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BY Felix Cuicredidi
TCSPs in Rwanda are now required to have the Central Bank license
On Friday, September 23, 2022, the National Bank of Rwanda (the Central Bank) for the first time issued a regulation no 52/2022 of 01/09/2022 to govern trust and company service providers (“TCSPs”) (the Regulation).
This new regulation requires that anyone who intends to provide trust and corporate services obtain a license from the Central Bank.
Under the Regulation, trust and corporate services are:
- acting as a corporate or partnership formation agent or arranging for another person to act as a director, secretary or senior manager of a company or a partner of a partnership or as a foundation senior manager;
- providing administration or management of a trust, company, partnership, foundation or for any other legal person or legal arrangement;
- providing registered office, business address or accommodation, correspondence or administrative address for a company, partnership, foundation or for another person;
- acting as a resident agent for the purposes of meeting requirements to hold beneficial ownership or interest information;
- acting as or arranging for another person to act as a trustee of an express trust; and
- acting as or arranging for another person to act as a nominee shareholder for another legal person.
The regulation stipulates, among other requirements, that an applicant for a TCSP license must have a permanent establishment in Rwanda and operate from business premises with adequate logistics and staff of adequate number, skills, knowledge, and experience to perform their duties. The applicant must also have an internal compliance system that ensures compliance with the standards of conduct issued under applicable laws and regulations, as well as a business plan that outlines the applicant's mission, vision, strategic objectives, market analysis, financial projections, and action plan.
The holder of a TCSP license would be required to maintain a professional indemnity insurance policy that is proportional with the levels of risk it is involved in and to pay an annual license fee of one million Rwandan francs (FRW 1,000,000) to the Central Bank. This is an obligation that would kick-in three years after a TCSP obtains the license.
TCSP licensees are also required to adhere to the applicable anti-money laundering and counter financing of terrorism (AML & CFT) laws and regulations and run quarterly regulatory reporting of financials of a trust under management. This will also extend to revenue and assets under management, as a continuing compliance obligation.
The Regulation provides for a moratorium of one year for entities such as law firms and accounting firms, that have been providing trust and corporate services prior to its entry into force before they can be required to apply for a TCSP license.
Reviewed by Dieudonné Nzafashwanayo, an Executive at ENSafrica.
Felix Cuicredidi
Trainee Associate
fcuicredidi@ENSafrica.com