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Guide to investing in Uganda guide to investing in Uganda Brief Guide to Investing in Uganda
Uganda lies astride the equator and enjoys a unique location at the heart of Sub- Saharan Africa within the East African region. The country is bordered by Sudan in the north, Kenya in the east, the United Republic of Tanzania in the south, Rwanda in the southwest and the Democratic Republic of Congo in the west. This location, though landlocked, gives the country a commanding base for regional trade and investment.
Why Invest in Uganda?
1. Predictable Environment: Uganda has been able to achieve macro-economic stability when clouds of uncertainty rocked many regions of the world. * Inflation rate has been controlled and managed at a single digit for over 15 years. *Stable annual economic growth averaging 6% per annum. * Maintained a competitive real exchange rate that supports export growth.
2. Fully Liberalized Economy: * All sectors liberalized for investment and marketing. * Free inflow and outflow of capital. * 100% foreign ownership of investment permitted. * Ranked the 5th freest economy in Sub-Saharan Africa by the 2007 Index of Economic Freedom.
3. Market Access: * Uganda enjoys a unique location at the heart of Sub-Saharan Africa giving it a commanding base for regional trade and investment. * Uganda is a member of the Common Market for Eastern and Southern African states (COMESA), a region with a market of over 380 million people in 19 countries. * Uganda is a member of the East African Community (EAC) comprising Burundi, Kenya, Rwanda, Uganda, and Tanzania with a population of over 115 million people. * Duty and quota free access into the US (AGOA), Generalized System of Preferences (GSP) scheme and EU (EBA) markets.
4. Strong natural Resource Base * Rich endowment of rainfall, soils, and favorable temperature range. A number of crops are grown organically. * Unexploited mineral deposits and tourism opportunities. Confirmed deposits include Phosphate, Gold, Zinc, Wolfram, Petroleum, Diamond, Vermiculite, Silica etc.
5. Government Commitment to Private Sector * Government and private sector dialogue in policy formulation. * Continuous improvement in provision of infrastructure and other social services.
6. Trainable Labor * Uganda presently produces over 15,000 University graduates per year. * Quality of labor is one of the biggest attractions.
7. Security of Investment * Guaranteed under the Constitution and the Investment Code 1991. * Uganda is a signatory to major international investment related institutions such as: * Multi lateral Investment Guarantee Agency (MIGA). * Overseas Private Investment Corporation (OPIC) of USA. * Convention on the recognition and enforcement of foreign arbitral award (CREFAA). * Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC). * ICSID, TRIMS, GATS, and TRIPS
8. Investment Incentives a) Investment Capital Allowances * Initial Allowance on plant and machinery 50-75% * Start up cost spread over 4 years 25% p.a. * Scientific research expenditure 100% * Training expenditure 100% * Mineral exploration expenditure 100%
Initial Allowance on hotel, hospitals and Industrial buildings 20%
Deductible annual Allowances (depreciable assets) Depreciation rates of assets range. 20-40% Depreciation rate for Hotels, Industrial Buildings and Hospitals 5%
b) Investors who register as investment traders are entitled to VAT refund on building materials for industrial/commercial buildings.
c) Duty and Tax free import of Plant & Machinery.
d) First Arrival Privileges in the form of duty exemptions for personal effects and motor vehicle (previously owned for at least 12 months) to all investors and expatriates coming to Uganda.
e) Export Promotion Incentives and Facilities * Manufacturing Under Bond. * Duty exemption on plant and machinery and other inputs * Stamp duty exemption * Duty draw back – a refund of all or part of any duty paid on materials, inputs imported to produce for export * Withholding tax exemptions on plant & machinery, scholastic materials, human & animal drugs and raw materials. * Ten year tax holiday – duty remission scheme for exporters involved in value addition.
Investment Opportunities
Agribusiness Uganda is among leading producers of coffee and bananas. It is also a major producer of tea, cotton (including organic cotton), tobacco, cereals, oilseeds (simsim, soya, sunflower, etc), fresh and preserved fruit, vegetables and nuts, essential oils, orchids, flowers and sericulture (silk). Opportunities include commercial farming and value addition, as well as the manufacture of inputs and supply of agricultural machinery.
Fisheries Uganda’s fish processing sector has expanded greatly in recent years and current export earnings for the year 2006 were close to US$146 million. Large fresh water expanses are home to a wide variety of fish products. Opportunities are available for fish farming and establishment of more fish processing factories on other lakes other than Lake Victoria. Uganda’s fish is a delicacy in Europe and has recently penetrated the US market.
