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Your legal structure depends on your business goals and growth expectations. If you intend to raise capital in the future or scale significantly, it's recommended to register as:

• A Private Limited Company (PLC) with multiple members,
   
• A One-Member PLC for initial formalization with flexibility, or
   
• A Share Company for businesses planning public offerings or significant equity investment.

Register when your business model is ready for execution, you're entering into contracts, or preparing to raise funds.

⚠️ Note: Many startups register too early without realizing that compliance requirements, such as periodic tax filings, annual renewals, and reporting obligations, consume significant time and resources. Time your registration strategically.

This depends on your sector. For example:

• Fintech businesses must obtain a license from the National Bank of Ethiopia (NBE). 
• Healthcare businesses must secure operational permits from the Ministry of Health (MoH).
• Food and drug-related businesses must secure operational permits from the Ethiopian Food and Drug Authority (EFDA)

You should register your trademarks, patents, copyrights, and industrial designs with the Ethiopian Intellectual Property Authority (EIPA).

Yes, if you handle customer, employee, or partner data. Compliance with the Personal Data Protection Proclamation No. 1321/2024 is required.

Common taxes include TOT or VAT, business income tax, and withholding tax. Tax obligations depend on your structure and revenue size.

Yes. A corporate bank account separates personal and business finances and is often required for investment or grant disbursements.

Equity is ownership in the company. It's crucial to align equity distribution with value contribution, risk, and future fundraising plans.

Yes, grant funds are taxable in Ethiopia, unless they fall under a specific exemption. The Income Tax Proclamation treats grant income as taxable unless:

• It is explicitly exempt under a law, an international treaty, or
• It’s covered by an agreement approved by the

• Employment agreements are mandatory under Ethiopian law.
• Probation Period: Not to exceed 60 working days.
• Distinguish between managerial and non-managerial employees, as they may have different working hour and benefit structures.
• Clearly separate employees from independent contractors or consultants in terms of benefits, taxes, and duties.

Absolutely. Use written agreements that define scope, timelines, payment terms, intellectual property rights, confidentiality, and dispute resolution.

The Startup Proclamation is a newly approved legal framework designed to support innovation, encourage entrepreneurship, and create a favorable regulatory environment for startups and their enablers, such as incubators, accelerators, and innovation hubs. It introduces certification, incentives, and support mechanisms tailored to early-stage businesses.

Two categories of entities can benefit:

• Designated Startups: Businesses that meet specific criteria and are officially recognized.
   
• Designated Ecosystem Builders: Entities such as incubators, accelerators, investors, etc., that support startups.

No, but designation is mandatory to access the benefits and incentives provided under the Startup Proclamation.

You're considered a startup if:

• You’re creating economic value through tech or tech-enabled innovation,
   
• Your product or service is innovative, scalable, and disruptive,
   
• You have limited or no operating history (under 5 years old),
   
• At least 25% of your capital is owned by the founder(s),
   
• You’re not already a large, mature, or public company.

If you're already well-established, focused on optimizing existing products rather than innovating, or publicly listed, you’re not eligible.

Yes. If you're an incubator, accelerator, investor, co-working space, or similar entity and actively contribute to building startups, you can be designated as a Startup Ecosystem Builder.

Apply through the National Digital Startup Portal (NDSP). Your application will be reviewed by a public-private committee called the National Designation Committee. MiNT may call you for an interview, if needed. If approved, you’ll receive a certificate within 30 working days.

You must:

• Comply with all applicable laws,
   
• Work toward your stated growth goals,
   
• Report periodically to MiNT on the use of incentives,
   
• Notify MiNT within 10 days of any changes to your corporate structure,
   
• Keep proper financial records.
   

Yes. There are three main financial support mechanisms:

• Startup Grant Program (via MiNT): Pre-seed, early-stage grants (one-year re-application restriction).
   
• Startup Fund of Funds: Investment in funds that invest in startups.
   
• National Credit Guarantee Scheme: Helps you secure loans by covering risks for lenders.
   

For up to 5 years, you are exempt from:

• Income/profit tax,
   
• Dividend tax,
   
• Withholding tax,
   
• Employment income tax (for expats).
  You can also carry forward losses for half the exemption period.
   

You’re welcome. No minimum capital requirement applies. You're eligible for all benefits except the Startup Grant Program.

Yes:

• Regulatory Sandbox: Test new ideas in a safe, regulated environment.
   
• Competency Certificate: You have up to 4 years to meet regulatory requirements (unless you’re in public health or national security).
   
• Work Permits: Expats joining your startup can get expedited 3-year work permits.

We understand that legal needs often evolve as your startup grows. If you’d like additional support navigating the legal side of building your business, you’re welcome to join our Startup Legal Clinic, where we provide free legal assistance to early-stage startups.

To learn more or sign up, please contact us or visit: https://forms.office.com/r/6724MqVuLQ