PROCLAMATION NO. 67/1997 COMMERCIAL REGISTRATION AND BUSINESS LICENSING PROCLAMATION

PROCLAMATION NO. 67/1997

COMMERCIAL REGISTRATION AND BUSINESS

LICENCING PROCLAMATION

WHEREAS, it is necessary to create conducive environment in every field of commercial activity in line with the free market economic policy;

WHEREAS, it is necessary to improve the registration and licensing procedures of commercial activities in a manner that will promote the free market economic policy and to abolish the constraints encountered by the law-abiding business community in this respect;

WHEREAS, on the one hand, it is necessary to create an enabling environment for the carrying out of lawful commercial activities and, on the other, to restrain illegal commercial activities;

WHEREAS, it is believed that the function of issuing business licences, which so far used to be carried out by different government institutions, must be carried out in an improved and relatively consolidated manner only by the pertinent institutions of the trade and industry sector, with the exception of those licences which must be issued by other government institutions, owing to the particular nature of the respective activities.

WHEREAS, the necessary changes should be made on some provisions of the law enacted to serve previous regimes, which are not consistent with the on-going free market economic system and it is necessary to consolidate into one proclamation those provisions of the law relating to registration and licensing, which hitherto are found scattered in different proclamations:

NOW, THEREFORE, in accordance with Article 55 (1) of the Constitution of the Federal Democratic Republic of Ethiopia, it is hereby proclaimed as follows:

PART ONE

General

1. Short Title

This Proclamation may be cited as the ”Commercial Registration and Business Licensing Proclamation No. 67/1997.”

2. Definitions

Unless the context otherwise requires, in this Proclamation:

1. ”Commercial Code” means the law issued in 1960. under the Commercial Code Proclamation No. 166/1960;
2. ”business person” means any person who professionally and for gain carries on any of those activities specified under Article 5 of the Commercial Code, or who dispenses services, or who carries on those commercial activities designated as such by Regulations issued by the Government;
3. ”commercial activity” means any activity carried on by a business person as defined under sub-Article (2) of this Article;
4. ”service” means any dispensing of service for consideration other than salary or wages;
5. ”domestic trade” means the selling by wholesale or retail of goods, or the dispensing of services, or operating as a domestic trade auxiliary in Ethiopia, as appropriate;
6. ”Foreign trade” means the exporting from or importing into Ethiopia of goods for sale or operating as a foreign trade auxiliary;
7. ”goods” means movable commodities, articles and materials except monetary gold, monies in any form, other means of payment, securities, shares and personal effects;
8. ”commercial representative” means any person who is not domeciled at the place where the head office of the business enterprise or business person he represents is situate, bound to such enterprise or business person by a contract of employment, and entrusted with the carrying out of only trade promotional activities on behalf and in the name of the business enterprise or the business person he represents without being a trader himself;
9. ”trade name” shall have the meaning assigned to it under Article 135 of the Commercial Code;
10. ”valid business licence” means a licence issued or renewed under this Proclamation in a particular budget year or a licence which is renewable pursuant to Article 25 of this Proclamation;
11. ”industry” means any manufacturing activity carried on for a commercial purpose using mainly motor-power-driven machinery and equipment and includes the premises in which it is carried out and engineering services;
12. ”manufacturing activity” includes any formulation, alteration assembling and prefabrication activity carried on by an industry;
13. ”engineering services” means repairing and maintaining machinery and equipment, pumps, electric and electronic appliances and other similar objects for industrial use and includes repair and maintenance works wherein spare parts are made;
14. ”Investment Proclamation” means the Investment Proclamation No. 37/1996;
15. ”domestic investor” and ”foreign investor” shall have the meaning assigned to them under Article 2(5) and (6) of the Investment Proclamation. respectively;
16. ”Appropriate Authority” means the Ministry of Trade and Industry and the pertinent Regional Bureau;
17. ”Ministry” means the Ministry of Trade and Industry;
18. ”Region” means any of those Regions specified under Article 47(1) of the Constitution of the Federal Democratic Republic of Ethiopia and for the purpose of this Proclamation. includes the Addis Ababa and Dire Dawa Administrations. Also the term, ‘Teklay Gizat”, in the Commercial Code shall be read as ”Region”
19. ”Bureau” means Regional Bureau which is appropriate to implement this Proclamation;
20. ”Person” means any physical or legal person.
21. ”Regulations” means Regulations issued to implement this Proclamation;
22. ”agricultural development” means the production of perennial and annual crops as well as the development of animal and fish resources, forests, wildlife and products thereof;
23. ”principal registration” means registration comprising the particulars under Article 105 of the Commercial Code.
24. ”summary registration” means registration comprising the particulars under Article 106 of the Commercial Code;
25. ”expansion or upgrading” means increasing invalue through additional investment, the full production or service capacity of an existing enterprise, be it in variety, volume or both;

3. Scope of Application

26. The provisions of this Proclamation relating to business licence shall apply to any person engaged in any commercial activity other than those specified under Article 20(1) of this Proclamation.
27. Regional governments may, by taking into consideration the objective conditions of the locality, exempt small-scale business persons from the obligation to obtain a business licence by setting a floor capital.
28. Without prejudice to the provisions of sub-Article (2) of this Article, the provisions of this Proclamation relating to registration shall apply to those business persons referred to in the same sub-Article (2), provided that they have permanent working places.

