Under Ethiopian company law, the company is a separate legal person—but that separation does not immunize directors and senior managers from liability for their own wrongdoing, or for breaches of statutory duties imposed on them as fiduciaries and gatekeepers.

Under Ethiopian law, the principal limited-liability vehicles are the share company and the private limited company (PLC). In closely held settings, shareholders often overlap with managers, financing is internal, and shares are illiquid.

Ethiopia has of late taken measures that liberalize the financial sector. The issuance of the new Banking Business Proclamation No. 1360/2025 (Banking Business Proclamation) and Capital Markets Proclamation No. 1248/2021 (Capital Market Proclamation) are salient examples.

People who control a company, be they directors, managers or controlling shareholders, may use their power to divert the company's wealth to unfairly enrich themselves or others.

The long-standing Commercial Code of Ethiopia first issued in 1952 was just recently replaced with a new Code in 2021.

Insurance provisions in commercial contracts are often copied from templates with little attention to local doctrine or claim mechanics.

Corporate criminal liability is increasingly central to business risk in Ethiopia, yet the doctrinal "trigger" is narrower and more text-dependent than...

Most business disputes are not caused by disagreement over headline commercial terms. They arise when the contract fails to allocate breakdown risk...

On February 12, 2026, the National Bank of Ethiopia issued the Foreign Exchange Amendment Directive No. FXD/04/2026 revising provisions of the Foreign Exchange Directive No. FXD/01/2024.

In this edition, we present a concise overview of key legislative developments from May and June 2025 that may be of relevance or may have an impact on your business

Insurance is often purchased as a "risk transfer," but in disputes it behaves like a contract of conditions: coverage turns on how risks are defined, how exclusions and deductibles operate...

In Ethiopia, registering a business is not optional-it is the legal doorway to operate and transact. Trading without registration and licensing exposes the owner to administrative penalties and potential criminal liability. Understanding how to legally establish a business in Ethiopia requires knowledge of three essential legal pillars: Commercial Registration, Trade Name Registration, and Business Licensing.

Over the past decade, Ethiopia has undertaken significant economic reforms intended to liberalize and modernize its financial sector. Among the most critical steps has been the promulgation of new capital market legislation, culminating in the Capital Market Proclamation No.1248/2021 (CMP).

Ethiopia’s post-July 2024 foreign exchange (FX) reforms—anchored in the National Bank of Ethiopia’s Foreign Exchange Directive No. FXD/01/2024—represent a structural shift from administratively constrained FX allocation toward a more market-based exchange rate and broader authorization of current-account FX transactions through the banking system.

Ethiopia's commercial landscape has undergone a profound structural transformation since the enactment of the Commercial Code of Ethiopia (Proclamation No. 1243/2021), which replaced the venerable 1960 Commercial Code that had governed business activity in the country for over six decades.

Ethiopia recently enacted the Startup Proclamation No. 1396/2025 (the "Proclamation"), introducing a long-awaited legal framework for the recognition, regulation, and support of startups...

Ethiopia’s “homegrown” reform agenda has recently moved from policy statements to legally operative market institutions. The post-2020 investment regime (Investment Proclamation No. 1180/2020 and implementing regulations) is now paired with a functioning capital market architecture (Capital Market Proclamation No. 1248/2021, implementing directives, and the Ethiopian Securities Exchange (ESX)).

Reasons ranging from macro-economic conditions to poor management may result in placing a business in financial distress.

Serving as a director of an Ethiopian company — whether a Share Company or a Private Limited Company — carries with it a range of legal duties and personal liabilities that many appointees, particularly those nominated by foreign parent companies, do not fully appreciate until a crisis arises.

The commercial relationship between the United Arab Emirates and Ethiopia has deepened considerably over the past decade, driven by geographic proximity, complementary economic profiles, and a growing web of bilateral agreements that provide the legal infrastructure for sustained investment flows. For UAE-based investors — whether Emirati nationals, family offices, sovereign-adjacent funds, or the substantial community of international entrepreneurs who operate through UAE corporate structures —