Starting a business in Eritrea: foreigner's guide (2026)

Eritrea ranks 189 out of 190 economies on the World Bank Ease of Doing Business index, reflecting extreme procedural and regulatory barriers to business formation.

The 1994 Investment Proclamation nominally permits 100% foreign ownership in most sectors, with no joint-venture requirement. However, domestic retail, wholesale, import trade, and commission agencies are restricted to foreign investors from countries with bilateral reciprocity agreements with Eritrea.

Foreign-owned mining operations must transfer a mandatory 10% equity stake to the Eritrean National Mining Corporation (ENAMCO), and ENAMCO holds an option to acquire an additional 30% equity. Mining is one of the few sectors where significant FDI has occurred.

The government suspended issuing new business licenses for over four years. In August 2024, the Ministry of Trade and Industry partially resumed issuing licenses, but only for small-scale enterprises and limited to Eritrean nationals who have completed national service. The process now takes over three months.

Formation requires approximately six steps: name reservation with the Ministry of Trade, document compilation, company registration (including Articles of Association), tax registration (TIN) with the Inland Revenue Department, business license issuance, and labor registration with the Ministry of Labour. As of 2024–2025, total timeline exceeds three months.

Minimum paid-in capital is 15,000 ERN for a Private Limited Company and 50,000 ERN for a Share Company. The Eritrean Nakfa is non-convertible, making repatriation of profits and foreign exchange transactions extremely difficult except in the mining sector.

Foreigners are prohibited by law from owning real property. Most businesses of meaningful scale are state-controlled or operated by the PFDJ ruling party. U.S. sanctions and Eritrea's disconnection from international financial systems for all but government-to-government transactions further preclude most foreign investment.