PART TWO

Registration of Traders

4. Establishment of Commercial Registers

The following commercial registers are hereby established:

1. a central commercial register which shall be administered by the Ministry;
2. a commercial register, which shall be administered by the Ministry, in which is registered any person engaged in those commercial activities for which the Ministry issues licences;
3. a commercial register which shall be administered by each Bureau.

5. Registration in the Commercial Register

4. No person shall engage in any commercial activity unless registered in a commercial register.
5. Any person other than those principally registered by the Ministry under Article 4(2) of this Proclamation shall principally register in the place where his head office is situate.
6. Any person shall principally register only once even though he carries on different commercial activities in different Regions.
7. Any person, who establishes branches in several Regions outside the place where he is principally registered, shall be summarily registered in those Regions by making a reference to the principal registration.
8. Although a trade name is one of the entries of a principal registration as provided for under Article 105 of the Commercial Code, principal registration shall be made without waiting for the registration of a trade name under this Proclamation.
9. Any person who is not registered in the commercial register prior to the issuance of this Proclamation, but who has been carrying on a commercial activity, under a licence from any authorized government institution shall be registered within 24 months from the effective date of this Proclamation.
10. Business persons to which reference is made to in Article 3(3) of this Proclamation shall also be registered within the time limit prescribed in sub-Article (6) of this Article.

6. Application for Registration and Decision

11. a business person shall, before starting his commercial activity, apply for a principal or summary registration by completing and submitting to the Appropriate Authority the application form, prescribed by the Regulations, to which he shall attach the necessary documents.
12. An application for the alteration or modification of any entry of a commercial registration shall be made to the Appropriate Authority within two months from the occurrence of such a situation by completing the application form prescribed by the Regulations.
13. Where any application for principal or summary registration is found acceptable, the Appropriate Authority shall register the applicant and issue a certificate of registration to him on payment of the fee prescribed by the Regulations.
14. Where the Appropriate Authority rejects the application for registration submitted pursuant to sub-Articles (1) and (2) of this Article, it shall notify the applicant in writing the reasons thereof.

7. Forwarding of Information and Documents Relating to Registration

15. Where the Ministry performs an act of registration under Article 4(2) of this Proclamation, it shall, in a form designed for this purpose, forward the particulars of registration to the Bureau of the Region where the head office of the applicant’s business is situate.
16. The Bureau which has made registration of a commercial activity under this Proclamation shall forward to the Ministry the particulars of registration in a form designed for this purpose.
17. The Ministry shall register in the central register information forwarded to it pursuant to sub-Article (2) of this Article and those registered by itself pursuant to Article 4(2) of this Proclamation.

8. Publication of Notice
Matters for which newspaper notice is required under this Proclamation shall be notified to third parties in the following manner:

1. Notice of matters registered by the Ministry or those concerning commercial activities carried on in more than one Region shall be made in a newspaper published by the Federal Government, having country wide circulation;
2. Notice of matters concerning commercial activities which are limited to a Region may be made in a newspaper published by the Regional Government;
3. The Appropriate Authority shall, prior to the publication of a notice decide which of the two alternatives under sub-Articles (2) and (3) of this Article shall apply for publication of such a notice.

9. Effective Date of Registration

4. Registration of business organizations shall be effective from the date of a newspaper publication of the notice relating to the formation of the business organization.
5. Registration of public enterprises, cooperative societies, individual business persons and commercial representatives shall be effective from the date of the respective registration without the need to publish the notice in a newspaper.

10. Cancellation of Registration

6. Without prejudice to the provisions of Articles 112, 113 and 226 of the Commercial Code, the Appropriate Authority shall decide to cancel the registration upon his being aware of the fact that either the business or there is a lawful decision prohibiting him to carry on his business.
7. The Appropriate Authority shall, before making its decision pursuant to sub-Article (1) of this Article, require the business person to submit his opinion; if, however, the business person cannot be contacted at his registered address, the Appropriate Authority shall make its decision on the basis of the available information.
8. The business person whose registration is cancelled shall get upon his request a certificate of cancellation of registration on payment of the fee prescribed by the Regulations.
9. Cancellation of the registration of business organizations shall be effective from the date of publication of a notice of cancellation in a newspaper at the expense of the applicant. Other cancellations of any trade registration shall be effective from the date of the entry of the cancellation in to the register.
10. The provisions of Article 7 of this Proclamation shall be applicable to the forwarding of documents relating to the cancellation of registration.

11. Issuance of Substitute Certificate of Registration

Any person whose certificate or registration is lost or damaged may apply in writing to the Appropriate Authority that made the earlier registration and obtain a substitute certificate of registration upon payment of the fee prescribed by the Regulations.

PART THREE

Registration of Trade Names

12.Establishment of Trade Name Registers

11. The following Trade Name registers which shall be administered by the Ministry are hereby established:

(a)a central trade name register;
(b)a trade name register in which any person licensed by the Ministry and foreign business persons get their trade names registered.

1. A Trade name register which shall be administered by each Bureau is hereby established.

13.Duties of the Ministry

The Ministry shall:

1. register in the central trade name register particulars of trade names forwarded to it by each Bureau and deposit related documents;
2. immediately forward information requested by each Bureau before the Bureau decides to register a trade name submitted to it;
3. Assist Regions in the proper application of the provisions of this Proclamation on trade name registration.

