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Investment Approval Procedures    

Under the Investment Proclamation No. 280/2002, Article 12, foreign investors, foreign nationals (excluding Ethiopians by birth) taken for domestic investors, domestic investors investing in areas eligible for incentives and domestic & foreign investors making investments in partnership are required to obtain investment permits from the Ethiopian Investment Authority.

To qualify for investment permit, an investor is required to submit the following documents:

, a completed application form obtained from the EIA;
, a project profile/business plan;
, a list of the type and quantity of machinery and equipment intended to be exempted from import duties and taxes;
, a draft memorandum and articles of association in the case of a business organization;
, in case of expansion or upgrading, a brief description of the same and its implementation programme;
, in case of planned employment of expatriate staff , with the exception of top management positions, a statement on the time and schedule for their replacement by Ethiopians and the training programme designed for such replacement; and
, a power of attorney in the case of submission of an application through an agent and other relevant information relating to the particulars of the project.

A foreign investor who intends to conclude a technology transfer agreement related to the investment will be required to submit a draft agreement to the Authority for approval and registration together with the application to investment permit. The EIA approves and gives an investment permit in 10 days if the above documents are received in full.

How To Set Up Business Organizations In Ethiopia

One-Stop-Shop: The EIA is a truly one-stop-shop for all foreign investment matters in Ethiopia. In this regard, the EIA :

, provides necessary information required by investors;
, receives investment applications;
, approves and issues investment permits to foreign investors;
, provides registration services to newly incorporated business organizations;
, approves expatriate posts in an approved investment and issues work permits to foreign employees;
, issues trade and operating license to approved foreign investment;
, facilitates the acquisition of land by foreign investors in accordance with the relevant laws of the federal and regional governments; and
, renders other pre-and post-investment approval services.

As a result of the appropriate measures taken by the Federal Government to organize EIA as a one-stop-shop for investors, cumbersome bureaucratic procedures faced by investors have been eliminated.

Companies incorporating in Ethiopia may operate through a subsidiary (i.e. incorporated under the Laws of Ethiopia) or through a branch (i.e. incorporated under the laws of a foreign country).

Ethiopian company law recognizes the commercial company in various forms. The most important types of business organizations are:

a) sole proprietorships;
b) branch offices of companies registered outside Ethiopia;  
c) share companies;
d) private limited companies (PLC);
e) partnerships; and
f) co-operatives.

The most widely used forms of companies are limited liability companies or PLC's which are formed in conformity with the requirements of the Commercial Code of Ethiopia of 1960.