DABLO LAW FIRM LLP

DABLO LAW FIRM is proud to announce its shortlisting for the prestigious “Ethiopian Law Firm of the Year” award at the Chambers Africa Awards 2025.This recognition by Chambers and Partners, a globally renowned authority on legal rankings and insights, underscores the firm’s dedication to excellence and the trust placed in it by its clients. The nomination reflects DABLO LAW FIRM’s commitment to delivering exceptional legal services across a range of practice areas, including corporate and commercial law, dispute resolution, and regulatory compliance. It also highlights the firm’s growing reputation as a leading legal practice in Ethiopia and beyond. DABLO LAW FIRM’s achievements are further amplified by its membership in the Alliott Global Alliance, a worldwide network of independent law firms, which enhances its ability to serve clients with international needs. Chambers and Partners, based in London, United Kingdom, has been a trusted name in legal rankings since 1989. Its awards and guides are widely regarded as a definitive mark of excellence in the legal profession, helping clients identify the best legal services for their requirements. The firm extends its congratulations to all other shortlisted law firms and looks forward to continuing its journey of excellence in the legal field.  

DABLO Law Firm LLP has proudly earned a prestigious ranking in the Chambers and Partners 2025 Global Guide, solidifying its position as a leading law firm in Ethiopia. This accolade highlights the firm's exceptional expertise across a wide range of practice areas, including corporate and commercial law, dispute resolution, regulatory compliance, and intellectual property. The recognition by Chambers and Partners follows the firm’s 2024 Legal 500 ranking and its shortlisting for the 2025 Chambers Africa Awards. It is a testament to DABLO's unwavering commitment to delivering top-tier legal services. The firm's international reach is further enhanced through its membership in the Alliott Global Alliance, a worldwide network of independent law firms. In addition to the firm's overall ranking, Principal Managing Partner Dawit has also been individually recognized by Chambers and Partners. This honor underscores his leadership and the high standards of excellence he upholds within the firm. Reflecting to this recognition, Mr. Dawit said "We are on a mission to become a law firm known for exceptional legal services in Ethiopia, and this is just the beginning" Chambers and Partners, a renowned research firm based in London, United Kingdom, has been producing international rankings for the legal industry since 1989. The rankings by Chambers and Partners are highly respected and serve as a definitive mark of excellence within the legal profession, guiding clients to the best legal service for their needs.  

DABLO Law Firm is pleased to announce the promotion of Mr. Iyasu Teketel to the position of Head of the Consultancy and Compliance Department.This decision reflects the firm’s confidence in Iyasu’s exceptional abilities, dedication, and proven track record of performance. In a statement, the Managing Partner of DABLO Law Firm, Mr. Dawit Kidane, expressed his enthusiasm for Iyasu’s new role, stating, “Iyasu’s extensive experience and outstanding contributions to the firm make him the ideal candidate for this position. His dedication and contribution have been instrumental to our success, and we are confident that he will lead the Consultancy and Compliance Department to new heights.” Iyasu’s promotion comes as a testament to his hard work, expertise, and commitment to the firm’s mission. His leadership is expected to further strengthen the Consultancy and Compliance Department, driving innovation and excellence in the firm’s operations. The firm also took the opportunity to acknowledge the remarkable contributions of Mr. Fitsum, the former Head of the Consultancy and Compliance Department. Mr. Dawit Kidane added, “We extend our heartfelt gratitude to Fitsum for his exceptional leadership and pivotal role in our firm’s achievements. We are pleased to share that Fitsum will continue to contribute to DABLO in another capacity, details of which will be communicated soon.” DABLO Law Firm invites its colleagues, partners, and clients to join in congratulating Iyasu on this well-deserved promotion and in expressing gratitude to Fitsum for his invaluable service. The firm remains committed to fostering talent and leadership within its ranks, ensuring continued growth and success in the legal and consultancy sectors.  

Addis Ababa, Ethiopia – 5 March 2025   – Dablo Law Firm, one of Ethiopia’s premier full-service law firms, has officially joined LEX Africa, the continent’s largest and longest-standing legal alliance. This strategic move strengthens Ethiopia’s representation in LEX Africa’s expansive network of leading independent law firms across 30 African countries. Founded in 1993, LEX Africa is a Band 1 ranked legal alliance that provides cross-border and local African legal solutions to businesses, investors, and organizations operating across diverse sectors. The addition of Dablo Law Firm further enhances LEX Africa’s ability to offer world-class legal expertise across Africa. LEX Africa Chairperson Pieter Steyn says, "We are delighted and honoured to welcome Dablo Law Firm to LEX Africa.  Ethiopia is a key African jurisdiction and DABLO law firm expands our Pan African Team and presence to cover 30 African countries. We look forward to working together with our new Ethiopian colleagues". Commenting on the firm’s admission to LEX Africa, Managing Partner Dawit Kidane said: "Joining LEX Africa is a significant milestone for Dablo Law Firm and a testament to our commitment to delivering high-quality legal services with a Pan-African perspective. As Ethiopia continues to attract international investment, being part of LEX Africa allows us to offer clients seamless access to top-tier legal expertise across the continent." Deputy Managing Partner Addisu Hailegebrel added: We are honored to become LEX Africa’s exclusive Ethiopian member. This alliance not only expands our reach but also enables us to collaborate with some of Africa’s most respected law firms. Our clients will benefit from enhanced cross-border legal capabilities, and we look forward to contributing to the alliance’s continued success."* Deputy Managing Partner Bruk Geremew also commented, saying: “Becoming part of LEX Africa is a pivotal moment for our firm and the broader Ethiopian legal market. This alliance allows us to connect with Africa’s top legal minds, share knowledge, and enhance the services we offer to our clients—both local and international. As Ethiopia’s economy continues to evolve, having access to a trusted Pan-African legal network ensures that we remain at the forefront of delivering innovative, business-driven legal solutions.” DABLO Law Firm specializes in a broad range of legal areas, including corporate and commercial law, investment law, litigation and dispute resolution, employment law, real estate and construction law, intellectual property, banking and finance, regulatory compliance, tax and customs, NGO and civil society law, gaming and entertainment law, and public-private partnerships (PPP). With a strong understanding of Ethiopia’s evolving legal and business landscape, the firm is well-positioned to support both local and international clients navigating the country’s dynamic investment climate.   For media inquiries, please contact: Dawit Kidane [email protected] +251938888887  

