Ministry of Urban and Infrastructure Issues Implementing Directive for Foreign National Residential Property Ownership Framework

On August 2026, the Ministry of Urban and Infrastructure issued Directive No. 1147/2018 (the “Directive”) to operationalize the Foreign Nationals’ Ownership Right of Residential House Proclamation No. 1388/2025 (the “Proclamation”). The Directive establishes the detailed procedural and administrative framework governing the ownership of residential houses by foreign nationals in Ethiopia. In particular, it provides requirements relating to eligibility, minimum capital thresholds, application and approval procedures, foreign exchange arrangements, registration of ownership, restrictions on ownership and use, and administrative penalties for non-compliance.

The Proclamation, enacted on 2 October 2025, introduced a significant change to Ethiopia’s property ownership regime by permitting qualifying foreign nationals to own residential houses and to acquire leasehold land for the construction of residential houses. This represented a departure from the previous restrictions applicable to foreign ownership of immovable property under the Civil Code. The Directive now provides the procedural framework required for implementation of this regime and brings greater certainty to transactions involving foreign residential property ownership.

The new framework operates within Ethiopia’s constitutional principle that land is owned by the state and the people. Accordingly, foreign nationals do not acquire ownership of the underlying land. Rather, ownership extends to the residential structure, while the land on which the structure stands is held through a lease arrangement. This distinction remains fundamental to understanding the nature and extent of the property rights available to foreign nationals under the new regime.

The constitutional foundation for the framework is Article 40(3) of the Constitution, which vests land ownership in the state and the people. Consistent with this principle, the Proclamation permits foreign nationals to acquire ownership of residential houses situated on land provided through a lease and allocated through a public bidding process.

The Proclamation generally permits foreign nationals who satisfy the prescribed requirements to own a residential house. It also establishes a separate regime for foreign investors. A foreign investor holding at least USD 150,000 in paid-up equity in an Ethiopian investment is recognised for purposes of residential property ownership. An investor holding a valid investment licence may own one residential house without satisfying the minimum monetary threshold, while ownership of additional residential houses is subject to the applicable threshold requirements.

The framework also provides immigration-related benefits to foreign nationals who acquire residential property. Ownership may entitle the owner and eligible family members to obtain a residence permit or a multiple-entry visa valid for up to five years, subject to the applicable requirements.

At the same time, the framework imposes important restrictions. Foreign nationals are prohibited from acquiring residential property through financing obtained from domestic financial institutions or by mobilising capital from within Ethiopia. In addition, residential property may not be used for commercial purposes, although the owner retains the right to rent the house for individual or family residential purposes. The Proclamation also repealed the former Civil Code provisions governing foreign ownership of immovable property and displaced the previously applicable investment-related provisions to the extent provided under the new framework.

III.         Scope and Eligibility

The Directive applies to foreign nationals who are or intend to become owners of residential houses or land for residential construction in Ethiopia, as well as persons involved in implementing the foreign residential property ownership regime.

An applicant is required to satisfy a number of documentary and substantive requirements before obtaining the necessary permit. These include a valid passport, relevant travel and immigration documents where applicable, a certificate confirming the absence of a criminal record from the applicant’s country of residence, evidence of the required minimum capital deposit, and evidence that the applicant is not subject to prohibitions arising from considerations of national peace, security, public interest, community morality or similar grounds. The application may be submitted in person, through a legal representative or through the applicable online system, and is subject to a service fee of USD 50 at the prevailing exchange rate.

Foreign investors are subject to additional requirements. In addition to satisfying the general eligibility requirements, an investor must hold a valid investment permit and provide written confirmation from the authority responsible for issuing the investment permit. The confirmation is expected to establish matters such as the investor’s shareholding, sector of engagement and investment status. The applicable minimum capital requirement must also be satisfied, and the purchase price of the residential house may not be lower than the applicable minimum capital threshold.

Once issued, the permit identifies the foreign national and records relevant information, including nationality, passport details, residential addresses, family members, registered capital and the fact that the registered capital is intended for the acquisition of one residential house. For foreign investors, the taxpayer identification number is also recorded. Please read the full details in the attachment.