Brief Guide to Investing in Uganda:

 Brief Guide to Investing in Uganda:

Why Invest in Uganda?
Since 1991, over 2000 enterprises of various sizes have committed in excess of US$2.5 billion in actual investment into the country for projects that range from agriculture, manufacturing to transportation. For many investors, Uganda is an attractive investment location in Africa for the following reasons: –

ˇ Strategic location at the heart of Africa that guarantees ready access to regional markets
ˇ A predictable and stable economic environment
ˇ A fully liberalized economy
ˇ An abundant natural resource base
ˇ Demonstrated Government commitment to the private sector
ˇ Existence of a well-trained, English speaking workforce
ˇ Well-developed basic infrastructure, compared to other countries in the region
Uganda currently ranks as the fastest growing economy in Sub-Saharan Africa and in many ways, has come to reflect the new face of emerging Africa.

The Incentive Regime:
Along with an excellent macro-economic record, Uganda provides a competitive incentive regime for private sectors: –

ˇ Uniform corporation tax of 30%, which is the lowest in the region
ˇ Import duty exemptions for plant and machinery
ˇ Duty draw-back facility for exporters
ˇ A fully liberalized foreign exchange regime with no restrictions on the movement of capital in and out of the country.
ˇ A freely convertible and stable currency
ˇ Special initial allowance (accelerated depreciation) of 50 – 75 per cent on plant and machinery
ˇ 100% initial allowance for training, scientific research and mineral exploration expenditures
ˇ Value Added Tax (VAT) deferral facilities for plant and machinery
ˇ First Arrival Privileges in the form of duty exemptions for motor vehicle and personal effects to all investors and expatriates coming to Uganda

Investment Opportunities:
The following is an outline of investment opportunities in some of the priority areas

Floriculture:
Floriculture gives the most attractive return on investment in agriculture in Uganda (30-40%) but requires high investment. The industry requires expansion and new enterprises, and the market can absorb an increase in production. Opportunities include production and supply of propagation materials to farmers, manufacture of greenhouse construction and packaging materials,

Fish and Fish Farming Industry:
The industry has emerged in recent years to become one of Uganda’s leading foreign exchange earners. Opportunities include the processing of value added products such as canned fish, aquaculture, and fish leather processing.

Cotton and Textile Industry:
A number of investment opportunities exist in the textile sector. These include growing of cotton for export, establishment of ginneries, and supply of inputs to farmers and production of edible oil from cotton.

Building and Construction Industry:
Opportunities include the provision of low cost housing in the urban and semi-urban areas, provision of housing and mortgage finance, and provision of construction equipment and building materials.

Foods and Beverages Sector:
Investment opportunities do exist mainly utilization of local agricultural raw materials to manufacture agro-processed products with higher export potential. Additional opportunities exist for support industries to the sector for example in packaging; value added processing and cold storage at export points.

Education Sector:
There are more opportunities in the education sector most especially at post primary level. These include secondary education, technical and vocational education, development of computer skills, managerial skills training.

Financial Services:
Given the favourable climate, stable macro-economic environment and political stability, There is enormous potential in the following areas: Merchant Banking, Development Banking, Commercial Banking, Discount Houses, Insurance Services, Leasing, Mortgage Financing, Building Societies, Micro-Financing Services, Specialized Training Institutions

Fruits and Vegetables:
Opportunities include commercial farming of fruits and vegetables, processing, production and export of de-hydrated fruits, cold storage facilities at collection points, organic farming, and irrigation schemes for commercial farms to ensure harvest throughout the year

Electronics Sector:
Opportunities include the establishment of service centres for the available brand radio, television and power conditioning equipment and the manufacture and assembly of computer equipment targeting the local and regional markets.

Dairy Sector:
Major investments opportunities exist in the production of powder milk and long life milk such as condensed milk or ultra heat-treated (UHT) milk, processing of dairy products such as butter, cheese, ice cream, yoghurt and ghee. There also exist opportunities in dairy cattle and goat breeding and dairy farm management.

Tourism Sector:
Opportunities in the sector include tour operations, water sports and related activities, accommodation, conferences and incentives travel, national park concessions, privatisation, and joint ventures with existing players.

More details on investment opportunities are available in the Sector Profiles and copies are available with the Uganda Investment Authority.

Investment Guarantees:
MIGA Coverage – Uganda became a member of the Multilateral Investment Guarantee Agency (MIGA) in 1992. Under this agency, foreign investors can insure their investment in Uganda against a wide range of non-commercial risks including expropriation, currency transfers, breach of contract and civil strife. Foreign investors can apply for MIGA coverage through UIA.

Overseas Investment Insurance Scheme – The scheme provides insurance cover for UK companies against the perceived political risks of investing in foreign markets.
Overseas Private Investment Corporation (OPIC) – An agreement signed in 1998 with the above US agency seeks to guarantee American investment in Uganda.
Uganda has also signed bilateral investment protection agreements with a number of other countries.

