Ethiopian Startup Proclamation No. 1396/2025

Federal Negarit Gazette, 31st Year No. 65, Addis Ababa, 2 September 2025. Published here for reference by the Ministry of Innovation and Technology.

PROCLAMATION No. 1396/2025
ETHIOPIAN STARTUP
PROCLAMATION
WHEREAS, globally the results of startups
supported by innovation and technology are
gradually contributing to economic growth and
development by creating large industries and
companies;
WHEREAS, Since startups play a key role in
accelerating economic growth and
development by harnessing Ethiopia's potential
and enabling it to become globally
competitive;
WHEREAS, since it is important to make
startups effective and successful by building a
conducive startup ecosystem;
WHEREAS, it is important to ensure
sustainable technological and economic
progress by establishing a streamlined system
of designation, accreditation, and capacity
building that provides targeted, integrated
support to startups and startup ecosystem
builders;

Article 55 Sub-Article (1) of the Constitution
of the Federal Democratic Republic of
Ethiopia, it is hereby proclaimed as follows.

PART ONE
GENERAL PROVISIONS
1. Short Title
This Proclamation may be cited as “Startup
Proclamation No. 1396/2025”.
2. Definitions
In this Proclamation, unless the context
requires otherwise:
1/ “Startup” means a person or a group,
with no or limited business history who
is engaged in creating economic value
through the introduction, creation,
transplantation, or reverse engineering of
a product, service, or process that
implements innovation, technology, or
technology enabled scalable, and market-
changing;

2/ “Accelerator” means a person, or a
program hosted by an entity that provides
an intensive, time-bound program
designed to support the establishment,
growth, and development of Startups;

growth of the economy, measurable
through one or a combination of
economic factors provided under Sub-
Article (5) of this Article;
5/ “Economic Factors” means factors that
helps to measure the economic value of
Startups and includes increased
efficiency and productivity, job creation,
export growth and diversification,
innovation, and social welfare
enhancement;
6/ “Foreign Investor” means any one of
the following who has invested foreign
capital in Ethiopia:
a) A Foreign national;
b) An enterprise in which a foreign
national has an ownership stake;
c) An enterprise incorporated outside of
Ethiopia by any investor;
d) An enterprise established jointly by
any of the investors specified under
Sub-Article (6) paragraph (a), (b) or
(c) of this article; or
e) An Ethiopian permanently residing
abroad and preferring treatment as a
foreign investor.

provides a supportive environment and
resources for Startups to foster their
growth and development;
9/ “Angel Investor” means a person who
invests his own capital in startups;

10/ “Grant” means capital provided to a
designated startup in the early stages of
development to cover costs associated
with the development and business
process of the startup;

11/ “Venture Capital” means a person
who invests in startups with financial,
technical, or managerial expertise that
have the potential to grow;

12/ “Innovation” means the creation,
development, and implementation of a
new product, service or process; or an
action that represents new solutions or a
significant improvement over existing
solutions;
13/ “Investor” means a person who invests
capital whether in cash or in kind in a
Designated Startup or a Designated
Startup Ecosystem Builder;

over-the-counter markets;

16/ “Regulatory Sandbox” means a
regulatory framework that allows for a
testing process of new products,
services, or processes of Startups under
the regulatory authority’s control and
oversight, prior to their introduction to
the Market;

17/ “Scalability” means the ability of a
startup to increase its market share at
low cost by adapting the quality,
efficiency, and performance of its
product, service, or process to
withstand market demand;
18/ “Startup Designation” means the
startup designated by the ministry in
accordance with this proclamation;

19/ “Startup Ecosystem” means the
interconnected network of actors and
organizations that provide resources,
knowledge, and support necessary to
foster the creation, development, and
growth of Startups;

higher education institutions, technical
and vocational education and training
institutions, research and development
agencies, non-governmental
organizations;
21/ “Tech-Enabled” means the utilization,
adoption, transplantation, or integration
of technology to innovate, enhance,
optimize, or transform processes,
products, services, or business models,
leading to improved efficiency,
outcomes, and innovation;

