Guide to Doing Business in Uganda

Country information

The total area of Uganda is about 241 000 square kilometres of which about 44 000 are covered by fresh water bodies. Its population is approximately 37.58 million. The official language is English. Swahili and Luganda are also spoken. The capital city and seat of Government is Kampala. Other major towns include Entebbe and Jinja, the second industrial town of Uganda and the source of the river Nile.

The Uganda political system

A multiparty democracy since 2006.

Latest GDP figures

USD 49.3 billion.

Inflation rate in Uganda

3.0%.

Investment climate

Uganda strongly encourages private investment, both foreign and domestic. The Government has pursued a steady policy of improving the investment climate by reducing bureaucracy, streamlining the legal framework, fighting corruption and stabilising the economy. The last point in particular has become a trademark for Uganda. The central bank has reduced its key lending rate to 9.75% as of October 2024 with the goal of supporting economic growth while maintaining inflation control.

The Government of Uganda’s strategy with respect to macroeconomic policy is to modernise the economy by relying on markets and the efforts of private entrepreneurs, while the Government provides the necessary legal, policy and physical infrastructure for private investments to flourish. This strategy has been endorsed by donors and is already showing positive results. The central objective is to provide sustainable, rapid and broad-based growth by guaranteeing security, the rule of law and structural reform.

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. In addition, Uganda offers a zero rate of import duty on plant and machinery as well as a uniform corporate tax of 30%. Provisions allow for assessed losses arising out of company operations (including the loss from the investment allowance) to be carried forward. Such losses are allowed as a deduction in determining the tax payer’s chargeable income in the following year of income.

Uganda also has a fully liberalised foreign exchange regime with no restrictions on the movement of capital in and out of the country. With the discovery of oil there are many opportunities in industries related to oil in the upstream, midstream and downstream markets. Investors can be supported through the Uganda Investment Authority (UIA), which issues investment licences to both domestic and foreign companies.

Forms of business in Uganda

• Private or public limited liability company
• Foreign company (i.e. a branch of a foreign company)
• Partnership (limited)
• Trusts
• Sole trader.

Formation of a company in Uganda

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 are required to register as foreign companies. Both local and foreign companies must be registered with the Uganda Registration Services Bureau (URSB). The URSB has implemented electronic services for business name searches, name reservations, certifications, annual returns filing, company registration, business name registration, and application status checks.

Requirements for incorporation of a local company

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:

• at least three proposed names 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. The statutory minimum number of members for a limited liability company is one
• the primary or principal objectives of the company
• the share capital of the company and the capital contribution of each member to the company. The official stamp duty is set at 0.5% of the nominal share capital. Normally we recommend that the initial share capital is only one million Ugandan Shillings (UGX) (about USD 300) as this significantly reduces the cost of incorporation by minimising stamp duty. The share capital can be increased as and when the requirement arises
• the name of at least two directors of the company. Other directors can be appointed in due course by company resolutions.

Registration of a foreign company

Foreign companies establishing a place of business in Uganda are required to register as foreign companies in terms of the Uganda Companies Act. The information required for registering a foreign company is as follows:

• several certified copies of a company’s Memorandum and Articles of Association
• a complete list of all the directors and the secretary of the company, their names, postal addresses, nationalities, passport copies and business occupations
• a statement of all subsisting charges created by the company
• a list of the shareholders of the company
• a letter from the Registrar of Companies in the company’s home country confirming that the company is registered in the home country
• 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
• official registration and processing fees.

Uganda visa requirements

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, Antigua and Barbuda, Barbados, Belize, Botswana, Burundi, Comoros, Cyprus, Democratic Republic of Congo, Eritrea, Fiji, Gambia, Ghana, Grenada, Ireland, Jamaica, Kenya, Lesotho, Madagascar, Malawi, Malaysia, Malta, Mauritius, Mozambique, Rwanda, Seychelles, Sierra Leone, Singapore, Solomon Islands, South Sudan, St. Vincent & The Grenadines, Eswatini, Tonga, Trinidad and Tobago, Tanzania, Vanuatu, Zambia and Zimbabwe.

