Ethiopia
Corporate Guide

What is the process of setting up a company in Ethiopia?

The roadmap for company incorporation, particularly for a foreign company, is:

• Submit an investment application form with the required documents to the Ethiopian Investment Commission (EIC) and obtain approval.
• Reserve a company name – three alternatives should be submitted to the EIC, and an available name will be reserved.
• Submit a memorandum of association (bylaws) for the entity and sign a copy of it at the EIC. 
• The EIC will issue two support letters for the new entity: one to open a blocked USD account¹ With the name of the entity under formation and the second to process the company’s tax identification number (TIN) registration at the Ministry of Revenues desk at the EIC.
• The entity opens a blocked USD bank account at the bank of its choice for the shareholders to wire USD 200,000, or whatever the legal minimum required amount is.
• An office lease agreement should be signed in the name of the entity under formation.
• The TIN registration must then be processed at the EIC (a lease agreement signed in the name of the entity under formation at the notary office is a condition for TIN registration). 
• Submit the TIN certificate, lease agreement and bank advice confirming that the minimum capital amount has been transferred to the EIC and obtain a commercial registration certificate and investment permit. At this stage, the entity acquires legal personality / judicial existence. 

After the entity attains judicial existence the investment permit will be a transitional licence until the date of commissioning an investment project. Once the entity is ready for business, the EIC will issue a business licence.

Footnotes

1: Foreign investors are required to meet a minimum capital requirement to invest in Ethiopia. Thus, one of the requirements to obtain a commercial registration certificate is to transfer the minimum capital into the company’s newly opened USD bank account. Until the company is registered and acquires a legal existence, the transferred money cannot be accessed or operated (i.e. it’s blocked). Once the company is fully registered and obtains its commercial registration certificate, a general manager or anyone authorised by the company can activate the bank account and make it ready for operation.