22/ “Region” means the regions established
under Article 47 of the Constitution of
the Federal Democratic Republic of
Ethiopia and newly organized in
accordance with Article 47, Sub-Article
(3) Letter (e), and the Addis Ababa and
Dire Dawa City Administrations;
23/ “Startup fund of funds” means an
investment fund that invests in startups
through other fund managers, which are
named after the fund, by holding shares
in other investment funds, either jointly
or separately, with individuals,
institutions or governments;

and regional levels.
PART TWO
POWERS AND FUNCTIONS
[
4. Powers and Functions of the Ministry
1/ The ministry shall have the following
powers and functions to implement the
provisions of this proclamation:
a) Coordinates startup ecosystem
development actors to create a
conducive environment for startups;
b) In accordance with this Proclamation
and any rules and regulations issued
pursuant to this Proclamation, it shall,
at the discretion of the committee,
grant a designation to a startup and
startup ecosystem developer, renew,
suspend or revoke the designation;
c) Manage the Startup Grant Program;

d) Conduct an annual evaluation and
issue a report on the performance of
Designated Startups and Designated
Startup Ecosystem Builders that are
recipients of incentives through the
mechanisms of this Proclamation.

2/ Create and administer a Digital Startup
platform.

c) Serve as a platform for interaction
between the Startup Ecosystem
Builders and other relevant
institutions;
4/ Notwithstanding Sub-Article (3) of this
Article, the Ministry may use the Digital
Startup Portal to discharge other
objectives as may be relevant to the
conduct of powers and functions given to
it under this Proclamation.
5/ It will work with the ministry of labor
and skills, while maintaining its
responsibility for coordinating and
monitoring capacity building;
6/ Organize and coordinate events to create
better understanding of the contribution
of startup and innovation to the economy,
in collaboration with the ministry of
labor and skill;
7/ The ministry, in collaboration with the
ministry of labor and skills, the ministry
of industry and other governmental and
non-governmental institutions, as well as
private sector actors, shall organize a
problem-solving competition and award
at least once a year.

a) Leads the coordination of government
institutions, the private sector, and
development partners that support
startup growth;
b) Review and approve monitoring and
evaluation reports on incentives
provided to Designated Startups and
Designated Startup Ecosystem
Builders;
c) Approve a strategy and monitor its
implementation to facilitate resources
which are needed to create a vibrant
Startup Ecosystem;
d) Ensure transparency and
accountability in the disbursement of
the Startup Grant provided under this
Proclamation;
e) Endorse the startup grant Directive to
be developed by the Ministry of
Finance and ensure its
implementation;
f) Initiate annual audits by an external
auditor licensed by the Accounting
and Audit Board of Ethiopia on the
accounts of the Startup Grant and, as
relevant, incentives provided to
Designated Startups and Designated
Startup Ecosystem Builders;

h) Notwithstanding to the provisions of
Subparagraph (h) of this Sub Article,
ensure that the annual audit report is
compiled, published and made
available to the public;
i) Hold a stakeholders consultation
composed of public and private sector
participants at least once a year to
identify obstacles that hamper the
development of the Startup Ecosystem
in Ethiopia;
j) Approves Directives regarding the
members of the national designation
committee and its procedures, as
proposed by the ministry;
k) Perform other activities which are
deemed necessary for the performance
of its functions provided under this
Proclamation.
2/ The Council shall give its powers stated
under Sub-Article (1) of this Article, to
the Science, Technology and Innovation
Council to be established by law.

startup Ecosystem Builder.
2/ Notwithstanding Sub-Article (1) of this
Article, being designated as a Startup or
startup Ecosystem Builder is a
prerequisite to be entitled for the
incentives and privileges provided under
this Proclamation.
SUB SECTION ONE
SATRTUP DESIGNATION AND
ESTABLISHING NATIONAL
DESIGNATION COMMITTEE
7. Eligibility for Designation as a Startup
1/ To be eligible for Designation as a
Startup, any person seeking to obtain the
designation of a startup shall meet the
definitional requirement of a Startup as
stipulated under this Proclamation.
2/ An individual who is not registered under
the law and meets the definition of a
startup as set out in this Proclamation
may be designated as a startup:
a) Be the owner of the product, process,
or service it provides or intends to
provide to the market or be able to
demonstrate in its application that it is
the owner by a signed affidavit;
b) Have at least Twenty Five percent of
its capital held by the founder; and
c) Not be a Public Company.