Forestry With over 4.9 million hectares of rich forest vegetation, Uganda possesses abundant potential in areas like timber processing for export, manufacture of high quality furniture/wood products and various packaging materials. There are also opportunities in afforestation and reforestation especially of medicinal trees and plants, soft wood plantations for timber, pulp & poles.
Manufacturing Uganda’s manufacturing output has been expanding by more than 10% annually over the last eight years. Opportunities exist in virtually all areas ranging from beverages, leather, tobacco based processing, paper, textiles and garments, pharmaceuticals, fabrication, ceramics, glass, fertilizers, plastic / PVC, assembly of electronic goods, hi-tech and medical products.
Mining Uganda has large under-exploited mineral deposits of gold, oil, high grade tin, tungsten/wolfram, salt, beryllium, cobalt, kaolin, iron-ore, glass sand, vermiculite and phosphates (fertilizer). A discovery of petroleum wells in the Lake Albert region has enhanced the sector’s joie de vivre. There are also significant quantities of clay and gypsum. Uganda provides special incentives to the mining sector with some capital expenditures being written off in full.
Infrastructure Although significant efforts have been made to develop and rehabilitate the existing physical and non-physical infrastructure, potential investment opportunities still abound. In particular, transport & logistics and energy sectors still require further investment. With less than 10% of the mainstream capacity of 2,700 megawatts of power exploited, Uganda has the potential to be a major supplier of hydro electric power to the entire East African region.
Financial Services Opportunities for investment exist for international multinational banking groups particularly promoting new or innovative financial products (i.e. Mortgage finance, venture capital, merchant banking and leasing finance) and also micro finance saving institutions, which propose to operate in rural areas. Insurance, in particular, is still a relatively young sector and offers several opportunities for investment.
Tourism The distinctive attraction of Uganda as a tourist destination arises from the variety of its game stock and its unspoiled scenic beauty. Within a relatively limited space of just over 240,000 square kilometres, Uganda offers an interesting contrast ranging from the wide East African plains and expansive savanna grasslands to the impenetrable, mountain rain forests and snow peaked mountains in the south western parts of the country. Uganda offers a wide range of bird species for viewing in addition to numerous sporting opportunities such as mountain climbing and water sports including white water rafting. The opportunities in tourism range from constructing high quality accommodation facilities, operating tours and travel circuits to the development of specialized eco-tourism.
Printing and Publishing In the printing and publishing sub-sector, opportunities exist for the printing of textbooks for schools. Currently, imports supply over 90% of Uganda’s textbook requirement (estimated at over U$7 million a year). Investment opportunities therefore exist in the various type of printing including flexography, screen printing, off-set printing and digital printing. Other opportunities include electronic printing magnetography, thermographic printing, ion deposition printing and direct charge deposition printing.
Education Uganda runs high quality courses at a relatively cheaper cost than other education destinations and is dedicated to making investment in the country’s knowledge hub a unique experience and a win-win situation for both investors and students. Investment opportunities therefore exist in Uganda for setting up of independent private universities, branch universities and offshore campuses. Other areas of investment include technical & vocational training, technologybased education & distance education and student financing.
Information Communication Technology Uganda’s Information and Communication Technology (ICT) sector is one of the most vibrant within the region. This vibrancy hinges largely on the good legal and regulatory frameworks. The supportive investment climate therein has exposed numerous opportunities in ICT innovation services leading to maximum utilization of the existing youthful human resource base quite suitable for the ICT work. The newly developed and highly qualitative ICT infrastructure is also ready to accommodate more future investments. Opportunities in the ICT include establishment of information and communication infrastructure and broadband services, business process outsourcing services, computer and related equipment hardware assembly, high level ICT training facilities on international standards, ICT business services incubation, hardware repair training facilities, software development niches, setting up information technology virtual zones (ITVZ), and setting up Internet service provider facilities in other parts of Uganda.
Uganda in Brief (Basic Country Data)
AREA Land Area 199,808 Sq. Km. Water and Swamps 41,743 Sq. Km Total Area 241,551 Sq. Km.
