Ethiopia Permitted Offshore Account
Due to Ethiopia’s strict currency controls, businesses registered in the country have historically been prohibited from using foreign bank accounts for making foreign currency payments. This has created obstacles for businesses operating in the country and impeded foreign investment, while also limiting exchange inflows and the ability to purchase from overseas.
In response, the National Bank of Ethiopia recently issued a directive allowing businesses investing in strategic areas to use offshore bank accounts to settle payments on capital expenses, insurance, contractors, maintenance and operation expenses, and external debt services.
These strategic areas include public-private partnership (PPP) power generation and infrastructure projects with large-scale capital investment, large-scale mining projects with substantial export potential, and infrastructure projects. In addition, other foreign investments may be eligible based on their strategic importance and potential for foreign exchange earnings, employment creation, technology transfer, and import substitution ability.
The new directive also guarantees foreign currency convertibility for dividend repatriation and loan repayments for strategic PPP power and mining projects.
For more information on this new Offshore Account Opportunities, Contact Commercial Specialist Yemesrach Kassu, Yemesrach.Kassu@trade.gov