Why Diaspora Account ?

It is strongly believed that allowing Ethiopians in Diaspora to maintain foreign currency account at home country will allow encouraging domestic investment, support the international foreign exchange reserve and ease the balance of payments problem of the country and will allow Ethiopians abroad to open foreign currency which as a result will encourage foreign direct investment. Accordingly; the National Bank of Ethiopia issued a new directive on the Establishment and Operation of Foreign Currency Account for Non-Resident Ethiopians in domestic commercial banks, FXD/31/2006 which is an amendment directive to directive No.  FXD/25/2004.

Why Diaspora Account ?

It is strongly believed that allowing Ethiopians in Diaspora to maintain foreign currency account at home country will allow encouraging domestic investment, support the international foreign exchange reserve and ease the balance of payments problem of the country and will allow Ethiopians abroad to open foreign currency which as a result will encourage foreign direct investment. Accordingly; the National Bank of Ethiopia issued a new directive on the Establishment and Operation of Foreign Currency Account for Non-Resident Ethiopians in domestic commercial banks, FXD/31/2006 which is an amendment directive to directive No.  FXD/25/2004.

What is Diaspora Account?

It is a deposit account targeted for Ethiopians in Diaspora which is maintained in foreign currency by the debit of which funds can be transferred abroad and/or used locally without any permit from the National/Central Bank.

Features of the Account

  • Deposit is made in one or more of the following currencies; US Dollar, Pound Sterling Euro. Deposits that are made in other convertible currencies such as Canadian Dollar, Saudi Riyal, Japanese Yen, Australian Dollar and UAE Dirham shall be converted to any of the above stated three currencies at spot exchange rate based on the preference of the account opener.
  • Opening bank maintaining these accounts shall allow repatriation abroad of the deposits opened in any of the accounts stated upon the request of the account holder.
  • Repatriation of the deposits shall not exceed the initial balance plus any interest receipt on the deposit amount.
  • It can be converted to a Birr account as per the prevailing exchange rate

Use of the Account

  • This account can serve as collateral to get loans in local currency from domestic banks in line   with the opening bank's credit policy.
  • It can be used to make local payments in Birr, transfer to other foreign currency accounts, make foreign payments such as import and other Foreign Services payments provided the account holder has the required business license to do so.
  • It is also used to make transfer abroad, make payments for bank charges, if any, levied by the opening bank.

Eligible Applicants

The following individuals/enterprises are eligible to use a Diaspora account:

  1. Non-Resident Ethiopian
  2. Non-Resident Foreign Nationals of Ethiopian origin
  3. Companies owned by the above-mentioned non-residents and located outside the Ethiopian territory for more than one year.
  4. Ethiopian nationals living and working abroad or in due process of living abroad for work for more than one year and who can produce authenticated documents.

Types of Diaspora Account

I. Fixed (Time) Deposit Account

  •  It is an interest bearing account with agreed maturity date. The minimum maturity period is three months.
  • It is opened with an initial deposit of US Dollar 5,000 or its equivalent in any of the above stated currencies.
  • Interest on such accounts shall be payable only if they are maintained at least for the minimum period.
  • Interest income on such accounts is tax-free.

II.    Current Account

  • It is operated by cheque book.
  • Withdrawals can be made at any time by writing a cheque.
  • It can be opened with an initial deposit of US Dollar 100 or its equivalent in any of the above stated currencies
  • The maximum amount to be deposited shall not exceed US Dollar 50,000 or its equivalent in any of the above stated currencies.
  • Interest shall not be paid to a non-resident foreign currency current account.

III. Non-Repatriable Birr Account

  • It may take the form of saving deposit account that can be used for local payments only.
  • Such account will pay double interest of the minimum saving deposit rate set by the National Bank of Ethiopia.
  • Money can neither be transferred from this account to abroad nor converted from the local currency to any foreign currency.

 

Generally Required Documents

  • Application forms properly filled and signed by the applicant.
  • Ethiopians or foreign nationals of Ethiopian origin shall present valid passport and/or identification card.
  • For businesses, Certificates of ownership /entitlement for the organization and/or Articles and Memorandum of Association

How to Open the Account?

  • Persons residing abroad can open the account in person or by post in his/her name.
  • Applicants who could not be physically presented to open the account in the domestic banks can use the Ethiopian Embassies, Correspondent Banks or nearby remittance service providers to prove their identities.
  • Opening of a foreign currency account by Power of Attorney is not allowed. However, Power of Attorneys is allowed to withdraw from these accounts provided that the Power of Attorney explicitly empowers them to operate these accounts.
  • An individual may open current account in only one of the domestic banks whereas he/she may open fixed deposit accounts in more than one bank.

Closure of the Account

 The following conditions may lead to closure of the Diaspora account:

  • Upon the request of the account holder.
  • When the account holder starts to live in Ethiopia after completion of his/ her stay abroad.
  • A foreign currency account is found to be opened in relation to money laundering or terrorist financing services.