Ethiopia’s House of People’s Representatives has finally approved the proclamation that permits foreign nationals to acquire residential houses.
The newly enacted proclamation, a refined version of an earlier draft, specifically allows foreigners to own residential properties only. An initial proposal that would have extended ownership to commercial buildings and land was scaled back due to concerns it might contradict Article 40(3) of the FDRE constitution, which vests land ownership with the people, and Articles 390-393 of the civil code.
The stated purpose of the proclamation is to attract foreign capital ‘without crowding out Ethiopians’ demand for house ownership.
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As a result, foreign nationals with a minimum investment threshold of USD 150,000 are now eligible to acquire a residential house in Ethiopia.
The law also states that while foreign homeowners can rent out their properties, they are expressly forbidden from using them for commercial purposes.
Similarly, foreign nationals are not permitted to obtain loans or raise capital from Ethiopian financial institutions for the purpose of buying or building homes.
The bill underwent review and endorsement by the standing committees on Urban Infrastructure and Transport Affairs, and Justice and Legal Affairs before its approval.
Professor Mohammed Abdo, chair of the standing committee, informed the house that the proclamation incorporates flexibility, allowing for adjustments through directives.