14. Registration of trade Name

4. Any person who is engaged in commercial activities may have his trade name registered by completing the application form prescribed by the Regulations at the place where he is principally registered.
5. Any person who is applying for the registration of his trade name shall, with his application, submit to the Appropriate Authority:

(a) his commercial registration certificate, and
(b)a valid business license.

1. Where the applicant is a foreign business enterprise, it shall, together with the application, submit its properly authenticated commercial registration certificate issued by the country in which it is registered.
2. The Appropriate Authority, upon ascertaining that the trade name submitted for registration,

(a)is not identical or misleadingly similar to the trade names previously registered, or
(b)is not contrary to morality or public order, shall, at the expense of the applicant, cause the publication in a newspaper of a notice indicating the subsequent registration of the trade name.

5. Where the applicant is a business person engaged in a commercial activity outside the Region where it is principally registered, or a foreign business enterprise, the Appropriate Authority shall, after having ascertained that the conditions under sub-Articles (3) and (4) of this Article are satisfied:

(a)ensure that the trade name submitted to it for registration is not already registered in the central trade name register;
(b)cause the publication of the notice referred to in sub-Article (4) of this Article in a newspaper published by the Federal Government, having countrywide circulation.

1. Where, within 30 days following publication of the trade name in a newspaper pursuant to sub-Article (4) or (5) of this Article, no objection is lodged to the registration of the trade name, the appropriate Authority shall issue to the applicant a trade name registration certificate, after the expiry of the 30 days period, upon the applicant’s payment of the fee prescribed by the Regulations.
2. Where the Appropriate Authority, rejects an application for the registration of a trade name under sub-Article (2) of this Article, it shall notify the applicant in writing of the reasons for the rejection.

15. Forwarding of Registration Information

1. The Ministry shall, by using a form designed for this purpose, immediately forward information relating to registration made under Article 14(6) of this Proclamation to the Bureau of the Region in which the head office of the business person is situate.
2. Each Bureau shall, by using a form designed for this purpose, forward to the Ministry information relating to the registration made under Article 14 (6) of this Proclamation.
3. The Ministry shall pursuant to Article 13 (1) of this Proclamation register in the central trade name register information transferred to it pursuant to sub-Article (2) of this Article.

16. Effects of Entry of a Trade Name in the Trade Name Register

1. The registration of a trade name shall be prima facie evidence of entitlement to and validity of the same trade name.
2. Without prejudice to Articles 137 and 138 of the Commercial Code, the mere prior registration of a trade name may not prevent the registration of the same trade name for a business with an entirely different nature.

17. Change or Modification of Trade Names

Without prejudice to Article 14 of this Proclamation, a person may change or modify his trade name which he has already registered.

18. Cancellation of Trade Name Registration

3. The Appropriate Authority shall cancel the registration of a trade name where:

(a)it is known it is no longer in use; or
(b)the owner has applied for its cancellation from the trade name register; or
(c)it is found that the registration was fraudulently made.

1. Before canceling the registration of the trade name pursuant to sub Article (1) of this Article, the Appropriate Authority shall, by means of a letter sent to his registered address, give him the opportunity to submit his written opinion. The trade name registration shall be cancelled where the reply of the owner of the trade name is found to be unsatisfactory or he fails to respond within 30 days after receipt of the letter or cannot be contacted at his registered address.

19.Substitute Trade Name Registration Certificate

Article 11 of this proclamation shall apply mutatis mutandis to the issuance of a substitute trade name registration certificate.

PART FOUR

Business License

20.Power to Issue Business License

2. Notwithstanding the provisions of other relevant laws, the Ministry or the Bureau shall issue licenses as appropriate, except those issued by other relevant government institutions for the following commercial activities:

(a)prospecting and mining of minerals;
(b)various water works services, not including water works;
(c)banking and insurance services,
(d)air transport service and other aviations service;
(e)commercial activities involving the use of radio-active materials and radiation emitting equipment;
(f)repairing and maintaining of arms and firearms and sale of explosives; and
(g)trade in tobacco and products.

1. without prejudice to the generality of sub-Article (1) of this Article, an appendix listing the commercial activities for which the Ministry shall issue business licenses is attached to this Proclamation.
2. Business licenses that shall be issued by the Bureau shall be determined by Regulations to be issued by the Regional Council.
3. The requirements to be satisfied for licenses to be issued for commercial activities covered by this Proclamation shall be defined in the respective directives issued by the relevant sect oral government institutions.
4. Where, owning to its particular nature a commercial activity for which a license is applied for, requires the applicant to hold a specific professional qualification or certification of competence, the appropriate sectoral government institution shall issue evidence of such professional qualification or a certificate of competence.

21.Obtaining Business Licence

5. Without prejudice to the provisions of Article 3(1) and (2) of this Proclamation no person may carry on commercial activity without obtaining a valid business licence.
6. Without prejudice to the provisions of Articles 3(2), 33 and 46(1) of this Proclamation the Appropriate Authority may order the closure of the business of the person who is found engaged in a commercial activity without a valid business licence.
7. A person who is summarily registered pursuant to Article 5 (4) of this Proclamation, may not be required to obtain another business licence for the same commercial activity in addition to that which he obtained from the region in which he is principally registered.
8. Where a business person, doing business in a Region in which he is summarily registered, commits any of the faults under Article 26(1) or Article 28(1), the Bureau which has made a summary registration of the business person shall, as appropriate, suspend or close the business pursuant to Article 26(1) and (2), 27and 28(1), (2) and (3) of this Proclamation.
9. The Bureau shall, within one month, make written notification to the Appropriate Authority which issued the business licence, of its action taken pursuant to sub-Article (2) of this Article.

