FAQ – Investment in Uganda – Uganda-UK Convention

1.Where do we go to obtain approvals to set up an investment in Uganda?
To set up an investment in Uganda, foreign investors need to obtain an investment license from the Uganda Investment Authority (UIA). Local investors are not obliged to license according to the current Code but the investment license gives the local investors access to various benefits, especially when importing plant and machinery.

2.How do we get approvals to set up investment in Uganda?
Steps to follow are:
• Register your company in Uganda with the Uganda Registration Services Bureau under the Ministry of Justice and Constitutional Affairs where you obtain the Memorandum and Articles of Association, and a Certificate of Incorporation.
• Get your Investment License: You apply for an investment license using Form UIA 1 and attach the documents under (a) plus a brief business plan. Form UIA 1 can be downloaded from the UIA website.
• Secure necessary secondary licenses: Certain sectors require other secondary licenses (i.e. mining activity, drug manufacture, air transport, banking, forestry, etc.). UIA can assist you to secure these licenses within reasonable time. However, though UIA can help with this process, it is the responsibility of each investor to identify, and comply with, all requirements of obtaining the permits, licenses and approvals required under Uganda law

3.Are there any fees or charges required to obtain the Investment License?
No. There are no fees charged for the licenses, but there are fees charged for registration of your company and some of the secondary licenses. The details are on the web site.

4.How long does it take to evaluate and approve the Investment License?
If all the information is in order it should take no longer than 5 working days.

5.How much should I invest to obtain an approval for a License?
Foreign investors require a minimum of US$100,000 in planned investment license. For local investors, the minimum investment requirement is US$50,000. Local investors, however, are not obliged to seek approval in order to implement their project.

6.As an investor am I eligible to any tax and duty incentives?
Yes, all investors are eligible to tax duty incentives, provided they meet the requirements under the respective incentive package. Detailed incentive information is available on the UIA web site (please check services).

7.Can I get government protection if I was to relocate my business to Uganda?
Government policy is one of deregulation and as such government promotes competition.

8.Where do I go to get work permit(s) for my company?
The Directorate of Immigration, under the Ministry of Internal Affairs, is responsible for issuing of work permits. The Directorate of Immigration’s policy requires any investor seeking a key post work permit to invest at least $100,000 before they will be considered. The UIA will always help eligible companies with a recommendation to acquire work permits for their directors and expatriate employees. The ultimate decision to issue the permit rests with the Directorate of Immigration.

9.How much does it cost to get a work permit?
The Department of Immigration’s costs for work permit are as follows:
• Application fees- Free
• Upon Approval issue fees: US$1,000
• There is no fixed Immigration bond- it differs from country to country.

10.Under what legal entities can we operate our business in Uganda?
Investors can operate their business through the following entities:
• Sole Trader
• Partnership
• Limited Liability Company
• Branch operation
• Subsidiaries

11.Do I need a local partner to operate any business in Uganda?
No, it is not a requirement to have local partners participate by holding shares in foreign companies. The business environment is liberalized where 100% holding is permissible.

12.I have my money, where can I be located and in which sectors can I invest?
You can locate in any district/town you prefer. A number of sectoral opportunities can be accessed from the web site. There is a list of special projects where you may consider investing in as well as a database of joint venture opportunities on offer from the local investors. See the relevant sections on the web site for details.

13.Are there any government projects/companies available that an investor can buy or invest in?
Yes, but almost all public companies have been divested, however, government still holds substantive shares in a number of divested companies and these shares shall be disposed through the Uganda Security Exchange.

14.What type of land is available in Uganda?
There are 4 major land regimes in Uganda, they are:
• Customary Land Tenure: Over 80% of land in Uganda is held on customary tenure system.
• Freehold- Land Tenure: Very little land is held under freehold tenure in Uganda. Freehold is the premier mode of private land ownership under English law. The Land Act recognizes it as one of the four regimes through which access to land rights may be obtained. Its incidents are defined to include registration of title in perpetuity and conferment of full powers of ownership (i.e. the power of use, abuse and disposition). Transactions involving freehold land are governed by the Registration of Titles Act (Cap. 230).
• Mailo Land Tenure: Land held under mailo tenure is confined to Buganda (Central Uganda). The system confers specie of freehold granted by the colonial government in exchange for political co-operation under the 1900 Buganda Agreement. Essentially feudal in character, the mailo tenure system recognizes occupancy by tenants (locally called Kibanja holders), whose relationship with their overlords is now governed by the provisions of the Land Act. Mailo land, like freehold is registered under the Registration of Titles Act. All transactions must therefore be entered in a register guaranteed by the state.
• Leasehold Tenure: The leasehold is a device known to every tenure regime whether customary, freehold or mailo. It involves the derivation of land rights from a superior title and the enjoyment of such rights in exchange of conditions including, but not limited to, the payment of rent. The leasehold transactions, being essentially contractual allow parties to define the terms and conditions of access in such a manner as to suit their reciprocal land use needs. The leasehold is particularly useful in urban areas or in situations of rapid changes in land use or market demands.

15.Can I get free or subsidized land from government?
Government does not give free land to investors, whether local or foreign. However, government can help the investor to obtain a leasehold tenure which can run up to 99 years.

16.Can I as an investor buy/own land for self and company?
According to the Land Act (1998), foreign investors (self or company) are not allowed to buy land outright, but can lease land for up to 99 years. However, companies with local shareholding participation of 50% or more can buy land outright but the transactions must follow the nature on the land tenure.

17.Is there sufficient infrastructure in Uganda for me to conduct my business successfully?
Uganda is well serviced with infrastructure. Supportive infrastructure is available ranging from telecommunication, water to electricity, good transport networks by water, land, rail and air, among others.

18.Can I as an investor obtain loans from commercial banks in Uganda?
Yes, investors can apply for loans from any commercial/development banks in Uganda. Banks, however, have their own criteria for prospective borrowers to meet/follow.

19.Does the Uganda Investment Authority (UIA) have an Investment Fund from which approved investments can benefit?
The UIA does not have any investment fund for investors to borrow to implement their projects. However, the UIA has a network of partners, locally and abroad where prospective investors can seek project finance information from.

20.What are the cost of utilities and labour in Uganda?
Details of cost of utilities (sea, air, roads, telecommunications, electricity, water) and labour are available on this website.

21.What taxes are charged in Uganda?
Uganda’s principal taxes are income tax on both individuals and companies, value added tax (VAT) on non-exempt or zero-rated supplies made in Uganda and excise duties, all of which are levied by the Central Government (through the Uganda Revenue Authority). In addition, licenses and rates are levied by the local authorities (districts). Detail of the respective rates of these taxes can be accessed from this web site.

22.Is it easy to transfer money out of Uganda by companies set up by foreign investors who need to make overseas payments?
Foreign investors with established businesses in Uganda can readily make payments overseas. Payments for imports and service related charges can also be made readily at the commercial banks without any prior approval. Similarly, dividend and capital payments are allowed subject to the tax laws of the country.

23.Does UIA also cater for Ugandans?
Yes, the UIA encourages Ugandans (and Ugandans in the diaspora as well) to invest at home as the only way to collectively contribute to the development of Uganda. Accordingly, a Ugandan Desk has been created specifically to work with local investors respond to their enquiries. The Desk provides invaluable information to local investors with respect to project finance, business ideas/opportunities, networking possibilities, etc.

24.How can I become a member of UIA?
The UIA is not a membership organization and its doors are open to both licensed and unlicensed projects for consultation on issues concerning investments, and private sector development in the country.