Ethiopia Opens Doors to Foreign Banks: Central Bank Reviews First Two Greenfield Subsidiary Applications

Speaking today at the Ethiopian Finance Forum (EFF), National Bank of Ethiopia (NBE) Supervision Director Frezer Ayalew announced that the central bank is currently reviewing two formal applications for 100-percent foreign-owned greenfield subsidiaries. Indicating that these and several more foreign banks are actively conducting researches. strong interests of international capital as a powerful indicator of confidence in Ethiopia's macroeconomic stabilization, Ayalew confirmed

The dual applications under review represent the active deployment of capital under the historic Banking Business Proclamation No. 1360/2025 . By opting for the greenfield subsidiary model, the applicant banks commit to establishing independent legal entities governed entirely by Ethiopian corporate law. This pathway demands substantial upfront foreign exchange commitments: each institution must inwardly remit a minimum paid-up capital of five billion Birr, depositing the funds in foreign currency into a blocked domestic account before final approval is granted.

For global lenders evaluating the market, the modernized regulatory framework provides four distinct entry modalities. Beyond establishing a wholly owned subsidiary, strategic foreign investors can opt to open a direct branch of their parent bank, provided the branch operates strictly as either a deposit-taking or non-deposit-taking entity. Alternatively, foreign institutions can pursue equity acquisitions, buying up to a 40 percent stake in an existing domestic bank. The total aggregate foreign ownership in any single local bank is strictly capped at 49 percent. Finally, foreign banks can establish representative offices to manage liaison and research activities without engaging in direct commercial banking.