22.Application for Business Licence

10. Any person engaged in a commercial activity shall submit to the Appropriate Authority an application for business licence by completing the application form prescribed by the Regulations.
11. On the basis of the requirements set by the directives of the relevant government institution for the commercial activity for which the licence is applied for, the applicant shall submit as appropriate, all or part of the information indicated below together with his application referred to under sub-Article (1) of this Article:

(a)certification of professional qualification and statements related to the commercial activity’s health and sanitary conditions, environmental protection and safety measures from the concerned government institutions.
(b)a statement signed by the applicant regarding his compliance with all other requirements pertaining to the business licence.

1. Notwithstanding the provisions of sub-Article (2) of this Article, the Regional Council may set by Regulations the conditions under which the information required pursuant to this same sub-Article(2) may be wholly or partially submitted, depending on the nature of the commercial activity and the local conditions.

23.Issuance of Business Licence

1) Without prejudice to Article 25 of the Investment Proclamation the Appropriate Authority shall, upon receipt of the application pursuant to Article 22 of this Proclamation, issue the business licence applied for on payment of the appropriate fee prescribed by the Regulations, after having ascertained that:

(a)the commercial activity intended to be carried on by the applicant, is not prohibited by law;
(b)the applicant has an investment permit, where the applicant is a foreign investor;
(c)the applicant has a residence permit and an investment permit, where the applicant is a foreign national who wished to be considered as a domestic investor;
(d)other conditions provided for by the Regulations are satisfied by the applicant.

2) Where the Appropriate Authority ascertains that the application for business licence is not acceptable under sub-Article (1) f this Article, it shall notify the applicant in writing of the reasons for rejecting the application.

24.Permit for Expansion and Upgrading

  Any person desiring to produce goods or dispense services by· expanding or upgrading existing industry, hotel. educational institutions, health service or agricultural development shall apply to the Appropriate Authority using the application form prescribed by the Regulations, to which he shall attach the information specified under Article 22(2) or (3) of this Proclamation.

  After examining the information submitted to it and ascertaining· that it is satisfactory, the Appropriate Authority shall issue to the applicant a written permit to produce goods or dispense services.

  Where the appropriate Authority does not accept the application· submitted to it pursuant to sub-Article (1) of this Article it shall notify the applicant in writing of the resons of rejecting the application.

25.Validity Period and Renewal of Business Licence

  A business licence issued pursuant to Article 23(1) of this· Proclamation shall be valid unless cancelled on the grounds specified under Article 28(1) of this Proclamation and as long as it is renewed pursuant to sub-Articles (2) and (3) of this Article.

  The business licence shall be renewed within six months after the· expiry of the budget year in which the licence has been issued or renewed upon payment of the appropriate fee prescribed by the Regulations.

  The holder of a business licence who has failed to have it renewed· within the time specified under sub-Article (2) of this Article, shall have it renewed within the next three months, i.e., from ‘Tir’ 1 to ‘Megabit’ 30, by paying, in addition to the renewal fee, a penalty equal twenty percent (20%) of such fee, for each month of delay.

26. Suspension of Business Licence

  The Appropriate Authority may, until such time as the shortcomings· indicated below are rectified, suspend a business licence, where the licence holder:

(a)has failed to maintain the standards of health and sanitary conditions, environmental protection, safety measures and the quality of his product or service, as confirmed by the concerned government; institution;
(b)has failed to supply, accurately and on time, the information requested by the Appropriate Authority pursuant to this Proclamation; or
(c)has otherwise violated this Proclamation or the Regulations.

1. Where a business licence is suspended under sub-Article (1) of this Article, the Appropriate Authority shall notify the licence holder in writing of the reason of suspension and the measure to be taken to rectify the shortcomings within a fixed period of time.
2. The licence holder who has received a written notification pursuant to sub-Article (2) of this Article, shall rectify the shortcomings within the fixed period of time.

27.Measures to be Taken During Suspension

Where the concerned government institution has confirmed that the business, which has its licence suspended pursuant to Article 26 of this Proclamation, is dangerous to public health and safety or to the national economy, the appropriate Authority shall temporarily close the business.

28.Cancellation of Business Licence

3. Without prejudice to sub-Article (3) of this Article the Appropriate Authority may cancel a business licence where the holder thereof:

(a)is found to have obtained or renewed his licence by submitting false information;
(b)is found using the licence for a purpose other than that for which it was issued or for improper commercial activities;
(c)has repeatedly committed the faults specified in Article 26(1) of this Proclamation;
(d)has failed to comply with the provisions of Article 26(3) of this Proclamation;
(e)has become bankrupt or ceased to operate his business;
(f)has failed to have is licence renewed pursuant to Article 25 of this Proclamation for a reason other than that of force majeure as defined by Article 1792 of the Civil Code.