I.              Introduction Ethiopia has introduced a new Directive to Regulate Foreign Investors’ Participation in Restricted Export, Import, Wholesale and Retail Trade Investments,Directive No. 1001/2024 aimed at gradually liberalizing the import and export sectors to facilitate foreign investment and enhance market openness. The directive addresses both legal and practical gaps in the existing investment regulations, introducing specific provisions governing the import, export, wholesale, and retail trade activities of foreign investors. II. Implications of the Directive The Directive introduces significant changes for both investors and consumers in Ethiopia’s trade sector. For investors, it creates new opportunities in import, export, wholesale, and retail trade while imposing strict capital requirements, export obligations, and sectoral restrictions, shaping the investment landscape. Consumers stand to benefit from greater product availability, competitive pricing, and improved service quality due to increased foreign market participation. However, local businesses may face heightened competition, which could impact market stability and product diversity. From a regulatory standpoint, the Directive reinforces the Ethiopian Investment Commission’s (EIC) authority in ensuring compliance, requiring investors to navigate evolving approval processes and enforcement mechanisms. III.          Foreign Investment in Export Trade Under the new directive, foreign investors are allowed to engage in export trade by purchasing and exporting designated commodities, including raw coffee, khat, oilseeds, pulses, hides and skins, forest products, poultry, and livestock. However, their participation is contingent upon demonstrating relevant experience, operational capability, or established market linkages within the sector. Export Trade Requirements To qualify for export trade participation, foreign investors must meet the following financial thresholds:[1] Raw Coffee: Must have purchased at least USD 10 million worth of Ethiopian products over the past three consecutive years and commit to an annual purchase of USD 10 million. Oilseeds: A minimum purchase of USD 5 million over the past three years, with an annual commitment of USD 5 million. Khat and Spices: A minimum purchase of USD 1 million over the past three years, with an annual commitment of USD 1 million. Hides, Skins, Leather, and Poultry: A minimum purchase of USD 500,000 over the past three years, with an annual commitment of USD 500,000. Live Animals: No prior purchase history or contractual obligation is required. For new foreign investors without a prior purchase history, the directive sets the following minimum investment requirements to ensure substantial financial commitment and sectoral engagement: Raw Coffee: A minimum investment of USD 12.5 million is required. Oilseeds: Investors must commit at least USD 7.5 million. Khat and Spices: A minimum investment of USD 1.5 million is mandated. Hides, Skins, Leather, and Poultry: Investors must allocate at least USD 750,000. Investment or business licenses are subject to renewal only upon confirmation that the investor has met their obligations.[2] Failure to comply may result in suspension or cancellation of the license, leading to the loss of associated rights and benefits. IV.          Foreign Investment in Import Trade Foreign investors may engage in all income-generating import sectors, except for the fuel and fertilizer trade, provided they demonstrate the necessary expertise, capacity, or market linkages.[3] Ethiopia restricts fuel and fertilizer trade to safeguard foreign exchange reserves, regulate prices, stabilize markets, and protect local industries. To maintain economic stability and support domestic production, the government prioritizes foreign currency allocation for essential sectors such as energy and agriculture while implementing targeted subsidies to ensure affordability. State-owned enterprises, including the Ethiopian Petroleum Supply Enterprise (EPSE) for fuel and the Ethiopian Industrial Inputs and Production Supply Enterprise (EIIPSE) for fertilizer, oversee distribution to regulate supply and mitigate global price fluctuations. To qualify for participation in the import sector, foreign investors must meet at least one of the following conditions:[4] Manufacturing Requirement: Provide evidence that the product they intend to introduce into the market is self-manufactured. Authorized Agency: Present proof of agency authorization for the imported product. Export Participation: Demonstrate prior involvement in the Ethiopian investment sector and provide proof of exporting at least 50% of their product or service to foreign markets. Investment Threshold: If not a manufacturer or authorized agent, commit to importing goods valued at a minimum of USD 10 million annually, submit a detailed business plan, and enter into a formal agreement with the relevant licensing authority. Additionally, the directive also applies to the renewal, suspension, and cancellation of import licenses, ensuring consistency in regulatory oversight.[5] V.            Foreign Investment in Wholesale and Retail Trade Wholesale Trade Participation Except for the wholesale trade of fertilizer, foreign investors are allowed to sell both locally sourced and imported products within Ethiopia’s domestic wholesale market. To obtain an investment permit, they must meet the following requirements:[6] Contract Commitment: Provide written evidence of their willingness to enter into a contractual agreement. Commercial and Logistics Infrastructure: Establish modern commercial networks and logistics services to ensure efficient business operations. Regulatory Compliance: Meet the minimum commercial and logistical standards set by the relevant ministry. Retail Trade Participation Investment permits for foreign investors in the retail sector are granted based on land or retail space occupation and investment commitments, as follows:[7] Supermarkets: The investor must operate within a minimum retail space of 2,000 square meters and commit to establishing at least five supermarkets within three years. Hypermarkets: The investor must operate within a minimum retail space of 5,000 square meters and establish at least two hypermarkets within three years. Malls: The investor must operate within a minimum retail space of 10,000 square meters and demonstrate the capacity to develop a shopping mall. Before obtaining an investment permit, investors must first meet all preconditions for securing a trade permit. The Ministry of Trade is responsible for overseeing the registration and licensing process for supermarkets, hypermarkets, and malls in accordance with the applicable regulatory framework. For foreign investors with minimal capital and qualifications, the regulatory board will assess applications based on specific conditions applicable to small-scale trade operations.[8] Conclusion The newly enacted directive represents a significant step toward opening Ethiopia’s market to foreign investors while ensuring compliance with sector-specific requirements. By introducing clear financial thresholds, operational criteria, and licensing conditions, the government aims to attract strategic investments while maintaining regulatory oversight. Investors looking to enter the Ethiopian market should carefully assess these requirements to ensure compliance and optimize their investment strategies. Footnotes [1] Article 6, Ethiopian Investment Board Directive to Regulate Foreign Investors’ Participation in Restricted Export, Import, Wholesale and Retail Trade Investments No.1001/2024. [2] Article 7, Id. [3] Article 8, Id. [4] Article 9, Id. [5] Article 10, Id. [6] Article 11, Id. [7] Article 13, Id. [8] Ibid.

