The latest regulations contained in the regulator Foreign Exchange Directive No. FXD/01/2024 dated July 2024 also prohibit Ethiopian nationals from holding and operating foreign currency accounts abroad.

Foreign investors are eligible to acquire external loans when the debt ratio does not exceed 60:40 of foreign capital.

“Unless expressly authorized by the NBE, no Ethiopian national, whether natural or legal person, residing in Ethiopia is permitted to own, possess or operate a foreign currency account abroad,” the regulation states.

The new rules provide that foreign investors who earn profits or dividends from their investments recognized and registered in Ethiopia will be required to produce tax receipts proving payment of all taxes owed to the government before sending their money home.

Foreign investors will also be required to provide authenticated minutes of the board of directors or equivalent body distributing profits or declaring dividends duly signed by the chairman or secretary of the board of directors and a copy of the financial documents usual closing dates duly audited by an independent third party. party monitoring institution authorized to operate in Ethiopia.

Other requirements include a valid business license, application letter, capital registration letter issued by the National Bank or Investment Authority, memorandum and articles of association and any other supporting documents that the NBE may require .

Branches of foreign companies operating in Ethiopia wishing to repatriate money are also required to meet these conditions, with the exception of authenticated board minutes.

The rules also prohibit investors managing foreign currency accounts from withdrawing their accounts.

The regulator allows foreign investors to repatriate proceeds from the sale or liquidation of a company, proceeds from the transfer of shares or ownership of a company, return of investment if not able to start the operation and profits of portfolio investments in equity or debt securities.

A foreign investor terminating its operations in Ethiopia will need to obtain approval from the NBE to repatriate its capital.

This after having produced a report of the decisions of the shareholders/partners, if they are organized in the form of a letter of declaration of legal entity by the owner, in the case of a sole proprietorship, an authenticated liquidation report by the court of competent authority and a letter from the Ministry of Commerce confirming the revocation/cancellation of the permit.

Other requirements include audited balance sheet and income statement, foreign capital registration letter, tax clearance from a relevant government authority and any other documents that may be required by the Bank.

The NBE also sets the maximum ownership shares of any given security (stocks or bonds) that can be held by foreign portfolio investors and also prescribes minimum mandatory periods during which a given foreign portfolio investor must invest before seeking to exit and /or to liquidate his portfolio. portfolio position.

A person entering Ethiopia with foreign currencies must convert them into an equivalent amount in birr or deposit it into their foreign currency account within 30 days from the date of entry stamped on the travel document by the Ethiopian Foreign Exchange Service. Immigration and Citizenship, specifies the regulations.