Navigating the process of starting a company in Ethiopia, specifically in Addis Ababa, can be daunting due to the scarcity of comprehensive information available. Recognizing this challenge, I’ve compiled a thorough guide based on my research to aid those embarking on this journey.
To begin with, it’s essential to understand the two primary types of business organizations prevalent in Ethiopia:
Sole Proprietorship: This structure entails a business owned and operated solely by one individual, with no legal distinction between the owner and the business entity.
Private Limited Company (PLC): This type of business requires a minimum of two individuals. Personal assets of shareholders are safeguarded, and their liability is limited. In the event of company losses, shareholders are not obligated to liquidate personal assets for repayment.
The initial step involves deciding the type of business and establishing mutual contributions, particularly if forming a PLC with partners.
Following this, attention turns to selecting a business sub-city within Addis Ababa, a decision influenced by various factors such as geographical advantages and alignment with the business’s objectives.
Subsequently, drafting Business and Association Memorandums, consisting of Articles of Memorandum and Articles of Association, is crucial. These documents outline company setup, governance, ownership structure, and distribution of responsibilities and powers.
While drafting these memorandums may require legal assistance, seeking guidance from professionals or legal firms is advisable to ensure accuracy and adherence to regulations.
Approval of the chosen sub-city by the relevant authorities is the next step, involving submission of the memorandums and alternative company names for consideration.
Securing office space and agreements is imperative, followed by authentication and authorization of documents by the pertinent agencies.
Obtaining a Taxpayer Identification Number (TIN) from the Ethiopian Revenues and Customs Authority (ERCA) is essential for tax compliance purposes.
Subsequently, registering the company’s information with the government and obtaining a Business Registration Certificate signifies official recognition of the business entity.
Depending on the nature of the business, acquiring a Competency Certificate from the relevant ministry may be necessary. This step varies according to industry requirements.
Finally, obtaining a Business License from the sub-city office of Trade and Industry grants legal authorization to commence operations.
Expect bureaucratic procedures and consider making multiple copies of essential documents to streamline the process.
Upon completion of these steps, it’s time to celebrate the initiation of your entrepreneurial journey. Best wishes for your endeavors ahead.
