Source-cited draft: company formation & entity choice for Ethiopia (tax year 2025) — rates, thresholds and rules with primary-source citations. Unverified; pending local-accountant review.
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Incorporation overview
The most common vehicle is the Private Limited Company (PLC) under the 2021 Commercial Code, including a one-member PLC. Incorporation runs through name reservation, notarised constitutive documents, TIN registration, commercial registration and a business licence.
Common entity types
Private Limited Company (PLC), One-Member PLC, Share Company (S.C.), branch of a foreign company, sole proprietorship, partnershipCommercial Code of Ethiopia Proclamation No. 1243/2021 (https://ysalawoffice.com/2025/03/20/company-law-in-ethiopia-a-comprehensive-guide/)
PLC membership limits
Minimum 1 (one-member PLC) or 2 members; maximum 50 membersCommercial Code of Ethiopia Proclamation No. 1243/2021 (https://www.apexhab.com/2025/08/15/one-person-plc-procedures-and-requirements-in-ethiopia/)
PLC minimum capital
ETB 15,000, fully subscribed and paid up at incorporationCommercial Code of Ethiopia Proclamation No. 1243/2021 (https://hulunem.com/ethiopia-business-guides/how-to-start-a-plc/)
Share Company minimum capital
ETB 50,000 with a minimum of 5 shareholders (approx — confirm under 2021 Code)Commercial Code of Ethiopia Proclamation No. 1243/2021 (https://ysalawoffice.com/2025/03/20/company-law-in-ethiopia-a-comprehensive-guide/)
Minimum capital for foreign investors
Generally USD 200,000 per investment project (USD 150,000 for joint ventures); lower thresholds for certain sectors (approx — confirm current Investment Regulation)Investment Proclamation No. 1180/2020 and Investment Regulation (https://www.healyconsultants.com/ethiopia-company-registration/setup-llc/)
Step 1 — Name reservation
Reserve a company name (submit several options); approval reserves the name for ~30 daysCommercial Registration and Business Licensing Proclamation (https://www.2merkato.com/articles/starting-a-business/82-how-to-start-a-plc-private-limited-company-in-ethiopia-particularly-in-addis-ababa)
Step 2 — Constitutive documents
Prepare and notarise the Memorandum of Association (MOA) and Articles of Association (AOA), in Amharic or EnglishCommercial Code of Ethiopia Proclamation No. 1243/2021 (https://hulunem.com/ethiopia-business-guides/how-to-start-a-plc/)
Step 3 — Tax Identification Number
Obtain a Taxpayer Identification Number (TIN) from the Ministry of RevenuesTax Administration Proclamation No. 983/2016 (https://hulunem.com/ethiopia-business-guides/how-to-start-a-plc/)
Step 4 — Commercial registration and licence
File for commercial registration and obtain a business licence specifying authorised activities (Ministry of Trade and Regional Integration or Ethiopian Investment Commission for foreign investors)Commercial Registration and Business Licensing Proclamation (https://www.2merkato.com/articles/starting-a-business/82-how-to-start-a-plc-private-limited-company-in-ethiopia-particularly-in-addis-ababa)
Typical incorporation timeline
Roughly 2–4 weeks for a domestic PLC once documents are ready (approx — confirm)Commercial Registration and Business Licensing Proclamation (https://www.healyconsultants.com/ethiopia-company-registration/setup-llc/)
Core annual compliance
Annual business-licence renewal, annual income tax return within 4 months of year-end, monthly VAT and payroll filings, and statutory bookkeepingCommercial Registration and Business Licensing Proclamation; Tax Administration Proclamation No. 983/2016 (https://hulunem.com/ethiopia-business-guides/tax-regulations/)
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