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Home Africa

Corporate relocation challenges in Ethiopia demands professionalism

Metassebia Hailu Zeleke by Metassebia Hailu Zeleke
September 26, 2019
in Africa, Ethiopia, FDI, Legislation, Tax
Reading Time: 2 mins read
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Legal reforms in the Ethiopian doing business attracts international law firms
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Relocating to a new place or country is a stressful activity most often than not. It also comes with some sum of risks. More specifically, companies face multifaceted challenges in relocation since most of a time large companies relocate large number of resources that include material, human and other resources.

Lidya A. Eshete, founder of Relocation Pro, which is a pioneer in relocation services in Ethiopia, said that “Ethiopia’s economy is demanding foreign direct investment (FDI) and the surge of these corporations in to the country demand professional relocation support”. Of course, there are different problems at all ends in the relocation process in Ethiopia. Sometimes relocation is concluded in a way that produces high expenditure to the FDI due to lack of relocation support from local professionals. So, what are some basic challenges faced by these companies?

a) Controlling Expenditure
It is obvious that the cost control factor is the main problem for the FDI in relocation situations. Controlling moving costs of the corporation is an important aspect of a reliable relocation services. Most of a time, companies put cost control as their main relocation challenge, and the primary cost control issue identified dealt with comprehensive issues. Additional costs also arise when the relocation is not executed as planned since it is possible to face with uncertainties in the third world countries like Ethiopia. The right way to ensure cost control is to have a relocation policy to make sure that it adequately supports the relocation activities by considering a local know-how.

b) Local Support
Another main challenge which is faced by companies is the relocation destination that shall involve local content either as a department of the organization or as an outsourced agent, who can perform the relocation service through proxy. It is because the company should be familiar with the relocation destination that apparently differs from current location.
Employees of the FDI may need a lot of support to find childcare, housing, schools, and other related services including visa facilities. They have to be also aware about the residence and work permits, language, local laws, as well as culture. Moreover, general orientation and visits immediately after arrival helps personnel of FDI to become accustomed to surroundings.

c) Tax Concerns
As FDI, it is required to ensure that employees and the entity itself shall have clarity in relation to local tax regulations and procedures that determines the comfort of all coming staffs in to the new destination. It is important whether the relocation is for a fixed or permanent period of time.

d) Compliance with local regulatory frameworks
Compliance with laws remains as the main challenge of relocation exercises. Laws as well as other related local regulations in relation to the relocation of FDI are becoming strict everywhere but not only in Ethiopia. As a result, professional relocation support is something important.

Of course, challenges related to relocation services differ with the nature and size of the FDI. The company coming through FDI needs a policy and strategy that shall involve a local content in order to benefit the maximum. Ethiopia, as a country shall encourage entrepreneurs, like Relocate Pro, to provide professional and accountable services that meet the expectation of companies coming through the FDI.

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Tags: ComplianceCorporate relocationEthiopiaExpenditureFeatureforeign direct investmentgovernanceHuman resourcesLocal supportMetassebia Hailu Zeleketaxesэфиопияエチオピア埃塞俄比亚
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Metassebia Hailu Zeleke

Metassebia Hailu Zeleke

Metassebia Hailu Zeleke is a PhD Student in African Studies specializing in Citizenship and Mobility in Africa at Addis Ababa University. He is from Law background and currently operating as Consultant & Attorney-at-Law by serving as a legal counselor to different corporate entities, foreign investors and international law firms. By now, he is Vice President of the Ethiopian Lawyers Association and also serving as Editorial Board Chairman of the peer-reviewed “Ethiopian Bar Review” Journal as well as editorial team chairman of the Ethiopian Lawyers’ voice called temuagach “ተሟጋች” newsletter. He is also serving as Management Board member in different organizations including the Ethiopian Shipping and Logistics Services Enterprise. He is also a part-time instructor at Unity University. Internationally, he is serving as a Research Fellow to the China-Africa Legal Research Center and a Consultant to the China Center for Legal Diplomacy. He has also different international recognition including appointment of “Ambassador for Peace” by the Universal Peace Federation (2011), recipient of a fellowship program at the Law School of Beijing Foreign Studies University (Beijing, 2014), recipient of the China-Africa Lawyers Exchange Program (Beijing, 2014) and recipient of the Young International Lawyers Program by International Bar Association (Tokyo, 2014). He can be reached through metassebiahz@gmail.com or +251-911-636064

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