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June 12 2025
The Ethiopian Investment Board has repealed Directive No. 1001/2024 and introduced Directive No. 1082/2025 to liberalize foreign investor participation in Ethiopia’s trading sector. This legal update outlines the major reforms introduced under the new directive and their implications for foreign investors.
Key Changes Introduced by the New Directive
Export Trade Reform
Directive No. 1082/2025 introduces a significant departure from the restrictive framework established under its predecessor, Directive No. 1001/2024. The former directive imposed stringent eligibility criteria, requiring foreign investors to demonstrate prior procurement volumes or contractual commitments ranging from USD 500,000 to USD 10 million annually over a three-year period, or alternatively, to furnish valid purchase orders of equivalent value in the absence of such history.
Under the revised regime, these quantitative thresholds have been repealed. In their place, the directive mandates the submission of a comprehensive due diligence report as the principal condition for participation. This report must substantiate the investor’s integrity, operational capacity, and financial soundness. It must also confirm the absence of the investor from national and international sanctions lists, and provide a thorough assessment of any involvement in illicit activities, including but not limited to money laundering, narcotics trafficking, and terrorism financing.
By eliminating minimum export value requirements—such as the previously mandated USD 10 million for coffee and USD 5 million for oilseeds—the directive lowers market entry barriers, thereby facilitating broader participation by small and medium-sized enterprises (SMEs) and new entrants. At the same time, the due diligence requirement ensures that liberalization is balanced with investor accountability and regulatory oversight.
Import Trade Reform :
While the exclusion of fertilizer and petroleum imports remains in effect, the directive repeals the burdensome eligibility criteria previously mandated under Directive No. 1001/2024.
Under the former regime, foreign investors were required to satisfy one of several conditions: they had to be the original manufacturer of the goods to be imported, an authorized agent of such a manufacturer, or an existing Ethiopian manufacturer exporting at least 50% of its production. In the absence of these qualifications, investors were obligated to submit a detailed import plan and enter into a binding agreement with the relevant authorities.
The revised directive eliminates these procedural and substantive hurdles. In their place, it introduces a singular requirement: the submission of a comprehensive due diligence report. This report must attest to the investor’s integrity, operational capacity, and financial standing, and must be prepared in accordance with the standards outlined in Article 5(2) and 5(3) of the directive.
By replacing rigid structural prerequisites with a uniform due diligence requirement, the directive enhances regulatory clarity and facilitates broader access to Ethiopia’s import trade sector, particularly for new entrants and small-to-medium enterprises, while preserving safeguards for market integrity and compliance.
Wholesale Trade Reform:
While the exclusion of fertilizer from wholesale trade remains in effect, the directive repeals the prior obligations imposed under Directive No. 1001/2024, which required investors to commit to constructing modern marketing infrastructure or to enter into pre-permit contractual arrangements with regulatory authorities.
Under the revised framework, the issuance of investment permits is now contingent solely upon the submission of a comprehensive due diligence report. This report must substantiate the investor’s integrity, competence, and financial capacity, as outlined under Article 5(2) and 5(3) of the directive. Once approved, foreign investors are permitted to engage in the wholesale distribution of both imported goods—procured under a valid import permit—and domestically sourced products.
Retail Trade Reform
Directive No. 1082/2025 introduces a substantial liberalization of Ethiopia’s retail trade sector by replacing the previously onerous infrastructure-based entry requirements with a simplified capital-based threshold. Under the repealed Directive No. 1001/2024, foreign investors were required to undertake significant physical infrastructure commitments—such as establishing five supermarkets of at least 2,000 square meters each (with two operational prior to licensing), two hypermarkets of at least 5,000 square meters each (with one operational), or a single retail outlet of no less than 10,000 square meters completed prior to licensing.
The new directive eliminates these structural obligations and instead imposes a streamlined requirement: a minimum paid-up capital of USD 2.5 million, in the form of cash or assets. In addition, the investor must submit a comprehensive due diligence report prepared by a recognized national or international verification agency. This report must attest to the investor’s integrity, operational capacity, and financial standing, in accordance with the standards set forth under Article 5(2) and 5(3) of the directive.
Notably, the directive also empowers the Ethiopian Investment Board to grant exceptions on a case-by-case basis for reputable single-brand retailers operating with smaller capital, thereby encouraging the development of niche retail formats and e-commerce-compatible business models. While the capital and infrastructure thresholds have been relaxed, the due diligence requirement remains a cornerstone of the regulatory framework, ensuring continued investor accountability and market integrity.
Institutional Oversight
The directive strengthens institutional oversight by empowering the Ministry of Trade and Regional Integration to monitor anti-competitive practices and protect consumer rights. A permanent joint committee—comprising the Ethiopian Investment Commission, Ministry of Trade, Ministry of Revenue, Customs Commission, National Bank, and others—will oversee implementation and ensure alignment with national economic goals
