COMPANY FORMATION

IPELA Company Formation Services​

IPELA is your reliable partner to plant, grow and reap your business in Ethiopia. We advise/represent clients from around the world who seek to establish a new company or to open branch, subsidiary or representative office. Our attorneys are well qualified in drafting all necessary legal documents, in advising on legal requirements and representing clients before government offices to process business licenses, permits and legalization and authentication of documents.

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Company formation Services

The Ethiopian law generally recognizes two forms of companies namely private limited company and share company.

Private limited companies can be established at a minimum capital of 15,000 ETB (around $535.00 with current rate). Formation of private limited company requires at least two members. One man company is not yet recognized under the Ethiopian law.

Private limited companies are allowed to engage in any business activity except financial sector, which includes banking and insurance.

Share companies, on the other hand, can be established at a minimum capital of 50,000 ETB (around $1,785.00 with current rate). Formation of share companies requires at least five members. Share Company can be formed among founders or by public subscription of shares.

Formation and registration of companies follows a series of steps from drafting of memorandum and articles of association (company bylaws) till getting into the recordal of companies registration. The main steps to be followed for the formation and registration of companies in Ethiopia are:

  • Drafting company bylaws;
  • Conducting search for the proposed company name at the competent trade office and getting approval for the registration of the name of the company;
  • Furnishing an identifiable office address;
  • Authentication and registration of company bylaws;
  • Getting Tax Identification Number (TIN); and
  • Handling issuance of principal registration certificate and business license.

The above list is for indicative purpose only and may vary depending on the specific business sector in which each company is intended to engage.

Ethiopia is not only a destination for new companies. There are also a number of foreign companies ever looking to expand their business to Ethiopia by opening branch, subsidiary or representative office. Ethiopian law allows foreign companies to open branch, subsidiary or representative office by fulfilling requirements stipulated under trade and investment laws.

Home documents like memorandum and articles of association of the parent company, a resolution adopted by an authoritative body of the parent company to open a branch, subsidiary or representative and a written application duly signed by an authorized person are some of the documents required to process registration of branch, subsidiary or representative office in Ethiopia.