1. Where the concerned government institution has confirmed that the business is dangerous to public health and safety or to the national economy, a business licence shall be suspended and the business closed until such time as the Appropriate Authority decides to cancel the licence pursuant to sub-Article (1) of this Article.
2. The Appropriate Authority before deciding to cancel the licence for the reasons specified in sub-Article, (1) of this Article shall require the licence holder by letter sent to his registered address, or, as may be necessary, by any mass media, to submit his written opinion on the anticipated cancellation of the licence.  The licence shall be cancelles where the licence holder has not submitted his opinion within thirty days from the day the letter was received by him, or was called through any mass media.
3. A business person whose business licence is cancelled for any reason other than that under sub-Article (1) (e) of this Article, may obtain a similar licence:

(a)after the expiry of one year from the day of cancellation of his licence; and
(b)by paying an amount which is twice the regular fee charged for a new trade licence.

1. The provisions of sub-Article (4) of this Article shall apply to a business person who has voluntarily ceased his business, unless he returns his licence to the Appropriate Authority within the normal licence renewal period of six months.

29.Issuance of Substitute Business Licence

2. Any person who has his business licence lost or damaged may obtain a substitute by applying in writing to the Appropriate Authority which issued the licence.
3. A business person whose licence is damaged shall return it when he applies for a substitute.
4. The Appropriate Authority, to which an application for a substitute business licence is submitted under sub-Article (1) of this Article, shall at the expense of the applicant, cause the publication in a newspaper of a notice regarding the loss of the licence and the request for a substitute, and shall then issue to the applicant a substitute on payment of the fee prescribed by the Regulations, if no one comes forward with an objection within one month from the publication of the notice.

22. Issuance of Licence in case of Transfer of Business

When a business is transferred to another person, the previous licence shall be returned and the person to whom it is transferred shall obtain a licence in his name. The procedure of transfer of business shall further be governed by the Regulations.

23. Temporary Licence

1. Any person desiring to engage in the field of industry, hotel, education, health or agricultural development or to expand or upgrade the existing one, may apply to the Appropriate Authority for a temporary licence.
2. Temporary licence issued pursuant to sub-Article (1) of this Article shall be valid until the completion of the project and may not be used for sale of products or for rendering services.

22. Commercial Activities for which Wholesale Business Licence is not Needed

Any person who has a permanent licence for agricultural development or industry shall not be required to posses a wholesale trade licence in order to wholesale his products.

23. Commercial Activities Carried on under another licences

Any person, who by using another licence, has been carrying on a commercial activity which is subject to the provisions of this Proclamation without having the appropriate trade licence, shall apply to the Appropriate Authority by completing the application form prescribed by the Regulations, within 24 months from the coming into force of this Proclamation, in order to carry on his existing business.

24. Submission of Information

1. The Appropriate Authority may call upon licence holders to submit information regarding their operations either periodically or as otherwise specified, and it shall be the duty of the micence holder to submit such information within the specified time limit.
2. Information submitted by licence holders under sub-Article (1) of this Article, shall be used for the purpose of enabling the Appropriate Authority to carry out its duties.

22. Inspection

1. The Appropriate Authority or the concerned government institutions may conduct follow-up and inspection work inorder to ensure the observance of the conditions subject to which any business licence is given.
2. Any inspector shall show his authorization paper and identification card to the person whose business permises are to be inspected or to the agent of such person.

22. Issuance of Certificate for a commercial Representative

1. Any person, desiring to engage himself as a commercial representative, shall, before starting operation, be registered with the Ministry and get a certificate of commercial representation.
2. A commercial representative may not offer goods or services for sale or enter into contract with clients in the name of his principal.
3. The procedures governing issuance, validity period and renewal, cancellation and acquisition of substitute certificate, and the business promotion activities carried on by a commercial representative shall be provided for by Regulations.

PART FIVE

Trade Promotion and Exhibitions

22. Coordination of Trade Sector Policy

1. Notwithstanding the provisions of other laws governing the powers and duties of Federal and Regional Government institutions, any government institutions making policy decisions which may affect commercial activities shall, before taking such policy decisions, consult and agree with the Ministry.
2. The Ministry may put forward to other Federal and Regional Government institutions policy proposals which it considers will promote trade, so that such government institutions include same in their policy decisions, and it may coordinate trade policy.

22. Promotion of Trade

1. In order to develop and expand domestic trade, the Bureau shall, in agreement with the concerned government institutions:

1. establish domestic trade exhibition centers in different places and encourage their establishment;
2. encourage the establishment of market halls in different places;
3. provide educational and professional support to business persons.

1. The Ministry shall provide support towards the establishment of trade exhibition centers upon request from Regions.
2. In order to develop and expand Ethiopia’s foreign trade, the Ministry may:

1. undertake in agreement with other concerned government institutions, measures to promote the country’s foreign trade;
2. provide educational and professional support to business persons.

1. The Appropriate Authority may establish and administer a trade promotion fund comprised of monies derived from government budgetary provisions, voluntary contributions by associations established in the trade sector and business persons, and assistance or donations from other sources, for the purpose of conducting market research, disseminating market information and promoting trade generally.
2. The collection and expenditure of the trade promotion fund under sub-Article (4) of this Article shall be governed by governed by Regulations.

22. Permission to Hold Local Trade Exhibitions

1. The holding of a trade exhibition locally in which local or foreign products or both are to be displayed requires the prior permission from the Bureau of the Region in which the exhibition is to be held.
2. The Bureau shall issue directives on the implementation of the issuance of permission for local trade exhibitions.

