The Ethiopian government has announced an ambitious set of policy reforms aimed at transforming regulations to better support the growth of startups in the country.
At an event on April 4th dubbed "Startup Ethiopia," federal authorities outlined wide-ranging changes across several ministries and agencies that will impact taxation, international payments, access to funding, intellectual property protection, and more.
Some of the key reforms unveiled include allowing startups to retain 100 percent of foreign currency earnings from service exports, unlike previous rules limiting it to 50 percent. They will also benefit from tax incentives like a tax holiday and loss carryforward provisions.
The Ministry of Revenue will also no longer require office lease agreements for tax registration of startups, only requiring a digital ID.
The Ethiopian Investment Commission is also reviewing investment laws to allow foreign investors more flexibility in minimum capital rules for backing local startups.
To boost access to financing, the National Bank of Ethiopia will study adjusting commercial bank debt leverage policies while the Development Bank of Ethiopia launches new equity funding windows for innovative enterprises.
Ethiopian Investment Holding (EIH) will partner with international financiers to establish a startup-focused venture capital fund as well.
Streamlining of intellectual property registration processes along with specialized customs support services and preferential payment facilities were other major policy adjustments proposed.
The coordinated reform package aims to incentivize entrepreneurship through targeted changes addressing key pain points in the regulatory landscape, according to government officials.
