Ethiopia has taken steps to welcome foreign investments in the export, import, wholesale and retail sectors. For over four decades, foreign investors were not allowed to participating in these business sectors. However, the Ethiopian Investment Board has recently allowed foreign investors to engage in export, import, wholesale, and retail trading in Ethiopia, as long as they meet the requirements specified in Directive No. 1001/2024.
Below, we highlight some of the key requirements and considerations to keep in mind.
Export: Export trade of raw coffee, khat, oilseeds, pulses, hides and skins, forest products, poultry and livestock bought on the market.
Import: All import trade except for importation of fertilizer and petroleum
Wholesale: All wholesale trade except for wholesale of fertilizers.
Retail: All retail business sectors.
Prior to obtaining permit to engage in export, import, wholesale, and retail trading in Ethiopia, foreign investors will go through an evaluation process that includes an assessment of their relevant experience, capabilities, and market connections.
Export
Foreign investors wishing to engage in export business in Ethiopia must show a history of purchasing goods from Ethiopia over the previous three years that meets the prescribed minimum threshold. The minimum threshold differs based on the type of commodity they plan to export. Additionally, they must commit to exporting a specific amount of the goods set under the Directive.
For a foreign investor without adequate history of purchasing from Ethiopia, it is necessary to show a well-established market and furnish a purchase order ranging from USD 500,000 to USD 12.5 million for the export, which varies depending on the sectors.
Import
1) manufacturers of the imported product,
2) agents of the manufacturer,
3) existing manufacturers in Ethiopia exporting at least 50% of their products to overseas markets, or
4) those who commit to importing commodities worth at least USD 10 million annually are eligible to engage in import trade in Ethiopia.
Wholesale
Retail
If a foreign investor fails to meet the commitments it has agreed upon, it may result in the non-renewal and the cancellation of its investment permits and business licenses.
With a proven track record, HSP offers extensive legal and tax assistance to foreign businesses looking to enter the Ethiopian market. Our services include: