Areas of Investment Restricted For Foreign Investors in Ethiopia

This article is a recent update to our blog post entitled Investment Opportunities open for Foreign Direct Investment in Ethiopia (posted on July 2013) and it focuses on the issue of various investment sectors reserved only to the government, domestic investors and Ethiopian nationals only. In other words foreign investors are not allowed to engage in the areas of investment listed below. The interpretation of the Investment Proclamation is believed to mean all other except these areas are open for foreign Investments. However, under the new Investment (Amendment) proclamation no. 849/2014, the Investment Board under a special circumstance is given the authority to grant the opening of investment areas which are exclusively reserved for domestic investors.

Areas Exclusively Reserved For the Government

  • Postal service except courier services
  • Transmission and supply of electrical energy through the integrated national grid system: and
  • Passenger air transport services using aircraft with a capacity of more than 50 passengers.

Areas Reserved For Joint-Venture Investment with the Government

  • Production of weapons and ammunition: and
  • Telecommunication service

Areas Exclusively Reserved For Domestic Investors

  • Export of raw coffee, chat, oil seeds, pulses, precious minerals, natural forestry products, hides and skins bought from the market, and live sheep, goats, camel, equines and cattle not raised by the investor;
  • Import trade (excluding LPG and bitumen),
  • Wholesale trade (excluding supply of petroleum and its by-products as well as wholesale trade by foreign investors of their locally produced products).
  • Manufacturing of ice crème and cakes;
  • Manufacturing of plastic shopping bags
  • Finishing of fabrics, yarn, warp and weft, apparel and other textile products by bleach­ing, dyeing, shrinking, sanforizing, mercerizing or dressing;
  • Tanning of hides and skins below finished level;
  • Manufacture of cement;
  • Manufacture of clay and cement products;
  • Tour operation below grade 1;
  • Construction, water well and mining exploration drilling companies below Grade 1;
  • Kindergarten, elementary and junior secondary education by constructing own building;
  • Diagnostic centre service by constructing own building;
  • Clinical service by constructing own building;
  • Capital goods leasing (this does not include leasing of motor vehicles); and
  • Printing industries

Areas Exclusively Reserved For Ethiopian Nationals

  • Banking, insurance, micro-credit and saving services;
  • Broadcasting and mass media services;
  • Attorney and legal consultancy services;
  • Preparation of indigenous traditional medicines;
  • Advertisement, promotion and translation works;
  • Domestic air transport services using aircraft with a seating capacity of up to 50 pas­sengers; and
  • Packaging, forwarding and shipping agency services.

If you have an additional question or comment or need to get a practical legal support in this regard please  Contact us.

“Copyright © 2003-2015 Fikadu Asfaw and Associate Law Office

Related notes

Note:This guide provides vital information on Ethiopian Investment law and practice and is not intended to substitute professional advice given with full knowledge of the specific circumstances of each case and proficiency in the law of Ethiopia such as might be provided by an Investment Attorney or Investment lawyer in Ethiopia.Such information about Investment in Ethiopia can be available from an Ethiopian Investment Lawyer, Ethiopian Tax lawyer, Ethiopian Employment Lawyer, Ethiopian Labour Relationships Lawyer, Ethiopian Immigration lawyer.

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