The enactment of Proclamation No. 1388/2025, titled the “Foreign Nationals’ Ownership Right of Residential House Proclamation,” establishes the legal framework for non-Ethiopian citizens and entities to own residential property or acquire land for housing construction within the country. The regulation is intended to facilitate foreign investment and accommodate the growing international diplomatic and business presence in Ethiopia.
Eligibility and Financial Criteria
The proclamation defines foreign nationals as any natural or legal person without Ethiopian nationality, excluding those of Ethiopian origin who remain governed by separate existing laws. To qualify for property ownership or construction, a foreign national must commit a minimum investment of $150,000 USD per residential unit. Licensed foreign investors with a minimum paid-up capital of $150,000 USD are also eligible.
Under the new rules, ownership is generally restricted to one residential house per person or entity. However, the Ministry of Urban and Infrastructure Development retains the authority to adjust this limit based on national interests. A critical requirement of this proclamation is that all associated costs—including the purchase price, lease payments, and government service fees—must be settled in an approved foreign currency. Furthermore, if land is acquired via lease for construction purposes, the full lease price must be paid in a single installment.
Rights and Usage Limitations
Foreign property owners are granted usage rights comparable to those of Ethiopian citizens, specifically the right to occupy or rent the property for residential purposes. It is important to note that the law strictly prohibits the commercial use of residential houses owned under this proclamation.
In connection with property ownership, the state provides immigration-related benefits, including eligibility for residence permits or multiple-entry visas valid for up to five years for owners and their families. Additionally, the proclamation allows for the repatriation of income derived from the sale or rental of the property in foreign currency, subject to the directives and oversight of the National Bank of Ethiopia.
Restrictions and Prohibitions
The proclamation outlines several prohibitions to maintain financial and social stability. Foreign nationals are strictly barred from accessing credit or borrowing from domestic financial institutions to fund residential acquisitions. Furthermore, foreign ownership is prohibited in government-subsidized housing projects intended for Ethiopian citizens.
The Council of Ministers also reserves the right to designate specific zones, such as border areas or locations of national security interest, where foreign ownership is restricted. The government may also apply the Principle of Reciprocity, adjusting the rights or obligations of foreign nationals based on the treatment of Ethiopian citizens in the applicant’s home country.
Administrative Requirements
Acquiring property under this law requires prior authorization from the Ministry of Urban and Infrastructure Development. Applicants must submit valid identification, proof of financial capacity, and a clear criminal record. The Ministry is mandated to issue a decision on completed applications within 30 working days and is responsible for maintaining a centralized registry of foreign-owned residential assets.
This legislation supersedes certain prior legal provisions, including specific articles of the 1960 Civil Code and portions of the 2020 Investment Proclamation, to the extent that they conflict with the new rules on foreign residential ownership.