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Steps
for establishing a company in Ethiopia: |
The documents to take along
to the Public Notary are: • Public enterprise (only if jointly with the government). A
note from the banks |
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Investment permit Agency: Ethiopian Investment Agency Office: Information desk (room No. 8 in the lobby) Documents required, to be submitted in two copies: • Application form for investment permit signed by the investor/agent. • Power of attorney, if application is made through an agent. • Memorandum and articles of association, or similar document of the parent company. • Relevant passport pages of each shareholder. • Clearance letter from the Ministry of Trade and Industry for the company name. • 3 recent passport-size photographs if the investor is an individual person. • In the case of a joint investment with a domestic investor, the identity card evidencing domestic investor status. Time needed: 1/2 hour inside the building, ready after 4 hours. Service costs: 600 Birr Remarks: The investment permit must be renewed annually until operations have started. An updated status report must be submitted every 6 months to the Agency. 2. Business registration Agency: Ethiopian Investment Agency Office: Information desk (room No. 8 in the lobby) Documents required for different business organizations (to be submitted in 2 copies): Sole business person: • Application form signed by the investor or his agent. • Power of attorney if the documents are signed by an agent. • 3 recent passport-size photographs of the investor. Branch of a foreign business organization: • Application form signed by an agent of the business organization. • A document that validates the registration and legal personality of the parent company. • The memorandum and articles of association or similar documents of the parent company. • In the case of a one-man company, letter of request for the establishment of a branch, written by the owner and authenticated by the Public Notary in both the country of origin and Ethiopia. • Minutes of the meeting held by the authorized body of the parent company in support of the establishment of a branch in Ethiopia, authenticated by the Public Notary in both the country of origin and Ethiopia. • Power of attorney if the documents are signed by an agent. • Relevant pages of the agent’s passport or identity card that shows his name and address. In case the business organization is a non-share company: • Application form signed by an agent of the business organization. • Power of attorney if the application is made through an agent other than somebody authorized in the memorandum and articles of association. • Memorandum and articles of association. • Relevant pages of each individual shareholder’s passport or identity card or photocopy of a certificate evidencing domestic investor status. When the business organization is a shareholder of the company to be registered, the following documents are needed: • Minutes showing that the business organization has a stake in the parent company, authenticated by the Public Notary in both the country of origin and Ethiopia. • A document that certifies the registration and legal personality of the business organization (memorandum and articles of association, and registration certificate). Share company: • Completed application form signed by an agent of the company. • Bank statement showing that one quarter of the company’s capital is deposited in a blocked account. • Minutes, and related documents, showing the commitments to buy shares. • Power of attorney if the application is made by an agent other than a person authorized in the memorandum and articles of association. • Report on contributions made in kind, if any, prepared and authenticated by an expert or institution designated by the Ministry of Trade andIndustry. • Copy of memorandum and articles of association. Time needed: 4 hours Service costs: 80.00 Birr (Application for Principal) Remarks: The Application for Principal/Summary Trade Registration with its required documents can be handed in together with the application for the investment permit. The business registration is the identification of the company. 3. Opening a bank account Bank: Any bank of your preference Documents required: • Memorandum and articles of association • Investment permit • Business registration • ID or passport of the person who opens the bank account • Power of attorney if opened by an agent Time needed: 1 to 2 hours Costs: A first deposit of 1500 Birr. 4. Work permit Agency: Ethiopian Investment Agency Office: Information desk Documents required: • 6 copies of the application form for work permit. • Copy of the principal registration certificate if the employer does not have an investment permit. • Copy of valid passport that shows the identity of the employee. • Copy of the power of attorney in case an agent is in charge of the application. • 6 passport-size photographs of the employee. Time needed: 1 hour Service costs: 600 Birr Remarks: Once the employee has a work permit, he can apply for a residence permit at the Security, Immigration and Refugee Affairs Authority office. 5. Residence permit Agency: Security, Immigration and Refugee Affairs Authority Office: White building on the left side when entering the compound, ground floor. Documents required: • Passport of the applicant. • Copy of the relevant pages of the passport. • Letter of the company, signed by the employer or his authorized agent, requesting the Immigration and Refugee Affairs Authority to grant a residence permit to the applicant, with full information about the company. • Completed application form. • Work permit Time needed: 4 hours in the Immigration Office; the permit will then be ready within 24 hours. Service costs: 400 Birr 6. Application for acquisition of land Agency: Ethiopian Investment Agency Office: Information desk Documents required: • 2 copies of the application form for acquisition of land. Remarks: The Ethiopian Investment Agency does not grant land. You need to fill this form so the Ethiopian Investment Agency can write a letter to the regional investment office (i.e. the Oromiya Investment Office in the case of the Oromiya Regional State) about your application for land. 7. Land-plan and handover of the land Agency: Oromiya Investment Office if the identified area is in the Oromiya region. Office: Room No. 9, 2nd floor, Land Acquisition Action: Deposit 100,000 Birr at a bank (any bank) as a subscription fee Documents required: • Copy of business plan • Copy of memorandum of association • Copy of business registration • Copy of investment permit • Copy of the relevant pages of the passport of the investor • Copy of the power of attorney if documents signed by an agent • Letter from of a bank confirming receipt of the 100,000 Birr subscription fee. This amount will be refunded once the company has started planting or is building a greenhouse. • File from the Ethiopian Investment Agency with all documents submitted for the business application and investment permit. Time needed: Variable Remarks: • Once your application for land is submitted to the Oromiya Investment Office, you yourself should call the Office to monitor progress. The phone numbers are: + 251 (0) 115531526 (commissioner) + 251 (0) 115531979 (department) The land application process comprises four stages: 1. Signature by the commissioner of the land lease agreement. 2. Approval of land lease agreement. 3. Receiving the land-plan you are entitled to. 4. Formal hand-over of the land. • Within 6 months after the formal hand-over of the land, investing in the allocated site must begin. • For investments in Oromiya, the Oromiya Investment Office writes a letter indicating the amount of land being developed. This will help you obtain tax exemptions for pick-up trucks. The original goes to the Ministry of Revenue; you as investor get a carbon copy. 8. Tax Identification Number (TIN) Agency and office: Ministry of Inland Revenue, Mexico Square, room No. 312 Documents required—only certified copies are accepted: • Application form for taxpayer identification number • Identification papers of the investor or his authorized agent • Passport size photo of the investor or his authorized agent • Memorandum and articles of association • Partnership agreement in case of partnership • Principal Trade Registration Certificate and Trade License, which is the investment license or investment permit • Trade name registration (if applicable) • Investment permit • Residence permit in case of foreign partnership • Power of attorney if registration is submitted by an agent. Time needed: 24 hours. Tax Privileges An investor in Ethiopia has several privileges, including: • Duty free import of capital goods for the business • Duty free car for the manager • Duty free import of household furniture for the manager • Income tax holiday for 5 years when production is exported (for the horticultural/ floricultural sector) • Duty free car for every 10 hectare of operational land. |
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Value added tax (VAT) number Agency and office: Ministry of Revenue, Mexico Square, room No. 410 Documents required: • Application form for VAT number • Copy of Principal Trade Registration Certificate • Copy of Investment Permit Time needed: max. 1 hour. 10. Custom exemptions on imports Agencies: • Ministry of Revenue and Ministry of Agriculture and Rural Development (in the case of fertilizer imports as trade goods, i.e. not as inputs for the companies) Office: • Ministry of Revenue: Agricultural Department, on the ground floor • Ministry of Agriculture and Rural Development: Food Security Bureau, 2nd floor, end of the hall, for permit to import fertilizers for trade. Documents required: • Letter of request • Business license/investment permit • Import permit for crop protection supplies, fertilizers, plant material and soil. • Bill of loading/airway bill • Copy of packing list • Certificate of origin (delivered by the chamber of commerce in your home country) • A phytosanitary certificate for plant material. • Bank permit if payment through bank • 10 copies of the imports’ invoices. Time needed: 4 hours (at the Ministry of Revenue). For importing a duty free car, you need a confirmation from the investment office of the region where you will be investing. Staff of that office has to go to your site and check whether construction work or land preparation has started. Once custom exemption on imports is granted, you will be given a letter of duty free. This letter, together with the required documents listed above, must be handed over to a customs clearing agency which will then handle and finalize the customs part. Overview of steps in duty free imports – Note that this is usually done by a customs clearing agent. Your first step is to go to the Ethiopian Customs Authority (for example in Addis Ababa, Djibouti or Nazareth) and declare all materials. The customs authorities will approve the letter of duty free. It will then take them some 10 days to prepare a declaration. Once everything is verified, you will be given a transit approval on the declaration. When importing a container, you or your agent will have to go to Djibouti (for sea freight) or to customs at the Bole Airport in Addis Ababa (for air freight). Submit the original declaration with the transit approval and the copies of the bill of loading, invoice, packing list, certificate of origin and, if necessary, a phytosanitary certificate to the customs authorities in the harbor or airport, collect a delivery order of the container and pay all expenses for the container (storage, rent, insurance). Next, the customs authorities will open the container and check its content as per the packing list. Provided that everything is as it should be, customs will give you a removal note. The truck is now ready to drive to the farm. Rented containers should be emptied and returned to the harbor as soon as possible. 11. Business license, before exporting Agency: Ethiopian Investment Agency Office: Information desk Documents required, to be submitted in 2 copies: • Application form for business license • Investment permit • Principal business registration • Copy of memorandum and articles of association. Time needed: 4 hours Service costs: 80.00 Birr Remarks: The business license replaces the investment permit. 12. Other An environmental impact assessment (EIA) is also required before starting a horticultural farm. The Ethiopian Horticulture Producer-Exporters Association (EHPEA) can advise you on the most efficient way to proceed. You may also consult the website of the Environmental Protection Authority (www.epa.gov.et) for more details on actual requirements, or check with their Environmental Impact Department, tel. 011-646 48 78. |