     I.          Introduction In recent years, Ethiopia has undertaken a significant policy shift in its approach to foreign direct investment (FDI) by opening sectors that were previously reserved exclusively for domestic investors. As part of the government's Homegrown Economic Reform (HGER) agenda, key reforms have been introduced, including allowing foreign investment in the telecom sector, opening export, import, wholesale, and retail trade to foreigners, establishing capital markets, launching a public-private partnership (PPP) framework, and enabling foreign investors to collaborate with the government on strategic projects. Furthermore, the foreign exchange regime has undergone a major overhaul, shifting from a managed exchange rate regime to a floating exchange rate regime. These reforms mark a decisive move towards liberalizing the economy and attracting greater foreign direct investment. Among these policy shifts, arguably the most significant is the opening of the financial sector to foreign investment. On December 17, 2024, the Ethiopian Parliament approved the new Banking Business Proclamation No. 1360/2024, marking a historic milestone as it allows foreign banks to re-enter the Ethiopian market after a 50-year absence. This landmark legislation opens the door for foreign banks to participate in Ethiopia's financial sector through various modalities, including establishing subsidiaries, opening branches, or acquiring shares in domestic banks. The move represents a significant step in liberalizing one of the last remaining closed sectors in the country, signaling a decisive shift from the government's long-standing protectionist policies toward a more open and market-oriented approach. This reform is expected to enhance competition, attract foreign direct investment, and modernize Ethiopia's banking industry, aligning with the broader goals of the nation's economic reform agenda. This article explores the key features of the new Banking Business Proclamation and highlights the opportunities it creates for foreign investors.    II.         Historical Context The idea of foreign banks operating in Ethiopia is not new. In fact, the country's first bank, the Bank of Abyssinia, was established in 1905 and was foreign-owned, with shares subscribed internationally. Following the brief Italian occupation of the country during World War II, Italian banks entered the market, later followed by British banks. However, all foreign banks were nationalized in 1975 following the fall of the Imperial Regime. The subsequent rise of the Derg, a military junta that adopted socialist ideology, led to a significant shift in Ethiopia's economic policies, including the closure of the banking sector to foreign entities. This closure lasted for nearly half a century, despite the fact that the Derg regime only lasted for 17 years. Even after the fall of the Derg regime in 1991, the banking sector remained closed to foreign investment, with a slight shift in policy allowing private domestic banks to operate starting from 1994.  III.         Key Changes and Objectives The prospects for foreign banks operating in Ethiopia have become increasingly promising. As part of the Homegrown Economic Reform Agenda (HGER), discussions on opening the banking sector to foreign investors have been ongoing for years. This effort has now culminated in the enactment of Proclamation No. 1360/2024, which repeals and replaces the previous Banking Business Proclamation No. 592/2008. The new legal framework formally permits foreign banks and investors to participate in Ethiopia’s banking industry, marking a significant shift in the country’s financial sector. Key Objectives Improving Competitiveness and Efficiency: One of the primary reasons for the amendment of the Banking Business Proclamation is to improve the competitiveness and efficiency of the banking industry by opening the sector to foreign investment. The proclamation expands the definition of "Bank" to include foreign banks, along with their subsidiaries and branches, marking a significant step towards integrating foreign investors into the financial industry. Attracting Foreign Direct Investment (FDI): The proclamation is designed to attract foreign direct investment into the banking sector, which is expected to bring in new capital, advanced technology, and innovative financial products. This is particularly important given Ethiopia's rapidly growing population of 120 million and an expanding middle class, making it an attractive destination for foreign banks. Enhancing Financial Inclusion: By allowing foreign banks to operate in Ethiopia, the government aims to enhance financial inclusion, particularly in underserved areas. Foreign banks are expected to bring higher standards of service and a wider range of financial products, which could help bridge the gap in financial access for many Ethiopians.  IV.         Modalities for Foreign Banks Entering the Ethiopian Market The proclamation establishes multiple avenues for foreign banks to enter the Ethiopian market. Beyond allowing foreign banks to operate, it also permits foreign nationals to acquire shares in Ethiopian banks. The available entry options include: Establishing Subsidiaries: Foreign banks can establish either partially or fully owned subsidiaries in Ethiopia. This allows them to operate as independent entities while adhering to Ethiopian banking regulations. Opening Branches or Representative Offices: Foreign banks can open branches or representative offices in Ethiopia. However, they are prohibited from operating both deposit-taking and non-deposit-taking branches simultaneously. Acquiring Shares in Existing Domestic Banks: Foreign banks can acquire shares in new or existing domestic banks. The proclamation sets limits on the amount of shares that foreign investor can acquire. In such case, the maximum amount of shares a strategic investor could acquire is 40 percent of the total subscribed share of the bank. Foreign individuals could hold up to seven to ten percent of the total share of the bank while foreign juridical persons are permitted to own up to ten percent of the total subscribed shares of the bank.  