status.
8. Startup and startup ecosystem builder
certificate
1/ The designation certificate of the startup
must meet the following requirement:
a) Name of the Startup;
b) Founder/s’ name;
c) Growth stage of the Startup; and
d) Industry or sector of the economy that
it is engaged in.
2/ The Designation certificate of the startup
ecosystem builder shall meet the
following requirements:
a) Name of the Startup Ecosystem
Builder;
b) Name of the owner/s;
c) Classification as an Ecosystem
Builder; and
d) The sector of the economy that it is
engaged in.
3/ The level of development, eligibility
requirements, and details that the
certificate should contain will be
determined by Directives.

the Ministry.
2/ Where an application to be Designated as
a Startup is found acceptable by the
Ministry, the Ministry shall register the
application, and issue a certificate of
Designation to the applicant; provided,
however, if the application for
Designation is rejected, the Ministry shall
notify the applicant in writing by stating
the reason for rejection within Thirty
working days.
3/ Where relevant, the Designation
Committee may call the applicant for an
interview or practical presentation about
the product, service, or process to be
undertaken by the Startup or may
conduct an in-person observation.
4/ An application for a Startup Designation
filed with the Designation Committee
shall be responded within Thirty working
days.
10. Establishment of National Designation
Committee
1/ The National Startup Designation
Committee (hereinafter the
“Committee”) is hereby established.
2/ Not less than 11 committee members,
including the Minister shall be
appointed by the council.

and research institutions,
c) Wide-ranging experience in the
startup industry,
d) From appropriate civil society
institutions.
e) The Ministry of innovation and
technology will be the president of
the committee.
4/ The Ministry shall allocate the
necessary budget for the work.
11. Powers and Functions of the Committee
1/ The Committee shall have the following
powers and functions:
a) Receive applications from Startups
and Startup Ecosystem Builders
through the Digital Startup Portal;
evaluate and decide on the merits of
applicants and submit the result to
the Ministry.
b) It may issue an operating manual
regarding its internal procedures.
2/ The ministry shall issue a Directive to
determine details of powers and
functions of the Committee.
12. Obligations of a Designated Startup
1/ A Designated Startup shall:
a) Perform its business in full
compliance with laws that are
applicable to its operation;

protection proclamation;
d) Provide periodical report to the
Ministry on incentives received and
advancement made by virtue of the
incentives;
e) Inform the Ministry of any change
in its corporate or legal structure,
composition, or business activity
within Ten working days to the
Ministry;
f) Properly utilize the incentives
obtained as per this Proclamation;
g) Maintain proper book of accounts in
accordance with reporting
obligations provided under the
relevant laws of the country; and
h) Fulfill any other obligation imposed
on it through this Proclamation,
Regulations and Directives issued
pursuant to this Proclamation.

2/ If the Designated Startup fails to fulfill
the obligations listed under Sub-Article
(1) of this Article, the Ministry shall
notify the Designated Startup to fulfill
its obligations within Fifteen working
days of knowing the failure.

Two years from the date of issue.
2/ An application for renewal of a Startup
Designation shall be submitted Thirty
working days prior to the end of the
Two years for which the Designation
was valid.
3/ The designated startup completes the
renewal form and attaches other
documents as stipulated in the
Directives issued by the Ministry,
submitting them on the Digital Startup
Platform.
4/ A Startup Designation given under this
Proclamation shall not in any way stay
valid for more than Eight years.
14. Suspension of a Startup Designation
1/ The Designated Startup:
a) Fails to fulfill its obligations under
this Proclamation, Regulation and
Directives issued there under;

b) Fails to provide timely and accurate
information upon request by the
Ministry;
c) Fails to carry out the activities for
which the Designation was obtained;
or

not be eligible for the incentives
provided under this Proclamation.
3/ When a Startup Designation is
suspended, the Ministry shall notify the
startup’s owner in writing, the cause of
the led suspension and measures that it
needs to take within 30 days to rectify
the shortcomings that to the suspension.

4/ Where the defects causing the
suspension of the Designation is
rectified within the time prescribed
under Sub-Article (3) of this Article,
the suspension shall be lifted and the
Designation shall become valid.
5/ The suspension of a business license or
competence certificate by a relevant
Government organ shall result in the
suspension of the Designation without
any precondition.
6/ A suspension of Startup Designation by
the Ministry shall not be construed as a
suspension of a business license or a
suspension of a competence certificate
of the Designated Startup.

that takes it out of the definition and
the eligibility requirements of a
Startup under this Proclamation or
under Regulations and Directives
issued pursuant to this Proclamation;

c) It is verified that the Designation
was issued or renewed based on
falsified document;
d) Utilized the Designation for an
unauthorized purpose;
e) Declared bankrupt;
f) Fails to have its Designation
renewed under the provisions of this
Proclamation;
g) The commercial registration of the
Startup is revoked under the relevant
Proclamation; or
h) Fails to rectify defects that resulted
in the suspension of its Designation
within 30 days.The Ministry may
revoke the designation.
2/ The Ministry, before deciding to revoke
the Designation of a Startup pursuant to
Sub- Article (1) (b), (c) and (d) of this
Article, shall notify the Startup in
writing, to submit its objection in
writing, if any.

