{"id":137156,"date":"2026-04-07T12:07:13","date_gmt":"2026-04-07T12:07:13","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=137156"},"modified":"2026-04-07T12:07:13","modified_gmt":"2026-04-07T12:07:13","slug":"ethiopia-doing-business-in","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/ethiopia-doing-business-in\/","title":{"rendered":"Ethiopia: Doing Business In"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-137156","comparative_guide","type-comparative_guide","status-publish","hentry","guides-doing-business-in","jurisdictions-ethiopia"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Dadimos &amp; Partners<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/03\/Dadimos-Partners-LLP.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Dadimos &amp; Partners<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/03\/Dadimos-Partners-LLP.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Doing Business In laws and regulations applicable in Ethiopia<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the system of law in your jurisdiction based on civil law, common law or something else?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Ethiopia operates a federal legal system that is primarily based on civil law, although some procedural rules reflect common law influences. The 1995 Constitution is the supreme law, followed by international treaties, legislation (including proclamations, regulations and directives), and customary law. Decisions of the Federal Supreme Court Cassation Division are binding on all courts in Ethiopia.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the different types of vehicle \/ legal forms through which people carry on business in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The main legal forms through which business is carried on in Ethiopia are:<\/p>\n<ol>\n<li><strong>Sole Proprietorship:<\/strong> A business owned and operated by one individual, with no separate legal personality from the owner.<\/li>\n<li><strong>General Partnership:<\/strong> A partnership in which the partners are jointly and severally liable for the partnership\u2019s obligations.<\/li>\n<li><strong>Limited Partnership:<\/strong> A partnership with general partners (with unlimited liability) and limited partners (whose liability is limited to their agreed contributions).<\/li>\n<li><strong>Limited Liability Partnership:<\/strong> A partnership (often used by professionals) in which each partner\u2019s liability is limited to their contribution, as provided by law.<\/li>\n<li><strong>Joint Venture:<\/strong> An arrangement established by a confidential agreement between the parties, which is not disclosed to third parties.<\/li>\n<li><strong>Share Company:<\/strong> A corporate form with fixed capital divided into shares and limited liability; it requires a minimum of five shareholders.<\/li>\n<li><strong>Private Limited Company:<\/strong> A company with between two and fifty members, established once the capital is fully paid and the memorandum of association is registered in the commercial register.<\/li>\n<li><strong>One-Person Private Limited Company:<\/strong> A private limited company with a single member.<\/li>\n<li><strong>Commercial Representative\u2019s Office:<\/strong> A structure that allows investors to conduct market research and business promotion without undertaking revenue-generating activities.<\/li>\n<\/ol>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can non-domestic entities carry on business directly in your jurisdiction, i.e., without having to incorporate or register an entity?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No. Foreign companies must incorporate and register a subsidiary, branch, or project office (for those entering the market through an international tender) in order to carry on business in Ethiopia.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any capital requirements to consider when establishing different entity types?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For a share company, a minimum capital of ETB 50,000 is required, with each share having a par value of at least ETB 100. A private limited company and a one-person private limited company require a minimum capital of ETB 15,000.<br \/>\nPartnerships have no prescribed minimum capital requirement. Instead, partners contribute assets such as money, property, or skills. Unless otherwise agreed, contributions should generally be equal and sufficient for the business\u2019s intended purpose. The following requirements apply to foreign investors seeking to do business in Ethiopia:<\/p>\n<p>For a wholly foreign-owned company, the minimum capital requirement is USD 200,000 (for businesses engaged in architectural or engineering works or related technical consultancy services, technical testing and analysis, or publishing, the minimum requirement is USD 100,000).<\/p>\n<p>For companies jointly owned with a domestic investor, the minimum capital requirement is USD 150,000 (or USD 50,000 where the business falls within the exceptions referred to in the preceding paragraph).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are the different types of vehicle established in your jurisdiction? And which is the most common entity \/ branch for investors to utilise?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A sole proprietorship must obtain a commercial registration certificate and a business licence from the Ministry of Trade and Regional Integration.<\/p>\n<p>A private limited company (PLC) is established by between two and 50 members. It must meet the minimum capital requirement of ETB 15,000, which must be fully paid in advance and deposited into a blocked bank account, with a minimum par value of ETB 100. A memorandum of association must be submitted as part of the application for commercial registration and a business licence.<\/p>\n<p>A share company requires fully subscribed capital, with 25% of cash shares paid into a blocked account. A detailed memorandum of association, a promoter-signed prospectus, and auditor verification of formation are mandatory. The company must have at least ETB 50,000 in capital, a minimum par value of ETB 100 per share, and at least five shareholders. Registration in the commercial register grants legal personality.<\/p>\n<p>A general partnership is established by two or more persons. The partners must agree to carry on the business and record that agreement in a memorandum of association. Contributions (whether money, property, or skills) are required and are typically equal unless otherwise agreed.<\/p>\n<p>A limited partnership is established by a memorandum of association specifying the general and limited partners. The firm name must include at least two general partners and the words \u201cLimited Partnership\u201d. General partners have unlimited liability (as in a general partnership), while limited partners\u2019 liability is capped at their contributions. Registration in the commercial register and a business licence are required.<\/p>\n<p>Limited liability partnerships (LLPs) are formed by licensed professionals to provide professional services, with partners\u2019 liability limited to their contributions. Formation requires a memorandum listing each partner\u2019s licence and profession, and the firm name must reflect the partnership\u2019s purpose and include \u201cLimited Liability Partnership\u201d. Only licensed professionals may be partners, and the general manager must also be a licensed practitioner. Registration in the commercial register is required.<\/p>\n<p>A joint venture is established by an agreement between two or more business entities. It does not have separate legal personality and is not disclosed to third parties. Standard commercial registration and business licence requirements do not apply to joint ventures.<\/p>\n<p>A one-member private limited company is established by submitting a declaration before a document-authenticating authority to form a separate legal entity with limited liability, followed by commercial registration and obtaining a business licence. The declaration must identify the member and a nominee (who cannot act as nominee for more than one one-member company at the same time), and include the nominee\u2019s acceptance. A minimum capital of ETB 15,000 is required. Any in-kind contributions must be described, valued by an auditor, and included in the registration.<\/p>\n<p>The most common entity used by investors is a PLC, as it has a relatively simple governance structure and reporting requirements. A share company is also commonly used.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is the entity operated and managed, i.e., directors, officers or others? And how do they make decisions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The operation and management of business structures in Ethiopia varies depending on the type of organisation:<\/p>\n<ol>\n<li>General partnerships are managed by appointed managers (who may, but need not, be partners). Decisions typically require unanimous consent, although the partners may agree to adopt majority voting.<\/li>\n<li>Limited partnerships have general partners (with unlimited liability) and limited partners (with liability capped at their contributions). Management is primarily the responsibility of the general partners. Unless the memorandum of association provides otherwise, decisions require the consent of all general partners and a majority of the limited partners.<\/li>\n<li>Limited liability partnerships are formed by licensed professionals, and the general manager must also be a licensed practitioner. Unless the memorandum of association provides otherwise, amendments to the memorandum require a two-thirds majority of partners, while other decisions may be made by a simple majority. Any decision to change the nationality or business purpose of the partnership requires approval by three-quarters of the partners.<\/li>\n<li>A joint venture is managed by one or more appointed managers, who need not be partners. If no managers are appointed, all partners have managerial powers. Partners may actively supervise the manager(s) and monitor performance to ensure alignment with the venture\u2019s objectives.<\/li>\n<li>A one-member private limited company gives the sole member limited liability, provided the full capital has been contributed. A nominee is appointed to ensure continuity in the event of the member\u2019s absence or death. The company is managed by a general manager (who may be the member). The member exercises the powers of the general meeting of shareholders, and all decisions must be recorded in minutes. Any amendments to the company\u2019s declaration must be registered in the commercial register.<\/li>\n<li>Share companies are governed by a board of directors elected by the shareholders, consisting of three to 13 members. The board oversees strategy, financial performance, and risk management, and appoints a general manager for day-to-day operations and a secretary for record-keeping and administration. The chairperson (a non-managing shareholder-director) leads the board. Board decisions are generally taken by majority vote. Shareholder meetings apply different quorum and voting thresholds depending on whether the meeting is ordinary or extraordinary. Shareholders may also establish an optional supervisory board to monitor management and promote compliance.<\/li>\n<li>Private limited companies may be managed either by a board of directors or by a general manager appointed by the shareholders. Where a board is established, it consists of three to seven members and generally follows rules similar to those applicable to share company boards. Where there is no board, the general manager has authority to act on behalf of the company in pursuit of its business objectives. Shareholder decisions are taken at general meetings: ordinary resolutions (simple majority) deal with routine matters, while extraordinary resolutions (higher thresholds) are required for significant decisions such as changes to capital.<\/li>\n<\/ol>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there general requirements or restrictions relating to the appointment of (a) authorised representatives \/ directors or (b) shareholders, such as a requirement for a certain number, or local residency or nationality?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In a general partnership, an individual may act as a manager unless removed by the other partners or by court order. Managers may not, without the consent of the other partners, undertake transactions similar to those carried out by the partnership, whether on behalf of a third party or in their own interest. They may also not be a partner with joint and several liability in another firm carrying on a similar business. These rules also apply to general partners in limited partnerships. In a limited partnership, limited partners are expressly prohibited from acting as managers, regardless of any power of attorney granted.<\/p>\n<p>Share companies in Ethiopia are subject to specific rules on directors and shareholders. A minimum of five shareholders is required. The board of directors, elected by the shareholders, must comprise three to 13 members, and no more than one-third may be non-shareholders. Directors must be of good moral character and must not have criminal convictions for specified offences. They may be removed at any time by a general meeting of shareholders. The chairperson must be a shareholder-director who is not involved in the company\u2019s day-to-day management. Directors are also subject to conflict-of-interest restrictions, including prohibitions on competing with the company or holding interests that conflict with its objectives. A supervisory board of three to five shareholder-members may be established on an optional basis.<\/p>\n<p>Private limited companies have specific requirements and restrictions relating to their structure and key personnel. They must have between two and 50 shareholders, although conversion to a single-member company is permitted. Management may be structured either through a board of directors (three to seven members) or through a general manager appointed by the shareholders. Where a board is established, its operating rules broadly align with those applicable to share company boards. The memorandum of association determines the number and powers of directors and, where a board exists, the board appoints the general manager; the general manager cannot also serve as the board\u2019s chairperson. A general manager is mandatory in all cases and may be either a shareholder or an external appointee.<\/p>\n<p>In a one-member private limited company, a nominee must formally declare acceptance of the nomination before a document-authenticating authority. An individual may act as nominee for only one single-member company at a time. The company must appoint a general manager, who may be either the sole member or another person. The general manager has the usual powers and duties of a manager in a private limited company, as set out in the relevant legal provisions.<\/p>\n<p>There are no specific requirements or restrictions relating to local residency or nationality for partners, the sole member, nominees, general managers, shareholders, or directors in the business forms described above.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Apart from the creation of an entity or establishment, what other possibilities are there for expanding business operations in your jurisdiction? Can one work with trade \/commercial agents, resellers and are there any specific rules to be observed?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the Commercial Code, businesses generally face no restrictions on expanding their operations and may engage commercial agents and resellers, provided they comply with rules prohibiting anti-competitive practices. For example, exclusive distributorship arrangements are prohibited under Ethiopian law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any corporate governance codes or equivalent for privately owned companies or groups of companies? If so, please provide a summary of the main provisions and how they apply.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The main corporate governance frameworks relevant to privately owned companies (and certain regulated entities) include:<\/p>\n<p><strong>1. The Commercial Code of Ethiopia<\/strong> provides the core governance framework for companies. It includes requirements to keep proper books and accounts, allocates responsibilities between shareholders, the board and management, and imposes directors\u2019 duties (including acting in the best interests of the company). It also supports transparency by requiring the preparation and disclosure of key information to shareholders (such as financial statements and management reports), and protects shareholder rights in relation to major corporate actions (for example, mergers, acquisitions, and changes to the company\u2019s structure).<\/p>\n<p><strong>2. National Bank of Ethiopia (NBE) Directive No. SBB\/91\/2024<\/strong> applies to all banks operating in Ethiopia. It aims to ensure banks are managed in a sound and prudent manner, balancing risk-taking with the interests of stakeholders. It defines corporate governance as the structure through which a bank\u2019s business and affairs are directed and controlled to promote prosperity and accountability. The directive covers corporate culture and ethics, board composition and effectiveness, management of conflicts of interest, shareholder protections, required disclosures, and the integration of sustainability considerations into risk management. The NBE supervises compliance and may impose sanctions for non-compliance. Compliance with the directive does not replace obligations under the Commercial Code of Ethiopia or other applicable laws.<\/p>\n<p><strong>3. Directive No. SIB\/48\/2019 (1st Replacement)<\/strong> applies to all insurers operating in Ethiopia and to Ethiopian reinsurers. It defines corporate governance as the structure through which an insurer\u2019s business and affairs are directed and controlled to enhance business performance and accountability. The directive addresses board size and composition, general meetings, nomination and election procedures, and the roles, responsibilities and authority of the board and chief executive officer. It also sets disclosure requirements, promotes transparency, and provides for sanctions for non-compliance.<\/p>\n<p><strong>4. The Capital Market Service Providers Licensing and Supervision Directive No. 980\/2024<\/strong> sets out governance-related requirements for entities seeking to provide capital market services, including expectations around governance structures, internal controls, and compliance.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the options available when looking to provide the entity with working capital? i.e., capital injection, loans etc.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>An entity can be funded with working capital in a number of ways, including equity injections and debt funding, each of which is subject to specific rules under the Ethiopian Commercial Code.