In any case, the proclamation limits the aggregate shareholding by foreign nationals and foreign-owned Ethiopian organizations to 49 percent of the subscribed shares of domestic banks. Exceptional Circumstances for Acquisition: In exceptional circumstances, foreign banks may be permitted by the National Bank of Ethiopia (NBE) to partially or fully acquire existing domestic banks. This is allowed only if the bank being acquired is well-established, reputable, and financially sound.    V.         Framework for Investment, Operations, and Regulations The Proclamation establishes a framework for foreign banks entering Ethiopia's financial sector, covering investment requirements, profit repatriation, property ownership, and employment of foreign nationals.  Key provisions on investment, property ownership, and employment, as well as the National Bank of Ethiopia's role in issuing further directives, are discussed below. Investment Requirements and Repatriation of Profits: Foreign banks entering the Ethiopian banking sector are required to structure their investments as foreign direct investment (FDI) using foreign currency. The bank's capital must be fully paid in cash up front. Additionally, if an Ethiopian organization is partially owned by foreign nationals, it must invest through FDI based on the aggregate percentage of foreign ownership, and this investment must also be made in foreign currency. The proclamation allows for the repatriation of dividends earned by foreign nationals from investments in banks and the salaries of foreign national employees, in line with the Foreign Exchange Directive FXD 01/2024 of the National Bank of Ethiopia. Property Ownership and Foreclosure: Foreign banks are permitted to own property in Ethiopia for the purpose of conducting their banking business. This will enable foreign banks to establish a physical presence and operate effectively within the country. However, issues related to properties acquired through foreclosure or mortgages will continue to be governed under Ethiopia’s existing legal regime. Employment of Foreign Nationals: In line with Ethiopia’s Investment Law, the proclamation allows foreign nationals to hold key positions such as Chief Executive Officer (CEO) and Senior Executive roles in banks. However, this is contingent on the non-availability of qualified Ethiopian nationals for these positions. Foreign employees may serve for a maximum of five years, with the expectation that their tenure will facilitate the transfer of knowledge and skills to local employees. Regulatory Oversight: The National Bank of Ethiopia (NBE) will play a pivotal role in regulating foreign bank operations. The NBE is tasked with issuing additional directives to address several key aspects of foreign bank activities, including: Minimum initial capital requirements for establishing foreign banks and their branches. Composition and fit-and-proper criteria for the board of directors of foreign banks. Permissible activities for foreign banks operating in Ethiopia. Minimum capital requirements for opening branches of foreign banks.  VI.         Potential Benefits and Challenges Following the enactment of the proclamation and subsequently opening the door to foreign investment in to the financial sector is expected to have both its benefits and challenges for the Ethiopian economy as well as the potential investor seeking to invest in the country. The new development would have the following benefit: Enhanced Competition and Efficiency: The entry of foreign banks into Ethiopia's financial sector can stimulate healthy competition, compelling local banks to improve their efficiency, service delivery, and technological adoption. Diverse Financial Products: Foreign banks bring advanced financial expertise and a wider range of products, such as derivatives, trade finance, and specialized credit facilities. Knowledge and Skill Transfer: With foreign banks come experienced professionals and innovative practices. Local financial institutions and regulators can benefit from exposure to international banking standards, risk management frameworks, and digital technologies, strengthening the overall financial ecosystem. Global Integration and Investment: Foreign banks can facilitate the inflow of foreign direct investment (FDI) by linking Ethiopia to global financial markets. The entry of foreign banks to the Ethiopian financial sector, among others would pose the following challenges Market Domination Risks: Foreign banks often possess greater resources, advanced systems, and international networks, potentially overshadowing local banks. This dominance could stifle domestic financial institutions, leading to market imbalances and reduced competition in the long term. Economic Risks: Increased foreign bank participation exposes Ethiopia’s economy to external risks such as exchange rate volatility and potential capital flight. Resource Disparity: Foreign banks' access to sophisticated technologies and funding could widen the gap between them and local banks. This disparity might restrict domestic banks’ ability to compete effectively and exacerbate inequalities in financial service access. Regulatory Challenges: Integrating foreign banks requires robust regulatory frameworks and institutional capacity to monitor and mitigate risks. Conclusion The new Banking Business Proclamation represents a significant step forward in Ethiopia's economic liberalization efforts. By opening the banking sector to foreign investment, the government aims to improve the competitiveness and efficiency of the financial industry, attract foreign direct investment, and enhance financial inclusion. The proclamation provides clear modalities for foreign banks to enter the Ethiopian market, ensuring that their operations are aligned with the country's economic goals and regulatory framework. As Ethiopia continues to implement its Homegrown Economic Reform Agenda, the entry of foreign banks is expected to play a crucial role in driving economic growth and development.  

