Company Formation in Ethiopia | Business Registration | IMC
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Ethiopia

SET UP A BUSINESS IN 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.

Scroll down for more information on Company Formation in Ethiopia.

 Company Formation 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.

Company Registration in Ethiopia – Licensing

  • An investment permit is issued to an investor to establish a new company or to expand or upgrade to 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 for Company Registered in Ethiopia

  • 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 exempted4. The corporate tax rate is 30%, the capital gain tax rate is 30% and dividend tax rate is 10%

Type Limited Liability Company/Branch office
Under Ethiopian law, foreigners can own 100%
Share Capital USD 200,000
Directors Minimum One
Shareholders Minimum Two
Memorandum and Articles of
Association
Yes
Can the entity hire expatriate staff in
Ethiopia
Yes
Tax Registration Certificate required Yes
Statutory audit required Yes
Secretary No
How long to open Corporate Bank Account 1 week
Timeframe to Incorporation 3-4 weeks
Annual Return Yes
Annual Tax Yes
Access to Mozambique
double tax treaties
Yes

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