<\/p>\n<p>Working capital can be injected through additional contributions from partners or shareholders. For example, a share company may increase its capital by issuing new shares, which may be paid in cash or in kind. In addition, where a private limited company has lost three-quarters of its capital, the members may make further contributions to restore the capital.<\/p>\n<p>A share company may also borrow by issuing debentures, provided its capital is fully paid up and it has been in business for at least one year with an approved balance sheet. As a general rule, the total value of debentures issued may not exceed the amount of paid-up capital, subject to certain exceptions (for example, where the company\u2019s immovable property is mortgaged). In addition, a company may not issue shares before the payments required by law and the memorandum of association have been made, and it may not provide financial assistance (including advances or loans) to enable third parties to acquire its shares.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the processes for returning proceeds from entities? i.e., dividends, returns of capital, loans etc.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For share companies and private limited companies (PLCs), the Commercial Code provides several ways to return value to owners, including dividend distributions, share buy-backs, capital reductions, loans, and bonus shares.<\/p>\n<p><strong>Dividend distributions<\/strong><\/p>\n<p>Dividends may be paid to shareholders only out of net profits shown in an approved balance sheet. The general meeting resolves on the method of profit distribution and sets the dividend payment date, which must be within four months of the relevant resolution. From the fixed payment date, a shareholder becomes a creditor of the company for the dividend amount.<\/p>\n<p><strong>Rules on share buy-backs<\/strong><\/p>\n<p>Share buy-backs are permitted only in specific circumstances intended to protect shareholder interests and company stability. A company may acquire its own shares only where authorised by a shareholders\u2019 meeting, the purchase is funded from net profits, and the shares being repurchased are fully paid up. Once acquired, the directors may not dispose of those shares, and their voting rights are suspended, effectively removing them from circulation. However, these restrictions do not apply where an extraordinary general meeting has resolved to repurchase shares as part of a formal capital reduction.<\/p>\n<p><strong>Process for capital reductions<\/strong><\/p>\n<p>A capital reduction is initiated by the board of directors, which must submit its proposals to the auditors at least 15 days before the extraordinary general meeting convened to consider and approve the reduction. The auditors must present a report at that meeting setting out their opinion on the proposals and the supporting rationale. Once implemented, the capital reduction must be recorded in the commercial register, announced in a widely circulated newspaper, and published on the company\u2019s website. Capital may be reduced in various ways, including by reducing the par value of shares or exchanging existing shares for a smaller number of shares. Any capital reduction must respect the principle of equality among shareholders.<\/p>\n<p><strong>Restrictions on loans and financial assistance<\/strong><\/p>\n<p>A company may not issue shares before the payments required by law and the memorandum of association have been made. In addition, it may not provide financial assistance (including advances or loans) for the purpose of enabling a third party to acquire its shares.<\/p>\n<p><strong>Conditions for issuing new shares<\/strong><\/p>\n<p>When issuing new shares, a company must comply with the provisions governing the formation of share companies. Unless the memorandum of association provides otherwise, existing shareholders have a pre-emption right to subscribe for newly issued shares in proportion to their existing holdings. Where a company whose capital is not fully paid increases its capital by a new issue of shares to be paid in cash (or by convertible debentures), the issue is null and void.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are specific voting requirements \/ percentages required for specific decisions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Voting thresholds depend on the type of company (share company (SC) or private limited company (PLC)), the type of meeting or resolution (ordinary or extraordinary), and the memorandum of association. Ordinary resolutions (passed at ordinary meetings) typically require a simple majority and cover matters such as approving financial statements and appointing directors and managers. In these cases, a resolution is passed if shareholders representing more than 50% of the capital represented at the meeting vote in favour.<\/p>\n<p>Quorum requirements for ordinary meetings differ for SCs and PLCs. For an SC, the quorum is shareholders representing 25% of the company\u2019s capital. If that quorum is not met and a second meeting is convened, decisions may be taken regardless of the number of shares represented and are passed by a simple majority of shareholders present. For a PLC, the quorum is shareholders representing more than 50% of the company\u2019s capital. If a second meeting is convened, decisions are likewise passed by a simple majority of shareholders present, regardless of the number of shares represented.<\/p>\n<p>Extraordinary resolutions are subject to higher quorum and voting thresholds. A unanimous vote of all shareholders is required to change the company\u2019s nationality and to increase capital by increasing the par value of existing shares. A vote of shareholders representing 75% of the capital is required to increase capital using profits or reserve funds to be distributed to shareholders. The same 75% threshold applies to amendments to the memorandum of association, unless the memorandum of association requires a higher threshold.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are shareholders authorised to issue binding instructions to the management? Are these rules the same for all entities? What are the consequences and limitations?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. In share companies and private limited companies, shareholders may give binding directions to management through resolutions passed at general meetings (ordinary or extraordinary, as applicable). Companies must hold at least one annual general meeting, and an extraordinary general meeting must be convened in certain circumstances (for example, to approve a capital increase or an amendment to the memorandum of association). Shareholder resolutions typically cover matters such as approving annual financial statements, appointing and removing directors, approving dividend distributions, appointing external auditors, and deciding major corporate actions (including mergers, acquisitions, and dissolution). Resolutions are recorded in minutes and, where required, registered, authenticated, and filed with the Documents Authentication and Registration Services and the Ministry of Trade and Regional Integration and\/or the Ethiopian Investment Commission.<\/p>\n<p>Failure to comply with shareholder resolutions may lead to removal from office and may give rise to claims for mismanagement and damages. Managers owe duties to the company and its shareholders and may be liable for loss caused by a breach of those duties, including acting contrary to shareholder instructions. In the event of bankruptcy, managers may also be required to contribute towards the company\u2019s debts (in whole or in part) where the company\u2019s assets are insufficient, in accordance with the applicable rules.<\/p>\n<p>However, shareholders may not directly run the company\u2019s day-to-day operations or make routine operational decisions, which remain the responsibility of management. Any shareholder resolution must also comply with mandatory legal requirements and the company\u2019s memorandum of association.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the core employment law protection rules in your country (e.g., discrimination, minimum wage, dismissal etc.)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Key protections for employees under Ethiopian labour law include:<\/p>\n<p><strong>Non-discrimination:<\/strong> An employer must not discriminate between workers on grounds such as race, sex, religion, political outlook, HIV\/AIDS status, disability, or any other irrelevant ground. This applies to recruitment, pay, and termination.<\/p>\n<p><strong>Working hours:<\/strong> The maximum working time is 8 hours per day or 48 hours per week. Exceeding these limits may result in a penalty of ETB 5,000 to ETB 30,000, depending on repetition. If the breach occurs more than three times, it may result in closure of the undertaking.<\/p>\n<p><strong>Leave:<\/strong> Employees are entitled to various types of paid leave, including:<\/p>\n<ol>\n<li>Annual leave of 16 working days for the first year of service, plus an additional one day for each two years of service;<\/li>\n<li>Maternity leave of 120 days (30 days pre-natal and 90 days post-natal);<\/li>\n<li>Paternity leave of 3 consecutive working days;<\/li>\n<li>Sick leave for up to 6 months (the first month on full pay, the next two months on half pay, and the following three months without pay);<\/li>\n<li>Family events or bereavement leave of 3 consecutive working days (for example, the employee\u2019s marriage or the death of close relatives);<\/li>\n<li>Union leave, as determined by the collective agreement;<\/li>\n<li>Exceptional or serious events leave of 5 consecutive working days;<\/li>\n<li>Special purpose leave (for example, to appear before tribunals, to vote, and for training as determined by the collective agreement).