Summary:
The Proclamation establishes a legal framework allowing foreign nationals to own residential houses in Ethiopia in order to attract foreign capital, expand the real-estate sector, and support housing supply without undermining citizens’ rights. Foreigners may own residential houses only on leased land obtained through public bidding and mainly for personal or family residence (commercial use is prohibited). Generally, a foreign national may own one residential house at a time and must invest a minimum of USD 150,000 per house, including lease costs, unless exempted as a licensed foreign investor. The Ministry of Urban and Infrastructure Development has broad regulatory authority, including setting limits on the number, size, and value of houses and restricting ownership by nationals of certain countries based on reciprocity or national interest. Ownership is subject to strict conditions such as legal identity, financial capacity, clean criminal record, and national security clearance. Eligible owners are granted property rights comparable to Ethiopian citizens and may receive residence permits or long-term multiple-entry visas for themselves and their families
1. Purpose and Policy Rationale
The Proclamation aims to attract foreign capital and investors by allowing foreign nationals to own residential houses in Ethiopia, while safeguarding Ethiopian citizens’ constitutional rights to land and housing. It supports the expansion of the real estate sector, encourages knowledge and technology transfer, improves housing supply, creates employment, and strengthens Ethiopia’s position as a regional diplomatic and investment hub.
2. Scope of Application
- Applies to foreign nationals’ ownership of residential houses in Ethiopia.
- Does not affect special rights already granted under other laws to foreign nationals of Ethiopian origin, whose privileges remain protected.
3. Key Definitions
- Foreign National: Any natural or legal person without Ethiopian nationality, excluding foreigners of Ethiopian origin.
- Residential House: A house used for individual or family residence, constructed or purchased on leased land.
- Lease: A time-bound right to use urban or rural land for housing construction under Ethiopian law.
- Foreign Investor: A person holding at least USD 150,000 capital share in an approved investment.
- Reciprocity Principle: Rights or restrictions may be applied to foreigners based on how Ethiopians are treated in the foreigner’s home country.
4. Ownership Rights of Foreign Nationals
- Any foreign national who meets the legal requirements may own a residential house in Ethiopia.
- Ownership is allowed only on leased land, which must be obtained through public bidding.
- The Ministry may restrict ownership for nationals of certain countries or stateless persons based on directives and national interest.
5. Special Provisions for Foreign Investors
- Licensed foreign investors may own one residential house without meeting the minimum investment threshold.
- To own more than one house, the investor must meet the minimum monetary requirement.
- Proof of investment license and capital contribution must be submitted to the Ministry.
6. Minimum Investment, Number, and Size of Houses
- Minimum investment:
- At least USD 150,000 per residential house, including lease value.
- Number of houses:
- A foreign national may generally own only one residential house at a time.
- The Ministry may revise this limit by directive based on national interest.
- Regulatory flexibility:
- The Ministry may adjust minimum investment amounts, house size, lease size, and total number of houses based on market conditions, regional development levels, and housing demand.
7. Preconditions for Ownership
A foreign national must:
- Submit valid identity and nationality documents.
- Prove sufficient financial capacity to meet the minimum investment.
- Have no criminal record.
- Pose no risk to national security, peace, or public order.
- Obtain prior authorization from the Ministry.
8. Rights of Foreign Owners
Foreign nationals who legally own a residential house:
- Enjoy property rights similar to Ethiopian citizens, subject to restrictions.
- May rent out the house for residential purposes, but commercial use is prohibited.
- Are entitled to:
- Residence permits for themselves and their families, or
- Multiple-entry visas valid up to five years.
- May legally repatriate rental or sale income in foreign currency, according to National Bank of Ethiopia rules.
9. Obligations of Foreign Owners
Foreign owners must:
- Comply with all Ethiopian laws applicable to citizens.
- Meet the minimum investment requirement.
- Pay lease fees, purchase costs, construction permits, and first-year government charges only in foreign currency acceptable in Ethiopia.
- If land is acquired by lease, pay the entire lease price in a single installment.
10. Restrictions and Prohibitions
Foreign nationals may not:
- Own residential houses in restricted or border areas, as determined by Council of Ministers regulations.
- Own houses in government-subsidized condominium projects built specifically for Ethiopian citizens.
- Finance house ownership through domestic banks or local financial sources.
11. Reciprocity Principle
Foreign nationals from countries that impose special rights or obligations on Ethiopians abroad may receive equivalent treatment in Ethiopia. The details will be set by Council of Ministers regulations.
12. Retention, Application, and Certification
- Ownership retention and transfer follow existing Ethiopian property laws, as applicable.
- Foreign nationals must apply for prior approval from the Ministry, either in person or through an online system.
- Ownership certificates are issued only after compliance with all legal and financial requirements.
11. Legality
- Effective Date: The proclamation is effective from October 2, 2025
- Repealed Laws: 1). Articles 390-393 of the Civil Code of 1960 shall not be applicable in respect of matters covered by this Proclamation; 2). The rights, restrictions and procedures adopted in respect of foreign investors under sub-article (2) of Article 18 of the Investment Proclamation No.1180/2020 and Article 17 of the Investment Regulation No.474/2020 shall be inapplicable.
- Amendment:
- Implemented by:
- Repealed: No
11. Key words:
Foreign Nationals, Residential House, Ownership Right, Leasehold Land, Public Bidding, Minimum Investment Threshold, Foreign Investors, Investment License, Ministry of Urban and Infrastructure Development, Eligibility Criteria, Criminal Record Clearance, One-House Ownership Rule, Property Rights, Residential Use Only, Prohibition of Commercial Use, Rental Income, Sale Proceeds, Foreign Currency Repatriation, Residence Permit, Multiple-Entry Visa, ,Domestic Financing Prohibition, Reciprocity Principle, Ownership Certification, Retention of Ownership Rights
Language: Amharic and English
Download (PDF):Foreign Nationals ownership Right of Residential House Proclamation No. 1388_2025 (2)
Similar laws: Ethiopia Investment Proclamation No. 1180/2020
Urban Lands Lease Holding Proclamation No. 721/2011
Important links:
www.investethiopia.gov.et
www.aalb.gov.et
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- Ethiopia Rent Control and Administration Proclamation No. 1320/2024
- Ethiopia General Education Proclamation No. 1368/2025
- Civil and Family Registration Proclamation No. 1370/2025
- Ethiopia Banking Business Proclamation No. 1360/2025
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