:The present study intended to analyze the effect of doing business indicators on the flow of foreign direct investment
(FDI). The study took time series data for the period 2010 to 2014. The data have been analyzed using graphic comparison,
analysis of variance and correlation tests. The correlation result indicated that costs of doing starting business, cost to get
electricity connection, cost of registering property, resolving insolvency and cost of construction permit have a strong negative
relation to the FDI flow to Ethiopia during the study period. The supportive data of enterprises survey conducted in the year 2006 ,
2011 and, 2015 by the World Bank disclosed that the biggest obstacles to operate business in Ethiopia are , access to finance,
corruption , customs and regulations, tax administration and getting electricity and transportation in comparison to other sub
Saharan and rest economies have not shown good progress the periods. So that the study suggests that the government of
Ethiopia needs to work to create a more conducive environment to both local and foreign businesses through building
infrastructures, stable legal systems and institution in order to reduce the cost of doing business and attract FDI flows.