Introduction

In 2025, the Ethiopian government introduced Directive No. 1082/2025, bringing important adjustments to the country’s investment framework. The directive opens several key trade sectors previously limited to domestic investors to foreign participation. The reforms aim to attract foreign capital, boost competition, and strengthen Ethiopia’s position as a destination for foreign direct investment (FDI).

Through clearer entry requirements, the directive reflects Ethiopia’s commitment to building a more open, transparent, and investor-friendly business environment, while ensuring foreign investment supports the country's broader development objectives.

Expanded Access to Export Trade

Foreign investors are now allowed to participate directly in the export of strategic commodities, including raw coffee, oilseeds, khat, pulses, hides and skins, forest products, poultry, and livestock. 

This change significantly expands foreign involvement in Ethiopia’s agricultural and natural resource exports, which were previously heavily restricted under earlier regulations.

Liberalization of Import Trade

The import sector has also been broadly opened to foreign investment. Foreign investors may now import most goods, with a few exceptions such as fertilizers and petroleum products, which remain restricted.

Opening of Wholesale Trade

Foreign investors are permitted to engage in wholesale trade across all sectors, except for the wholesale of fertilizers. This measure allows foreign businesses to distribute both imported and domestically produced goods, contributing to a more efficient and diversified supply chain.

Controlled Entry into Retail Trade

For the first time, Ethiopia’s retail sector is open to foreign investors, subject to specific conditions. Investors must meet a minimum paid-up capital requirement of USD 2.5 million, which may be contributed in cash or through in-kind assets. In-kind contributions must be professionally valued and certified by experts designated by the Ethiopian Investment Commission (EIC).
In addition, the Investment Board has the authority to approve lower capital thresholds for single-brand retail operations, depending on the investor’s global reputation and business model.

Due Diligence and Integrity Requirements

Foreign investors seeking to invest under this directive are required to submit a comprehensive due diligence report as part of their investment permit application. The report may be prepared either by the investor or by a recognized national or international verification agency.
The report must confirm that the investor is not subject to international sanctions, has no record of illicit activities, and maintains financial stability, operational capacity, and business integrity.

Permit Issuance and Regulatory Oversight

The Ethiopian Investment Commission (EIC) serves as the lead authority responsible for processing investment applications, verifying compliance, and issuing investment permits. Once a permit is issued, the Ministry of Trade and Regional Integration grants the relevant business license.

Professional Assessment and Outlook

Directive No. 1082/2025 introduces meaningful reforms to Ethiopia’s investment framework, easing capital requirements and relaxing long-standing restrictions that previously limited foreign investor participation in major trade sectors.

These reforms provide clearer entry conditions and expanded market access, giving foreign investors greater legal certainty and predictability for investment planning and operations. The relaxed participation rules create a stronger platform for foreign businesses to enter and grow within Ethiopia’s economy.

For the Ethiopian government, the directive serves as a targeted policy tool to attract sustainable foreign direct investment, strengthen foreign exchange reserves, promote fair competition, and ensure that foreign participation contributes to national development objectives.

Overall, Directive No. 1082/2025 represents a carefully designed reform that supports Ethiopia’s broader economic diversification, job creation, technology transfer, and long-term competitiveness as a growing investment destination.