Investing in Rwanda: Legal Requirements and Incentives

Investing in Rwanda: legal requirements and incentives: Rwanda is currently ranked among the best places for investment. According to the Rand Merchant Bank (RMB) report of 2019, Rwanda was ranked 8th among the top ten African countries to invest in. The country is renowned for its efficient and swift company incorporation process, which is conducted online and can be completed within two hours.

Legal Requirements

An investor must begin by incorporating a company. The procedure for incorporation is as follows:

Types of Companies

Companies in Rwanda are categorized into two types: Private and Public Companies.

Essential Requirements for Registration of a Private Company:

• A name ending with the words “Private Limited Company” or the letters “Ltd”
• One or more shares with restricted rights of transfer
• One or more shareholders with unlimited or limited liability
• One or more directors, with at least one ordinarily resident in Rwanda
• Memorandum of Association (compulsory) and Articles of Association (optional)

Essential Requirements for Registration of a Public Company:

• A name ending with the words “Public Limited Company” or the letters “plc”
• One or more shares, all of which must be fully transferable
• Shareholders whose liability is limited to the amount, if any, unpaid on the shares they hold
• One or more directors
• A company secretary

Incentives for Investors

As an investor in Rwanda, there are various privileges and incentives to enjoy. Among many other incentives, Rwanda guarantees that all business sectors are open for private investment, regardless of the origin or religion of the investor, as long as the governing laws and public morals are respected. This creates a very friendly environment for investors.

To enjoy these special incentives, an investor must apply for an investment certificate. At Stabit Advocates, we are here to “Solve Your Legal Puzzles.”

Essential Requirements for an Investment Certificate:

• Fill out an appropriate form indicating identity and other necessary details
• Payment of non-refundable registration fees
• A certificate of legal personality of the business company
• A business plan including the project name, detailed information on the project, action plan, commencement date, and information on any raw materials sourced locally, as provided for in the Law relating to Investment Promotion and Facilitation

Incentives for Registered Investors

After acquiring the investment certificate, an investor can enjoy special incentives such as preferential corporate tax rates and tax holidays:

• Preferential Corporate Tax of 0%: Available if conditions are met, including having headquarters or a regional office in Rwanda, investing at least USD 10 million in tangible or intangible assets, providing employment and training to Rwandan nationals, and conducting international financial transactions worth at least USD 5 million.
• Preferential Corporate Income Tax Rate of 15%: Available if the investor exports 50% of turnover of goods and services produced in Rwanda, engages in energy generation, transmission, and distribution from various sources, or operates in the transport sector with a fleet of at least five trucks, each with a capacity of at least 20 tons.
• Corporate Income Tax Holiday of Up to 7 Years: Available for investors investing at least USD 50 million and contributing at least 30% equity in sectors such as energy (producing at least 25 megawatts), manufacturing, tourism, health, and Information and Communication Technology (ICT).
• Corporate Tax Holiday of Up to 5 Years: Available for registered investors dealing in microfinance institutions approved by competent authorities.
• Exemption from Customs Taxes and Duties: Available for investors in products used in export processing zones, according to the customs rules and regulations of the East African Community.
• No Capital Gains Tax: Income derived from the sale of commercial immovable property is included in the taxable income of the investor.
• Value Added Tax (VAT) Refund: Investors are refunded VAT within 15 days upon receipt of the relevant documents by the tax administration authority.

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Contact Information

Stabit Advocates

Website: www.stabitadvocates.com

Email: info@stabitadvocates.com

Phone: +250 789 366 274

For more information or to discuss your case, please contact us at www.stabitadvocates.com.

This guide is intended to provide general information and does not constitute legal advice. For specific legal advice tailored to your situation, please consult with a qualified attorney at Stabit Advocates.