<\/li>\n<\/ol>\n<p><strong>Termination:<\/strong> An employer may terminate a contract of employment only for serious misconduct, the employee\u2019s inability to perform the work, or the organisational or operational requirements of the undertaking.<\/p>\n<p>An employee may terminate their contract of employment without notice due to serious misconduct by the employer (for example, sexual harassment, criminal acts, imminent danger at work not addressed by the employer, or failure by the employer to meet its obligations). An employee may also terminate their contract without giving a reason by giving 30 days\u2019 prior notice.<\/p>\n<p><strong>Social security:<\/strong> An employer must contribute 11% of the employee\u2019s salary to the employee\u2019s social security (pension scheme).<\/p>\n<p><strong>Child labour:<\/strong> The minimum working age in Ethiopia is 15. It is therefore prohibited to employ a person under 15 years of age. Young workers (15\u201318) must not be assigned to work that endangers their life or health, to overtime work, or to work on weekly rest days or public holidays. The maximum working time for young workers is 7 hours per day. However, for apprenticeship purposes, children who have attained 14 years of age may be employed.<\/p>\n<p><strong>Dispute resolution:<\/strong> Labour disputes may be handled by a conciliator appointed by the Ministry of Labour and Skills (MoLS), upon application by either party. The conciliator deals with most labour matters and seeks to achieve a negotiated settlement. Cases not resolved through conciliation may be referred to the Labour Relations Board. The law also establishes specialised labour benches at both first-instance and appellate levels.<\/p>\n<p><strong>Minimum wage:<\/strong> Unlike in many jurisdictions, there is no fixed minimum wage in Ethiopia\u2019s private sector. Salaries are therefore generally determined by agreement between the parties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">On what basis can an employee be dismissed in your country, what process must be followed and what are the associated costs? Does this differ for collective dismissals and if so, how?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>An employee may be dismissed for serious misconduct, inability to perform the work, or the organisational or operational requirements of the undertaking. Serious misconduct includes (among other things) fraud, theft, assault, lateness for eight days within six months, absence from work for five days within six months despite notice, poor performance, conviction, and gross negligence; such conduct may justify termination without prior notice. Other grounds (such as permanent disability, a manifest loss of capacity to perform the work, inability to carry out the work due to health or disability, unwillingness to relocate, or cancellation of the employee\u2019s post for good cause) may justify termination with notice of one to three months, depending on the employee\u2019s length of service. Failure to give the required notice gives rise to an obligation to pay salary in lieu of notice for the relevant notice period.<\/p>\n<p>If either the grounds for termination or the procedure followed is unlawful, the employee may be reinstated, or the employer may be required to make payments including: severance pay of one to 12 months\u2019 salary (depending on length of service), compensation of six months\u2019 salary, and salary for the notice period, among other remedies.<\/p>\n<p>Collective dismissals for organisational or operational reasons are permitted. Where the undertaking permanently ceases operations, the volume of work or profits decline due to reduced demand for its products or services, or the employer changes working methods or introduces new technology, affected employees may be dismissed. Where such dismissals affect 10% or more of the workforce, the employer must consult the trade union or employees\u2019 representatives, make efforts to retain senior and productive employees, notify the Ministry of Labour and Skills (MoLS), and give a fixed two-month prior notice. Affected employees are also entitled to two months\u2019 salary in addition to the severance pay referred to above.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction have a system of employee representation \/ participation (e.g., works councils, co-determined supervisory boards, trade unions etc.)? Are there entities which are exempt from the corresponding regulations?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Ethiopian Labour Proclamation permits the formation of a trade union within an undertaking that employs 10 or more employees, provided the union has at least 10 members. Employees engaged in similar activities across different undertakings that each employ fewer than 10 employees may form a general trade union. Trade unions may form federations, and federations may in turn form confederations. Trade unions represent members in collective bargaining and labour disputes, monitor working conditions, and protect members\u2019 rights.<\/p>\n<p>Managerial employees are excluded from union membership. In addition, the exercise of certain union rights (including striking and lock-outs) is prohibited for workers in essential public service undertakings, including aviation, electricity and water supply, urban light rail transport, hospitals, clinics, dispensaries and pharmacies, fire brigades, and telecommunications.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a system governing anti-bribery or anti-corruption or similar? Does this system extend to nondomestic constellations, i.e., have extraterritorial reach?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Ethiopia introduced its first dedicated anti-corruption legislation in 2001 through the Federal Ethics and Anti-Corruption Commission Establishment Proclamation No. 235\/2001, which established the Federal Ethics and Anti-Corruption Commission (FEACC). Further specialised legislation was later adopted, including the Corruption Crimes Proclamation No. 881\/2015 and the Revised Special Anti-Corruption Procedure and Rules of Evidence (Amendment) Proclamation No. 882\/2015. These laws criminalise bribery and corruption, set out specific procedures and evidentiary rules for the investigation and trial of corruption offences, and provide for preventive and awareness-raising measures. Following the Revised FEACC Establishment Proclamation No. 1236\/2021, the FEACC\u2019s former power to investigate and prosecute corruption offences was removed, and those powers are now vested in the Public Prosecutor.<\/p>\n<p>In addition, the Criminal Code of 2004 criminalises offences including bribery, embezzlement, abuse of power, and illicit enrichment.<\/p>\n<p>The Corruption Crimes Proclamation No. 881\/2015 imposes severe penalties for bribery offences, ranging from one year\u2019s simple imprisonment to rigorous imprisonment of up to 25 years, and a fine of up to 200,000 Birr.<\/p>\n<p>Extraterritorial reach: Both the Corruption Crimes Proclamation No. 881\/2015 and the Criminal Code have extraterritorial reach. Bribing foreign public officials, or employees of international organisations, is criminalised. The legislation also criminalises accepting a bribe from a foreign state, person, or organisation (including a transnational corporation). These offences attract the same penalties as set out above.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What, if any, are the laws relating to economic crime? If such laws exist, is there an obligation to report economic crimes to the relevant authorities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Ethiopia has several laws addressing economic crime. The main ones include:<\/p>\n<p>9. Asset Recovery Proclamation No. 1364\/2025;<\/p>\n<p>10. Prevention and Suppression of Money Laundering and Financing of Terrorism Proclamation No. 780\/2013 (as amended by Proclamation No. 1387\/2025);<\/p>\n<p>11. Corruption Crimes Proclamation No. 881\/2015;<\/p>\n<p>12. Prevention and Suppression of the Financing of the Proliferation of Weapons of Mass Destruction Proclamation No. 1132\/2019;<\/p>\n<p>13. Disclosure and Registration of Assets Proclamation No. 668\/2010;<\/p>\n<p>14. Order of the Council of Ministers to Freeze Finances Used to Support the Proliferation of Weapons of Mass Destruction, issued pursuant to Article 9 of Proclamation No. 1132\/2019;<\/p>\n<p>15. Prevention and Suppression of Terrorism Crimes Proclamation No. 1176\/2020;<\/p>\n<p>16. Prevention and Suppression of Trafficking in Persons and Smuggling of Persons Proclamation No. 1178\/2020;<\/p>\n<p>17. Tax Administration Proclamation No. 979\/2016;<\/p>\n<p>18. Customs Proclamation No. 859\/2014; and<\/p>\n<p>19. The Criminal Code Proclamation No. 414\/2004.<\/p>\n<p>The AML\/CFT Proclamation imposes a duty to report suspected economic crime to the relevant authorities. Financial institutions, designated non-financial businesses, and professions must report to the Financial Intelligence Services (FIS) any reasonable suspicion that funds or property are proceeds of crime, are related or linked to such proceeds, or are intended to be used for the financing of terrorism. Confidentiality may not be relied upon as a defence for failure to report.