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Trade & Investment

Discover the many opportunities for your business in Ethiopia

With a stable and democratic government, improving infrastructure and one of the fastest growing economies in the world, Ethiopia is fast-becoming a prime investment destination for businesses across the globe. Strategically located at the cross-roads between Africa, the Middle East and Asia, Ethiopia is the second most populous country in Africa and offers untapped resources, a vast domestic market and a large, young workforce. Recent government reforms and incentives are unlocking investment and business opportunities in a variety of export-oriented sectors including manufacturing, agriculture and agro-processing and industrial zones development, amongst others. If you are interested in exploring investment opportunities in Ethiopia, get in touch with us today by booking an appointment below.


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Doing Business in Ethiopia


What UK businesses, operating on the ground, are saying about investing in Ethiopia.

Ivan Menezes

CEO Diageo
“Africa is hugely important for Diageo and Ethiopia is going to be one of the cornerstone markets for us… It’s got good demographics, very good economic growth and we’ve got good support from the government. I see a market the size of Ethiopia having significant opportunities for all player to grow.”

Giles Bolton

Ethical Trading Director Tesco
“Ethiopia could blaze a trail in Africa in garment production, which could be a major driver of economic development for the continent as it has been in Asia… We see it as strongly in our business interest to take long-term view.”

Dougie Brew

Director of Communications & Corporate Affairs Unilever Africa
“We decided to invest in Ethiopia due to its demography, broad-based growth, and the opportunity to develop a sustainable and inclusive business model.”

Reg Hankey

CEO Pittards
“The Ethiopian government and authorities have been very supportive, and the establishment of a modern leather goods manufacturing unit in the country, incorporating best practices for high quality production, should help to showcase to the world the potential of this fast-developing country.”

UK Investments in Ethiopia

A number of UK businesses have invested in Ethiopia, including well-known multinational companies.

Strategic Sectors for Investment

Ethiopia has comparative advantages in a wide array of investment sectors. Discover them below.


The country’s total land area coverage is about 111.5 million ha, of which 74.3 million ha is suitable for agriculture. Eighteen major agro-ecological zones have been identified in the country, and over 3 million ha land has been made available for investment. Ethiopia offers one of the largest and most diverse agricultural investment opportunities in the continent.

Textile & Apparel

Ethiopia has a comparative advantage in the production and processing of textile fabrics and garments. An abundance of raw materials, low wages and low energy costs give it a comparative advantage over other countries and regions. Ethiopia also grows some of the world’s finest cotton and has a rich spinning and weaving history.

Leather & Footwear

With an annual production of 5 million tons of hides, 8.1 million tons of sheepskins and 7.5 million tons of goatskins, Ethiopia has a comparative advantage in the leather industry. There are ample opportunities for investment in tanning, up to the finishing and manufacturing of luggage items, handbags, saddlery and harness items, footwear, garments and other leather goods.

Industrial Parks

As part of the second Growth and Transformation Plan, the Government has embarked on the establishment on Industrial zones and parks across Ethiopia. The industrial zones, which will be located along key economic and infrastructural corridors across the country, will welcome both foreign and domestic investors engaged in export-oriented industries and aimed at coordinated production along value chains.


Although only a decade old, horticulture is the fifth foreign revenue earner for Ethiopia, generating US$245 million in 2013/2014 compared to US$28.5 million in 2004/2005. Total land area available for horticulture is about 12,552 hectares, with only 11% of this land being developed for horticulture. Currently, over 130 international investors are operating in Ethiopia’s horticulture sector, exporting to Europe, the USA and Middle East.

Tourism & Hospitality

Located in the Horn of Africa’s rift valley region and known worldwide for being the origin of mankind and one of the oldest civilizations, Ethiopia commands a large and untapped potential for tourism and hospitality business. In addition, Addis Ababa’s significance as the political capital of Africa brings high representation of international and regional organizations, including the seat of the African Union and the United Nations Economic Commission for Africa.
Ethiopia Blooming: Discover Ethiopia's Horticulture Industry


Ethiopia offers investors a comprehensive set of fiscal and non-fiscal incentives to encourage investment in strategic sectors, including:

Customs duty payment exemption on capital goods and construction materials, and on spare parts whose value is not greater than 15% of the imported capital goods’ total value Income tax exemption from two to seven years for manufacturing or agro-processing and agricultural investments Carry forward of losses for half of the tax holiday period Several export incentives, including the Duty Draw-Back, Voucher, Bonded Factory and Manufacturing Warehouse, and Export Credit Guarantee schemes Government guarantees the remittance of profit, dividends, principals and interest payments on external loans, and The provision of land at competitive lease prices

