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29
April

Business Registration and Licensing Procedures

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The years 2010/2011 have been demanding for the Ethiopian business community. A wave of new proclamations, regulations and directives on taxes, business registration and licensing, price caps, private employees pension scheme, etc have been passed, issued or announced. We have written in this article the procedures on the commercial registration and business licensing in Ethiopia.
The Ethiopian Standard Industrial Classification (Download Here)
Commercial Registration and Business Licensing Proclamation No. 686/2010 or 686/2002 EC (Download Here)
Many businesses have been asking 2merkato.com to post the procedures for the new licensing regulation in Ethiopia based on Proclamation 686/2010. We have written the highlights of the regulation here. And the procedures can be found below.
Existing businesses were required to re register according to the new regulation till 7 July 2011. (It was extended by a month till 6 August 2011)
According to the information we obtained from the Ministry of Trade office, the Subcity Trade offices, one can get licensed for as many businesses as possible. However, only one major group will be there on one license. As many as 9 sub-groups can be put on one license if these categories fall under the same Major Group. Some types of subcategories require certificate of professional competence given by the concerned body of the government. We have downloaded the Ethiopian Standard Industrial Classification from Ethioinvest.org and one can download it from here . This document contains detail references of what type of businesses should get certificates of professional competence from where.  
1.    What is new?
2.    Major Divisions of the new licensing standard
3.    Commercial Registration Procedures
4.    Business Licensing Procedures

What is new?
These are some of the new additions/requirements
•    Bank statements/ asset evaluation are required to attest the registered capital of a business, but this was not required before.
•    Certificate of competency issued by the concerned governmental body. This used to be done for a few categories only. Now the majority is required to have this certificate.
•    A title deed  for own offices of  an authenticated contract of lease (by Wilina Masreja) if it's leased.
•    General forms of business such as General Import, General Export are not allowed. The subcategory has to be specified as per the Ethiopian Standard Industrial Classification.

Major Divisions for the Ethiopian Business Licensing Categories
According to the Ethiopian Standard Industrial Classification (ESIC), which is adapted from the International Standard Industrial Classification (ISIC), we have ten divisions and in total there are about 900 different sub-categories.
1.    Agriculture, Hunting, Forestry and Fishing
2.    Mining and quarrying
3.    Manufacturing
4.    Electricity, Gas and Water Supply
5.    Construction
6.    Wholesale and Retail Trade, Repair of Motor Vehicles, Motor Cycles and Personal and Household Goods; Hotels and Restaurants; Import and Export
7.    Transport, Storage and Communication
8.    Financial Inter mediation, Insurance, Real Estate and Business Services
9.    Community, Social and Personal Services
10.    Private Household Exterritorial, Non-governmental Organizations, Representatives of Foreign Governments and Other Activities not Adequately Defined

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