<\/p>\n<p>Ethiopia\u2019s anti-corruption laws also impose a duty on anyone with information about corruption offences to disclose that information to the competent authorities. The main exception is where disclosure would breach a duty of confidentiality.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is money laundering and terrorist financing regulated in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Ethiopia has a comprehensive legal framework for the prevention of money laundering and terrorist financing. The primary legislation is the Prevention and Suppression of Money Laundering and Financing of Terrorism Proclamation No. 780\/2013 (as amended). The law criminalises money laundering and terrorist financing, sets out preventive measures, and empowers the Financial Intelligence Services (FIS) as the lead authority. In addition to confiscation of property, money laundering is punishable by rigorous imprisonment of 5\u201325 years and a fine of up to ETB 1,000,000, while terrorist financing is punishable by rigorous imprisonment of 10\u201325 years and a fine of up to ETB 1,000,000.<\/p>\n<p>Other key legislation includes the Corruption Crimes Proclamation No. 881\/2015, the Criminal Code Proclamation No. 414\/2004, the Banking Proclamation and other financial sector laws, the Customs Proclamation No. 859\/2014, the Federal Police Proclamation, the Disclosure and Registration of Assets Proclamation No. 668\/2010, the Financial Intelligence Centre Establishment Regulation (as amended), the Asset Recovery Proclamation No. 1364\/2025, and the Procedure of Freezing of Terrorists\u2019 Assets Regulation No. 306\/2014.<\/p>\n<p>These laws require customer due diligence (including identification of customers and beneficial owners, and ongoing monitoring of high-risk accounts), reporting (including suspicious transaction reports and reports of large cash transactions exceeding ETB 1 million to the FIS), and retention of records for up to ten years. These obligations apply not only to financial institutions but also to designated non-financial businesses and professions. In addition to the FIS, the National Bank of Ethiopia (NBE) plays an important role in enforcing AML and counter-terrorist financing requirements for financial institutions. The Federal Police and the Attorney General also play important roles in the investigation and prosecution of these offences.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there rules regulating compliance in the supply chain (for example comparable to the UK Modern Slavery Act, the Dutch wet kinderarbeid, the French loi de vigilance)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As noted in Question 14 above, Ethiopian labour law prohibits the employment of children under 15 years of age, with a limited exception permitting children aged 14 to work for apprenticeship purposes. The law also includes provisions on occupational safety and health, and sets specific protections for young workers, including limits on working hours and restrictions on hazardous work.<\/p>\n<p>The Prevention and Suppression of Trafficking in Persons and Smuggling of Persons Proclamation treats causing a child to work in breach of these restrictions as labour exploitation of children. It also prohibits trafficking in persons and the smuggling of persons.<\/p>\n<p>Beyond these protections (which apply primarily to employers), Ethiopia does not currently have specific legislation comparable to the UK Modern Slavery Act, the Dutch Child Labour Due Diligence Law, or the French Duty of Vigilance Law that requires businesses to undertake human rights due diligence across their supply chains.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please describe the requirements to prepare, audit, approve and disclose annual accounts \/ annual financial statements in your jurisdiction.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A reporting entity must submit annual audited financial statements to the Accounting and Auditing Board of Ethiopia (AABE) within four months of the end of its fiscal year. These entities include banks, insurers, enterprises, and other institutions. Financial statements must be prepared in accordance with IFRS. For financial statements and audit reports to be accepted, they must be prepared either by the reporting entity\u2019s professionals or by external professionals or audit firms registered with the AABE.<\/p>\n<p>Financial statements submitted to the AABE must first be approved through the company\u2019s internal governance process, including approval at the annual general meeting (AGM). A maximum of four original copies of the audited financial statements, approved by management and with each page sealed by the company and the audit firm, must then be submitted.<\/p>\n<p>Share companies are also required to publish their balance sheet on their website and in a widely circulated newspaper.<\/p>\n<p>Where a reporting entity is incorporated abroad and the law of that country is substantially the same, financial statements prepared abroad are treated as complying with the requirements of Ethiopian law.<\/p>\n<p>Failure to submit annual audited financial statements to the AABE attracts a penalty of ETB 200 for the company and ETB 100 for the director for each day of delay, for up to three months. If the failure to submit extends beyond three months, it may result in criminal liability, punishable by simple imprisonment of up to two years and\/or a fine of ETB 20,000.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please detail any corporate \/ company secretarial annual compliance requirements?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Key corporate and company secretarial annual compliance requirements include:<\/p>\n<p><strong>Tax compliance:<\/strong> Category \u201cA\u201d taxpayers (bodies\/corporates and individuals whose annual turnover is ETB 2,000,000 or above) must file their annual income tax declarations within four months of the end of the tax year, and pay any tax due within the same period. Businesses must also pay quarterly advance tax equal to 25% of their profit for the preceding tax year. Taxpayers whose assessed tax is less than 2.5% of their gross revenue are subject to Minimum Alternative Tax (MAT) of 2.5% of gross revenue. Businesses and professionals are required to keep proper books and records. Category \u201cB\u201d taxpayers (individuals whose annual turnover is less than ETB 2,000,000) must file their annual income tax declaration between 8 July and 6 September.<\/p>\n<p>In addition, business entities have provisional tax declaration obligations in respect of withholding tax. Withheld tax must be remitted within 30 days of the end of the month in which the withholding income was paid.<\/p>\n<p>If the company is VAT-registered, VAT returns must be filed by the last day of the calendar month following the end of the relevant accounting period (which has recently been changed to monthly filing from the previous quarterly filing). VAT payment is due on the same date as the VAT return filing deadline. However, VAT payable on a taxable import is due at the time of import.<\/p>\n<p>Failure to file returns and\/or pay tax by the due date attracts significant penalties, which may be up to 25% of the unpaid tax (for late filing) or up to the amount of the unpaid tax (for late payment).<\/p>\n<p><strong>Renewal of business licence or investment permit:<\/strong> A business licence must be renewed annually. The renewal period runs from 08 July to 08 January each year (Ethiopian Calendar). A similar period applies to businesses that have registered a different calendar. Businesses that fail to renew within this period are granted an extended renewal window from 09 January to 07 July each year; however, renewal during the extended period attracts a fine ranging from ETB 2,500 to ETB 10,000 (ETB 2,500 for the month of January and ETB 1,500 for each subsequent month of delay). Failure to renew within the extended period results in cancellation of the business licence.<\/p>\n<p>Likewise, an investor must renew their investment permit annually until they commence marketing their products or services and obtain a business licence, after which investment permit renewal is no longer required.<\/p>\n<p>Report and publication of audited financial statements: Share companies (which are the closest equivalent to public companies in other jurisdictions) and private limited companies with 10 or more shareholders, or whose assets exceed ETB 10 million, are required to appoint external auditors. Audited financial statements must be presented at the AGM, and a summary is published in the company\u2019s annual report.<\/p>\n<p>Share companies (SCs) must submit to the auditors and the Ministry of Trade and Regional Integration (MoTRI) a detailed inventory of the company\u2019s assets, the balance sheet, the profit and loss account, and the directors\u2019 report at least 45 days before notices convening the AGM are dispatched. In addition, the approved balance sheet and an extract of the AGM minutes approving it must be sent to MoTRI and posted on the company\u2019s website within 30 days of approval.<\/p>\n<p>Any investor (including subsidiaries and branches of foreign companies) holding an investment permit must submit quarterly progress reports on implementation of the investment project to the Ethiopian Investment Commission (EIC). Investors must also provide information whenever requested by the competent authority.