Draft Bill Proposes 15% Cap on Foreign Portfolio Ownership in Ethiopian Firms

Ethiopia’s proposed foreign portfolio investment (FPI) regulation has sparked significant debate regarding capital repatriation, investor confidence, and the readiness of local financial institutions. During a public consultation held in Addis Ababa on October 26, 2026, stakeholders examined a draft regulation that seeks to cap foreign portfolio ownership in listed Ethiopian companies at 15 percent. Spearheaded by the Ethiopian Capital Market Authority, the proposed framework aims to formalize foreign participation in the nascent local capital market.

Participants at the forum raised critical questions concerning the practical implications of the 15 percent cap, expressing concerns about potential impacts on foreign investor interest and the operational readiness of local firms. Discussions also focused on the mechanisms for profit repatriation and the role of domestic entities in managing international capital flows. The authority is expected to incorporate these concerns into the final version of the regulation as the country moves forward with financial sector liberalization.