I. Introduction Ethiopia has recently enacted the Special Economic Zone (SEZ) Proclamation No. 1322/2024, marking a pivotal legislative milestone designed to bolster investment opportunities and drive economic growth. The proclamation provides a refined definition of SEZs, characterizing them as designated areas under the oversight of the Ethiopian Investment Board. These zones are equipped with customs control mechanisms, business-friendly policies, streamlined trade facilitation, robust infrastructure, and attractive tax incentives. The framework encompasses a diverse range of investment zones, including industrial parks, free trade zones, and agricultural hubs, positioning Ethiopia as a competitive destination for both domestic and foreign investors.[1] The legislation is designed to stimulate private sector engagement, attract foreign direct investment (FDI), and generate employment opportunities. By fostering export growth, promoting import substitution, and integrating Ethiopia into global value chains, the proclamation aims to position the country as a key player in the international economy. Additionally, it introduces a comprehensive policy framework for economic reforms within Special Economic Zones (SEZs), aimed at enhancing the business climate and boosting competitiveness. The legislation also establishes a robust regulatory framework to govern the operation, management, and oversight of these zones, ensuring transparency, efficiency, and sustainable development. This strategic initiative underscores Ethiopia's commitment to driving economic transformation and creating a more dynamic and investor-friendly environment. II. Key Provisions of the SEZ Proclamation The SEZ Proclamation introduces a structured approach to the establishment, operation, and governance of special economic zones in Ethiopia. Some of its core features include: Designation of SEZs: The law provides clear criteria for designating and developing SEZs, including industrial parks, free trade zones, logistics hubs, and service-oriented economic zones.[2] Regulatory Oversight: A dedicated regulatory authority is established to oversee SEZ operations, ensuring compliance with national economic policies, the primary body being the Ethiopian Investment board[3] of the Ethiopian Investment Commission. Other Regulatory bodies such as the National Bank of Ethiopia (NBE) and the Ministry of Trade and Regional Integration (MoTRI) will also be involved as per their scope and authority of regulation. Investment Incentives: In addition to incentives provided in the Investment Incentives Regulation Number 517/2022, businesses operating in SEZs benefit from tax, import and export exemptions within the SEZ, customs duty waivers, relaxed foreign exchange regulations, zero rated VAT and exemptions from other indirect taxes, and duty-free construction material and capital goods importation into SEZs and more. Further, it also provides non-fiscal incentives such as exemption from expropriation (excluding for the reason of public interest), work permits, remittance and opening of foreign currency accounts.[4] Simplified Business Environment: The law introduces streamlined procedures for business registration, licensing, and dispute resolution within SEZs.[5] Infrastructure and Private Sector Involvement: The proclamation encourages private sector participation in SEZ development and management through public-private partnerships (PPPs) as well as domestic and foreign private investors. Involved Entities: The law introduces SEZ Enterprise[6], SEZ developers[7], SEZ Sub-developers[8] and the SEZ operators[9] as individuals contributing to the design, construction, operation, ownership and maintenance of the SEZ. III. Comparison with the Previous Legal Framework Prior to the enactment of the SEZ Proclamation, Ethiopia’s industrial and economic zones were primarily governed by the Industrial Parks Proclamation No. 886/2015 and various sectoral regulations including the Industrial Parks Regulation Number 417/2017. The new SEZ law introduces several key changes: Scope and Classification: The previous framework focused primarily on industrial parks in federal regions, whereas the new law expands the scope to include free trade zones[10], logistics parks[11], and service hubs within the territory of Ethiopia offering a more diversified economic model. Regulatory Structure: The old framework lacked a centralized authority for economic zones beyond industrial parks, whereas the new law establishes a dedicated regulatory body to oversee all SEZs. The Ethiopian Investment Board[12], with cooperation of the NBE, MoTRI and the Ministry of Labour and Skills will oversee the entry, operation and exit of SEZs. Investment Incentives: While the Industrial Parks Proclamation provided tax incentives, the new SEZ law enhances these benefits by introducing more flexible foreign exchange rules[13] and broader tax relief measures[14] in addition to non-fiscal incentives. Business Operations and Facilitation: The new law simplifies administrative procedures for investors, reducing bureaucratic hurdles and enhancing ease of doing business within SEZs by introducing one-stop services within the SEZs.[15] IV. Implications and Future Prospects The SEZ Proclamation is expected to attract increased foreign direct investment and enhance Ethiopia’s global trade competitiveness. By offering a more structured and investor-friendly environment, the law aligns with Ethiopia’s broader economic liberalization agenda. With effective implementation, infrastructure development, and coordination among relevant stakeholders, the law is bound to achieve its economic objectives. V. Conclusion Ethiopia’s adoption of the SEZ Proclamation No. 1322/2024 marks a progressive shift in its economic policy framework. By addressing limitations in the previous regulatory regime and expanding the scope of economic zones, the law lays a solid foundation for sustainable economic growth. Investors and businesses should closely monitor regulatory developments and implementation strategies to maximize the opportunities presented by Ethiopia’s evolving SEZ framework. Footnotes [1] Article 2(1), Special Economic Zone Proclamation No. 1322/2024. [2] Articles 5 –12,Id. [3] Article 13 and 2 (41), Id. [4] Articles 57 and 58, Id. [5] Article 14(1) (x) Id. [6] Article 2(17) Id [7] Article 2(14) Id. [8] Article 2(15) Id. [9] Article 2(16) Id. [10] Article 2(5) Id. [11] Article 2(9) Id. [12] Article 2(41), Article 13 Id [13] Article 34 (3), (4) Id. [14] Article 57 – 58, Id. [15] Article 14 (1) (x) Id.

Introduction Ethiopia has embarked on a new era of economic policy, marked by currency devaluation and a significant revamp of the foreign currency exchange regime.The National Bank of Ethiopia (NBE) has revised its long-standing practice of fixing and controlling the exchange rate, opting for a market-based exchange regime. It has introduced a new Foreign Exchange Directive (FXD/01/2024) on July 29, 2024, which repealed all the previous sporadic directives governing the foreign exchange regime and consolidated the applicable rules into a single directive. This move is the fourth and by far the most radical currency devaluation measure taken by the government since the fall of the Derg regime in 1991.  DABLO has examined the content of the new Directive, and here are the key legal changes brought by the Directive. Market-Based Exchange Regime: The role of the NBE has been reduced to monitoring the overall operation while the foreign exchange regime is to be governed by the market. Banks are allowed to freely set exchange rates and trade currencies with their customers and among themselves.[1] The NBE will compile an Indicative Daily Exchange Rate based on reports of daily exchange rates used by the banks. This rate will serve as a reference to set exchange rates but is by no means binding on the banks, as they are free to negotiate the market rate. Banks are required to report their daily foreign exchange rates to the NBE using a predetermined format.[2] The directive has introduced a two-tier structure for spot foreign exchange markets. The first tier is the wholesale or inter-bank forex market, where authorized banks engage in foreign currency transactions with one another.