Uganda Investment Authority:
UIA is the agency set up by Government to promote investment in Uganda, to market Uganda’s investment opportunities to targeted investors all over the world; to coordinate the national investment-marketing program and to serve as a point of contact for investors interested in Uganda. As a business oriented agency, UIA is manned by prof3essional staff that help investors by facilitating them in implementing their planned investments with minimal problem. UIA also advises Government on appropriate investment friendly policies and is generally equipped to swiftly handle investors’ requirements for information or action.

Financial Support/Assistance:
Foreign investors can apply for loans from the local banking sector. Investors can also list their projects on the local stock exchange. A number of projects exist to support investors in given sectors. UIA can advise potential investors on the how and where to access existing financing options for their planned investors.

Getting Started – A Brief Guide

Foreign investors require a minimum investment of US$100,000 in order to secure an investment license from the Uganda Investment Authority. For local investors, the minimum investment requirement is US$50,000. Local investors, however, may proceed with their investors without licensing with the Uganda Investment Authority.

As a new investor, you will need to go through the following steps to start up your investment in Uganda: –

Step 1 – Register your company in Uganda

Register your company in Uganda at the Registrar General’s office and obtain the following documents: –

  • Memorandum and Articles of Association
  • Certificate of Incorporation

Step 2 – Get your Investment License

Apply for an investment license using UIA Form 1 and attach the following:-

  • Memorandum and Articles of Association
  • Certificate of Incorporation for (limited liability companies)
  • Business Plan

Normal processing time for an investment license is 2 – 5 days.

 

Step 3 – Secure necessary secondary clearances

As you proceed to implement your project, you may require certain secondary permits or clearances depending on the nature of your investment e.g. for mining activity, air transport, banking, forestry. UIA can assist you to obtain such secondary licenses as well as get access to other services. UIA can also assist you in obtaining suitable industrial land, work permits for your expatriate staff, and utilities like telephone, electricity and water.

 

Import and Export in Uganda:

In terms of exports and imports, few countries in Africa provide the sort of strategic location that Uganda offers to the investors. The country is located at the heart of East and Central Africa, a region that includes some of Africa’s most economically important countries.

Uganda is a member of the Common Market for Eastern and Southern African States (COMESA), a reign with a market of over 300 million people and bringing together 20 countries. As a trading bloc, COMESA imports more than US$17 billion and exports over US$13 billion worth of goods each year.

Investors in COMESA countries like Uganda enjoy preferential treatment for their intra-COMESA exports by way of reduced tariffs. The target is to reduce tariffs for intra-regional exports to zero by the year 2,000.

Uganda is also a member of the East African Cooperation bringing together Kenya, Tanzania and Uganda.

In terms of international market access, Uganda offers the prospective investor preferential access to the European Union and United States of America for a number of exports.

Uganda has also signed bilateral trade and investment promotion agreements to promote export and import with the United Kingdom, Italy, Kenya, Tanzania, South Africa, Egypt, India, China, Germany, the Netherlands and many other countries.

Visa/Entry (Work) Permit:
A visitor is given single journey visa to Uganda and on arrival he/she is issued with a visitor’s pass for purposes of either spending a holiday, travelling, or investigating the possibilities of caring on any business, trade or profession in Uganda (see fact sheet on visas for fees and countries exempted).

Please bring spare passport photographs.

Multiple entry visas can be granted to business executives, who expect to make numerous visits either for business meetings or organization.

Entry Permit Classes:
A  Persons in Government services, UN organizations, OAU, PTA and other Institutions approved by the minister.
A  Contracting companies of the for said organizations
B-F  Investors in various disciplines
G  Employees

Investors and employees are required by law to execute a security bond equivalent to the cost of a single economy class ticket to their country of origin. The money if necessary, is used for purposes of defraying expenses incurred or may be incurred by the Government in connection with maintenance and/or repatriation of the person of whom the deposit ahs been made.

No entry permit fee is charged for class A1.
For all other classes, the payments at published rates are made in foreign currency or its equivalent in local currency. Renewals of entry permits are provided at annual rates.

Visas:
Effective March 1, 1999, Government of Uganda introduced visa requirements for all visitors entering Uganda. Therefore; –

ˇ All foreigners travelling to Uganda will be required to obtain visas from Uganda Diplomatic and Consular missions abroad prior to their travel.
ˇ Visas can be obtained at entry point in cases where foreign nationals cannot access a Uganda Diplomatic and