LOCATION Latitude 4012’N and 1029’S Longitude 29034’E and 3500’W
ALTITUDE Minimum (above sea level – Albert Nile) 620 metres Maximum (above sea level – Mt. Rwenzori) 5,110 metres
CLIMATE Kampala: Annual Mean Temperature 17.00C Kampala: Annual Rainfall 1436.0 mm
LAND USE Arable Land 25% Permanent Crops 9% Permanent Pastures 9% Forests and Woodland 28% Other 29%
DEMOGRAPHICS Total Population (2007 mid year)* 28.2 million Female Population 14.46 million Male Population 13.74 million Percentage Urban (2007mid year)* 13.3 % Population of Kampala City (2007 mid year)* 1.4 million Population/Aged under 18 Years (2007 mid year) 56% Population/Aged 65+ (2007mid year) 4.6% Population Density (2002) 123 persons/km2 Inter-Censal Annual Population Growth Rate 1991- 2002 3.2% per year Infant Mortality Rate (2002 census)* 76 per 1000 Life Expectancy at birth (2002 census)* 50.4 years Male 48.8 years Female 52.0 years Population per Physician (Doctor) 18,575
MAJOR LANGUAGES English, Luganda and Kiswahili
EDUCATION Literacy Rate (2006) 69 % Male 76% Female 63%
RELIGIONS Roman Catholic 33% Protestant 33% Muslim 16% Indigenous Beliefs 18% Note: *Demographic estimates were based on the census 2002 final results. The Role of Uganda Investment Authority
UIA is the agency set up by an Act of Parliament (Investment Code 1991) to promote and facilitate private sector investment in Uganda. The agency serves to: 1. Provide first hand information on investment opportunities in Uganda; 2. Issue Investment Licenses; 3. Assist in securing other licenses and secondary approvals for investors; 4. Help investors to implement their project ideas through assistance in locating relevant project support services; 5. Provide assistance in the acquisition of industrial land; 6. Help to obtain work permits and special passes for investors and their expatriate staff; 7. Arrange contacts for potential investors and organize itineraries for visiting foreign missions in the country; 8. Assist investors in seeking joint venture partners and funding; 9. Review and make policy recommendations to Government about investment;
Financial Support/Assistance Foreign investors can apply for loans from the local banking sector. Investors can also list their companies on the local stock exchange. A number of financial support initiatives 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 investments.
Getting Started – A Brief Guide Foreign investors require a minimum of US$100,000 in planned investment in order to secure an investment license from the Uganda Investment Authority, whereas for local investors, the minimum planned investment requirement is US$50,000. Local investors, however, may proceed with their investment without licensing with the Uganda Investment Authority. The license is very crucial to foreign investors as it is the instrument that legalizes their investment in Uganda. Traders do not require a license from UIA but must demonstrate operating capital of US$ 100,000 before trading licenses and entry permits are issued by local authorities.
Steps to Register your Investment in Uganda
Step 1 – Register your company in Uganda Register your company in Uganda at the Uganda Registration Services Bureau (URSB) and obtain the Memorandum and Articles of Association, and a Certificate of Incorporation.
Step 2 – Get your Investment License Apply for an investment license using UIA Form 1 and attach the documents in step 1 plus a brief Business Plan. Normal processing time for an investment license is 2 – 5 days.
Step 3 – Secure necessary secondary clearances Certain sectors require other secondary licenses e.g. for mining activity, air transport, banking, forestry. UIA will assist you to secure these licenses within reasonable time. UIA shall also assist you in obtaining suitable industrial land and work permits for your expatriate staff. Utilities like telephone, electricity and water can easily be secured from the relevant offices.
One–stop-shop – The one-stop-shop has now been implemented permitting investors to obtain all these services at the UIA. This initiative saves the investors both time and money to have their projects licensed and implemented expeditiously. Representatives from Uganda Revenue Authority, Department of Immigration and Ministry of Lands are already housed at the UIA for this cause.
Visitors Guide
Accommodation: In Kampala, there are several high-class hotels to choose from. A chain of hotels and lodges of a consistent standard, which are well distributed in major towns and in national parks, exist. Reservations should be made in advance whenever possible.
Airlines: Main ones are; British Airways, Ethiopian Airways, Emirates, Kenya Airways, SN Brussels, Air Tanzania, Egypt Air, and Dairo Air (Cargo).
Banking: There are several local and foreign owned commercial banks under the supervision of the Central Bank. The banks are open to the public from 8.30 am to 3.00 pm every Monday to Friday. Foreign currency may be exchanged at different banks and forex bureaus. No limitation on the amount of foreign currency traded.