Licensing and Registering a Business

Ethiopia’s new Business Licensing and Registration process is straightforward and can be completed in a few simple steps:
  • Sole Proprietorship
  • Private Limited Company (PLC)
  • Branch / Multinational Company
  • 1
    Collect information:

    from Information and Investment Promotion Directorate at Ministry of Trade

  • 2
    Collect application form:

    from Ethiopia Investment Commission Information Desk

  • 3
    Submit application form:

    with current passport and visa to Licensing and Registration Department

  • 4
    Collect Letter to open a Bank Account:

    submit company documents to National Bank of Ethiopia

  • 5
    Open a Bank Account:

    deposit minimum capital requirement at National Bank of Ethiopia

  • 6
    Collect Bank Letter:

    confirming opening of bank account and depositing of minimum capital

  • 7
    Obtain an Investment Permit Certificate:

    from Licensing and Registration Department

  • 1
    Collect application form and information:

    from Information and Investment Promotion Directorate at Ministry of Trade

  • 2
    Submit application for company documents:

    to Licensing and Registration Department

  • 3
    Reserve a unique name:

    Receive letter of clearance for chosen name from relevant departments at Ministry of Trade, Regional Government or City Administration

  • 4
    Authenticate company documents:

    Receive authenticated Memorandum and Articles of Association from Licensing and Registration Department

  • 5
    Obtain a Tax Identification Number (TIN):

    Submit application form and company documents to Ethiopian Revenue and Customs Authority

  • 6
    Register and Obtain Commercial Registration Certificate:

    from Commercial Register

  • 7
    Register for VAT:

    with Ethiopian Revenue and Customs Authority

  • 8
    Obtain a Business License:

    from Ministry of Trade

  • 1
    Collect information:

    from Information and Investment Promotion Directorate at Ministry of Trade

  • 2
    Collect application form:

    from Ethiopia Investment Commission Information Desk

  • 3
    Submit application form:

    with authenticated document from parent company, new general manager’s passport and visa to Licensing and Registration Department

  • 4
    Collect Letter to open a Bank Account:

    Submit company documents to National Bank of Ethiopia

  • 5
    Open a Bank Account:

    Deposit minimum capital requirement at National Bank of Ethiopia

  • 6
    Collect Bank Letter:

    Confirming opening of bank account and depositing of minimum capital

  • 7
    Obtain an Investment Permit Certificate:

    from Licensing and Registration Department


The Ethiopian tax system comprises direct and indirect taxes. Direct taxes include personal income tax, rental tax, withholding tax and corporation tax, among others. The main types of indirect taxes are value added tax (VAT), customs duty, excise and turnover taxes.

Corporate income tax 30%
Turn over tax 2% and 10%
Excise tax 10% up to 100%
Customs duties 0% up to 35%
Income tax from employment 0% up to 35%
Withholding tax 2%
VAT 15%
Export tax 0% (with exception of hides and skins -150%)
Royalty tax 5%
Dividend tax 10%

Business income tax is charged on all income of an entity having a permanent establishment in Ethiopia.

Income tax applies to residents with respect to their worldwide income, and non-residents with respect to their Ethiopian-sourced income.

In the case of a corporate person, the latter is considered a resident when any of the three conditions below are present:

  • If the principal office is located in Ethiopia;
  • If the effective management of the company is in Ethiopia; or
  • If the company is registered by the Ministry of Trade and Industry
Employment monthly income (Birr) Tax rate (%)
The first 150 Exempt
151 - 650 10
651 - 1,400 15
1,401 - 2,350 20
2,351 - 3,550 25
3,551 - 5,000 30
Over 5,000 35

Both foreigners working in Ethiopia and Ethiopian citizens are subject to personal income tax. Income tax is levied on any income derived from employment, including any payments or gains in cash or in kind.

Taxable business income/Birr Tax Rate (%)
0 - 1,800 Exempt
1,801 - 7,800 10
7,801 - 16,800 15
16,801 - 28,200 20
28,201 - 42,600 25
42,601 - 60,000 30
Over 60,000 35

For further information on taxation in Ethiopia, please visit Investment Commission Website.


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

    Yes. It is prohibited to engage in any commercial activity unless registered as per the terms of Proclamation No. 980/2016 which stipulates that no person shall engage in business activity without acquiring a business license. The Proclamation further states that no person can obtain any kind of business license without first being registered in the commercial register and acquiring commercial registration certificate. It is upon registration that business organizations will have legal personality.

  • What kind of businesses can I license or register in Ethiopia?

    The types of businesses an individual can register in Ethiopia fall under three principal categories: a sole proprietorship, public limited company (PLC) and a branch/multinational company. The steps required to register such businesses are detailed above.

  • Are there special incentives provided by the government to investors investing in Industrial parks?

    Yes, the government is highly committed to welcoming investments in industrial parks. These investments are exempt from income tax for a period of 10 years in Addis Ababa and 15 years for parks outside Addis Ababa.

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