Ethiopia_Africa_Shanghai CHYIELD Enterprise Consulting Co., Ltd.

GLOBAL REGISTRATION

Ethiopia

Advantages of Registering a Company in Ethiopia

1. Favourable geographical location: A landlocked nation in Northeast Africa, Ethiopia sits at the heart of the Horn of Africa.

2. Political stability: As one of Africa’s earliest independent countries, it maintains a stable political situation.

3. Well-developed infrastructure: Its aviation industry has expanded rapidly, with more than 40 airports nationwide.

4. International investment agreements: It has signed over 30 bilateral agreements on investment promotion and protection, with China serving as a key cooperation partner.

REQUIREMENTS

COMPANY TYPE

MATERIALS

Serial

Name

Details

Shareholders and Directors

A private limited company requires a minimum of 2 and a maximum of 5 shareholders, and the appointment of directors is not mandatory.

Registered Address

A physical registered address is required, and the lease contract shall be submitted to the government authorities.

Registered Capital

The minimum capital requirement for foreign investors launching businesses in Ethiopia is USD 200,000, and full capital contribution must be paid up;

For joint ventures between foreign and Ethiopian investors, the minimum capital threshold is USD 150,000, and full capital payment is not compulsory, subject to the terms stipulated in the joint venture agreement.

Investment Sectors

Pursuant to Investment Proclamation No. 1180/2020, all industrial sectors are open to foreign investment.

Serial

Name

Details

Sole Proprietorship

A sole proprietorship is the simplest form of business establishment that only requires one investor. The owner bears unlimited liability for all business debts. This type of entity is not subject to corporate income tax; all profits are attributed to the individual owner and taxed under personal income tax rules.

Private Limited Company

This is the most common investment vehicle for foreign investors. It requires a minimum of two investors and a maximum of fifty. Investors are liable for the company’s debts only up to their capital contributions. Both managers and shareholders enjoy limited liability, and shareholders must obtain the company’s approval prior to transferring their shares.

Public Limited Company

A Public Limited Company requires a minimum of five shareholders with no upper limit on the total number of investors. Its registered capital shall be no less than 30 million Birr. It is generally suitable for large enterprises with participation from major funds, as it facilitates capital raising and share transfers. Shareholders shall bear limited liability for the company’s debts. In the event of corporate liquidation upon bankruptcy, shareholders’ losses are capped at the amount they invested in the company.

Branch Office

A branch is an affiliate under the jurisdiction of the parent company, referring to an institution established outside the parent company’s registered address that conducts business activities in its own name. A branch does not possess independent legal personality, and the parent company shall bear all corresponding civil liabilities.

Serial

Name

Details

Information Collection Form

Information collection form;

Scanned passports and proof of address of Ethiopian company directors (utility bills or bank/credit card statements with residential address issued within the latest three months);

Power of Attorney;

Individual Shareholder

Scanned copy of passport;

Proof of residence (utility bills or bank/credit card statements stating the address issued within the past three months)

Corporate Shareholder

Business Registration Certificate and Memorandum & Articles of Association;

Complete equity structure diagram of the proposed company;

Scanned passports and proof of address (utility bills or bank statements with residential address issued within the latest three months) of individual shareholders holding 25% or more company shares;

Scanned passports and address proof (latest three months’ utility bills or bank statements with address) of legal representatives and directors of corporate shareholders;

Board Resolution.

Notes

The documents shall be notarized and authenticated or apostilled, accompanied by certified English translations.

REGISTRATION PROCESS

1

Fill out the information collection form

The client fills out the information collection form and provides relevant documents.
2

Company name availability check

Company name availability check
3

Notarization and Authentication

Notarize and authenticate documents of shareholders and directors
4

Sign the documents

Client signs all documents
5

Complete registration at the Registry Office

Carry out registration with the Companies Registry
6

Tax Registration

Corporate Tax Registration
7

Open a corporate bank account

Open a corporate bank account