ETHIOPIA Law and Practice Contributed by: Getu Shiferaw, Awoke Mitku, Gutema Kajela Ejeta and Debora Belachew, Mehrteab & Getu Advocates LLP
• the Ministry of Trade and Regional Integration (MoTRI); • the Document Authentication and Registra - tion Service (DARS); • the Ministry of Revenues (MoR); • the Ethiopian Investment Commission (EIC); • the Ethiopian Capital Market Authority (ECMA); • the COMESA Competition Commission (CCC); • the NBE; • the Ethiopian Communications Authority (ECA); • the Ministry of Mines (MoM); and • the Petroleum & Energy Authority (PEA). Depending on the sector in which a target is engaged, the primary regulator for M&A activity in Ethiopia may vary. The EIC has the mandate of investment promotion and regulation. Foreign investors execute the resolution with regard to M&A before this organ. The merger agreement is signed before DARS, which is a government- run public notary. The MoR must be notified of a merger, and the entity is expected to secure tax clearance in order to proceed therewith. MoTRI also requires that merger filing and approval be secured. This is a requirement for those who meet the minimum threshold for approval provided by Ethiopia’s anti-competition law, namely a minimum of ETB30 million with respect to the combined annual turnover, assets or registered capital of the parties. Following the application, MoTRI will conduct a study and review the merger agreement and merger report prepared by the parties. MoTRI will then issue a public notice of the merger in a widely circulated newspaper for a period of 15 days, inviting third parties to submit any objection they may have. If there is no objection, then MoTRI will issue a merger approval.
If the merger involves entities that are subject to sector-specific regulation by the ECA (for telecoms and data centres), the NBE (financial services), the MoM (mining, oil and gas, other natural resources), the PEA (petroleum and energy), or the ECMA (secondary market), then merger notification and approval may also be requested by the regulators of the sectors prior to proceeding. For states that are members of the Common Mar- ket for Eastern and Southern Africa (COMESA), the regulations of COMESA provide a compre - hensive framework for regulating mergers within that market. The filing threshold for COMESA is fulfilment of the following requirements: • at least two of the merging parties must have operations in two or more COMESA member states; and • each must have an annual turnover or asset value of at least USD10 million in the COME - SA region. 2.3 Restrictions on Foreign Investments There are areas of investment in Ethiopia that are partly or fully restricted for foreign inves - tors, such that they can only invest jointly with a domestic investor or with the government of Ethiopia. However, since Ethiopian law follows a negative listing approach in relation to foreign investment, some sectors are open for foreign investors. Some changes have been introduced in the past few months. The Ethiopian Investment Board has issued a new directive that has lifted restric - tions on engagement in areas of investment that were previously reserved for domestic investors, namely: • export trade;
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