22. Permission to Hold a Foreign Trade Exhibition

1. The holding of any Ethiopian trade exhibition in a foreign country or for Ethiopia’s participation in any trade exhibition organized in and by a foreign country or organization requires a prior written permission of the Ministry.
2. No person may display any product of Ethiopia in a trade exhibition organized in a foreign country with a view to advertising such product, without having a written permission of the Ministry.
3. Any trade exhibition of foreign products sponsored by a foreign government or a foreign organization intended to display foreign products in Ethiopia shall require a prior written permission of the Ministry.
4. The issuance of permit for foreign trade exhibitions shall be governed by directives to be issued by the Ministry.

PART SIX

Miscellaneous Provisions

22. Regulations of Imports and Exports

The Ministry may, in the national interest with the approval of the Council of Ministers, declare the importation into or exportation from Ethiopia of any goods to be subject to general licences and prescribe the conditions and fees payable for the issuance of such licences.

23. Regulation of Supply of Services and Spare Parts

1. A business person or an agent who imports agricultural, industrial and construction machinery, mechanical appliances and motor vehicles:

1. continue to supply their spare parts by maintaining at all times a stock of such spare parts in his store, which however, shall not be less than the minimum level set by the Ministry in consultation with the appropriate government institutions, so long as the spare parts are not out of manufacture or the said spare parts can not be adequately found elsewhere;
2. maintain at all times complete servicing facilities to purchasers at reasonable prices.

1. Where a business person fails to comply with the provisions of sub-Article (1) of this Article, such business person shall be deemed to have violated the provisions of Article 26(1) (c) of this Proclamation and for this reason administrative and penal actions shall be taken against him pursuant to Articles 26(2) and (3), 27,28 and 46(3) hereof.
2. Where it is necessary to replace monopoly practices with competitive ones in those areas of activity referred to under sub-Article (1) of this Article, the Ministry may oblige foreign suppliers represented by sole agents to have more than one agent, or to cause any sole agent to have a market share not exceeding a certain percentage.

22. Power Delegated to the Investment Organ

The Ethiopian Investment Authority or any Regional executive body empowered to give investment permit shall:

1. Carry out its functions pertaining to the registration of commercial activity and issuance of licences delegated to it under Article 25 of the Investment Proclamation, in compliance with this Proclamation and the Regulations;
2. collect registration and licence fees in the name of the Appropriate Authority and forward the money to the Ministry of Finance or the Finance Bureau, as the case may be and notify the Appropriate Authority of this fact;
3. Forward to the Appropriate Authority quarterly report of the performance of delegated activities and documents relating to commercial registration and issuance of licence.

22. Power Provisions

1. Any business licence issued or renewed in accordance with law during the budget year this Proclamation has come into force, shall be deemed to have been issued or renewed pursuant to this Proclamation.
2. Any business licence which is renewable on the effective date of this Proclamation in accordance with the law it was issued shall be renewed pursuant to this Proclamation.
3. Commercial registration or trade name registration made according to the Domestic Trade Regulation Proclamation No. 335/1987 and the Domestic Trade Regulations No. 109/1987 shall be deemed to have been made in accordance with this Proclamation.
4. Notwithstanding the provisions of Article 48(1) (g) of this Proclamation, the Domestic Trade Regulations No. 109/1987 shall remain in force until Regional Councils issue their own Regulations in so far as they are not inconsistent with the provisions of this Proclamation.

22. Penalty

Without prejudice to administrative measures that may be taken by the Appropriate Authority and unless the offence is punished with more severe penalty under other applicable laws:

1. any person who engages in commercial activities without having a valid business licence shall be punished with fine equal to double the revenue estimated to have been earned by him during the period of time he operated the business without a valid business licence, and with imprisonment from 3 upto 5 years;
2. any person who has intentionally got his business or trade name registered or has obtained business licence or got same renewed using false information shall be punished with fine equal to double the revenue estimated to have been obtained by him up to the ime when it was discovered that he has been registered or licenced by using false statement, and with imprisonment from 7 upto 10 years;
3. any person who violates other provisions of this Proclamation or the Regulations or a public notice shall be punished with fine from Birr 3,000 upto 5,000 (Birr three thousands upto five thousands) and with imprisonment from6 months upto 1 year;
4. without prejudice to the provisions of sub-Article (3) of this Article any public servant or official who is assigned to perform duties related to commercial registration and issuance of licence and who by taking bribes or through nepotism or favouritism or other illegal relationships, made or caused registration; issued or caused the issuance of licences, otherwise than as provided for in this Proclamation shall be punished with imprisonment from 10 upto 15 years;
5. The penalty provided for under sub-Article (4) of this Article shall also be applicable to the person who has given a bribe;
6. when the offence provided for in sub-Article (4) of this Article is committed by two persons one as giver and the other as recipient of the bribe, the one who first exposes the commission of the offence shall be free from criminal liability.

47. Power to Issue Regulations

The Council of Ministers or the Regional Councils shall issue Regulations in order to implement this Proclamation.

48. Laws Repealed and Inconsistent

1. The following laws are hereby repealed:

1. The Business Enterprises Registration Proclamation No. 184/1961;
2. The Industrial Licence Proclamation No. 292/1971;
3. The Foreign Trade Proclamation No. 293/1971;
4. The Industrial Licence Regulations No 423/1972;
5. The Foreign Trade Regulations No. 424/1972;
6. The Regulation of Domestic Trade Proclamation No. 335/1987;
7. The Domestic Trade Regulations No. 109/1987;
8. The Industrial Licence Council of Ministers Regulations No. 8/1990;

1. No other law or customary practice which is inconsistent with this Proclamation shall have effect with respect to matters governed by this Proclamation.

