A foreign currency account/ Diaspora Account Establishment and Operation in Ethiopia

Reference: National Bank of Ethiopia FXD/69/2021Diaspora account Amendment Directive

A foreign currency account/ Diaspora Account Establishment and Operation in Ethiopia.

Who can Open Diaspora Account?

Eligibility Criteria

The following individuals and/or enterprises may open a foreign currency account in any of banks in Ethiopia.

a) Non-Resident Ethiopian.

b) Non-Resident Foreign Nationals of Ethiopian origin.

Types of Currency allowed to open a Foreign Currency accounts

It is required to maintain Foreign Currency accounts in the following types of currency only.

a) The US dollar

b) Pound Sterling

c) Euro

A bank may accept deposits in other convertible currencies that include Canadian Dollar, Saudi Riyal, Japanese Yen, Australian Dollar and UAE Dirham. And, these other currencies shall be converted to any of the three currencies enumerated above at spot exchange rate based on the preference of the account opener.

What are the criteria to open Diaspora Account/ A foreign currency account?

Non-Resident Ethiopians/Foreign Nationals of Ethiopian origin shall present the following documents to open an NR foreign currency account in domestic banks.

a) Application forms properly filled and signed by the account holder.

b) Non Resident Ethiopians shall present

–  resident permit/certification, authenticated and registered by pertinent authority, to confirm the Ethiopian National living and working abroad for more than one year and subject to renewal upon presentation of valid documents on a yearly basis.

c) For Non Resident Ethiopians living and working in neighboring and Middle East counties

–  authenticated valid resident permit and/or valid work permit, by Ethiopian Embassies and legations residing abroad, subject to renewal upon presentation of valid documents on a yearly basis.

d) For individuals

– Valid passport and/or identification card of foreign nationals of Ethiopian origin of the applicant.

e) For businesses

– Certificate of ownership entitlement for the organization and/or article and   memorandum of association authenticated and registered by the pertinent authority.

Applicants who could not be physically present to open the NR account in the bank shall use the Ethiopian Embassies, correspondent bank or remittance service providers nearby to prove their identities.

Types of Permitted Account

A bank may open the following types of non-resident foreign currency accounts.

  1. Current account

– Which takes the form of current deposits where withdrawals may be made at any time upon demand by writing a check and/or a pre-arranged procedure adopted by the opening bank.

  • Fixed or time deposit account
  • Maturity period may vary based on the agreement made between the depositor and the opening authorized bank. However, the minimum maturity period for such an account shall be three months.
  • Non – repatriable Birr account

– Which may take the form of saving deposit that can be used for local payments  only.

Opening Foreign Currency Account

The minimum amount required for an initial deposit to open a current foreign currency account shall be USD 100 or its equivalent in any of the eligible currency.

The minimum amount required in an initial deposit to open a fixed deposit foreign currency account shall be USD 5,000 or its equivalent in any of the eligible currencies.

An individual may open current account in only one of the domestic authorized banks whereas he/she may open fixed deposit accounts in more than one bank.

A request for opening an account for deposit in foreign currency shall be accompanied by a letter of application and a specimen signature.

Power of attorney holders are not allowed to open foreign currency accounts and credit the account on behalf of non-residents and/or foreign nationals of Ethiopian origin.

However, power of attorney holders are allowed to withdraw from these accounts for the purpose enumerated in the directives in addition to investment purpose provided that the document explicitly empowers them to operate the accounts.

Use of the Account

The foreign currency accounts may be used to:

a) Make local payments in Birr.

b) Make foreign payments for import items listed under priority sector in the “Transparency in Foreign Currency Allocation and Foreign Exchange Management Directive”, food items provided the account holder has the required business license to do so, and other Foreign Service payments.

c) Effect transfer abroad.

d) Withdraw for travel allowance of their requirements in cash notes or any other instruments upon presentation of valid travel document from their account.

e) Convert into a Birr account at the prevailing exchange rate.

f) Pay for authorized bank charges, if any, levied by the opening bank. g) Serve as collateral or guarantee for loans or bids.

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