SUB-SECTION TWO
DESIGNATION OF STARTUP
ECOSYSTEM BUILDERS
16. Eligibility for Designation as a Startup
Ecosystem Builder
1/ To be eligible for Designation as a
Startup Ecosystem Builder shall:
a) Have a commercial registration,
business license or an investment
permit, as applicable;
b) Have one or more of the following
necessary resources to support the
growth of Startups:
(ⅰ) Physical space to accommodate
Startups;
(ⅱ) Technology infrastructure;
(ⅲ) Adequate financial resources;
(ⅳ) Adequate equipment for
innovation to enable Startups
test, prototype, install, verify, or
research products services or
processes;

(ⅴ) Mentorship and coaching
programs;
(ⅵ) Networking opportunities; or
(ⅶ) Legal and administrative suppor.
c) Be managed by persons with
relevant competence on business
and innovation; and

Startup Ecosystem Developer by
financial institutions, higher education
institutions, technical and vocational
education and training institutions,
research and development agencies,
non-governmental organizations, and
other institutions that have been
engaged in the development of startup
ecosystems prior to the implementation
of this Proclamation; the details shall be
determined by a Directive issued by the
Ministry.
3/ A Designated Startup Ecosystem
Builder shall be granted by the Ministry
a certificate evidencing its status.
17. Application for Startup Ecosystem
Builder Designation
1/ The application for Designation of
Startup Ecosystem Builder shall be
done through the Digital Startup Portal
by filling the prescribed form and
attaching documents specified on the
platform.
2/ Where an application to be designated
as a Startup Ecosystem Builder is found
acceptable by the committee, the
Ministry shall register the application
and issue a certificate of Designation to
the applicant.

Builder Designation shall be reviewed
and responded within Thirty working
days.
6/ The Ministry may issue a Directive that
will be utilized to evaluate applications
for Designation as a Startup Ecosystem
Builder.
18. Obligation of Designated Startup
Ecosystem Builders
1/ A Designated Startup Ecosystem
Builder shall:
a) Keep its book of accounts in
accordance with reporting obligation
provided under the relevant laws of
the country;
b) Respect and abide by the applicable
laws of the country;
c) Fulfill the necessary competence
and quality standard requirement;
d) Create and facilitate an enabling
environment for the enhancement of
innovation and technology;
e) Distribute Startup incentives
channeled to it, on the basis of merit
in a fair and efficient manner;

Startup Ecosystem in line with the
objectives they are established for;
and
h) Provide information to the Ministry
within 15 days on any change of its
business operation or objective.

2/ If the Designated Startup Ecosystem
Builder fails to fulfill the obligations
listed under Sub-Article (1) of this
Article, the Ministry shall notify the
Designated Startup Ecosystem Builder
to fulfill its obligations within 30 days
of knowing the failure.
3/ The Designated Startup Ecosystem
Builder shall respond to the notice
within a period of Thirty working days
following receipt of the notice
stipulated under Sub-Article (2) of this
Article.
4/ The Ministry may issue a Directive for
the proof of qualification of Startup
Ecosystem Builder.
19/ Renewal of a Startup Ecosystem
Builder Designation
1/ A Startup Ecosystem Builder
Designation Shall be valid for Five
years.

any other documents specified in the
Digital Startup Portal.
20. Suspension of a Startup Ecosystem
Builder Designation
1/ The Ministry may suspend a
Startup Ecosystem Builder
Designation where the Designated
Startup Ecosystem Builder:
a) Fails to fulfill its obligations under
this Proclamation, Regulations and
Directives issued there under;

b) Fails to provide timely and accurate
information upon request by the
Ministry;
c) Fails to carry out the activities for
which the Designation was obtained;

d) Commits other similar offences; or
e) If a renewed business license cannot
be provided.