48. Effective Date

This Proclamation shall come into force as of the 6^th day of March, 1997.

Done at Addis Ababa, this 6^th day of March, 1997.

NEGASO GIDADA(DR.)

PRESIDENT OF THE FEDERAL

DEMOCRATIC REPUBLIC OF ETHIOPIA

 Ethiopia is ranked 132^nd out of 189 countries on doing business index in 2015. Small and Medium businesses are springing up everywhere in Addis Ababa, the capital and financial city of Ethiopia and in other regions as well. We have brought together some articles that might help potential business starters in following regulations and procedures so that they could avoid any trouble later. 2merkato.com is a business gateway to Ethiopia that has more or less all the required information on regulations and procedures one needs while starting business in Ethiopia or with Ethiopians.

You can find links to the articles below.

Business Startup in Ethiopia: Information and Frequently Asked Questions

What do you need to start a business in Ethiopia? Let's assume you have garnered enough capital to start some kind of business in Ethiopia and you do not know where to start. We believe that any potential businessperson who wants to start business in Ethiopia should be well informed of the existing regulations, procedures, incentives, potential partners. This way errors and potential losses can be minimized.

2Merkato can serve as a launch pad to start a business in Ethiopia because by attempts to answer frequently asked questions to start a business in Ethiopia.

Do I need to register and obtain license to do business in Ethiopia?

Yes. It is prohibited to engage in any commercial activity unless registered in a Commercial register; and according Proclamation No. 980/2016, no person shall engage in business activity without acquiring business license. The Proclamation further stipulates no persone is allowed to obtain any kind of business license without first being registered in the commercial register and acquiring commercial registration certificate. It is upon registration that business organizations will have legal personality.

For a detailed answer please check our business licensing and registration page.

Do I need to have a Trade Name and Trade Mark?

Not necessarily. Although a trade name is one of the entries of a principal registration as provided for under Article 105 of the Commercial Code, principal registration shall be made without waiting for the registration of a trade name under Proclamation No. 980/2016 If there is no name registered, the business is referred by name of the owner in Sole Proprietorship business form or the name of the Private Limited Company or the Share Company.

For a detailed answer please check our business licensing and registration page and Trade Mark page.

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What are the main business forms/ types in Ethiopia?

Some of the main types and more common business forms/ types in Ethiopia:

1. A sole business person: the business is owned by one person. Some of the advantages are: it's easier to start and close.
2. Private Limited Company: Can be formed by a minimum of 2 and a maximum of 50 persons. It is advantageous for high profit making businesses and it can be managed in a structured way, but it's difficult to close the business.
3. Share Company: Can be formed by a minimum of 5 persons. A minimum capital of Br. 50,000 is needed to set up a Share Company. The minimum price a single share can have is Br. 10.

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Who can be regarded as a domestic investor, a foreign investor?

The previous investment law had a rule that a Domestic investor is an Ethiopian or a foreign national permanently residing in Ethiopia having made an investment, and includes the Government, public enterprises as well as a foreign national, Ethiopian by birth and preferring treatment as a domestic investor. A Foreign investor is a foreigner or an enterprise owned by foreign nationals, having invested foreign capital in Ethiopia, and includes an Ethiopian permanently residing abroad and preferring treatment as a foreign investor.

However, the current investment law, Proclamation No.  Currently issuane of domestic status for foreign investors in on hold.

Is there an incentive for investors in Ethiopia?

Yes. There are two: exemption from Customs duty and exemption from income tax. For a detailed answer, please check the investment incentives page.

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As a businessperson (or entity), do I need to be registered as a taxpayer, what are the tax regulations and procedures in Ethiopia?

Yes, every business person or entity should be registered to pay tax and must obtain a taxpayer's identification number(TIN). However, each person or entity will have only one TIN. For a detailed analysis check our tax page.

Who can be my potential business partners in Ethiopia?

We have a list of more than 5000 businesses in Ethiopia assembled and sorted in categories, sub categories etc. Please check our business directory.

How to find information on tenders/bids in Ethiopia? How to participate in a tender/ bid in Ethiopia?

You can find information on tenders/ bids in Ethiopia on our tender page. The guidelines to participate in a tender/bid in Ethiopia are found here.

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Can I engage in import/ export business in Ethiopia?

Yes and no. That depends on the type of import/ export business you want to engage in and whether you're a domestic investor or a foreign one. Please check our import, export and investment pages.

Last Updated on 05 January 2017

How to Set Up an Office in Ethiopia for a Small or Medium Business

This article is a general guideline on how to set up an office in Ethiopia (particularly in Addis Ababa). Regulations on Licensing/Registration/Investment permit etc are found separately on our Starting A Business section and Investment page.

Office Building:

There are numerous new buildings coming up in Addis Ababa. You can rent offices on these buildings. The buildings can be found in almost all areas and you can choose as per your need, location of your clients, etc. Villas that can be turned to offices are available as well. The rent lease has to be authenticated by the Documents Authentication and Registration Office, as is required by the Commercial Registration and Business Licensing Proclamation No. 686/2010 or 686/2002 EC. in order to aquire commercial licence.

