ABOUT DJIBOUTI

Djibouti is a small but strategically significant country located in the Horn of Africa. Bordered by Eritrea, Ethiopia, and Somalia, and facing the Red Sea and the Gulf of Aden, Djibouti acts as a vital gateway to international maritime trade routes. The capital city, Djibouti City, is the largest urban center and home to over 70% of the population. Djibouti uses the Djiboutian Franc (DJF) as its official currency. As of 2024, 1 Indian Rupee equals approximately 2.1 DJF, making the currency exchange relatively favorable for Indian investors.

With a population of approximately 1.1 million (2023), Djibouti is classified by the World Bank as a Lower Middle-Income country. The country is known for its political stability, U.S. and Chinese military bases, and strategic role in international shipping—especially as a logistics hub for landlocked Ethiopia, which relies heavily on Djibouti’s ports for trade.

There are two international airports in Djibouti and one major seaport — the Port of Djibouti — which handles a majority of Ethiopia’s import-export needs. In recent years, with help from China, Djibouti has also developed the Doraleh Multipurpose Port and Djibouti International Free Trade Zone (DIFTZ), which is the largest free trade zone in Africa.

The corporate tax rate in Djibouti is 25%, while small enterprises and startups benefit from special economic incentives if registered in free zones. Opesh Group will assist investors in Due Diligence, legal documentation, license procurement, business planning, and even rental assistance for setting up office spaces in Djibouti.

Company Formation in Djibouti

Under Djiboutian commercial law, foreign investors are allowed 100% ownership in several business types, including:

• Limited Liability Companies (SARL)

   

• Public Limited Companies (SA)

   

• Branch offices and Representative offices

   

Free Zone companies benefit from zero customs duties and simplified business regulations.

TYPES OF BUSINESSES TO START IN DJIBOUTI

1. Logistics and Warehousing

Djibouti is home to the largest and busiest ports in East Africa. With Ethiopia relying on it for over 95% of its trade, logistics, warehousing, and freight forwarding businesses offer lucrative returns. You can start a logistics firm in the Free Trade Zone to capitalize on zero tax benefits.

2. Renewable Energy

With high solar irradiation and strong winds, Djibouti is pushing for clean energy. The government plans to be 100% powered by renewables by 2035. Investors in solar and wind energy projects can benefit from government subsidies and international funding.

3. Tourism and Hospitality

Despite stunning landscapes like Lake Assal (the saltiest lake in the world), volcanoes, coral reefs, and a unique position between Africa and the Middle East, Djibouti’s tourism sector is underdeveloped. There is high demand for resorts, eco-lodges, and tour agencies.

4. Agriculture and Food Processing

Djibouti imports over 90% of its food. There is an opportunity for hydroponic farms, cold storage units, dairy plants, and food processing units especially targeted towards the growing urban population and neighboring Ethiopia.

5. Information Technology and Digital Services

Djibouti is connected via eight undersea internet cables and serves as a regional internet hub. There are strong opportunities in e-commerce, digital services, fintech, and telecom infrastructure.

6. Construction and Infrastructure

With billions invested in ports, railways, and buildings, construction firms and material suppliers have large-scale business potential. New city development and housing projects are in demand.

7. Health & Pharmaceuticals

Djibouti has a shortage of advanced healthcare facilities and medicines. Hospitals, diagnostic labs, pharma distribution centers, and medical device manufacturing units are promising ventures.

8. Education and Training

The local youth population (over 60% under age 25) needs skill development. There is demand for English medium schools, skill training centers, and technical/vocational institutions.

ADVANTAGES OF STARTING A BUSINESS IN DJIBOUTI

• Strategic Location: Located on one of the busiest shipping lanes globally—connecting Europe, Asia, and Africa.

   

• Gateway to Ethiopia: Ethiopia’s dependence on Djibouti for its imports offers guaranteed business demand.

   

• Free Trade Zone Benefits: 100% foreign ownership, zero customs duty, and simplified taxation policies in DIFTZ.

   

• Stable Currency: DJF is pegged to the U.S. dollar, ensuring macroeconomic stability.

   

• Government Incentives: Land lease at subsidized rates, tax holidays for new investors, and streamlined registration through the National Investment Promotion Agency (NIPA).

   

• Young and Trainable Workforce: The country has a rising number of English-speaking professionals.

   

• Growing Digital Infrastructure: Strong international internet connectivity makes Djibouti a tech-friendly destination.

   

BUSINESS OPPORTUNITIES FOR INDIANS IN DJIBOUTI

Djibouti and India have a growing diplomatic and trade relationship. Indian companies can tap into:

• Construction & housing projects

   

• Solar energy and mini-grids

   

• Exporting spices, rice, textiles, and pharmaceuticals

   

• IT and telecom support services

   

• Education franchises and coaching centers

   

• Medical supply chains and clinics

   

MAJOR IMPORTS & EXPORTS

Exports from Djibouti:

• Live animals (esp. for Saudi Arabia)

   

• Re-exported goods (fuel, machinery)

   

• Sea salt

   

• Cement

   

Imports into Djibouti:

• Food products

   

• Machinery & equipment

   

• Vehicles

   

• Petroleum products

   

• Pharmaceuticals

   

• Textiles

   

Indian Exports to Djibouti:

• Rice, pulses, spices

   

• Pharmaceuticals

   

• Iron & Steel

   

• Plastics

   

• Electrical machinery

   

• Clothing & garments

   

INDIAN COMPANIES ALREADY IN DJIBOUTI

• Ashok Leyland – supplying buses and trucks

   

• Dr. Reddy’s & Cipla – exporting pharmaceutical products

   

• L&T – involved in port infrastructure and logistics facility development

   

• TATA Motors – supplying vehicles for construction and passenger transport

   

ECONOMIC SNAPSHOT 

• GDP: $3.9 Billion

   

• GDP Growth Rate: 4.2%

   

• GDP per Capita: $3,500

   

• Ease of Doing Business Rank: 112

   

• Inflation Rate: 2.8%

   

• Major Sector Contributions:

   

  • Services: 70%
    
  • Industry: 17%
    
  • Agriculture: 13%

     

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