2/ When a Startup Ecosystem Builder
Designation is suspended, the Ministry
shall notify the holder of the
Designation in writing, the cause of the
suspension and measures that it needs
to take within 30 days to rectify the
shortcomings that led to the suspension.

a competency certificate by the relevant
Government organ shall result in the
suspension of the Designation without
any precondition.
5/ A suspension of a Startup Ecosystem
Builder Designation by the Ministry
shall not be construed as a suspension
of a business license or a competency
certificate of the Designated Startup
Ecosystem Builder.
21. Revocation of a Startup Ecosystem
Builder Designation
1/ The designation of a Startup Ecosystem
Builder where:
a) Terminates the business activity by
its own choice;
b) It is verified that the Designation
was issued or renewed based on
falsified document;
c) Utilized the Designation for an
unauthorized purpose;
d) Declared by court as bankrupt;
e) Fails to have its Designation
renewed under the provisions of this
Proclamation;
f) If the business registration or
business license is revoked in
accordance with the relevant
Proclamation; or

2/ If the designation is revoked for the
reasons mentioned in Sub-Article (1) of
this Article, the Startup Ecosystem
Builder is required to submit a
necessary exit report.
3/ The Ministry, before deciding to revoke
the Designation of a Startup Ecosystem
Builder pursuant to Sub-Article (1) (b),
(c) and (d) of this Article, shall notify
the Designated Startup Ecosystem
Builder in writing, to submit its
objection in writing, if any.
4/ If the objection of the Designated
Startup Ecosystem Builder is not found
to be satisfactory or the Designated
Startup Ecosystem Builder fails to
submit its objection within Thirty
working days of receipt of the notice,
the Designation shall be revoked.
22. Establishment of grievance committee
1/ An inclusive and independent grievance
committee (hereinafter referred to as
the Grievance committee) consisting of
no less than 7 members is hereby
established to resolve any grievance
filed against startups and startup
ecosystem builders, including
the designation, suspension and
cancellation of designation.

INCENTIVES FOR DESIGNATED
STARTUPS
SUB-SECTION ONE
GRANT AND GUARANTEE FUND
23. Establishment of a Startup Grant
Program
1/ A Startup Grant Program (here under
the “Grant”) is hereby established to
support Designated Startups and shall
be administered by the Ministry
pursuant to a Directive to be issued by
the Ministry of Finance.
2/ The budget required to launch the grant
will be covered by the government.
3/ Without prejudice to Sub-Article (2) of
this Article, the funds of the Grant may
consist of:
a) Support made by development
partners; and
b) Any other resources approved by the
Ministry of Finance to be a part of
the Grant.

4/ The Ministry of Finance shall issue a
Directive as to the management,
administration, and operation of the
Grant.

a Directive by the Ministry.

2/ Notwithstanding Sub-Article (1) of this
Article, the use of the Grant for the
following personal or commercial
activities are prohibited:
a) Personal expenses unrelated to the
Designated Startup’s operation;

b) Commercial activities not specified
in the Grant application;
c) Repayment of personal or corporate
debts;
d) Investments activities unrelated to
the objectives of the Designation;

e) Purchase of real estate or other fixed
assets which are not relevant to the
establishment, implementation,
development, and operation of the
Designated Startup; and
f) Any other activity prohibited by the
Directive issued by the ministry.
3/ Designated Startup Ecosystem Builders
that take part in the Distribution of the
Grant as per Article 24, of this
Proclamation, shall not use the Grant
for their own personal or commercial
activities.

ecosystem developer.
2/ The minimum and maximum amount of
the Grant distributed to a Designated
Startup shall be determined by the
Ministry taking into consideration the
objective of the Grant stated in this
Proclamation and the provisions of the
Directive to be issued by the Ministry
of Finance for the management of the
Grant.
3/ A Designated Startup who has received
a Grant shall not be entitled to reapply
for another Grant for a period of One
year.
4/ Individual founders or co-founders with
Twenty Five percent or more ownership
interest in a Designated Startup and
who has already secured a Grant
through another Designated Startup
shall not be eligible to apply for another
Grant for a period of One year.

5/ If a Designated Startup that has already
secured a Grant is legally liquidated,
the restriction under Sub-Article (3) and
(4) of this Article shall not be
applicable.
6/ A Grant shall not be applied for the
same idea and by the same Designated
Startup twice.

