The Ethiopia Investment Board, chaired by Prime Minister Abiy Ahmed (PhD), has significantly reduced capital thresholds for foreign investors entering previously restricted sectors, including export, import, wholesale, and retail trade. Effective as of June 12, 2025, the amended directive cuts requirements by more than half, revising a policy introduced in March 2024 to stimulate foreign capital inflows amid slowing investment and calls for equitable treatment of local and international investors.
The revised directive aims to bolster investor confidence and attract additional foreign capital by promoting transparent, simplified, and predictable permit procedures while ensuring equal treatment for domestic and foreign investors. It retains provisions allowing foreign participation in sensitive sectors such as the export of raw coffee, sesame seeds, pulses, oilseeds, khat, leather, poultry, and live livestock. However, a key change is in retail trade, where foreign investors can now participate with a reduced paid-up capital of USD 2.5 million, compared to higher informal benchmarks in the past.
Additionally, the directive mandates that foreign investors submit a due diligence report from a recognized national or international verification agency to confirm their integrity and capacity. Any non-cash assets contributed to the paid-up capital must be evaluated by a professional appointed by the Ethiopian Investment Commission.
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This policy shift aligns with Ethiopia’s broader economic strategy, including recent initiatives like the USD 6.5 billion UN Sustainable Development Cooperation Framework (2025–2030) and the Horn of Africa Gateway Development Project with Kenya, as the country seeks to enhance its appeal as a regional investment hub while balancing local and global interests.
