How to Start a Company in Ethiopia: A Practical 2026 Guide

Starting a company in Ethiopia is a sequence of registrations and approvals. In simple terms, you choose the business activity and legal structure, reserve the name, authenticate the documents, obtain a TIN, register the business, and obtain the licenses needed to operate.

The exact documents and office can change by legal structure, location, and business activity. Prepare the items below, then confirm the current checklist with the responsible office before submitting.

Company registration at a glance

1. Define the business activity and choose a legal structure.
2. Reserve a unique company name.
3. Prepare and authenticate the formation documents and business address.
4. Obtain a Taxpayer Identification Number (TIN).
5. Obtain the commercial registration certificate.
6. Obtain a competency certificate if the activity requires one.
7. Obtain the trade or business license.
8. Register employees for income tax and pension when applicable.
9. Set up tax records, invoices, and annual license renewal.

Step 1: choose the activity and legal structure

Write down exactly what the business will sell or provide. This determines the activity code, licensing office, and whether a sector regulator must approve the business.

Then choose the legal structure. Common choices include a sole proprietorship, private limited company (PLC), one-member PLC, or share company. A sole proprietor operates personally. A PLC or share company is a separate legal entity and requires formation documents.

Step 2: reserve a company name

For a PLC or share company, prepare three name options. Submit them through the Ministry of Trade and Regional Integration, the relevant Trade Bureau, or the available online service. The officer or system checks for duplicate names and confirms the accepted name.

• Choose names that are easy to spell and clearly different from existing businesses.
• Keep the name-confirmation document for the next steps.
• A company-name reservation is not the same as trademark protection.

Step 3: authenticate the formation documents

A PLC or share company prepares a Memorandum and Articles of Association. A one-member PLC uses the appropriate single-member formation document. Sole proprietors generally use their identity and business documents instead of company articles.

Submit the formation documents, accepted company name, identity documents, and proof of the business address to the competent document-authentication service. Founders, the manager, and sometimes the landlord may need to appear in person depending on the documents being authenticated.

• Check that names, identification numbers, ownership percentages, and addresses match on every document.
• If the address is rented, prepare the lease and the landlord’s supporting documents.
• Keep the authenticated originals and clear digital copies.

Step 4: obtain a TIN

Apply for a Taxpayer Identification Number at the responsible Revenue office or through an available digital service. A sole proprietor applies personally. A company is normally represented by its appointed manager.

Submit the requested form and supporting documents, complete any required biometric registration, and check the TIN certificate carefully. The spelling of the business name and the TIN must match the commercial-registration documents.

Step 5: obtain commercial registration

Commercial registration creates the official record of the business. Apply through the Ministry of Trade and Regional Integration, the relevant Trade Bureau, or the available online service.

The application normally includes the authenticated formation documents, accepted company name, authenticated address evidence, TIN certificate, manager information, and the prescribed fee. Commercial registration alone does not authorize the business to start trading; the relevant trade license is still required.

Competency certificate when required

Some activities require proof that the business has qualified staff, suitable premises, equipment, vehicles, or other sector-specific capacity. The responsible sector agency may review documents and inspect the premises before issuing a competency certificate.

Ask the Trade Bureau whether the selected activity code requires this certificate and which agency issues it. Skip this step only when the licensing office confirms that it is not required.

Step 7: obtain the trade license

A valid trade or business license allows the company to carry out the approved activity. Submit the commercial-registration certificate, TIN certificate, competency certificate when required, and the other documents listed for the activity.

The Ministry of Trade and Regional Integration currently describes trade-license renewal as annual. Keep the tax-clearance and accounting records needed for renewal, and follow the expiry date printed on the license.

Step 8: register employees

When the business hires employees, register the employer and employees for the applicable employment-income tax and pension obligations. Keep employment agreements, payroll records, declarations, and proof of payment.

This step can be completed alongside banking, accounting, and operational setup after the company documents are available.

Step 9: set up current tax records

Do not follow the old Turnover Tax (TOT) registration procedure. Ethiopia’s 2025 income-tax amendment repealed the former TOT regime.

The repeal does not automatically make every business VAT-registered. Ask the responsible Revenue office whether the business must register for VAT under the current VAT law and registration rules. A business that is not required to register for VAT still has income-tax, bookkeeping, invoicing, and filing obligations.

• Confirm the business’s taxpayer category and VAT status.
• Use approved invoices or fiscal devices as instructed.
• Record sales, expenses, payroll, withholding, and bank transactions.
• File returns and make payments by the deadlines given by the Revenue office.

Simple document checklist

• Identity documents for the owner, founders, and manager
• Three proposed company names
• Formation documents for the selected legal structure
• Lease, title, or other accepted address evidence
• TIN certificate
• Commercial-registration certificate
• Competency certificate when required
• Trade or business license
• Accounting, VAT-status, invoice, payroll, and renewal records

Frequently asked questions

Can one person register a company?

Yes. A person can operate as a sole proprietor or use the one-member PLC structure when limited liability and a separate legal entity are preferred.

Is commercial registration enough to start operating?

No. The business must also obtain the trade license and any competency or sector approval required for its activity.

Does every business need a competency certificate?

No. It depends on the business activity. Confirm the requirement and issuing agency before applying for the trade license.

Is TOT still used?

The former Turnover Tax regime was repealed in 2025. Confirm the business’s current VAT and income-tax treatment with the responsible Revenue office.

How often is the trade license renewed?

The current Ministry of Trade service page describes renewal as annual. Follow the expiry date on the license and the current online or Trade Bureau instructions.

Continue the series

• How to Start an E-Commerce Company in Ethiopia
• How to Start a Ride-Hailing App in Ethiopia
• How to Start an Equb App in Ethiopia

Official sources

• Ethiopian Business Portal — Starting a Business
• MESOB — Government Services
• Ministry of Trade and Regional Integration — Trade License Services
• Value Added Tax Proclamation No. 1341/2024
• Income Tax (Amendment) Proclamation No. 1395/2025
• Ethiopian Intellectual Property Authority — Registration Procedure

This is a practical preparation guide. Use the current forms and instructions issued by the responsible office for the business’s location and activity.