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Investing in Ethiopia

Foreign and Domestic Investment has been steadily growing in Ethiopia. The Federal and Regional Governments encourage investment; they provide land, incentives such as tax holidays, an improved bureaucracy at the Federal and Regional Investment offices, etc. The Government itself has been investing heavily to improve the country’s infrastructures and as a result, the road network has improved greatly in the last few years and this helps investment. 

 The EIC(Ethiopian Investment Commission) is the primary Government organ that serves as a nucleus for investment matters and is given the power and duty to promote, coordinate and enhance investment activities. The Ministry of Public Enterprises issues Government tenders in areas such as infrastructure development and public sectors, while the Ministry of Trade and Industry registers and licenses investors in brownfield investment. The National Bank of Ethiopia controls and facilitates foreign exchanges.

Even though procedures vary slightly depending on the business form under which investors plan to operate their business. All investments require an 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: 

  • Foreign investors;
  • Foreign nationals, excluding Ethiopians by birth,
  • Domestic investors investing in areas eligible for incentives;
  • Domestic and foreign investors making investments in partnerships.

After obtaining an investment permit, the investor is required to have a business license upon registration in the commercial register. A commercial registration and business license would confer several rights and duties on the investor including the right to commence business operation. (See the article on commercial registration and business licensing). Although the Ministry of Trade and Industry is the major government organ to regulate and administer commercial registration and business license, the Ethiopian Investment Commission administers the commercial registration and business license for investors.

Addis Houses is a real estate company in Addis Ababa, working on real estate sales of residential and commercial properties, property development, property management, and investment guidance.