<\/p>\n<p><strong>Annual general meeting (AGM):<\/strong> Companies (SCs and PLCs) must hold at least one AGM of shareholders each year. The AGM is empowered to approve key matters such as annual financial statements, profit distribution, the appointment and remuneration of auditors and directors, and other significant corporate decisions, and may issue directions to management within the limits of the law and the memorandum of association.<\/p>\n<p><strong>Sector-specific compliance:<\/strong> Financial institutions (banks, insurers, and microfinance institutions) have additional compliance obligations and are supervised by the National Bank of Ethiopia (NBE). Banks must, among other things, submit an annual external audit report to the NBE; submit duly signed financial statements within two weeks of the AGM of shareholders; publish their balance sheet and profit and loss account in a widely circulated newspaper and on their website; and display the latest audited balance sheet and profit and loss account conspicuously at their place of business.<\/p>\n<p>Employment compliance: Businesses employing foreign nationals must ensure that relevant work permits and residence permits are renewed annually.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a requirement for annual meetings of shareholders, or other stakeholders, to be held? If so, what matters need to be considered and approved at the annual shareholder meeting?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Both share companies and private limited companies are required to hold at least one annual general meeting of shareholders. The meeting must be held within four months of the end of each fiscal year (and, in certain cases, may be held within six months with the permission of the competent authority). Matters typically considered and approved at the annual general meeting include the annual financial statements (including reports from management and the auditors), profit distribution, the appointment of auditors and directors, determination of the remuneration\/benefits of directors and auditors, major corporate decisions, and any other matter of concern to the company.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any reporting \/ notification \/ disclosure requirements on beneficial ownership \/ ultimate beneficial owners (UBO) of entities? If yes, please briefly describe these requirements.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Under Ethiopia\u2019s AML\/CFT legal framework (Prevention and Suppression of Money Laundering and Financing of Terrorism Proclamation No. 780\/2013, as amended by Proclamation No. 1387\/2025), all legal persons established or registered in Ethiopia are required to:<\/p>\n<ol>\n<li>Maintain adequate, accurate, and up-to-date information on their beneficial owners and on their administration and control structure;<\/li>\n<li>Fully co-operate in determining beneficial ownership and provide information held to the competent authorities in a timely manner; and<\/li>\n<li>Co-operate with financial institutions and designated non-financial businesses and professions by providing adequate, accurate, and up-to-date information on the company\u2019s beneficial ownership.<\/li>\n<\/ol>\n<p>The Financial Intelligence Services (FIS) is the authority responsible for accessing beneficial ownership information. Other relevant authorities involved in beneficial ownership governance include the Ministry of Trade and Regional Integration and the Ministry of Revenues, or their regional equivalents. Recent amendments have sought to align Ethiopia\u2019s AML\/CFT framework more closely with Financial Action Task Force (FATF) standards.<\/p>\n<p>Financial institutions and designated non-financial businesses and professions (including lawyers and law firms, and banks) are also required to carry out customer due diligence. This includes identifying beneficial owners and taking all reasonable measures to verify their identities.<\/p>\n<p>In Ethiopia, beyond the definition of beneficial ownership in the AML\/CFT law, the detailed criteria for determining beneficial ownership are not expressly set out. A \u201cbeneficial owner\u201d is defined as \u201cany natural person who ultimately owns or controls a customer or an account, the person on whose behalf a transaction is being conducted, or the person who ultimately exercises effective control over a legal person or arrangement\u201d.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What main taxes are businesses subject to in your jurisdiction, and on what are they levied (usually profits), and at what rate?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The main taxes businesses are subject to in Ethiopia include:<\/p>\n<p><strong>Corporate income tax:<\/strong> This is levied on annual taxable profit (revenue less allowable deductions). The standard corporate income tax rate is 30%, and it applies to all types of businesses, as well as branches and project offices of foreign investors.<\/p>\n<p>Resident companies are taxed on their worldwide income, whereas non-resident companies are taxed only on their Ethiopian-sourced income.<\/p>\n<p><strong>Value added tax (VAT):<\/strong> VAT is imposed on the supply of taxable goods and services made in Ethiopia, and on imports. It applies to: (i) taxable supplies of goods or services made by a registered person in Ethiopia; (ii) the importation of taxable goods and taxable services; and (iii) reverse-charge supplies made to a registered person, a government entity, or a large unregistered person. The mandatory VAT registration threshold is annual turnover of ETB 2 million, while the voluntary VAT registration threshold is ETB 1 million.<\/p>\n<p>The standard VAT rate is 15%. However, the law also recognises zero-rated supplies and exempt supplies and imports. The VAT payment period is 30 days from the end of the transaction month.<\/p>\n<p><strong>Withholding tax (WHT):<\/strong> Businesses are required to deduct withholding tax on domestic transactions at a rate of 3% of the value of the transaction and remit it to the tax authority monthly. The thresholds for withholding are ETB 20,000 for the supply of goods and ETB 10,000 for services. Where a supplier fails to provide a tax identification number (TIN) and a valid trade licence, the withholding tax rate is 30%. Amounts withheld are creditable against the supplier\u2019s annual tax liability.<\/p>\n<p>In addition, businesses are required to withhold tax from a range of other payments (including dividends, interest, royalties, savings deposits, rent, repatriation of profits, and management and technical fees), typically at rates ranging from 5% to 15%.<\/p>\n<p>Ethiopia has signed double taxation treaties with several countries, which may provide for reduced withholding tax rates for eligible investors.<\/p>\n<p><strong>Customs duty:<\/strong> This is levied and collected on imported goods. Regular tariff rates range from 0% to 35%, depending on the nature and value of the goods and their origin. Essential goods such as pharmaceuticals and educational materials may attract a 0% rate, whereas luxury items (including cosmetics and high-end electronics) may be subject to a 35% rate. A special tariff applies to goods produced in, and imported from, Common Market for Eastern and Southern Africa (COMESA) member states, which is 10% less.<\/p>\n<p><strong>Excise tax:<\/strong> Excise tax is imposed on excisable goods manufactured in Ethiopia, excisable goods imported into Ethiopia, and excisable services supplied in Ethiopia. It applies to selected goods, including luxury items, goods with relatively inelastic demand, and goods considered hazardous to health or associated with social harms.<\/p>\n<p>Excise duty rates range from 5% to 500%. The highest rates apply to motor vehicles (particularly used vehicles). Perfumes and cosmetics are chargeable at 100%, while alcohol, human hair and wigs are chargeable at 40%.<\/p>\n<p>Excise tax on taxable imports is payable at the time of importation. For locally produced goods, it is payable within 30 days after the goods are cleared from the manufacturing premises. For services, it is payable within 30 days of the following month.<\/p>\n<p><strong>Property tax:<\/strong> A 2025 law introduced property tax on urban real estate (land and buildings). The tax base is calculated as 25% of the value of the property. Tax rates range from 0.2% to 0.1% for land, and from 0.1% to 1% for buildings. The rates are intended to be implemented gradually, starting from the lower rates (0.2% for land and 0.1% for buildings) and increasing over four years to the higher rates (0.1% for land and 1% for buildings).<br \/>\nThe Ministry of Finance may adjust the tax rates and taxable percentages.<\/p>\n<p><strong>Surtax:<\/strong> Imported goods (with a few exceptions) are subject to a surtax at a rate of 10%. The tax base is the aggregate of the CIF (cost, insurance and freight) value, customs duty, VAT, and excise duty.<\/p>\n<p><strong>Payroll (pension) contributions:<\/strong> Businesses are required to contribute to the pension fund for employees engaged for not less than 45 days (whether for a definite or indefinite period, or for a piece of work), including managerial employees. This does not include employees engaged in cotton collection, sugar-cane cutting, and other similar seasonal work regularly repeated during the year. The employer contribution is 11% of the employee\u2019s salary, and the employee contribution is 7%.<\/p>\n<p><strong>Capital gains tax:<\/strong> See the response to Question 28 below.