[3] The second tier is the retail forex market, where authorized banks or foreign exchange dealers conduct transactions with their customers. In this market, banks are permitted to negotiate buying and selling rates freely with their customers, allowing for greater flexibility in pricing based on market conditions and customer agreements. Currency Surrender: One of the most notable changes in the Directive is the elimination of the requirement for commercial banks and exporters to surrender their export earnings to the NBE. This change aims to give exporters greater flexibility in managing their finances. Exporters are now permitted to retain 50% of their export earnings in foreign currency, up from the previous 40%.[4] Exporters are permitted to use the foreign currency solely for their own purposes and may retain it in their retention account indefinitely.[5] Import Restrictions and Currency Allocation: The Directive lifts the previously imposed import restriction on 38 product categories while maintaining the restriction on capital account outflows. It is interesting to note that while the Directive uncategorical lifts the restriction on the 38 product categories, a letter written by the Ministry of Finance on July 30, 2024, maintained the restriction imposed on imports of fully assembled automobiles that run on fuel and three-wheel vehicles. The Directive also removes the rules governing banks’ allocation and distribution of foreign exchange, which was previously managed through a waiting list system for various import categories. Engagement of Non-Bank Actors: The Directive paves the way for non-bank actors to engage in foreign currency transactions at market rates. These entities must obtain prior authorization or a license from the NBE.[6]  Accordingly, on October 2, 2024 the National Bank has announced that five companies who applied for licenses and fulfilled the minimum requirements set by the Bank have been granted licenses to operate as Independent Foreign Exchange Bureaus. Franco Valuta Imports: Although the directive initially lifted restrictions on Franco valuta imports[7],  the Ministry of Finance has reinstated the ban on imports that do not utilize foreign exchange from the banking system. In a letter sent to the Customs Commission and the National Bank of Ethiopia on November 8, 2024, the Ministry announced its decision to reimpose the restriction. As a result, the Franco valuta ban has been reinstated just three months after it was lifted by the directive. Foreign Currency Accounts: The directive significantly relaxes the regulations governing foreign currency accounts for foreign institutions, foreign direct investment (FDI) companies, international organizations, embassies, foreign NGOs,[8] and the Ethiopian diaspora.[9] It permits the opening of three types of foreign currency accounts: Foreign Currency (FCY) Accounts for Foreign Entities, FCY Accounts for Residents and Non-Resident Ethiopians, and Retention Accounts for exporters of goods and services. Foreign entities are now allowed to maintain multiple accounts across different financial institutions, unlike the previous times where they were allowed to maintain a single foreign currency account.[10] Additionally, foreign nationals employed by these entities can fully utilize their accounts without being required to surrender any portion of their foreign currency earnings. For Ethiopians, both resident and non-resident, the directive broadens the scope of foreign currency accounts, enabling them to receive funds from international remittance service providers, salaries, rental income, and other legitimate sources. These accounts can also be used to make payments for foreign services, further enhancing financial flexibility. Repatriation of Capital: To enhance Ethiopia’s appeal as a destination for foreign direct investment, the directive establishes clear and streamlined procedures for the repatriation of capital and earnings. It explicitly recognizes the rights of foreign investors to transfer funds abroad in convertible currency, ensuring ease of capital movement. Under this directive, foreign investors can repatriate profits and dividends earned from their investments, proceeds from the sale or liquidation of an enterprise, and funds obtained from the transfer of shares or ownership in a business.[11] Additionally, investors who are unable to commence operations are entitled to reclaim their initial investment, while profits from portfolio investments in equity or debt securities can also be repatriated. Eased Rules for External Loans and Supplier Credit: The directive introduces significant reforms to enhance financial flexibility and investment opportunities. It removes the previous interest rate ceiling on foreign borrowings, allowing banks and companies to negotiate competitive financing terms with external creditors freely. Additionally, it expands the list of eligible entities that can access foreign loan, now construction companies can now access supplier credit to import machinery. However, to maintain regulatory oversight and financial stability, all loan agreements with external creditors must be registered and approved by the National Bank of Ethiopia (NBE). [12] Foreign Investments in Security Market: The Directive opens the Ethiopian Securities Market to foreign investments, paving the way for international participation and investment. However, its implementation is to be governed by specific regulatory requirements established by the National Bank of Ethiopia and the Ethiopian Capital Market Authority (ECMA).[13] Special Privileges for Companies in Special Economic Zones: Under the Directive, Companies operating in Special Economic Zones (SEZ) are granted special foreign exchange privileges, including the ability to retain 100% of their foreign exchange earnings. [14] Limits on Foreign Currency: The rules governing the amount of foreign cash travelers could carry while traveling to and from the country have been relaxed.[15] The Directive also stipulates specific time limits for holding and converting foreign currency for individuals entering the country. Off-Shore Accounts: The Directive also allows the opening of off-shore accounts for Strategic Foreign Direct Investment projects.[16] Projects with special significance and contribution in terms of size, job creation, import substitute, foreign exchange inflows, technology transfer, or sector-specific impact could be allowed by NBE’s Executive Management to own off-shore accounts. Sanction: The Directive imposes a sanction of USD 2,500.00 (two thousand five hundred US Dollars) per violation on banks and other licensed entities for any violation of the Directive. In addition, NBE has also been given the discretion to impose further sanctions. Conclusion In conclusion, the introduction of the Foreign Exchange Directive (FXD/01/2024) represents a transformative shift in Ethiopia’s economic landscape, signaling a move towards greater market flexibility and financial openness. By removing restrictions on foreign exchange and creating a more liberalized environment for both domestic and foreign investors, the directive aims to foster economic growth, attract foreign direct investment, and improve financial stability. While the transition to a market-based exchange rate system and other key reforms offers significant opportunities, ongoing regulatory adjustments, such as the reimposition of the Franco valuta import ban, highlight the complex balancing act the government faces in managing the country's economic interests. As Ethiopia continues to adapt to these changes, the ultimate success of these reforms will depend on how effectively they are implemented and their ability to generate sustainable growth in the evolving global economy. Footnotes [1] Article 4, The Foreign Exchange Directive No. FXD/01/2024 (herein under FXD 01/2024) [2] Article 5, Id. [3] Article 4.3, Id. [4] Article 6.2, Id. [5] Previously, the directive permitted exporters to retain 50% of their foreign currency earnings for only one month, after which they were required to sell it to commercial banks at a freely negotiated rate. However, as of November 14, 2024, the National Bank of Ethiopia has revised this policy, allowing exporters to retain the 50% indefinitely, providing greater flexibility in managing their foreign exchange holdings. [6] Article 4.2, FXD 01/2024. [7] The importation of goods for which foreign exchange from the domestic banking system is not payable. [8] Article 13, FXD 01/2024. [9] Article 14, Id. [10] Article 13.2.1, Id. [11] Article 16.2, Id. [12] Article 17.1, Id. [13] Article 20, Id. [14] Article 21.3, Id. [15] Article 22.7, Id. [16] Article 19, Id.