What you have to check when renting offices on buildings or Villas

• Is deposit required? How many months advance rent have to be paid?
• Is regular Generator service available in case of power outage? (This is important!!)
• Are there sufficient phone lines in the building? This is very crucial for your work.
• Are there sufficient parking spaces?

Furnishing your office

You can buy imported or locally made furniture. Almost all the main furniture sellers will agree to deliver the material to your office. The main office furniture sellers are found on Bole Road, at Hayuhlet Area and at Piazza. Technostyle (located in Flamingo area in Bole, on Lex Plaza at Hayahulet); Waryt (located on Waryt Building on Haile Gebreselassie Avenue); 3F (in Piazza, Before Bambis on Dil Building); Deluxe Furniture (Located at Olympia and also on Bole Road some 100m East from Getu Commercial Centre) are the biggest that provide quality material; Technostyle is known for their quality yet cheap priced office furniture.

But it's good to take a tour of Bole Road, Ethio China Friendship Road, Debrezeyit Road, Hayahulet area, Urael Area and Piazza to check every possibility. You may also check our business directory.

Communication

• Fixed Phone Lines

The best thing is to have a fixed land line. You can apply to the local telecommunications office and it takes 2-5 weeks to get the lines depending on availability, etc. You can have the phone numbers with you when you move your office provided your new office is located in the same sub city/region.

In case land lines are not available, you can always buy wireless phones that operate on CDMA 1x technology.

For more you can visit Ethio Telecom's website.

• Mobile Phones

You can buy prepaid SIM cards almost everywhere. But when you buy credit to charge your account, the shopkeepers usually give you local receipts that may be rejected by the tax auditors. Therefore, the best thing is to apply for post paid SIM CARDS. For more you can check Ethio Telecom's website.

• Internet

You can apply for dial up service (but you need to have a phone line), broadband, wireless CDMA (CDMA 1x and EVDO). All have their pros and cons. Dialup is very slow, broadband is fast but expensive, CDMA 1x is good and post-paid service is available for the voice-data, but for the data service no post-paid service is available; EVDO is fast but expensive and there are two types of EVDO service (limited and unlimited) and post-paid service is available for the unlimited service. For application process and rates, you may check Ethio Telecom's website. Ethio Telecom has also setup a new website for CDMA information only. This new website can serve us a good guide while choosing which CDMA service to buy.

Office Equipment

• Computers, Laptops, Networking equipment and accessories

Computer Dealers are found in almost every corner of the city. While buying a computer, you can go for brand or assembled PC’s, brand laptops, and second hand brand PC’s. Dell, ACER and HP brands are widely available for desktop PC’s and Toshiba, Dell, HP and ACER are available for laptops. All these brands have their own authorized dealers. SNAP Computer (on Bole Road), Net Computer (on Bole Road), SysTech (at Bole Medhanialem), ALTA CompuTEC (Bole Road), Nejat (Bole Road) and ETComp (on Bole Road) are among the best known dealers in the city. You may find accessories in these shops as well. But it’s worthwhile to take a tour of the city (especially Bole Road, Bole Medhanialem area, Piazza) and compare prices. You can also check the Computer & Accessories Importers section and Computers/ Accessories Sales and Maintenance Service Providers section of our Ethiopian business directory.

• Photocopy Machines, Fax Machines

Gellately and Hankey (located in Piazza and Bole Road), ICAS (located in Bole Road), Jupiter Trading (located in Kazancis area) and PETRAM (located on Mexico Square area) are among the biggest dealers. They have brands such as Cannon and Olivetti. You can check the Office Machines Importers section and of Office Machines Sales & Repair our Ethiopian business directory.

Last Updated on 07 September 2013

How to Start an Export Business in Ethiopia

Written by Administrator

Published on 21 June 2010

Category: Starting A Business

Any domestic investor can engage in import/ export business in Ethiopia. Check our import/export page

Registration and License: A minimum capital of Br. 5,001.00 is needed to register and get business license. All exporters in Ethiopia, except those who are found in Dire Dawa, should be registered and get their license from the main office of the Ministry of Trade and Industry located near Hilton Hotel or beside Casanchis super market, located in Addis Ababa. Exporters in Dire Dawa can apply in Dire Dawa.

What documents one has to provide is mentioned on our business registration and license page. 

Cost:

• To get principal registration: Br. 80
• To get summary Registration: Br.10
• To get new trade name: Br. 80
• To get New Business License: Br. 80

One can register to export all types of goods allowed for export.  According to the new proclamation number 686/2010, there is no license for General Import/Export. The subcategory has to be specified for all kinds of exports on the business license as per the Ethiopian Standard Industrial Classification. However, it used to be the case that exporting the following goods only needed to be mentioned specifically in the business license.

• Forestry Products
• Gemstone
• Incense and Gum
• Gum
• Gold
• Coffee: special permit/approval is needed from Ethiopian Commodity Exchange:
• Live Animals except calves and lambs
• Tantalum
• Chat (Qat)
• Platinum
• Veterinary Medicine: special permit/approval is needed from Ethiopian Drug Administration and Control Authority (DACA). To know the regulations, guidelines and procedures of permits issued by DACA (permits for Medical Appliances, some kind of chemicals, pharmaceuticals and veterinary medicine), please check DACA’s website: www.daca.gov.et (Phone: +251 11 5524122-23, fax: +251 11 5521392, email: daca@ethionet.et; located on Bole Road, adjacent to Shoa supermarket).