Sectors of Investment permitted for foreign Investors in Ethiopia

This article is a recent update to our blog post entitled Areas of Investment Restricted for Foreign Investors in Ethiopia (posted on 2015). This article focuses on sectors of investments restricted to foreign investors and those reserved for joint investments with the government or domestic investors. According to article 6 (1) of the new Investment Proclamation no. 1180/2020, any investor may engage in any area of investment except where it is contrary to law, moral, public health, or security. However, there are areas of investment reserved for joint investment with the Government, for domestic investors, and for joint investment with domestic investors.  In other words, foreign investors are not allowed to engage in the areas of investment which are exclusively reserved for domestic investors as listed below. Yet, under the new Investment  Proclamation, the Investment Board under a special circumstance is given the authority to revise the lists of investment reserved for joint investment with the Government, for domestic investors, and for joint investment with domestic investors.

Areas Reserved for Joint-Venture Investment with the Government

  • Manufacturing of weapons, ammunition and explosives used as weapons or make weapon,
  • Import and export of electronical energy,
  • International air transport services,
  • Bus rapid transit: and
  • Postal services excluding courier services

Areas Exclusively Reserved for Domestic Investors

  • Subject to applicable law, banking, insurance, and microfinance business excluding capital goods finance business,
  • Transmission and distribution of electrical energy through integrated national grid system.
  • Primary and middle level health services,
  • wholesale trade, petroleum, petroleum products, wholesale of own products produced in Ethiopia, Excluding wholesales of electronic commerce,
  • Retail trade, excluding retail of electronic commerce as provided under appropriate law of own products produced in Ethiopia,
  • Import trade excluding liquefied petroleum gas and bitumen,
  • Export trade of raw coffee, khat, oil seeds, pulses, minerals, hides and skins, products of natural forest, chicken, and livestock including pack animals bought on the market,
  • Construction and drilling services below Grade1,
  • Hotel, lodge, resort, motel, guesthouse, and pension services excluding those that are star designated,
  • Restaurant, tearoom, coffee shops, bars, nightclubs, and catering services excluding star-designated national cuisine restaurant service,
  • Travel agency, travel ticket sales and trade auxiliary services,
  • Tour operation,
  • Operating lease of equipment, machineries and vehicles excluding industry- specific heavy equipment, machineries, and specialized vehicles,
  • Transport services, excluding the following areas.
    1. Railway transport,
    2. Cable-car transport,
    3. Cold-chain transport,
    4. Freight transport having a capacity of more than 25 tones, and
    5. Transport services reserved for joint investment with the Government or domestic investors,
  • Making indigenous traditional medicines,
  • Producing bakery products and pastries for domestic market,
  • Grinding mills,
  • Barbershop and beauty salon services, smithery, and tailoring except by garment factories,
  • Maintenance and repair services including aircraft maintenance repair and overhaul (MRO), but excluding repair and maintenance of heavy industry machineries and medical equipment,
  • Aircraft ground handling and other related services,
  • Saw milling, timber manufacturing, and assembling of semi-finished wood products,
  • Media services,
  • Customs clearance service,
  • Brick and block manufacturing,
  • Quarrying,
  • Lottery and sports betting,
  • Laundry services excluding those provided on industrial scale,
  • Translation secretarial services,
  • Security services,
  • Brokerage services,
  • Attorney and legal consultancy services and
  • Private employment agency service, excluding such services for the employment of seafarers and other similar professionals that require high expertise and international experience and network,

Areas Exclusively Reserved for Joint Investment with Domestic Investors

  • Freight forwarding and shipping agency services,
  • Domestic air transport services,
  • Cross-country public transport services using buses with a seating capacity of more than 45 passengers,
  • Urban mass transport services with large carrying capacity,
  • Advertisement and promotion services,
  • Audiovisual services motion picture and video recording production and distribution and
  • Accounting and Auditing services,

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

“Copyright © 2003-2020 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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