ECONOMY – PRIVATISATION

Potential investors in Uganda, as in all countries, investors must, before they start operations, obtain various permits or certificates.
Uganda Investment Authority was et up to act as one – stop – center for facilitating investors, who may not be familiar with the various procedures that may be required. The formalities are detailed below:
Info Authority/Organisation.
License
An investment license is required for all foreign Investors before any of their investments become operational.
Uganda Investment Authority
Plot 28 Kampala Road
Tel: 251562-5, 234105
Fax: 342903
E-mail: info@ugandainvest.com
http://www.ugandainvest.com
Registering a Business Registrar of Companies
Ministry of Justice
Parliamentary Buildings
P.O.Box 7183 Kampala, Uganda
Tel: 233219
E-mail: registrar@justice.go.ug
http://www.justice.go.ug
Issuance of Trading License
A trading license is required of any business operating in Uganda.
The license is issued by the local authority (town or city council).
The Relevant City/Town Council
Environmental Compliance
The National Environment Management Authority is the authorized body to issue environment impact assessment.
National Environment Management Authority (NEMA)
Communications House, Colville Street, 4th Floor
Tel: 236817/251064/5/8
Fax: 257521/232680
E-mail: nema@imul.com
http:// www.nemaug.org
Importation/Clearance of Plant and Machinery
An investor importing plant and machinery as defined in Section 84 & 85 of the Finance Bill, 1999 is not required to pay import duty, VAT, Withholding tax and Import commission
Assistant Commissioner, Technical
Uganda Revenue Authority.
MTAC – Nakawa, Jinja Road
Tel: 220090
http://www.ugrevenue.com
First Arrival Privileges
A foreign investor who holds an investment license and his expatriate staff are entitled to import a personal vehicle and personal effects, free of import duty and VAT, under First Arrival Privileges.
The Deputy Commissioner,
VAT Department,
Uganda Revenue Authority.
Plot 2A, Kampala Road
Tel: 231176/231178
Fax: 221778
http://www.ugrevenue.com
VAT Deferred Payment Arrangement
Licensed Investors can enjoy Deferred VAT Payment Facility on plant and machinery, raw materials for drugs, seedlings, greenhouse equipment, plastic sleeves, and tea clones for a period of one calendar month.
The facility is granted on consignment-by-consignment basis, as approved by Commissioner VAT.
Uganda Revenue Authority
VAT Department
http://www.ugrevenue.com
Tax Objections and Appeals
A taxpayer that is dissatisfied with a tax assessment may lodge an objection to the assessment with the Commissioner of Income Tax who will take action.

If the investor is not satisfied with the action taken, the investor may appeal to the Tax Appeals Tribunal located at NIC Building, Kampala.

The Assistant Commissioner
Technical and Inspectorate
Internal Revenue Department
Uganda Revenue Authority
Colline House 4TH Floor
Tel: 345568/345565
Export Procedures/ Duty Draw-back facility
There are NO taxes imposed on all exports or re-exports from Uganda.
However, all investors are required to follow certain procedures in order to be able to claim refund on duties paid on inputs used in the production of the exported goods.
The Commissioner Customs and Excise
Tel: 222506

The Assistant Commissioner Central
Tel: 221866 – Kampala
Tel: 221858
http://www.ugrevenue.com

Application for Fixed Line
(Uganda Telecom Limited)
Note: – Average time for installation is 1 – 3 weeks. In case DPs are full the time can be 3 – 6 months.
Uganda Telecom
Rwenzori Courts
P.O.Box 2518 Kampala, Uganda
Tel: 256-41-346055/246354
Fax: 256-41-342762
http://www.utl.co.ug
Application for Water Supply The Managing Director
National Water and Sewerage Corporation
Application for Electricity Supply
Note:
For routine installations, the UEB generally has the required equipment ex-stock and installation typically occurs within 2-4 months after payment depending on the size of the job. In Jinja and Entebbe the time lag between payment and installation may be shorter.
Manager, Corporate Planning and Strategy
Amber House,
Plot 29/31 Kampala Road
Tel: 346199/235119
Work and Entry Permits
The UIA assists investors in obtaining work permits from the Immigration Control Board.
Licensed investors are required to submit their work permit applications through the UIA for faster and easier processing.
Classes of Work Permits
The Commissioner Department of Immigration
Ministry of Internal Affairs
P.O. Box 7165 Kampala, Uganda
Tel: 231641/231031
http://www.immigration.go.ug
Approval of Building Plans by Kampala City Council
(KCC)
The Information Desk
Kampala City Council
City Hall, Room B8
Tel: 244000
Civil Aviation Authority
Entebbe International Airport
Tel: 320516/320517
Fax: 321401
Email: caa@starcom.co.ug

Taxation in Uganda

Principal Taxes:

Uganda’s principal taxes are income tax both on individuals and companies, Value Added Tax, customs, and excise duty levied by the Central Government through the Uganda Revenue Authority and Graduated Tax and land rates, which are levied by local authorities.

Filing:

All registered business organizations are under obligation to send a provisional return of income for any year of income as follows: –

Individuals:

not later than three months from the commencement of the 12 months ending in such year of income for which such individual makes up his or her accounts and in any other case of an individual, not later than March 31 of such year of income;

Corporate bodies:

Not later than six months from the commencement of the period of 12 months ending in such year of income for which the body prepares the accounts and in any case not later than June 30 in such year of income.

 

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