Ethio Alliance Advocates

Ethiopia’s Investment Incentive Reform 2026: Key Legal Shifts from Regulation 517/2022 to 586/2026

Ethiopia’s Investment Incentive Reform 2026: Key Legal Shifts from Regulation 517/2022 to 586/2026

Mar 10, 2026 |

Ethiopia has significantly revised its investment incentive regime with the replacement of Investment Incentive Regulation No. 517/2022 by the new Regulation No. 586/2026. This reform shifts the system from multi-year tax holidays and broad customs exemptions to a performance-based framework with targeted incentives. In essence, blanket income tax holidays are eliminated, replaced by reduced tax rates tied to priority sectors and performance, and new incentive categories (such as Special Economic Zones, start-ups, and green investments) have been introduced. The core customs duty benefits are largely retained but with refined conditions. This legal update outlines the key changes between the two regulations across five dimensions: tax incentives, customs duty incentives, administrative procedures, eligibility criteria, and sectoral priorities, and concludes with implications for investors and practitioners. 

read more
Legal Insight: New Developments in Ethiopia’s Foreign Exchange Framework

Legal Insight: New Developments in Ethiopia’s Foreign Exchange Framework

Mar 10, 2026 |

Following the comprehensive macroeconomic reform program, the National Bank of Ethiopia (NBE) has undertaken significant measures aimed at liberalizing the foreign exchange regime and fostering the development of a more efficient and market-oriented forex system. A central pillar of these reforms has been the gradual removal of current account restrictions and the introduction of regulatory flexibility designed to stimulate foreign exchange inflows, encourage investment, and enhance market confidence.

read more
Risk Based Capital Adequacy Requirements for Banks-Directive No. SBB/95/2025

Risk Based Capital Adequacy Requirements for Banks-Directive No. SBB/95/2025

Nov 27, 2025 |

By Kaleegziyabher Gossaye.
The directive is organized into six parts. The first part outlines the general provisions of the directive. The second part deals with definition of capital. The third part discusses the capital requirements for credit risk. The forth and the fifth part extend to the capital requirements of market risks and operational risks. The last part, but not the least, is dedicated to miscellaneous provisions.

read more
Ethiopia’s Amended Income Tax Proclamation: Implications for Revenue, Professionals, & Investors

Ethiopia’s Amended Income Tax Proclamation: Implications for Revenue, Professionals, & Investors

Aug 17, 2025 |

The goals of the amendment are typically outlined in the preamble of the proclamation. Therefore, the objectives mentioned in the preamble include: improving revenue collection through adjustments to the rates applied to certain incomes; expanding the tax base; creating an efficient system of tax incentives; and curbing tax avoidance strategies, which encompass restrictions on cash payments.

read more
U.S. International Tax Law in a Coffee Bean

U.S. International Tax Law in a Coffee Bean

Jul 28, 2025 |

The highlands of Ethiopia are widely regarded as the birthplace of coffee. The story of Ethiopian coffee dates back to around 850 AD, when both Arabica and Robusta coffee are believed to have originated. Today, Ethiopia remains the top coffee producer in Africa, cultivating over 5,000 varieties. Coffee is a major global export for the country, where agriculture remains a key driver of the economy. Ethiopia also ranks first in wheat production and third in maize production across Africa.

read more
Tax Audits in Crisis: Can Ethiopia’s New Directive Restore Trust in the System?

Tax Audits in Crisis: Can Ethiopia’s New Directive Restore Trust in the System?

Jun 26, 2025 |

Ethiopia has introduced new tax audits, conducting procedures, and the Assessment Directive No. 1063/2025, marking a significant development in its tax history. Tax audits represent a major challenge within the Ethiopian tax system; the implementation of tax audits contradicts the voluntary compliance expected from taxpayers under the self-declaration tax policy. During these audits, tax auditors often seek additional taxes without a legal foundation, aiming to meet monthly revenue collection targets. This trend significantly harms taxpayers, leading to non-compliance with tax laws and fostering illegal practices.

read more
The National Bank of Ethiopia issued new directives on June 25, 2025, finalizing the opening of the country’s financial sector to foreign players

The National Bank of Ethiopia issued new directives on June 25, 2025, finalizing the opening of the country’s financial sector to foreign players

Jun 26, 2025 |

Directive No. SBB/94/2025 provides a structured regulatory framework for banking operations in Ethiopia. The directive outlines the procedures for licensing and renewing banking businesses and representative offices. Adhering to these guidelines is crucial for maintaining the stability and integrity of the banking sector in Ethiopia.

read more
Major Changes in Ethiopia’s VAT Regime

Major Changes in Ethiopia’s VAT Regime

Nov 30, 2024 |

On June 27, 2016, during its 36th regular meeting, the House of Peoples Representatives ratified Value Added Tax (VAT) Proclamation No.1341/2016, by replacing Proclamation No.285/1994. The Proclamation became effective immediately upon its approval.