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any particular incentive regimes that make your jurisdiction attractive to businesses from a tax perspective (e.g. tax holidays, incentive regimes, employee schemes, or other?)<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Ethiopia\u2019s investment incentives were recently overhauled by Investment Regulation No. 586\/2026, which repealed Investment Regulation No. 517\/2022 (as amended by Regulation No. 566\/2025). The current incentive regime is anchored on capital investment in priority sectors (including manufacturing, import substitution, agro-processing, renewable energy, mining value-addition, and technology transfer) and performance linked to job creation, technology transfer, and export earnings. The regime provides robust incentives while seeking to maximise value for taxpayers. To be eligible, an investment must create additional production capacity or generate value-addition, and incentives must be used exclusively for the intended purposes and eligible expenditure.<\/p>\n<p>Key incentives include:<\/p>\n<p><strong>Income tax incentives:<\/strong> Investors in priority sectors may be eligible for a reduced income tax rate ranging from 5% to 25% (instead of the standard corporate income tax rate of 30%). The reduced rates may apply for periods ranging from two to 10 years. Special Economic Zone (SEZ) developers, sub-developers, and enterprises; fertiliser manufacturers in SEZs; and start-ups are eligible for the highest incentive: a reduced tax rate of 5% for 10 years. Investors operating outside SEZs in eligible areas are entitled to a reduced tax rate of 15%, while listed companies are taxable at 25% for three years. Under the current incentive regime, there is no 0% income tax holiday (unlike the previous regime).<\/p>\n<p>To be eligible for income tax incentives, an investor (other than an SME) must invest at least USD 10 million, or the equivalent in Birr.<\/p>\n<p>Incentives for investors operating in more remote areas are expected to be set out in a future directive.<\/p>\n<p><strong>Capital allowances:<\/strong> A deduction for capital expenditure on capital goods and building materials used for investment in priority areas is available, provided that: (i) the investor has invested at least USD 2 million (or the equivalent in Birr); (ii) the capital goods are wholly owned by the taxpayer; and (iii) the capital goods are used to generate taxable income. The deductible rate for the first year is 50%, and in subsequent years it is 25% per annum on the remaining capital cost.<\/p>\n<p>A deduction is also permitted for expenditure on scientific research connected with the taxpayer\u2019s business activities in the relevant tax year.<\/p>\n<p><strong>Exemption from Minimum Alternative Tax (MAT):<\/strong> SEZ developers and sub-developers are exempt from MAT for 10 years. Likewise, an investor in a start-up is exempt from MAT for three years, but only to the extent of the loss incurred in the start-up, provided the investor can demonstrate that the loss arose from the investment in the start-up.<\/p>\n<p><strong>Exemption from dividend tax:<\/strong> SEZ developers and sub-developers, dividends distributed to shareholders by recognised start-ups, and recognised start-up ecosystem builders are exempt from dividend tax for five years.<\/p>\n<p><strong>Exemption from capital gains tax:<\/strong> Recognised start-up ecosystem developers are exempt from capital gains tax on capital gains realised from the sale of ownership interests in a start-up.<\/p>\n<p><strong>Customs duty incentives:<\/strong> New investments, as well as eligible upgrade or expansion projects, may benefit from a 100% exemption from customs duties and other taxes on imports of capital goods (such as plant, machinery and equipment) and construction materials. However, the new incentive regime removes the customs duty exemption for spare parts worth up to 15% of the total value of imported investment capital goods. The new regime also requires Investment Board approval (upon the request of the Ministry of Finance) for customs duty-free importation of cargo, public transport, and special-purpose vehicles.<\/p>\n<p>Duty-free importation is permitted without limitation as to quantity or timing for developers, administrators, or enterprises operating within SEZs. In other eligible sectors, duty-free importation is permitted for five years. An investor entitled to duty-free privileges who purchases capital goods or construction materials from local manufacturers is entitled to a refund of the customs duty paid on raw materials or components used as inputs to produce such goods. Investment capital goods imported in this manner may be transferred to another investor enjoying similar privileges, or to non-eligible investors after payment of the applicable customs duty.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any impediments \/ tax charges that typically apply to the inflow or outflow of capital to and from your jurisdiction (e.g., withholding taxes, exchange controls, capital controls, etc.)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The adoption of Foreign Exchange Directive FXD-01-2024 by the National Bank of Ethiopia (NBE) on 30 July 2024 ushered in the liberalisation of Ethiopia\u2019s previously controlled foreign exchange regime. The directive repealed all previously issued exchange control-related directives and guidelines. A further amendment to the foreign exchange regime was introduced by Foreign Exchange Directive No. FXD-04-2026.<\/p>\n<p>Foreign investors are permitted to repatriate, without prior NBE approval, profits and dividends accruing from investments; proceeds from the sale or liquidation of an enterprise; proceeds from the transfer of shares or ownership interests in an enterprise; return of investment where the investor is unable to commence operations; and profits from portfolio investments in equity or debt securities, provided that audited financial statements, tax clearance certificates, and proof of investment registration are in place.<\/p>\n<p>In addition, banks are authorised to approve, register, and process external borrowing and the associated repayments, subject to a debt-to-equity ratio not exceeding 60:40 and ongoing reporting obligations. Banks may also offer private foreign exchange loan guarantees of up to 10% of the bank\u2019s total capital, subject to the single-borrower limit.<\/p>\n<p>Outward investment by Ethiopian entities is permitted on a case-by-case basis, subject to NBE approval. Banks are authorised to allow service payments of up to USD 20,000 for education and medical expenses. Outward remittances by individuals of up to USD 3,000 are permitted. The cash notes declaration requirement for amounts exceeding USD 10,000 (or the equivalent) has been removed.<\/p>\n<p>Withholding tax on the repatriation of profits by foreign investors is 15%.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any significant transfer taxes, stamp duties, etc. to be taken into consideration?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Ethiopia imposes transfer taxes and stamp duty that may be relevant, including:<\/p>\n<p><strong>Capital gains tax:<\/strong> This is imposed on gains from the sale of business assets such as shares, bonds, or immovable property. The capital gains tax rate is 15%.<\/p>\n<p><strong>Stamp duty:<\/strong> This is payable on instruments such as a company\u2019s memorandum of association, bonds and warehouse bonds, employment contracts, registration of title to property, leases, and transfers of similar rights.<\/p>\n<p>Stamp duty rates for bonds, registration of title to property, and leases are 1%, 2%, and 0.5%, respectively, of the value. Stamp duty on other instruments is nominal.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any public takeover rules?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. The main legal framework relevant to public takeovers and M&amp;A with competition implications in Ethiopia includes:<\/p>\n<ol>\n<li>Merger Directive No. 01\/2016, which regulates mergers and acquisitions involving companies with significant market share in Ethiopia, with the aim of preventing anti-competitive practices;<\/li>\n<li>The Trade Competition and Consumer Protection Proclamation No. 813\/2013, which addresses anti-competitive business practices and consumer rights;<\/li>\n<li>The Commercial Code Proclamation No. 1243\/2021, which sets out company law procedures and requirements for mergers and amalgamations; and<\/li>\n<li>\u00a0Telecommunications Competition Directive No. 798\/2021, which regulates market competition in Ethiopia\u2019s telecommunications sector.<\/li>\n<\/ol>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a merger control regime and is it mandatory \/ how does it broadly work?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Ethiopia has a mandatory merger control regime overseen primarily by the Ministry of Trade and Regional Integration (MoTRI), based on notification thresholds. Notification is required before completion of a merger or acquisition where the combined annual revenue, assets, or registered capital of the parties exceeds ETB 30 million. For foreign investors, the registered capital stated in the Capital Registration Certificate is used for purposes of the threshold test.<\/p>\n<p>Following notification, MoTRI assesses whether the transaction is likely to have adverse effects on trade competition. It may request further information and invite objections from affected parties. MoTRI may approve the transaction, approve it subject to conditions, or prohibit it. Interim decisions are typically issued within 15 working days, and decisions on large mergers within 30 working days. MoTRI may also conduct post-merger assessments to verify compliance, and approvals may be revoked where false information was provided or conditions are not fulfilled. Breaches of the merger control rules may result in fines ranging from 5% to 10% of annual turnover.