their investment licenses at the Ethiopian
Investment Commission (EIC). The following are the requirements for acquiring the license:
1. Application form for new investment permit duly signed by applicant or legally
authorized agent
2. Where application is submitted by agent, then verified copy of power of attorney
3. Copy of memorandum and article of association
4. Four ¾ inches size photograph taken within the last six months (of the general manager if applicant is a business
organization, if not photograph of the individual investor)
5. Copy of renewed Identification or Passport
6. Service Fee of 600 Birr
7. Investment Visa
8. Authenticated Business Background Certificate
9. Business proposal
Steps in investment licensing
The step-by-step procedure for applying for a sole proprietorship, PLC, Joint Ventures and
Share Company, and a multinational company is found on EIC’s website.
( https://www.invest-ethiopia.com/)
Minimum Capital Requirements
For wholly foreign-owned company, the minimum capital requirement is 200,000 USD (USD
100.000 if it is architectural or engineering works or related technical consultancy services,
technical testing, and analysis or in publishing)
For joint venture company, the minimum capital requirement is 150,000 USD (USD 50.000 if
it is architectural or engineering works or related technical consultancy services, technical
testing and analysis or in publishing).
Business License – check list
1. Application for business license duly signed by investor, general manager or his/her
legally authorized agent,
2. Where application is submitted by agent, verified copy of power of attorney,
3. Copy of investment permit,
4. If the applicant is a foreigner treated as domestic investor, a copy of renewed residence
permit or an ID card affirming Ethiopian status by birth,
5. Project progress follow-up report,
6. Copy of taxpayer’s identification number (TIN) certificate,
7. Copy of renewed commercial registration certificate,
8. For a foreign investor, copy of foreign investment capital registration certificate,
9. For a business organization, copy of memorandum and articles of association (including
amendments, if any),
10. Proof of competence issued by relevant organizations, as appropriate,
11. Four ¾-inches size photographs taken within the last six months if the applicant is
individual investor,
12. Service Fee of Birr 100.
Residence Permit
Upon the submission of investment permit, the Main Department for Immigration and
Nationality Affairs issues a residence permit to a foreign investor. A foreign investor, who is a
shareholder of a company or a branch company and an expatriate staff who has a work
permit, are also entitled to a residence permit.
An investment license, TIN certificate and Business License can be issued at the specific
location (district) where the investor chose to invest. If Competence of Certificate (COC) is
required, this can be issued at regional (federal) level, depending on the requirement based
on the project.
Investment License
Requirements
to get Investment License for newly approved Project:
1. Filling request form,
2. Letter of decision regarding land for investment,
3. Photocopy of Taxpayer Identification Number (TIN),
4. Recent 3 passport size photographs,
5. Photocopy of Id-card for an individual promoter or an agent,
6. Copy of approved land lease/rent agreement,
7. Article of association and Memorandum of Association documents if the request is by
an organization,
8. If the application is provided by an agent, legal evidence must be provided showing
the power of attorney,
9. Payment of 600 Birr for services
After the above checklist is fulfilled, the application would be submitted to the investment
office of the district.
Business License process for Ethiopian investors
Step 1: Initial unique name registration,
Step 2: Business Document Authentication,
Step 3: Issuance of new Taxpayer Identification Number (TIN) Certificate,
Step 4: Commercial Registration,
Step 5: Apply for competency certificate,
Step 6: Apply for Trade/Business License,
Step 7: Register for Pension and Income Tax for employees,
Step 8: Renew Trade/Business and other license,
Step 9: Get a tax account.
Land acquisition process in the region
In Ethiopia, land is a public property. Individuals, companies and other organizations have
only use right of land. There are two broad classifications of land for rent or lease purposes:
rural land and urban land. Application for land acquisition can be made during a field visit of
an investor and after taking out an investment license. The Ethiopian Investment Commission
(EIC) has the mandate to facilitate the allocation of land for FDI projects throughout the
country. Urban land for other activities is available on an auction basis. The auction prices
vary, depending on demand. The lease and rental prices of urban and rural land vary
according to location, type of investment and class of land. The land cannot be mortgaged or
sold, but the lease or rental value of land and the fixed assets thereon may be mortgaged or
transferred to a third party.
Rural Land
Rural land is rented mainly for agriculture. The Ministry of Agriculture and Rural Development
allocates farmland to foreign investors. In addition, it provides technical support for private
investors investing in agriculture. There is strong commitment from the government to avail
the country’s fertile land for investment. Land Application can be submitted to the land
administration bureau of the district directly after securing the investment license. The
authority will issue a letter to the respective zone (region) land administration and investment
Bureau to facilitate for the land acquisition. When submitting the letter, investors are also
expected to submit a project proposal that clearly indicate profitability, employment
opportunity and new technology. A team of experts from the district will evaluate the
proposal. The outcome will be communicated within two weeks. If accepted, the district
Administration for rural Land and Environmental Protection will liaise with city, district and
village. The authorities will engage current users of the land and process compensation.
Making occupied land ready to investors may take from two to three months. For dairy and
agro-processing where there is already non-occupied land, it can be finalized in one week
once the project is accepted.
Urban Land
The regional
administrative units oversee allocating urban land for investors. Urban land is divided into land for industrial use and
land for other activities. Industrial land is given much attention by the government and several industrial villages (zones) with the necessary
infrastructural facilities (roads, electricity, water, telephone) are
established in the major cities and towns in
order to support the country’s drive for rapid industrialization.
Industrial
land in industrial zones is allocated to investors at fixed prices. Land for
export- oriented industries is
generally available at concessionary rate. The land is administered on lease, auction and rental systems. The
initial lease charge in leased towns ranges, according to the grade of the land, from Birr 4.67 the lowest in the area
of service delivery projects up to Birr 80 the highest in the areas of trading
activities per square
meter in the holding period.
In the rest
medium and small towns, the rate of land rent ranges from Birr 0.01 to 0.50 per square meter per year. There are areas
which are prepared for manufacturing, industry and agro- processing by the regional government and have committed
to provide economic infrastructures
like water, electricity, and road within the industry zones at 11 cities with
an amount of 1,216.12 hectares of
free land from third parties, the cost of such essential infrastructure development (installation) is covered by the
regional government.