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Guide to Starting a Business in Ethiopia

Staff Reporter | 3:18 PM |

Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Ethiopia. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
This information was collected from World Bank: Doing Business 
No.ProcedureTime to CompleteAssociated Costs
1Check the company name for uniqueness1 dayno charge
2Authentication of the company documents and of the lease agreement at the office of registration of Acts and documents2 daysETB 390
3Submit documents and obtain a letter from the Commercial Registry to open a bank account1 dayNo charge
4Open a bank account1 dayno charge
5Register and obtain the Commercial registration certificate1 dayETB 80
6Make a company seal2-3 daysETB 100
7Register with Ethiopian Inland Revenue Authority and Customs for income tax and VAT2 daysno charge
8Obtain business license1 dayETB 80
9Install a cash registration machine1-5 daysETB 5,000-10,000