Ecosystem Builder to Designated
Startups shall be determined by the
Ministry of Finance.
9/ The beneficiaries and the distributing
Designated Startup Ecosystem Builder
of the Grant shall have a periodical
reporting obligation to the Ministry
regarding the distribution and the usage
of the Grant on a timely basis.
26. National Credit Guarantee Fund for
Startups and Ecosystem Builders
1/ The National Credit Guarantee fund
(hereinafter the “Guarantee fund”) is
hereby established.

2/ Beneficiaries of the Guarantee fund
shall be:
a) Designated Startups,
b) Designated Startup Ecosystem
Builders, and
c) Micro, Small and Medium
Enterprises with the aim of
increasing the level of credit access
to Startups and Micro, Small and
Medium Enterprise.

3/ The supervisory authority of the
Guarantee fund shall be the National
Bank of Ethiopia.

ecosystem builders; and micro, small,
and medium enterprises, respectively,
in accordance with the provisions of
this Proclamation.
5/ The Government shall make an initial
capital to establish the Guarantee fund.
6/ Notwithstanding Sub-Article (2) of this
Article, the Guarantee fund mandate to
provide guarantees can be expanded
when the necessary authorization is
provided by the National Bank of
Ethiopia.
7/ The organizational structure, source of
income, management, administration,
operations and other details of the
guarantee fund shall be determined by a
Regulation issued by the council of
Ministers.
27. Objectives of the Guarantee Fund
The objective of the Guarantee fund is as
follows:
1/ Issue credit guarantees to Designated
Startups, Designated Startup Ecosystem
Builders, and Micro, Small and
Medium Enterprises;
2/ Invest its assets; and
3/ Effect payments to admitted financial
institutions on claims made in
accordance with the credit guarantees;

2/ Beneficiaries shall utilize the loan for
the specific purposes stated in the loan
application.
29. Prohibition
[ 1/ Beneficiaries of the Guarantee fund are
prohibited from using the proceeds of
the loan for expenses not related to
what has been authorized by the loan
agreement.
2/ Intentional or negligent default to repay
a loan that is guaranteed under the
Guarantee fund is strictly prohibited.
3/ Beneficiaries who intentionally
defaulted on repayment under the
Guarantee fund shall not be allowed to
benefit from the Guarantee fund for the
period of Ten years.
4/ Consequences related with intentional
default and failure to repay loan shall
be determined by the Regulation to be
issued by the Council of Ministers.
SUB-SECTION TWO
MISCELLANEOUS INCENTIVES
30. Tax Incentives
1/ A Designated Startup shall be a
beneficiary of the incentives specified
under the relevant Investment
Incentives laws.

b) From income tax on dividend
distributed to shareholders; and
c) From withholding tax; It will be
exempt.
3/ Any form of grant, incentive, gift,
donation, or similar type of contribution
to a Designated Startup with no
possibility of equity or conversion to
debt shall be considered, for the
purpose of the Income Tax
Proclamation, as a non-income proceed
and shall not be taxed.
4/ The income earned by foreign nationals
employed as employees of a designated
startup before the expiration of the
startup designation period shall be
exempt from income tax.
5/ The application for eligibility to tax
exemption shall be verified by the
Ministry and shall be submitted for
approval to the Ministry of Finance.
31. Loss Carry Forward by Startups
1/ A Designated Startup who has incurred
a loss within the period of income tax
exemption, this loss can be carried
forward to a tax period equal to half of
the exemption period after the tax
exemption period ends.

3/ The loss to be carried forward in
accordance with Sub-Article (1) and (2)
of this Article shall only be carried
forward for Three years.
32. Loss Carry Forward by Investor
1/ An Investor that has invested money in
a Designated Startup in return for
equity and subsequently lost money in
the Designated Startup should be
eligible to deduct one hundred percent
of the loss incurred on its own financial
statement.
2/ The loss to be carried forward in
accordance with Sub-Article (1) of this
Article shall only be carried forward for
Two years.
33. Duty Free Privilege for Designated
Startups
1/ A Designated Startups may import duty
free capital goods necessary for its
operation.
2/ For the implementation of Sub-Article
(1) of this Article, a Designated Startup
shall submit, the list of capital goods to
be imported duty-free and get approval
of same from the Ministry of Finance.

34. Duty Free Privilege for Designated
Startup Ecosystem Builders
1/ A Designated Startup Ecosystem
Builder may import duty free capital
goods necessary for the establishment
of a new facility or the expansion or
upgrading of an existing facility.

