Business FAQ

Business Startup in Ethiopia: Information and Frequently Asked Questions

the following can serve as a launch pad to start a business in Ethiopia because by attempts to answer frequently asked questions to start a business in Ethiopia.

  • Do I need to register and obtain license to do business in Ethiopia?
  • Do I need to have a Trade Name and Trade Mark?
  • What are the main business forms/ types in Ethiopia?
  • What do I need to invest in Ethiopia, to register as an investor in Ethiopia?
  • Who can be regarded as a domestic investor, a foreign investor?
  • Is there an incentive for investors in Ethiopia?
  • As a businessperson, do I need to be registered as a taxpayer, what are the tax regulations andprocedures in Ethiopia?
  • How do I file and pay my tax in Ethiopia?
  • Who can be my potential business partners in Ethiopia?
  • Can I engage in import/ export business in Ethiopia?
  • How can I get information on tenders/ bids in Ethiopia? How can I participate in a tender/bid in Ethiopia?
  • Can I engage in import/ export business in Ethiopia?
  • What are the existing regulations and procedures in import, export, shipping, and customs in Ethiopia?

Do I need to register and obtain license to do business in Ethiopia?

Yes. It is prohibited to engage in any commercial activity unless registered in a Commercial register; and according to the Council of Ministers Regulation No.14/1997 or 14/1989 on Addis Ababa Dire Dawa Administration Commercial Registration and Licensing, any person engaged in a commercial activity, the capital of which is more than Birr 5,000, is to obtain a business license by applying to the appropriate authority. Capital includes fixed assets and working capital put at the disposal of the business, but excludes the business premises unless the businessperson chooses otherwise.

For a detailed answer please check our business licensing and registration page.

Do I need to have a Trade Name and Trade Mark?

Not necessarily. Although a trade name is one of the entries of a principal registration as provided for under Article 105 of the Commercial Code, principal registration shall be made without waiting for the registration of a trade name under Proclamation No. 67/1997. If there is no name registered, the business is referred by name of the owner in Sole Proprietorship business form or the name of the Private Limited Company or the Share Company.

For a detailed answer please check our business licensing and registration page and Trade Mark page.

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What are the main business forms/ types in Ethiopia?

Some of the main types and more common business forms/ types in Ethiopia:

  1. A sole business person: the business is owned by one person. Some of the advantages are: it’s easier to start and close.
  2. Private Limited Company: Can be formed by a minimum of 2 and a maximum of 50 persons. It is advantageous for high profit making businesses and it can be managed in a structured way, but it’s difficult to close the business.
  3. Share Company: Can be formed by a minimum of 5 persons. A minimum capital of Br. 50,000 is needed to set up a Share Company. The minimum price a single share can have is Br. 10.

Who can be regarded as a domestic investor, a foreign investor?

According to investment Proclamation, a Domestic investor is an Ethiopian or a foreign national permanently residing in Ethiopia having made an investment, and includes the Government, public enterprises as well as a foreign national, Ethiopian by birth and preferring treatment as a domestic investor. A Foreign investor is a foreigner or an enterprise owned by foreign nationals, having invested foreign capital in Ethiopia, and includes an Ethiopian permanently residing abroad and preferring treatment as a foreign investor. Currently issuane of domestic status for foreign investors in on hold.

Is there an incentive for investors in Ethiopia?

Yes. There are two: exemption from Customs duty and exemption from income tax. For a detailed answer, please check the investment incentives page.

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As a businessperson (or entity), do I need to be registered as a taxpayer, what are the tax regulations and procedures in Ethiopia?

Yes, every business person or entity should be registered to pay tax and must obtain a taxpayer’s identification number(TIN). However, each person or entity will have only one TIN. For a detailed analysis check our tax page.

Who can be my potential business partners in Ethiopia?

We have a list of more than 5000 businesses in Ethiopia assembled and sorted in categories, sub categories etc. Please check our business directory.

How to find information on tenders/bids in Ethiopia? How to participate in a tender/ bid in Ethiopia?

You can find information on tenders/ bids in Ethiopia on our tender page. The guidelines to participate in a tender/bid in Ethiopia are found here.

Can I engage in import/ export business in Ethiopia?

Yes and no. That depends on the type of import/ export business you want to engage in and whether you’re a domestic investor or a foreign one. Please check our import, export and investment pages.

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