Ethiopia’s home market is huge, with over 100 million inhabitants, making it Africa’s second most populated country after Nigeria. Ethiopia has been one of the world’s fastest-growing industries in the recent ten years, with overall yearly development rates spanning 7% to 12%. With generalized legislative adjustments made under the new administration, the economic climate changed dramatically.

Ethiopia is a member of the following international trade deals:

Bilateral Investment Treaty with Algeria

In 2002, Algeria and Ethiopia signed the Bilateral Investment Treaty (BIT). As stated in the trading contract, the deal shall apply to capital invested in either Contractual Party’s area in conformity with its rules and regulations by investors from the other Participating State before to or after the coming to effect of this deal. 

It will not, however, apply to claims stemming from conflicts that happened before it came into law.

Each Signatory is required to promote investments in its region by capitalists from the other Participating states in conformity with its regulations, to provide a favorable environment for such investments, and to conduct them fairly and equally.

In the area of the other Contractual Member, the investments of one Participating Party’s investors are fully protected under this agreement. 

Bilateral Investment treaty between Ethiopia and Germany 

The Empire of Ethiopia and The Federal Republic of Germany ratified the agreement in 1964 to enhance industrial ties between the two countries and create a favorable environment for operations by citizens and firms of either country in the other’s country.

According to the treaty, each Signatory will promote, as far as practicable, investments by citizens or firms of the other Signing State on its territory and will accept such investments in line with its regulations. If made in compliance with such legislation, such assets will be fully protected under the present Treaty. In any case, each Contracting Party must handle such investments fairly and equally.

Ethiopia-Libya BIT

Libya and Ethiopia established a trade pact in 2004 intending to encourage, promote, and protect investments, as well as a desire to expand both countries’ economic cooperation on equal ground and common goals.

The policy emphasizes that assets and services linked with purchases of investors of either Contracting Party will be granted fair and equitable respect and shall be protected in the region of the other Negotiating Member under Article 3; fair and honest treatment.

The Netherlands, Switzerland, Austria, India, Malaysia, Finland, Belgium, Turkey, Equatorial Guinea, China, Israel, Russia, the United States, the United Kingdom, Egypt, Italy, South Africa, Yemen, Tunisia, Djibouti, Spain, Qatar, France, Sudan, Kuwait, Iran, and Sweden are among the countries that have ratified bilateral trade accords with Ethiopia.

Double Taxation Treaty 

Cyprus’ system of Double Taxation Treaties continues to grow with the conclusion of a new DTT with the Federal Democratic Republic of Ethiopia on December 30, 2015.

The agreement was issued in the official Cyprus Government Gazette on January 18, 2016, and is built on the OECD Model Agreement on the Prevention of Double Taxes on Earnings.

The execution of this deal further validates the Cypriot administration’s attempts to enhance economic and commercial links with Africa, as another four DTTs with African nations, namely South Africa, Mauritius, Seychelles, and Egypt, are already in place.

Ethiopia-Cyprus 

As per this agreement, if the beneficiary is the principal shareholder of the assets, the tax liability will be no more than 5% of the net dividend amount.

Ethiopia has double tax treaties with 12 countries, including Russia, Italy, Turkey, France, Israel, South Africa, Kuwait, the Czech Republic, Yemen, and Romania.

Africa Continental Free Trade Agreement (AfCFTA)

This pact aims to create a tariff-free continent that may help local businesses flourish, intra-African commerce expands, industrialization improves, and jobs are created. The deal establishes a unified continental market for products and services, as well as a customs union that allows capital and business visitors to freely transit.