As you prepare to grow your business overseas, you’ll need a legal presence established in the new country. At Globalization Partners, we offer a seamless alternative to subsidiary setup so you can save time and resources and start doing business sooner. Let us partner with you and streamline the process for your business growth worldwide.
How to Set up an Ethiopia Subsidiary
Establishing a business in Ethiopia typically takes about 32 days, so start the process with adequate time before beginning work abroad. While the country does not require a paid-in minimum capital deposit, you may want to put some money into a local bank to prepare for setup expenses. Another critical decision to consider is the type of business you’ll establish. The option that will likely fit your requirements for a new business entity is a Limited Liability Company (LLC).
National labor laws and market standards outline steps you’ll need to accomplish to establish your company in the country. Plan your strategy for completing each part of the process and make sure you have the resources on hand to meet requirements.
1. Reserve a Company Name With the Ministry of Trade
Your first step is to reserve a unique name for your company in the country. You’ll need to submit a form and receive a Letter of Recommendation (LR) to include with your articles of association and memorandum as you continue the process. After you pay Ethiopian Birr (ETB) 27, you can get a confirmation letter of your company name which the Ministry of Trade must send to the Ethiopian Revenues and Customs Authority.
You’ll also need to publish your company name in the national newspaper for 15 days to ensure its availability. This process will cost ETB 300.
2. Authenticate Your Company Paperwork
Next, you’ll need to appear with any company partners at the Documents Authentication and Registration Office (DARO) to verify your identity and the validity of any documentation. This step will cost about ETB 451.
3. Obtain a Tax Identification Number
Apply to the Ethiopian Revenue and Customs Authority for a tax identification number (TIN) and certificate.
4. Register Your Company
You can submit your articles of association and memorandum through the Commercial Register and obtain a registration certificate for ETB 102.
5. Register for Social Security
As an employer, you are responsible for registering your business and your employees with the Private Organizations Employees Social Security Agency (POESSA).
6. Get a Business License
To begin conducting business in the country, you’ll need to obtain a business license through the Ministry of trade for ETB 102.
The Benefits of a Subsidiary in Ethiopia
A subsidiary is a solution that some companies choose for international business. Once they’ve established a legal presence in the country, they are free to hire local professionals, establish relationships with business partners, and conduct other operations in-country. They’ll also have the advantages of minimized liability because a subsidiary can assume legal risk as a separate legal entity.
While a subsidiary can be an effective option for some global businesses, it’s not the best solution for every company. The setup process requires extensive resources, and it can involve complex transactions and legal regulation.
With Globalization Partners as your Employer of Record (EOR), you have a solution that delivers the advantages of a subsidiary with minimized risks and no time-consuming setup. You can choose us to provide subsidiary outsourcing, promptly establishing your business in the country so you can start hiring and networking sooner.
Establish Your Business Globally With Globalization Partners
When you need a trusted partner to handle your business setup in a new country, Globalization Partners is here to help. Get in touch with our team today to learn more about how we can streamline your operations.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.