Arrange method of payment - Ethiopia
Quick info guide
To obtain an import license you need to have;
- A copy of your Tax Identification Number (TIN);
- A copy of the Memorandum of Association and Articles of Association for private limited and share companies;
- Two passport size photographs taken within the last six months;
- If the applicant is a foreign investor, the investment and residence permits; and
- A valid commercial registration certificate.
License fees: 102 ETB
The following goods are prohibited imports to Ethiopia:
(i) Used clothing
(ii) Arms and ammunition, except by the Ministry of Defense
(iii) Goods of a commercial nature and quantity that are not imported through formal bank payment mechanisms.
How to import goods into Ethiopia
To start an import business, one requires commercial registration and a license from the Ministry of Trade and Industry. The fees for commercial registration and business license are 102 ETB for each. For anyone who wishes to get started in business in general and import trade in particular, it is necessary to visit the Ministry of Trade and Industry which is located around ‘Kazanchis’ on the way to ‘Filwuha’ in the same building with the Development Bank of Ethiopia.
Steps to follow when importing goods into Ethiopia
Step 3: Arrange method of payment
Payment through a bank requires two tasks; i.e.
Foreign currency approval
A foreign currency approval must be obtained. This approval is necessary due to the foreign exchange controls in place and will allow the importer to pay for the imported goods in foreign currency. As part of the request, the importer must present his/her valid business license and a proforma invoice from the supplier
Obtain bank permit/arrange mode of payment
The payment arrangements have to be agreed with the importer’s bank. In this regard, the methods of payment for imports used in Ethiopia are the following:
(a) Letter of credit (L/C) - the bank undertakes to pay the supplier a stated sum of money within a prescribed time limit and against the handover of the documents needed for the release of goods from customs
(b) Cash against document (CAD) - where the importer’s bank hands over to the importer the documents needed for the release of goods from customs against full payment
(c) Advance payment - the importer orders the bank to pay the seller by means of SWIFT transfer prior to shipment or rendering the service