2/ For the implementation of Sub-Article
(1) of this Article, a Designated Startup
Ecosystem Builder shall submit, the list
of capital goods to be imported duty-
free and get approval of same from the
Ministry of Finance.
3/ If a Designated Startup Ecosystem
Builder entitled to a duty-free incentive
buys capital goods from a local
manufacturing industry, the duties and
taxes paid on inputs for the
manufacturing of such goods shall be
refunded by the Customs Commission.

4/ A designated startup ecosystem builder
must have a valid designation at all
times when applying for incentives
under this Proclamation.

35. Establishment of Startup Fund of Funds
1/ The Startup Fund of Funds (hereinafter
the “Fund”) is hereby established as a
commercial enterprise by the
Government of Ethiopia in partnership
with the private sector and may include
Foreign Investors.
2/ The Government’s interest of the Fund
of Funds shall be held by the Ethiopian
Investment Holdings. The amount of
ownership interest held by the
government will be determined in
accordance with Article 9 of
Ethiopian Investment Holdings
Regulation No. 487/2022.
3/ The fund will be managed by a private
fund manager selected through a
competitive process by the board of
directors of Ethiopian investment
holding.
4/ Notwithstanding of this Article, the
relevant provisions of the Commercial
Code, the capital markets Proclamation
and other relevant laws shall apply.

domestic startup ecosystem.
3/ Subject to Sub-Article (1) of this
Article, other purposes of the Fund may
be determined by the Fund Manger as
deemed appropriate.
PART SIX
REGULATORY SANDBOX
37. Regulatory Sandbox
1/ With the objective of fostering
innovation and promoting the growth of
the Startup Ecosystem, the Ministry
may establish and implement a
regulatory sandbox framework that will
enable testing and introduction of new
and innovative products, services, and
processes to the market by Startups.
2/ The Ministry may issue a Directive to
determine additional eligibility criteria,
application process, and other
additional conditions applicable for
participation in the regulatory sandbox.
38. Competency Certificates
1/ In cases where a certificate of
competence is required as a prerequisite
to obtain a business license, a
Designated Startup shall be allowed to
fulfill such certificate of competence
within Four years of Designation.

to public health and national security.

39. Work Permit
1/ Subject to the applicable laws on work
permit, a foreign national opting to join
a Designated Startup located in
Ethiopia, shall be entitled to a work
permit valid for Three Year.
2/ A foreign national who wants to join a
startup in Ethiopia as an employee is
entitled to a startup visa.

40. Foreign Startups and Ecosystem
Builders
1/ The minimum capital requirement
stipulated under Article 9 of the
Investment Proclamation No.
1180/2020 shall not apply on Foreign
Startups and Foreign Startup Ecosystem
Builders who establish or invest on
Startups in Ethiopia.
2/ Foreign Startups and Foreign Startup
Ecosystem Builders shall be entitled to
all the incentives provided under this
Proclamation.
3/ Notwithstanding Sub-Article (2) of this
Article, Foreign Startups shall not be
entitled to the Grant program provided
under Article 24 of this Proclamation.

1/ No person may replicate, utilize, or
appropriate the product, service, or
process for which a Startup obtained its
Designation, nor may they represent
themselves as a Designated Startup or
engage in commercial activities based
on such replication, without the prior
written consent of the Designated
Startup and approval from the Ministry.
2/ Notwithstanding Sub- Article (1) of this
Article, it shall not apply to the
following conditions:

a) When a Designation is not obtained
on the processes or products,
service;
b) A valid Intellectual property right is
provided;
c) Incidental similarities arising from
standard industry practices that do
not involve direct copying; or
d) There is a significant improvement
in the product, service or the Process
that satisfies the definitional
requirement of a startup.

43. Power to Issue Regulations and
Directives
1/ The Council of Ministers shall issue
Regulations necessary for the
implementation of this Proclamation.
2/ The Ministry shall issue Directives
necessary for the implementation of this
Proclamation and Regulations issued
pursuant to Sub-Article (1) of this
Article.
44. Effective Date
This Proclamation shall enter into force on
the date of its publication in the Federal
Negarit Gazette.

Done at Addis Ababa, On this 2nd day of
September, 2025
TAYE ATSKE SELASSIE
PRESIDENT OF THE FEDERAL
DEMOCRATIC REPUBLIC OF
ETHIOPIA