Addis Ababa, Ethiopia – July 2025 — Ethiopia has officially approved its long-awaited Startup Proclamation, a major step forward for the country’s tech and innovation ecosystem. The new law, which has been in development since 2018, was approved by the Council of Ministers and is now awaiting final passage by the House of People’s Representatives.
Once enacted, the law will provide formal recognition and support for startups, offering benefits such as tax breaks, access to funding, and easier business registration. It defines a startup as a business less than three years old with annual revenue below 5 million Ethiopian birr (around $38,000).
A key feature of the new law is the creation of a national startup fund worth 2 billion birr (about $36 million), which will provide seed funding and low-interest loans to qualifying startups. In addition, certified incubators and accelerators will be eligible for government co-financing, and public universities will be required to support local innovation by investing at least 2% of their research budgets into partnerships with startups.
The law also introduces regulatory sandboxes, allowing startups in fintech and digital services to test new products in a controlled environment with fewer restrictions.
This long-awaited legislation is expected to attract more investors, strengthen the business environment, and position Ethiopia as a rising player in Africa’s tech landscape.