The National Bank of Ethiopia has reaffirmed a broad, prohibition-first stance on virtual assets. Here is what the Notice covers, how it fits within Ethiopia's wider monetary, payments, foreign-exchange, capital-markets and AML/CFT framework, and what businesses should do now.At a glanceProhibition-first, not crypto-only. The ban covers any digital representation of value that can be traded, transferred, exchanged or used for payment or investment — not just cryptocurrency."Unless expressly authorized" is the operative test. A general business licence, sandbox participation, or registration with another regulator does not amount to NBE authorization.Multiple regulators can apply at once. The same token may simultaneously engage the NBE, the Capital Market Authority, and AML/CFT law.Licensed e-money is not a virtual asset. Birr-funded, redeemable e-money issued under an NBE licence remains part of the regulated payment system.A perimeter clarification, not a self-contained codeOn 23 July 2026, the National Bank of Ethiopia ("NBE") issued a Public Notice on Virtual Assets (the "Notice"). It reiterates that the use, purchase, sale, exchange, transfer, trading, settlement and facilitation of transactions involving virtual assets are prohibited unless expressly authorized by the NBE under the existing legal framework. The Notice is deliberately broader than a warning about cryptocurrency: it reaches digital representations of value capable of electronic trade, transfer or exchange, or use for payment, investment or a similar purpose.The regulated conduct is equally broad. The Notice identifies virtual asset–fiat exchange, virtual asset–virtual asset exchange, transfer, safekeeping or administration (including instruments enabling control), and financial services connected with an issuer's offer or sale. Exchanges, brokers, custodians, wallet operators, over-the-counter desks, token issuers, payment facilitators and other intermediaries are therefore within the clearest area of exposure. "Facilitation" also directs attention to substance over contractual labels: calling a service "technology," "consulting" or "peer-to-peer" does not resolve the legal analysis if the service makes a prohibited transaction possible.The Notice should not, however, be treated as though it were a new proclamation containing a complete licensing, offence and penalty regime. It expressly relies on the existing legal framework. Its immediate significance is that it states the NBE's regulatory perimeter and expected compliance position; the precise legal consequence in a particular case must still be traced to the applicable proclamation, directive, licence condition and facts. The phrase "unless expressly authorized" is pivotal. Silence, a general business licence, registration with another regulator, or access to a regulatory sandbox is not equivalent to NBE authorization.The statutory architecture behind the NoticeMonetary authority, legal tender and regulatory mandateThe National Bank of Ethiopia Proclamation No. 1359/2025 supplies the principal institutional foundation. The NBE's objectives include price stability and the soundness and stability of the financial system (Article 5). Its powers extend to monetary and foreign-exchange policy, macroprudential measures, the licensing and supervision of financial institutions, regulation of market conduct, and the operation and supervision of payment, clearing and settlement systems (Article 6). Article 6(21) also permits a regulatory-sandbox framework for testing innovative financial services; the provision creates a controlled regulatory mechanism, not a general exemption for unapproved activity.The same Proclamation places the Birr at the centre of domestic monetary arrangements. The Birr is Ethiopia's monetary unit and legal tender; monetary transactions are presumptively expressed, recorded and settled in Birr unless the NBE authorizes otherwise (Article 35). The NBE alone may issue legal tender (Article 36). A privately issued token does not acquire legal-tender status because it is technologically transferable, denominated by reference to a currency, or accepted by a particular network.Payment instruments and e-money: the critical distinctionThe National Payment System Proclamation No. 718/2011, as amended by Proclamation No. 1282/2023, requires NBE authorization for payment-system operation and payment-instrument issuance. Under the amended law, a payment instrument is issued against receipt of an equivalent amount in Ethiopian Birr. "Electronic money" is a monetary value representing a claim on its issuer, electronically stored, issued against receipt of equivalent Birr funds, accepted by persons other than the issuer and redeemable in cash. Licensing and authorization are further governed by Payment Instrument Issuer Directive No. ONPS/09/2023, as amended by Directive No. ONPS/10/2025.This is the most important limiting principle against an overbroad reading of the Notice: not every digital record of value is thereby prohibited. A lawfully issued, Birr-funded, redeemable e-money product operating within an NBE authorization is part of the regulated national payment system. By contrast, a transferable token or "stablecoin" does not become authorized e-money merely because it is price-stable, asset-backed or marketed for payments. Its issuance model, redemption claim, reserve arrangements, transferability and regulatory authorization must satisfy the payment laws, and the virtual-asset restriction remains relevant unless the NBE has expressly cleared the activity.Foreign-exchange controls remain independently relevantArticle 39 of Proclamation No. 1359/2025 provides that foreign-exchange transactions may be conducted only with banks or authorized dealers, or under special NBE permission, subject to directives. The Foreign Exchange Directive No. FXD/01/2024, as successively amended through 2026, governs authorized channels, accounts, payments and transfers. A virtual asset is not automatically "foreign currency" merely because it is traded globally: the statutory definition of foreign currency turns on legal-tender status abroad and NBE acceptance. Nevertheless, a virtual asset–fiat conversion, offshore funding arrangement or cross-border transfer may engage foreign-exchange controls in addition to the Notice. Using a virtual asset as an intermediate settlement layer is not a safe harbour from rules governing the underlying inflow, outflow or payment.Concurrent capital-markets and AML/CFT exposureDigital assets that function as securitiesThe Capital Market Proclamation No. 1248/2021 and the Ethiopian Capital Market Authority ("ECMA") rules may apply concurrently where a token represents an investment, ownership interest, debt, profit right or comparable financial claim. Article 2(19) of the Capital Market Service Providers Licensing and Supervision Directive No. 980/2024 defines "digital assets" broadly as things in digital form having value, ownership and usage rights, and treats digital assets as securities in line with Article 2(62)(g) of the Proclamation. Public offerings and trading also engage the registration and disclosure framework, including Directive No. 1030/2024.The