Uganda, often referred to as the pearl of Africa is bordered by South Sudan in the north, Kenya in the east, the United Republic of Tanzania in the south, Rwanda in the southwest and the Democratic Republic of Congo in the west. It is a landlocked country but perhaps with unlocked and unlimited investment opportunities.
A potential investor considering investing in Uganda, will find a well-regulated highly liberalized economy in which all sectors are open for investment and there is a free movement of capital to and from the country. The country has a strategic commanding base to be a regional hub for trade and investment. Uganda enjoys pivotal trade partnerships that create a viable market for business.
Unlike most other countries, in Uganda, the business operating environment allows the full repatriation of profits after the mandatory taxes have been paid, as well as 100% foreign ownership of private investments. The incentive regime is structurally embedded in the country’s tax laws making them nondiscriminatory and accessible to both domestic and foreign investment depending on the sector and level of investment.
The minimum capital investment required for a foreign investor to be eligible to invest in the country in virtually any sector, apart from those that may compromise the country’s security, is US$100,000.
Uganda’s labor is highly trainable, English speaking and the cost compares favorably in Africa.
WHY DO BUSINESS IN UGANDA
Minus a wide range of opportunities and a vibrant Mushrooming economy. There are many reasons for one to invest in Uganda but most common are but not limited to the following;
Strong Incentives for Foreigners
Uganda has very open investment incentives for foreigners, the most important include;
- Investment Capital Allowances
- Deductible Annual Allowances
- Duty- and Tax-free import of plant and machinery
- First arrival privileges for personal effects and motor vehicles
- Export zones
- No restriction to 100% ownership of investments
- No barriers to remittances of dividends
- Fully convertible Currency
- Capital account transactions and exchange market fully liberalized
- No restrictions on capital transfers
Ownership in Companies
There are no restrictions on the equity share that foreign nationals may hold in a locally incorporated company and no rules or regulations restricting joint ventures between Ugandan and foreign investors. These issues are subject to mutual agreement between the partners.
Performance Requirements
Foreign investors are subject to performance obligations regarding the size of investment, staff training and local employment, local procurement and environmental protection.
Labor issues
Uganda has a large quantity of both skilled and non-skilled, professional and technical English-speaking workers. On the World Banks Doing Business Survey 2007, Uganda ranks first among all sub-Saharan countries in terms of ease of hiring. The country does not have a history of labor disputes or strikes. Many existing investors see the existing labor regulations as unproblematic and in much favor of the investors for better growth.
Investment Protection
The investment code protects licensed investors. Uganda has signed various bilateral and multilateral agreements.
Fiscal incentives for foreign investors in Uganda
Uganda’s fiscal incentive package provides for generous capital recovery terms, particularly for investors whose projects entail significant investment in plant and machinery and whose investments are medium/long term.
Investment restrictions and sectors not entitled to investment incentives
The investment code allows foreigners to invest in all activities except for those which compromise national security, or which require the ownership of land.
Legality of Company formation
In Uganda, you can operate business under two categories 1) as a foreign company or 2) Local company. Foreign companies are companies incorporated outside Uganda but extending their business into Uganda. Local company or business is one that is incorporated and registered in Uganda regardless of the shareholders origin. It was now made easy in a way that even one person(shareholder) can register a limited liability company unlike in the past when two or more shareholders were needed to form a company
To register a local or foreign company or business in Uganda is easy and cheap. If you are not well versed with the country dynamic and professional tasks required, just get a consultant or firm like NBK-Premier Solutions Ltd, then the process can take you even no hustle. Call/WhatsApp: +256704597816.
About Land
The right to all land is vested in the citizens of Uganda. Foreign investors may only own land in a joint venture with a majority local shareholder. Leasing is an option for all foreign investors, for terms anywhere from five to 99 years from private owners, municipal councils and other public agencies.
LAND IS AVAILABLE IN THREE CATEGORIES:
Public land: Both local and foreigners may lease public land, which is available through municipal councils and District Land Commissions.
Leased land: Available from Buganda Land Board and other landlords
Freehold: Available from private individuals for sale or contractual lease.
Paying Taxes
Income tax is at 30% of net income (after all business expense and deductions) VAT is at 18% and Withholding tax for purchases at 6%. Dividend and capital payments are allowed subject to the tax laws of Uganda. Dividends are subjected to withholding (rate for residents and non-residents is 15%). With the approval of the Bank of Uganda, dividends can be remitted to non-resident shareholders. Capital gains on business assets are subject to a tax rate or 30%.
Sample Sectors.
Agriculture and Agro processing.
Post harvesting equipment, such as packaging and food processing facilities. Opportunities to invest in Small and Medium Enterprises in the agriculture sector exist in:
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- Farming and Agri business
- Packaging of fruits and vegetables
- Investment in cold storage facilities at collecting point
- Laboratory testing services, material, equipment
- Production of sun-dried products
Manufacturing
Opportunities exist in plenty when it come to manufacturing. Uganda is just moving and opening up for manufacturing of various items from the traditional products and packaging. Main sectors for manufacturing based Small and Medium Enterprises in Uganda are: Foods and beverages, textiles and garments, wood crafts, leather products, printing and graphics products, Chemical and Pharmaceuticals, Handcrafts, Building materials and ceramics, just to name but a few.
Food and Beverages
Uganda has a competitive advantage in farming and processing of several foods and beverages. Possible investment opportunities are in:
- Planting and processing of coffee
- Extraction of vegetable and essential oils
- Packaging of beans and other vegetables for export
- Etc.
Building materials
Investment opportunities are available in:
Manufacture of pre-fabricated concrete systems
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- Establishment of mini-cement factories
- Exploitation of non-metallic minerals to provide floor/wall tiles, cement, glass, etc
Services
Investment opportunities in the services sector range from financial services, tourism and information technology/electronics sector, hospitality, engineering, consultancies, technical works, etc.
There are over 260 investment opportunities in Uganda and choosing the best for you requires a quick assessment of your needs so as better recommendations are done. In case you may be reading this article at your desirous moment to venture into Ugandan business and unaware of where to start, then consultants like: NBK PREMIER SOLUTIONS will guide you.
Uganda, will never disappoint when it comes to investments.
