Laws and regulations on investments

The Investment Proclamation (No. 769/2012) is the main legislative framework governing investments. The Investment Regulation (No. 270/2012), the Ethiopian Investment Board and the Ethiopian Investment Commission Establishment Regulation (No. 313/2014) also define the investment framework.

Foreign investors can invest alone. No restrictions apply on equity ownership in joint venture investment. Investors can fully repatriate profits and dividends.

Investment areas open to foreign investors

Area

Manufacturing industry

Sub-area

Basic metal industry Basic pharmaceutical products and pharmaceutical preparations industry

Beverage industry

Chemical and chemical products industry

Computer, electronic and optical products industry

Electrical products industry Fabricated metal products industry Food industry

Integrated manufacturing with agriculture Leather and leather products industry Machinery and equipment industry

Manufacturing of office and household furniture

Manufacturing of other equipment (jewellers and related articles, musical instruments, sports equipment, games and toys and similar products) Other non-metallic mineral products industry Paper and paper products industry

 

 

Rubber and plastics products industry

Textiles and textiles products industry

Vehicles, trailers and semi-trailer industry Wood products industry

Area

Agriculture

Sub-area

Crop production

Animal production

Mixed (crop and animal) farming

Forestry

Area

ICT

Area

Generation, transmission and supply of electrical energy

Area

Hotel and tourism

Sub-area

Star designated hotels –including resort hotels-, motel

Lodges

Restaurant

Grade 1 tour operation

Area

Grade 1 Construction contracting (including water well drilling for mineral exploration)

Area

Real estate development

Area

Education and training

Sub-area

Secondary and higher education by constructing own building

Technical and vocational training service (including sport)

Area

Health services

Sub-area

Hospital service by constructing own building

Area

Architectural and engineering works and related technical services, technical testing and analysis

Area

Publishing

Area

Import trade

Area

Importation of LPG (Liquefied Petroleum Gas) and bitumen

Area

Export trade

Sub-area

Except raw coffee, chat, oil seeds, pulses

Except precious minerals, natural forestry products

Except hides and skins bought from the market

Except live sheep, goats, camel, equines and cattle not raised by the investor

Area

Whole sale trade

Sub-area

Supply of petroleum and its by-products as well as whole sale of own products

Area

Logistics industry

Investment requirements

Requirement

Precisions

Minimum capital

>USD 200,000 if the foreign investor is not in partnership with a domestic investor.

>USD 150,000 if in partnership with a domestic investor.

>USD 100,000 if investment done in the following sectors (or >USD 50,000 if in partnership with a domestic investor):

architectural or engineering works or related technical consultancy services, technical testing and analysis or in publishing work.

Investment permit

Permit is delivered by the Ethiopian Investment Commission

Approval from the Ministry of Trade

Only required for the purchase of an existing private company (brown-field investment)

Expropriation and compensation

The Investment Proclamation (769/2012) provides strong guarantees against expropriation or nationalization, except when the public interest requires it.

In case of expropriation or nationalization for public interest, the government of Ethiopia has to compensate the investor at an amount “corresponding to the prevailing market value”.

Investments made by foreign investors benefit from extra protection.