Business
A 1960 commercial code replaced in 2021, with the state still dominant in key sectors
Commercial Code Proclamation 1243/2021 replaced the 1960 code, modernising company forms, insolvency and governance. Investment Proclamation 1180/2020 sets which sectors are open to foreign capital, and several remain reserved or joint-venture only.
Key rules
- Jurisdiction — Federal for company registration, investment licensing and competition; the Ethiopian Investment Commission is the gateway for foreign investors.
Governing law
- Commercial Code Proclamation 1243/2021
- Investment Proclamation 1180/2020 and Regulation 474/2020
- Civil Code 1960 — general law of obligations
- Trade Competition and Consumer Protection Proclamation 813/2013
In practice
The 2021 Commercial Code was a substantial rewrite rather than an amendment: it introduced the one-member private limited company, a modern business-reorganisation and insolvency regime in place of the old bankruptcy provisions, and clearer directors' duties. It matters for anyone working from older material, because sixty years of commentary on the 1960 code is now partly obsolete on company law while remaining useful on the law of obligations, which stayed in the 1960 Civil Code. Investment Proclamation 1180/2020 moved Ethiopia to a negative-list approach, but banking, insurance and telecommunications were historically closed and liberalisation has been gradual and sector-specific, so the operative question for a foreign investor is always which schedule the activity falls into rather than whether investment is permitted in general.