples are listed out below:

  • The newly constructed Addis light railway and Addis-Adama express covering a total of 12,000 KMs;
  • Major six railway routes and numerous road projects are also under construction which will link major surplus producing areas with industry clusters; 
  • The current power generations stands at 4,730 MW and the GoE plans to reach 17,000 MW by 2020 and with this target in mind the country is constructing the biggest hydroelectric power generating dam in Africa known as the Great Renaissance dam. This dam is currently at 50% construction and is anticipated to increase the current power generation of the country by more than 6,000 MW; 
  • The country is home to Africa’s largest airline hub, Ethiopian Airlines, which flies to 93 destinations and frequently awarded for best airline of the region, ET Airlines will add 37 destinations by 2020;  
  • The Ethiopian Shipping Lines provides logistic service and it is a privately operated company.
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1, What are the different Local Taxations & Filing Requirements?

  • The Ethiopian Revenues and Customs Authority (ERCA) is the body responsible for collecting revenue from customs duties and domestic taxes.
  • The Ethiopian tax system comprises direct and indirect taxes. Direct taxes include personal income tax, rental tax, withholding tax, and corporation tax, among others. The main types of indirect taxes are VAT, customs duty, excise and turn over taxes. Main taxes are summarized in the table below.
 Type of Taxes Rate
1 Corporate Income Tax 30%
2 Turn Over Tax 2% and 10%
3 Excise Tax 10% up to 100%
4 Customs Duties 0% up to 35%
5 Income Tax from Employment 0% up to 35%
6 Withholding Tax 2%
7 Value Added Tax (VAT) 15%
8 Export Tax Nil (with exception of hides and skins-150%)
9 Royalty Tax 5%
10 Dividend Tax 10%
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1, What are the availability of Banks and Insurances in the Country?

  • There are more than 20 local banks and insurances that provide banking and insurance services. Most of them are private banks (1 government bank – Commercial Bank of Ethiopia) and their interest rate and working hour is different among them. 
  • Most of the international transactions are done in the form of opening a letter of credit (LC) in the banks. The government works to address the shortage of Foreign Currency by taking different measures such as regulating the foreign exchange market and increasing export earnings through diversification of products and destinations. In addition, the government allows for expatriation of dividend profit to home country with no restriction on the amount.
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1, How are the Establishment of Bank Accounts?

  • The company has to provide an authenticated memorandum of understanding (MoA) and article of association (AoA) to the EIC where a letter will be provided to the investor. The investor can then take this letter to any bank of its choosing and proceed in opening a bank account into which the requested initial deposit (Refer above sub-section) can be made. 
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1, Is there any available Loan provided for a Start-Up Capital?

  • Development Bank of Ethiopia provides working capital fund for investors. 
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1, What are Tax Incentives given for New Investments?

The tax incentives provided depend on the type of manufacturing the investor is engaged in and the location of the investment. An attractive incentive package covering, among others, tax holidays, duty-free imports and full repatriation of profits is provided. In addition, free trade agreements with EU and US, preferential duty to all other major markets


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1, Are there any Duty Free Privilages given for Import of Machineries, different Equipments and Vehicles?

Any new or used machinery, equipment and any construction material which are relevant to the investment project can be imported duty free. EIC will assist investors in the process.  

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1, What is the Plan to Improve Logistics and Maritime Transportation?

  • The government is working to improve the delivery service of products going in and out of the country by constructing dry ports for better facilitation of logistics. It is also working to build the capacity of the local service providers by arranging different workshops with the relevant stakeholders. Set up of an electronic documentation system that facilitates the export and import between Ethiopia and Djibouti is also underway.
  • When the Addis-Djibouti electric railway becomes operational, it will enable investors to cut down the cost of transporting goods from the port almost by half (50%) and lowers the delivery time from days to just 8 up to 10 hours. 
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1, What is the amount of Customs Duty Fee on Imports?

  • While importing for the purpose of a manufacturing investment, there is no customs duty levied but when it is used for the local market consumption, the duty ranges from 0 – 35 %.
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1, How can an Investor Acquire Land?

  • All land in Ethiopia is considered public property. Individuals, companies and other organizations can, however, acquire the right to use land. There are two broad classifications of land for rent or lease purposes: rural land, mainly used for agricultural purposes, and urban land, mainly used for industrial purposes or other activities. Land lease or rental rates differ from location to location. EIC proves the Factor Cost publication (provided in EIC website).      


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