2Merkato Provides Information On How to Start Business in Ethiopia

April 16, 2009 - PRLog -- What do you need to start a business in Ethiopia? Let's assume you have garnered enough capital to start some kind of business in Ethiopia and you do not know where to start. We believe that any potential business person who wants to start business in Ethiopia should be well informed of the existing regulations, procedures, incentives, potential partners. This way errors and potential losses can be minimized.

http://www.2Merkato.com can serve as a launch pad to start a business in Ethiopia because it attempts to answer the possible questions one asks before one starts business in Ethiopia.

Do I need to register and obtain license to do business in Ethiopia?Yes.

No person shall engage in any commercial activity unless registered in a Commercial register; and according to the Council of Ministers Regulation No.14/1997 or 14/1989 on Addis Ababa Dire Dawa Administration Commercial Registration and Licensing, any person engaged in a commercial activity, the capital of which is more than Birr 5,000, is to obtain a business license by applying to the appropriate authority. Capital includes fixed assets and working capital put at the disposal of the business, but excludes the business premises unless the businessperson chooses otherwise.

For a detailed answer please check our business licensing and registration pages.

Do I need to have a Trade Name and Trade Mark?Not necessarily.

Although a trade name is one of the entries of a principal registration as provided for under Article 105 of the Commercial Code, principal registration shall be made without waiting for the registration of a trade name under Proclamation No. 67/1997. If there is no name registered, the business is referred by name of the owner in Sole Proprietorship business form or the name of the Private Limited Company or the Share Company.

For a detailed answer please check our business licensing and registration pages.

What are the main business forms/ types in Ethiopia?

Some of the main types and more common business forms/ types in Ethiopia:

1. A sole business person: the business is owned by one person. Some of the advantages are: it's easier to start and close and the tax paid will be less if the annual profit is less than Birr 153,000.

2. Private Limited Company: Can be formed by a minimum of 2 and a maximum of 50 persons. It is advantageous for high profit making businesses and it can be managed in a structured way, but it's difficult to close the business.

3. Share Company


Who can be regarded as a domestic investor, a foreign investor?

According to investment Proclamation, a Domestic investor is an Ethiopian or a foreign national permanently residing in Ethiopia having made an investment, and includes the Government, public enterprises as well as a foreign national, Ethiopian by birth and preferring treatment as a domestic investor. A Foreign investor is a foreigner or an enterprise owned by foreign nationals, having invested foreign capital in Ethiopia, and includes an Ethiopian permanently residing abroad and preferring treatment as a foreign investor.

Is there an incentive for investors in Ethiopia?Yes.

There are two: exemption from Customs duty and exemption from income tax. For a detailed answer, please check the investment incentives page.

As a businessperson (or entity), do I need to be registered as a taxpayer, what are the tax regulations and procedures in Ethiopia? Yes

Every business person or entity should be registered to pay tax and must obtain a taxpayer's identification number or TIN. However, each person or entity will have only one TIN. For a detailed analysis check our tax page - http://www.2merkato.com/tax-system

Who can be my potential business partners in Ethiopia?

We have a list of more than 5000 businesses in Ethiopia assembled and sorted in categories, sub categories etc. Please check our business directory - http://www.2Merkato.com/directory.

Can I engage in import/ export business in Ethiopia? Yes and no.

That depends on the type of import/ export business you want to engage in and whether you're a domestic investor or a foreign one.

# # #

2merkato.com provides information how a new company can be established in ethiopia, where and when tax has to be paid, which proclamation and regulations applies to which business, things you have to take in consideration when importing & exporting ...