<\/p>\n<p>In addition, the telecommunications sector is subject to a separate mandatory merger control regime under the Telecommunications Competition Directive No. 798\/2021. Prior approval from the Ethiopian Communications Authority is required for any merger or acquisition involving a telecommunications operator. The parties must file a mergers and acquisitions notification at least 90 working days before the anticipated completion date. The Authority assesses the likely effects on competition for telecommunications services, including impacts on prices, service quality, consumer choice, and innovation. Within 30 working days, it issues a notice of approval, denial, or commencement of a regulatory proceeding for further investigation. The Authority may also grant conditional approval subject to remedies or obligations. Decisions are subject to review and appeal.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there an obligation to negotiate in good faith?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Under the Ethiopian Civil Code, parties engaged in negotiations are required to act in good faith.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What protections do employees benefit from when their employer is being acquired, for example, are there employee and \/ or employee representatives\u2019 information and consultation or co-determination obligations, and what process must be followed? Do these obligations differ depending on whether an asset or share deal is undertaken?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>On an acquisition, Labour Proclamation No. 1156\/2019 provides protections for employees. An amalgamation, division, or transfer of ownership does not, by itself, terminate a contract of employment. Where two or more undertakings are amalgamated and each has a collective agreement, the agreement of the undertaking with more workers applies to the amalgamated undertaking; if the number of workers is equal, the agreement that is generally more favourable to workers applies. If only one undertaking has a collective agreement, that agreement applies to the new undertaking.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please detail any foreign direct investment restrictions, controls or requirements? For example, please detail any limitations, notifications and \/ or approvals required for corporate acquisitions.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Foreign direct investment (FDI) in Ethiopia is subject to a regulatory framework, and certain sectors are either prohibited or reserved for the government or domestic investors. For example, the transmission and distribution of electrical energy through the integrated national grid system is reserved to the government. Certain activities are restricted to domestic investors only, such as air transport services using aircraft with a seating capacity of up to 50 passengers and customs clearance services. In special circumstances, the Ethiopian Investment Board (EIB), through the Ethiopian Investment Commission (EIC), may open sectors normally reserved for domestic investors. For example, foreign nationals have recently been permitted to engage in financial services, legal practice, and legal consultancy. Under Directive No. 1082\/2025, foreign investors are also permitted to participate in export, import, wholesale, and retail trade activities previously restricted to domestic investors, subject to conditions. In particular, foreign investors may engage in the export of products such as raw coffee and livestock; in most import and wholesale activities (except fertilisers and petroleum); and in retail trade, provided they meet a minimum paid-up capital of USD 2,500,000 and pass a comprehensive due diligence review.<\/p>\n<p>In joint ventures with domestic partners, foreign investors are generally limited to a maximum of 49% of the share capital in certain sectors, such as freight forwarding and shipping agency services, and accounting and auditing services. In broadcasting and media services, foreign nationals or entities are limited to a maximum shareholding of 25%.<\/p>\n<p>Accordingly, where a foreign investor seeks to enter a permitted sector through a merger or acquisition, it must comply with applicable notification and approval requirements. A notifiable transaction must not be completed without prior approval. Transactions carried out without the required consent are invalid, and the parties may be exposed to criminal liability and turnover-based fines.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction have any exchange control requirements?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Ethiopia has exchange control requirements primarily governed by Foreign Exchange Directive No. FXD\/01\/2024 and its subsequent amendment, Directive No. FXD\/04\/2026. Together, these directives regulate foreign exchange transactions, including the purchase, sale, transfer, borrowing, lending, assignment, exchange, receipt, payment, and crediting of foreign currency. The directives generally permit foreign exchange purchases and cross-border payments for current account transactions (unless specifically restricted), while capital account transactions remain limited and are permitted only where expressly authorised or exempted. Banks play a central role in the foreign exchange market and are authorised to buy and sell foreign currency at freely negotiated rates, subject to reporting those rates to the National Bank of Ethiopia (NBE). Exporters are required to repatriate foreign exchange earnings, and foreign exchange bureaux (bank-affiliated or independent) must be authorised by the NBE. Resident capital account transactions are generally prohibited unless approved by the NBE, and the directives also impose limits on foreign currency cash notes that authorised banks may hold, together with reporting requirements and sanctions for violations.<\/p>\n<p>Directive No. FXD\/04\/2026 introduced liberalisation measures aimed at enhancing market flexibility. These include permitting banks to engage in forward foreign exchange transactions (in addition to spot transactions), removing minimum deposit requirements for foreign currency accounts, and allowing service exporters to retain 100% of their export proceeds indefinitely in retention accounts. Resident individuals are also permitted to transfer up to USD 3,000 abroad for family subsistence.<\/p>\n<p>In addition, authorised banks may approve certain transactions, such as the remittance of profits and dividends for registered foreign investments and the repayment of external loans and suppliers\u2019 credits, without prior NBE approval. Other reforms include removal of the customs declaration requirement for foreign currency cash exceeding USD 10,000 and authorisation for banks to issue international payment cards to account holders without requiring proof of travel.<\/p>\n<p>Despite these liberalisation measures, the NBE maintains key controls, including the mandatory repatriation of export proceeds, cash holding limits for banks and independent foreign exchange bureaux, and comprehensive reporting requirements to support compliance with NBE standards.<br \/>\nOutward investments by Ethiopian entities also remain subject to case-by-case approval by the NBE.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the most common ways to wind up \/ liquidate \/ dissolve an entity in your jurisdiction? Please provide a brief explanation of the process.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Ethiopia, common ways to wind up, liquidate, or dissolve a business entity include voluntary dissolution by the members and court-declared bankruptcy. Voluntary dissolution is initiated by the members and follows the process set out in the Commercial Code. Liquidators are appointed (either as provided in the memorandum of association or by agreement of the partners\/shareholders; failing agreement, by the court). The liquidators then wind up the business by completing ongoing operations, preparing an inventory of assets and liabilities, collecting receivables, selling assets, and settling debts with creditors. For share companies, the decision to dissolve must be publicly announced. Once the liquidation is completed, the liquidators apply to cancel the entity\u2019s registration in the commercial register, which terminates its legal existence.<\/p>\n<p>Alternatively, an entity may be dissolved through court-declared bankruptcy. Bankruptcy proceedings may be initiated by the debtor, creditors, a public prosecutor, or by the court. The court issues a judgment of bankruptcy after assessing cessation of payments and the feasibility of reorganisation. Following the judgment, the debtor loses control of its assets, which are administered by a trustee in bankruptcy. The trustee may continue operations for the purpose of selling the business as a going concern. Bankruptcy proceedings conclude after distribution of the estate, or where assets are insufficient, or where there are no claims against the estate.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">10683<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/137156","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=137156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}