WHEREAS, it is necessary to create conducive environment in every field of commercial activity in line with the free market economic policy;

WHEREAS, it is necessary to improve the registration and licensing procedures of commercial activities in a manner that will promote the free market economic policy and to abolish the constraints encountered by the law-abiding business community in this respect;

WHEREAS, on the one hand, it is necessary to create an enabling environment for the carrying out of lawful commercial activities and, on the other, to restrain illegal commercial activities;

WHEREAS, it is believed that the function of issuing business licenses, which so far used to be carried out by different government institutions, must be carried out in an improved and relatively consolidated manner only by the pertinent institutions of the trade and industry sector, with the exception of those licenses which must be issued by other government institutions, owing to the particular nature of the respective activities.

WHEREAS, the necessary changes should be made on some provisions of the law enacted to serve previous regimes, which are not consistent with the on-going free market economic system and it is necessary to consolidate into one proclamation those provisions of the law relating to registration and licensing, which hitherto are found scattered in different proclamations;

NOW, THEREFORE, in accordance with Article 55(1) of the Constitution of the Federal Democratic Republic of Ethiopia, it is hereby proclaimed as follows: