Introduction
The total area of Uganda is about 241 000 square kilometres of
which about 44 000 are covered by fresh water bodies. As per the last
population census conducted in 2014, the population of Uganda is approximately
37.58 million. English is the official language. Swahili and Luganda are also
spoken. The capital city and seat of Government is Kampala. Other major towns
include; Jinja, Mbala, Arua, Entebbe, Gulu and Mbarara. The latest GDP figures
is USD$21.49 billion.
The Government of Uganda strongly encourages private investment,
both foreign and domestic. Efforts aimed at improving investment climate have
been made at different levels such as; by reducing bureaucracy, streamlining
the legal framework, fighting corruption and stabilising the economy.
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. Uganda
also has a fully liberalised foreign exchange regime with no restrictions on
the movement of capital in and out of the country.
Formation
of a company in Uganda
(a)
Local
company
Companies, both local and foreign must be registered. A local
company is one which is incorporated and registered in Uganda or a company
whose major shareholding is held by Ugandans and the majority of its business
is conducted in Uganda. Foreign companies and branch offices that are required
to register as foreign companies.
A local company is one that is incorporated and registered in Uganda.
The information required for the incorporation of a local company is as
follows:
The proposed name of the Company’s business and the proposed
principal place of business.
The full names, address, age, nationality, position and other
occupations of all members/ shareholders and directors of the proposed company.
The share capital of the company and the capital contribution of each member to
the company. The statutory minimum number of members/ shareholders required for
a limited liability company is one. Note that all the shareholders and
directors of the company can be foreigners.
(b)
Foreign
company
Three certified copies of the company’s certificate of
registration from the Country of origin. Three certified copies of the
Memorandum and Articles of Association/ Constitution of the company.
A complete list of all the directors and the secretary of the
company, their names, postal addresses, nationalities, business occupations and
dates of birth.
A statement of all subsisting charges created by the company
(particulars of subsisting debts of the company) if any. A list of the
shareholders of the company.
The name and postal address of someone resident in Uganda
authorised to accept on behalf of the company service of court process and any
notices required to be served on the company. The full address of the
principal/registered office of the company in Uganda. The company can initially
use the address of its attorneys in Uganda.
Other
Government approvals
Besides company registration, there is
also a requirement for tax registration for any person doing business in
Uganda. Upon application, the Uganda Revenue Authority issues a Tax
Identification Number. This is the identifier in Uganda for business purposes.
Trading or operating licenses are
issued by the respective Government or professional bodies where necessary,
depending on the nature of business being undertaken. Local Government
Authorities, for example Kampala Capital City Authority (KCCA), usually issue
the trading licenses for businesses that are being established within the city.
The investment license is issued by Uganda Investment Authority.
Visa requirements and
Immigration
Under Ugandan immigration regulations, the requirement to obtain a
visa to visit Uganda varies according to the visitor’s country of origin.
Ugandan visa policy is based on the principle of reciprocity i.e all countries
that require visas for Ugandans are also subject to visa requirements in
Uganda.
Visitors from the following countries do not require visas: East
African citizens and nationals of COMESA member countries, Angola, Comoros,
Eritrea, Kenya, Malawi, Mauritius, Madagascar, Rwanda, Seychelles, Swaziland,
Tanzania,
Zambia, Zimbabwe, Antigua, Vanuatu, Cyprus, Tonga, St. Vincent and The
Grenadines, Solomon Islands, Singapore, Sierra Leon, Malta, Lesotho, Jamaica,
Grenada, Gambia, Fiji, Belize, Barbados, Bahamas, Italy (only diplomatic
passports).
Visitors
from other countries must obtain visas from Uganda’s diplomatic and consular
missions abroad. Visas can also be obtained on arrival at Entebbe Airport or
any other entry point in cases where foreign nationals cannot access a Uganda diplomatic
and consular mission abroad, provided one satisfies the entry requirements. It
is however advisable to get a visa before embarking on a trip to Uganda to
avoid unnecessary paperwork at point of entry.
Entry
visas should be distinguished from work permit / work visa. Once the company
decides to hire a non-citizen, such an employee must apply for work permit.
Uganda Immigration board is responsible for issuing work permits.
Taxation of companies
A corporate tax is levied on companies, partnerships and sole proprietorships.
Any income arising out of any trade, profession, vocation or adventure in the
nature of trade is taxable under special rules applicable to business entities
unless otherwise specified as being exempt under the tax code.
The income of all companies accruing or derived from Uganda is
taxable. A company is liable to pay tax separately from its shareholders. The
sources of a company’s income on which tax can be levied include profits and
gains from any business carried on for whatever period of time. Other sources
include dividends from shares in other companies and interest from the use of
the company’s property. The income tax rates are; Resident and Non Resident
Companies - 30%, Branch tax - 30%, Branch profit Remittance tax - 15%
Market
Depending on the nature of Investment, the country provides a huge
market for the products/services given its rapidly growing population and the
fairly sound purchasing power. Additionally, Uganda is a member of the Common
Market for Eastern and Southern Africa (COMESA) and of the East African
Community which also includes Kenya, Tanzania, Rwanda and Burundi. Additionally
Uganda is a member of the ACP-EU partnership agreement between a number of
African, Caribbean and Pacific states and the European Union.
Land acquisition
Local investors and Ugandan citizens can own land while foreign
investors are restricted to long term leases, usually from five to 99 years.
Land can be obtained from private owners, local councils and other government
agencies. A company may also decide to simply hire land for its intended
purpose. Land within the city is scarce. It is advisable that the company
retains an attorney or reputable real estate company to identify land that is
suitable for intended activities.
Labour relations
There are several labour laws in place that are intended to
protect both the employer and the employee. The labour laws include; The Employment Act, Occupational Safety and
Health Act, The Workers’ Compensation Act and The Labour Disputes (Arbitration
and Conciliation) Act. The local labour force is plentiful and cheap. Trade
unions are not yet strong although collective bargaining agreements are in
force with some companies.
Author
Benard Ainamani (Commercial Lawyer)
Partner at Blair & Co Advocates
Tel: +256 774851102
Email: benaine2014@gmail.com
Web: www.blairandcompanyadvocates.com
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
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