Five Investment Options that Minimum Capital Requirement doesn’t Apply for Foreign Investors

By Mahlet Mesganaw, Partner at DMLF

The Investment Proclamation No 1180/2020 has allowed minimum capital requirement NOT to apply for the following investment transactions. 

1. Where a foreign investor  buys a share of a foreign investor in an existing company in full or in part;

2. Where a foreign investor  acquires the entirety of an existing enterprise owned by a foreign investor;

3. Where a foreign investor re-investing his profits or dividends generated from his existing enterprise in any investment area open for foreign investor and

4. Where a foreign investor is elected as member of board of directors following the change of a private limited company to share company.

5. Where a foreign enterprise concludes export oriented non-equity based collaboration agreement with a domestic investor.

Therefore the requirement of minimum capital injection to the above areas of businesses are not required for foreign investors. Those foreign investors and domestic investors operating in Ethiopia can use these options. More so foreign investors who wish to see the opportunities existing on the ground, can use one of the above options to invest in Ethiopia.

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