Recognizes branches of foreign business organisations and "groups" of companies

On 25 March 2021, the House of Peoples Representatives of Ethiopia approved a new Commercial Code, which replaced the Commercial Code of 1960. Key innovations include: 1) Allowing foreign business organisations to carry out their business through their branches in Ethiopia, provided the branch (i) is registered in the Commercial Register kept by the Ministry of Trade and Regional Integration and (ii) has its own manager. 2) Recognizing the concept of "groups of companies", which may be of interest to investors wishing to set up multiple entities in the country (art. 550). The Code defines a "group" as an economic entity comprising a parent company and both domestic and foreign subsidiaries. 3) Defining the terms "subsidiary", "parent company", "wholly owned company" and "control", thus providing the framework for group companies and certain governance practices (art. 551 and seq.).

• Type:

  • Entry and establishment (Ownership and control)
  • Treatment and operation (Company laws and corporate governance)

• Industry:

  • Not industry specific

• Sources:

  • Clifford Chance, Ethiopia: New Commercial Code, https://www.cliffordchance.com/content/dam/cliffordchance/briefings/2023/02/ethiopias-new-commercial-code.pdf, 02 Mar 2021