Clothing: Light summer clothes throughout the year around. Jacket and tie ordinarily required in official meetings.
Drinking Water: We recommend that you drink previously boiled water or bottled water.
Food: A wide range of restaurants exists including continental, Chinese, English, Italian, Japanese, French, Lebanese, Korean, Indian and several other cuisines.
Inoculation: Inoculation requirement of yellow fever and cholera are mandatory in Uganda. Anti- malaria medication is necessary in most parts of Uganda, though malaria is rare in most highland areas.
Languages: The official language is English. Luganda and Swahili are commonly spoken in most parts of the country.
Sport: There are a variety of sports available in the city centre - squash, golf, tennis, badminton, football etc.
Transport: The roads are generally in good condition. Four-wheel drive vehicles are only necessary in the game parks or up country during the rainy season. Public transport is readily available.
Visa/Entry (Work) Permit: A visitor is given a single journey visa to Uganda and on arrival he/she is issued with a visitor’s pass for purposes of either spending a holiday, traveling, or investigating the possibilities of carrying on any business, trade or profession in Uganda. 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: A1 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 has 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. Underlying the Uganda Visa Policy is the principle of reciprocity, that is, all countries that require visas for Ugandans are also visa prone in Uganda. Therefore; - * Foreigners travelling to Uganda will be required to obtain visas from Uganda Diplomatic and Consular missions abroad prior to their travel. * Visas can be obtained at entry point in cases where foreign nationals cannot access a Uganda Diplomatic and Consular missions abroad.
Visa Fees From the 2007/2008 budget, the following fees are being charged: Single entry visa US$ 50 Multiple entry visa (6 months) US$ 100 Multiple entry visa (12 months) US$ 200 Note: - Multiple Visas are obtainable only from Uganda Missions Abroad.
Exempt Countries Visa requirements for countries are based on a reciprocal arrangement. 10 The following countries are exempt: * East African citizens * Nationals of COMESA countries (Angola, Comoros, Eritrea, Kenya, Malawi, Mauritius, Madagascar, Rwanda, Seychelles, Swaziland, Tanzania, Zambia, Zimbabwe. * Other countries e.g. Antigua, Bahamas, Barbados, Belize, Fiji, Gambia, Grenada, Jamaica, Lesotho, Malta, Sierra Leone, Singapore, Solomon Islands, St Vincent & The Grenadines, Tonga, Vanuatu, Italy (only diplomatic passports) and Cyprus.
Useful Contacts
Uganda Registration Services Bureau Plot 5 George Street, Amamu House 4th floor P.O. Box 6848 Kampala, Uganda Tel: +256-41-4235915/233219/345727 Fax: +256-41-4250712 Uganda Tourist Board P.O.Box 7211 Kampala, Uganda Tel: +256-41-4342196/7 Fax: +256-41-4342188 E-mail: http://
Immigration Department Ministry of Internal Affairs Jinja Road P.O.Box 7165 Kampala, Uganda Tel: +256-41-4231031/231641 Fax: +256-41-4231188 E-mail:
Uganda National Bureau of Standards Plot M217 Nakawa P.O. Box 6329 Kampala, Uganda Tel: +256-41-4286123, 262688/9, 222367 Fax: +256-41-4286123 E-mail: http://
Bank of Uganda 37/43 Kampala Road P. O. Box 7120 Kampala, Uganda Tel: +256-41-4258441/6, 341223 Fax: +256-41-4231549 http://
Uganda Manufacturers Association Lugogo Show Grounds P.O. Box 6966 Kampala, Uganda Tel: +256-41-4221034/220831 Fax: +256-41-4220285 E-mail:
Uganda Export Promotion Board Conrad Plaza, 5th Floor P.O. Box 5045 Kampala, Uganda Tel/Fax: +256-41-4259779 E-mail:
National Environment Management Authority NEMA House, 3rd Floor Plot 17/19/21 Jinja Road P. O. Box 22255 Kampala, Uganda Tel: +256-41-4251064/5/8 Fax: +256-41-4257521 http://
For further information, contact: -
Uganda Investment Authority The Investment Center Plot 22B Lumumba Avenue P. O. Box 7418 Kampala, Uganda Tel: +256-41-4301000 Fax: +256-41-4342903 E-mail: http://
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