The proclamation incorporated substantial updates in the VAT proclamation, it tried to address changes in economic activities, electronic transactions, tax exemptions, and the relationship between input and output tax, and aligned the system with existing global standards. It is made to create clear and effective legal frameworks that contribute to an efficient implementation of VAT within the national legal system.

read more
Love unto Grave (ፍቅር አስከ መቃብር): The Circulated Contract’s Implications

Love unto Grave (ፍቅር አስከ መቃብር): The Circulated Contract’s Implications

Nov 20, 2024 |

The well-known and prominent novel love unto Grave (ፍቅር አስከ መቃብር) was adapted in the film series aired by the state media, EBC, in early October. The film series produced by EBC and directed by the renowned cinematographer and director Sew Mehon (Somic). However, after airing for four consecutive episodes, the federal Supreme Court, up on the application of the author heirs issued an interlocutory injection order suspending the broadcasts. Additionally, the court is now entertaining the case brought by the heirs, summoning the defendants to submit their statement of defense.

read more
Legal updates and Recommendations on the Draft Real Estate Bill in Ethiopia

Legal updates and Recommendations on the Draft Real Estate Bill in Ethiopia

Oct 27, 2024 |

The draft bill on Real Estate Development, Marketing, and Property Valuation has been tabled before the House of Peoples’ Representatives (HPR) for ratification following discussions by the Council of Ministers. This article aims to highlight the contents of the draft proclamation as a legal update and point out areas of concern that should be reconsidered during the ratification process.

read more
Immigration

Immigration

Jul 4, 2024 |

Our law firm has team of lawyers having knowledge and experience in assisting people with immigration related matters. Our lawyers ensure fulfillment of all necessary documents, provide advice on visa application and make sure that all requirements are adhered to....

read more
Investment

Investment

Jul 4, 2024 |

Lawyers play crucial role in protecting interests of investors by identifying legal requirements regulating investments and ways to comply with those requirements. Deal-making, negotiation, assessment of risks and benefits related to merger and acquisition; ensuring...

read more

Energy

Mar 18, 2024 |

The sector of Energy is a pivotal sector in the development strategy of the country in terms of consumption for households to investments and export to earn foreign currency.  In this regards, Ethiopia issued a proclamation that enables and facilitate the private...

read more

Aviation

Feb 19, 2024 |

Because of liberal approach brought by the investment proclamation No. 1180/2020, foreign investors are allowed to carry out domestic air transportation jointly with domestic investors and international air transportation jointly with government of Ethiopia....

read more

Technology, Media & Telecommunication

Feb 19, 2024 |

Ethiopia’s focus on building green economy has opened up opportunity for investors working on areas of manufacturing environment friendly machineries.  The country gave also more attention to involvement of artificial intelligence on its different economic sectors. It...

read more

Mining

Feb 19, 2024 |

Now, in Ethiopia many foreign and local companies are operating in different mining commodities to be benefitted and benefit the country at large.  Apart from this, there are a large assortment of future investments opportunities found in Ethiopia in terms of mutual...

read more

NGO’s

Feb 19, 2024 |

The Ethiopian parliament issued Civil Societies organizations proclamation no 1113/2019 with the aim of ensuring the fullest exercises of freedom of association to protect the rights of citizens and to enhance the development and the democratization of the country. In...

read more

Government & Public Law

Feb 19, 2024 |

At the heart of a just society lies Government and Public Law. Ethio-Alliance Advocates LLP navigates this intricate domain, ensuring responsible governance, safeguarding public interests, and upholding individual rights. We serve diverse clients: like government...

read more

Hospitality & Leisure

Feb 19, 2024 |

This blossoming sector, brimming with hotels, restaurants, theme parks, and travel agencies, weaves a tapestry of experiences enriching lives and propelling economic growth. Its impact reverberates: generating billions, creating millions of jobs, attracting foreign...

read more

Infrastructure

Feb 19, 2024 |

Following the promulgation of the investment proclamation, some sectors that were considered to be reserved only for the public sector have been open for the private sector. Public private partnership (PPP) can help overcome inadequate infrastructure that hinders...

read more

Real Estate & Conveyance

Feb 19, 2024 |

EAA’s Real Estate Practice area Group provides comprehensive advice on all aspects of real estate laws, including setting up of a real Estate company, acquisition, development, leasing, financing, compliance, entitlements, and disposition. EAA’s Real Estate lawyers...

read more