Permissible Investment Sectors for Foreign Investors in Ethiopia

 

In accordance with the new Investment Proclamation, foreign investors are granted the opportunity to engage in various investment sectors, with the exception of those that contradict the law, moral values, public health, or security. However, certain sectors are specifically reserved for joint investment with the government, domestic investors, or joint investment with domestic investors. Consequently, foreign investors are prohibited from participating in the following investment sectors exclusively designated for domestic investors. Nevertheless, under specific circumstances, the Investment Board, as outlined in the new Investment Proclamation, possesses the authority to revise the lists of sectors reserved for joint investment with the government, domestic investors, or joint investment with domestic investors.

Sectors Reserved for Joint-Venture Investment with the Government:

1. Production of weapons, ammunition, and explosives intended for use as weaponry

2. Import and export of electronic energy.

3. International air transport services.

4. Bus rapid transit.

5. Postal services, excluding courier services.

Sectors Exclusively Reserved for Domestic Investors:

1. Banking, insurance, and microfinance business (excluding capital goods finance business) in accordance with applicable law.

2. Transmission and distribution of electrical energy through an integrated national grid system.

3. Primary and middle level health services.

4. Wholesale trade, petroleum, petroleum products, wholesale trade of own products produced in Ethiopia (excluding electronic commerce wholesale).

5. Retail trade, excluding electronic commerce retail, of own products produced in Ethiopia as stipulated by appropriate law.

6. Import trade, excluding liquefied petroleum gas and bitumen.

7. Exportation of unprocessed coffee, khat, oil seeds, pulses, minerals, hides and skins, products derived from natural forests, poultry, and livestock (including pack animals acquired from the market).

8. Construction and drilling services below Grade 1.

9. Hotel, lodge, resort, motel, guesthouse, and pension services, excluding those with star designation.

10. Excluding restaurants specializing in star-designated national cuisine, the following establishments are included: restaurants, tearooms, coffee shops, bars, nightclubs, and catering services.

11. Travel agency, travel ticket sales, and trade auxiliary services.

12. Tour operation.

13. The operating lease of equipment, machinery, and vehicles is permitted, with the exception of industry-specific heavy equipment, machinery, and specialized vehicles.

14. Transport services, excluding specific areas:

   a. Railway transport.

   b. Cable-car transport.

   c. Cold-chain transport.

   d. Freight transport with a capacity of more than 25 tons.

   e. Transport services reserved for joint investment with the government or domestic investors.

15. Manufacturing of indigenous traditional medicines.

16. Production of bakery products and pastries for the domestic market.

17. Grinding mills.

18. Barbershop and beauty salon services, smithery, and tailoring (excluding garment factories).

19. Maintenance and repair services, including aircraft maintenance repair and overhaul (MRO) but excluding heavy industry machinery and medical equipment repair and maintenance.

20. Aircraft ground handling and related services.

21. Saw milling, timber manufacturing, and assembly of semi-finished wood products.

22. Media services.

23. Customs clearance service.

24. Brick and block manufacturing.

25. Quarrying.

26. Lottery and sports betting.

27. Laundry services, excluding industrial scale operations.

28. Translation and secretarial services.

29. Security services.

30. Brokerage services.

31. Attorney and legal consultancy services.

32. Private employment agency services, excluding those for the employment of seafarers and other professionals requiring high expertise and international experience and network.

Sectors Exclusively Reserved for Joint Investment with Domestic Investors:

1. Freight forwarding and shipping agency services.

2. Domestic air transport services.

3. Cross-country public transport services using buses with a seating capacity of more than 45 passengers.

4. Urban mass transport services with large carrying capacity.

5. Advertisement and promotion services.

6. Audiovisual services, motion picture and video recording production and distribution.

7. Accounting and auditing services.

These are sectors and their categories allowed by Ethiopian laws.