|The Investment Code Act governs investment in Uganda. |
For the purposes of administration of the UIA, which serves as a one-stop centre for business registration and licensing, has been established.
registration / licensing requirements
A foreign investor is only allowed to operate a business in Uganda in accordance with an investment licence issued under the Investment Code Act. Once a secondary licence is obtained (where relevant), an investment licence is to be obtained from the UIA. Requirements for obtaining such a licence include investing at least USD100 000 in Uganda over three years (cash or assets).
Investors in the energy-generation, mining, banking, air-transport, pharmaceuticals-production, education, health, telecommunications, and oil and gas industries must obtain a secondary licence from the ministry/department/agency regulating such industry, prior to applying for an investment licence.
Project developers in the following industries are also required to obtain an environmental impact assessment report/certificate of approval from the National Environment Management Authority, where relevant, before commencing with a specific project: urban development, transportation, aerial spraying, mining, forestry, agriculture, processing and manufacturing, electrical infrastructure, management of hydrocarbons, waste disposal and natural conservation areas.
non-industry specific registrations/
The following general non-industry specific registrations/licences may also be required:
|Uganda Revenue Authority (“URA”)||Any person who derives an amount subject to tax under the Income Tax Act is defined as a taxpayer and is required to register with the URA and obtain a tax identification number (“TIN”), which is used for all types of taxes.|
It is also a requirement that directors of the company obtain TINs.
If the company's expected annual turnover is more than UGX150-million, it will be required to register for value-added tax (“VAT”).
|Ministry of Trade, Industries and Cooperatives (“MITC”)||Prior to submitting an application for a trading licence as set out below, foreign investors are required to obtain permission from, and register with, the MITC to trade in Uganda.|
|(Kampala Capital City Authority (“KCCA”)||A trading licence is to be obtained from the relevant Municipal Licensing Authority (in Kampala, the KCCA). A separate trading licence is to be obtained in respect of each branch/store of an entity.|
|National Social Security Fund (“NSSF”)||A company is required to register with the NSSF if it has five or more employees, within 21 days of becoming liable to register as contributing employer.|
In addition, each employee is required to have their own member number under which contributions are made.
Industry-specific licences may also be required.
Various incentives are available to entities operating in:
- free zones (designated areas where goods introduced and produced are generally regarded as being outside the customs territory, in so far as import and export duties are concerned);
- export processing zones to produce any type of goods and services for export; and
- free-port zones dedicated to activities of a preparatory nature, such as warehousing and storage, labelling, packing and repacking, sorting, grading, cleaning and mixing, breaking bulk, simple assembly and grouping packages.
exchange control regulation
There are no exchange control restrictions in Uganda and foreign exchange can be brought into and repatriated from the country without government approval. However, the Foreign Exchange Act requires every payment made in foreign currency to or from Uganda between residents and non-residents, or between non-residents, to be made through a commercial bank.
The Investment Code Act provides that compensation paid to an investor is freely transferable out of Uganda and is not subject to exchange control restrictions under the Foreign Exchange Act or any other law made thereunder.
Where the Bank of Uganda (“BoU”) has reason to believe that an offence has been or is about to be committed, the Foreign Exchange Act provides that the BoU may require a bank to obtain permission before executing any payment of foreign currency. The BoU has discretion to grant or deny the permission.
types of entities available for foreign investment
Business in Uganda may be conducted in an incorporated or an unincorporated form.
The most widely used unincorporated forms are the sole proprietorship and the partnership.
Incorporated/registered forms of business include companies incorporated outside Uganda, cooperative societies and companies incorporated under the Companies Act.
In terms of the Companies Act, any one or more persons may, for any lawful purpose, form an incorporated (private) company and any seven or more persons may form a publicly held company.
Foreign companies are, in general, free to create branches or subsidiaries in Uganda and to engage agents.