NBE and ECMA perimeters are therefore cumulative, not alternative. A token may be a "digital asset" or security for capital-market purposes and also fall within the NBE Notice because it is electronically traded, transferred or used for investment. ECMA licensing or securities registration should not be assumed to substitute for express NBE authorization; conversely, NBE authorization would not by itself satisfy capital-market requirements. The controlling analysis is functional and may require coordinated clearance from both regulators.AML/CFT obligations and criminal misuseThe Prevention and Suppression of Money Laundering and Financing of Terrorism Proclamation No. 780/2013, as amended by Proclamation No. 1387/2025, reinforces the risk analysis without itself supplying market authorization. The amendment broadens "property" or "fund" to encompass intangible assets and electronic or digital documents and instruments evidencing title or an interest, and includes digital financial service providers within the definition of financial institution (amended Article 2). Customer due diligence, beneficial-ownership inquiry, recordkeeping, suspicious-transaction escalation and cooperation with the Financial Intelligence Service remain relevant wherever the statutory conditions apply.Virtual assets can increase exposure to pseudonymous transfers, layering, fraud proceeds and sanctions or terrorism-financing risks, but illegality should not be inferred from technology alone. The predicate facts remain decisive. Similarly, the Computer Crime Proclamation No. 958/2016 may apply to fraud, unauthorized access, interference, identity misuse or other computer-enabled conduct; it does not convert every virtual-asset interaction into a computer crime. These laws operate alongside, rather than replace, the financial-regulatory prohibition.Boundary questions: a functional readingOn licensed e-money, digital form alone is not determinative — Birr-funded, redeemable e-money issued within an NBE authorization belongs to the regulated payment system. The practical consequence is that the exact licence, product approval, reserve and redemption terms need to be verified.For stablecoins and investment tokens, transferability and use for payment, exchange or investment ordinarily bring the product within the Notice; backing or denomination does not create authorization. In practice, no such product should be launched, listed or settled without written NBE clearance and, where relevant, ECMA compliance.On custody and wallet technology, safekeeping, administration and instruments enabling control are expressly named, while pure software questions depend on functionality and the provider's role in facilitation. This means control of keys, transaction initiation, fee flows and user intermediation all need to be mapped.For mining or validation, the Notice does not identify computation, mining or validation as a stand-alone category — though transfer, sale, custody or conversion of outputs is separately captured, and other investment, energy, tax and FX rules may apply. The full operating and monetization chain should be analysed accordingly; a mining approval should not be treated as trading permission.On NFTs, points and closed-loop value, labels are inconclusive. Transferability, marketability, redemption, payment or investment use and third-party acceptance determine risk, and the Notice provides no product-by-product safe harbour. A written classification should be sought where the product approaches transferable value.For offshore platforms and passive holdings, offshore execution does not eliminate an Ethiopian nexus. The Notice clearly covers transfers and use, but does not separately state a rule for passive possession — so permission to liquidate, transfer or use should not be inferred; those acts require specific advice and authorization analysis.Immediate compliance prioritiesConduct an activity-level inventory. Map whether the business buys, sells, exchanges, transfers, settles, safeguards, administers, offers or facilitates virtual assets. Include treasury, employee payments, merchant settlement, customer rewards, embedded wallets, APIs, offshore affiliates and third-party agents.Verify express authorization. Obtain and review the actual NBE instrument authorizing the activity. Corporate registration, an investment permit, an ECMA licence, a technology contract or sandbox engagement should not be treated as a substitute. Ambiguous products warrant written regulatory clarification before launch.Separate lawful payments from virtual-asset activity. Banks, payment-service providers and fintechs should distinguish licensed Birr e-money and ordinary digital payments from virtual-asset flows. Controls should be risk-based and documented so that compliance does not unnecessarily disrupt lawful services.Strengthen financial-crime controls. Review onboarding, beneficial ownership, source-of-funds, merchant monitoring, blockchain-related indicators where relevant, suspicious-transaction escalation, record retention and incident response. A prohibited or attempted transaction may still generate reporting and preservation duties.Reassess contracts and communications. Remove virtual-asset settlement clauses and unapproved token offerings; review representations given to users and investors; allocate regulatory-change and termination risk; and ensure marketing does not imply NBE or ECMA approval that has not been granted.ConclusionThe Notice confirms that Ethiopia remains a prohibition-first jurisdiction for virtual-asset activity, subject only to express NBE authorization. Its central contribution is breadth: the perimeter is not confined to cryptocurrency trading and extends to transfer, custody, administration, settlement, issuer-related financial services and facilitation. At the same time, careful legal classification remains essential. Licensed Birr e-money is not synonymous with a virtual asset; a virtual asset is not automatically foreign currency; and a token may attract capital-market, AML/CFT, computer-crime and other laws without those regimes supplying the NBE authorization the Notice requires.For businesses and investors, the prudent question is therefore not simply, "Is this crypto?" It is: what value is represented, who issues or controls it, how it is funded and redeemed, what rights it confers, how it moves, which regulated service is performed, and which authority has expressly approved that service? Until a more detailed authorization regime or product-specific guidance is issued, written clearance and disciplined perimeter analysis are the soundest safeguards.DABLO Law Firm LLP advises banks, fintechs, payment providers, technology companies, investors and issuers on Ethiopian financial regulation, product structuring, licensing, capital-markets compliance and regulatory engagement.Disclaimer. This legal insight is provided for general information as at 23 July 2026. It is not legal advice and does not create a lawyer–client relationship. The application of Ethiopian law depends on the facts, the governing authorizations and subsequent regulatory measures. Specific advice should be obtained before acting.