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 the point of entry.

Categories of taxes in Uganda

Both direct and indirect taxes apply in Uganda. Direct taxes are levied on individual and corporate income. Indirect taxes are levied on certain transactions such as the sale and purchase of land, goods and services. Taxes are administered by the Uganda Revenue Authority (URA).

Taxation of individuals

Income tax is calculated on the individual’s net assessable income after making allowance for deductible expenses. The sources of assessable income for individuals include employment, business and property. The annual income threshold is UGX 2 820 000 (approx. USD 900) below which no income tax is chargeable for an individual. Different tax rates apply depending on whether the individual is a resident or non-resident of Uganda for tax purposes.

Income tax annual rates for residents (UGX per annum)

Chargeable incomeRate0 to 2 820 000NilExceeding 2 820 000 but not exceeding 4 020 00010% of the amount by which chargeable income exceeds UGX 2 820 000Exceeding 4 020 000 but not exceeding 4 920 000UGX 120 000 plus 20% of the amount by which chargeable income exceeds UGX 4 020 000Over 4 920 000UGX 300 000 plus 30% of the amount by which chargeable income exceeds UGX 4 920 000

Where the chargeable income of an individual exceeds UGX 120 000 000, an additional 10% is charged on the amount by which chargeable income exceeds UGX 120 000 000.

Income tax annual rates for non-residents (UGX per annum)

Chargeable incomeRate0 to 4 020 00010%Exceeding 4 020 000 but not exceeding 4 920 000UGX 402 000 plus 20% of the amount by which chargeable income exceeds UGX 4 020 000Over 4 920 000UGX 582 000 plus 30% of the amount by which chargeable income exceeds UGX 4 920 000

Where the chargeable income of an individual exceeds UGX 120 000 000, an additional 10% is charged on the amount by which chargeable income exceeds UGX 120 000 000.

Pay As You Earn (PAYE) and taxation of employment benefits

PAYE is not a separate tax. It is an instalment income tax system under which employers are required to deduct tax instalments from their employees’ salary or other employment income. The instalments so deducted are remitted to the Uganda Revenue Authority (URA) and based on the PAYE tax return lodged by the employer. The employer offsets the total amount deducted from the individual employee against the employee’s tax liability at the end of the tax year. Every employer must therefore register for PAYE as well as be familiar with the rules relating to filing of PAYE returns and the computation of PAYE.

Corporate tax rate in Uganda

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:

Entity or incomeRateResident companies30%Branch tax30%Branch profit remittance tax15%Capital gains tax30%Mining companies25–45%Non-resident company providing shipping, air transport or telecommunications services in Uganda2%

Taxation of partnerships, sole proprietorships and trusts

Income tax assessments for a partnership can be made either in respect of the individual partners or in the partnership’s name. The profits of a partnership, including a firm carrying on a trade or profession, are taxable at a rate of 30%.

A sole proprietor is taxed in the same way as an individual.

The income tax rate applicable to trusts is 30% of the chargeable trust income for the relevant year of income. A trust is exempt from income tax where income of the trust is paid directly to the beneficiary without passing through the hands of the trustee or where a trustee relies on the argument that a share or part of the assessable income accrues or arises for the benefit of the beneficiary.

Value Added Tax (VAT)

VAT is a consumer expenditure tax. It is payable by individuals, corporate entities and other businesses and enterprises alike. The business sales turnover threshold for VAT is UGX 150 000 000 (approx. USD 40 000) per year or UGX 37 500 000 (approx. USD 10 000) per three consecutive months. Individuals and firms whose business sales turnover is below the thresholds are not required to register for VAT.

Individuals and firms with business sales turnover above the thresholds must register for VAT. It does not matter whether the business is profitable or not. All VAT registered persons are entitled to an input tax credit, i.e. a refund of the VAT spent on all the inputs (raw materials) used to generate income by the business.

Stamp duty

Stamp duty is a direct tax levied on specified documents and transactions under the Stamps Act. These include legal documents and transfers and specified agreements.

Taxation of rental income

Rental income of an individual is segregated from other income and is taxed at a rate of 20% of gross rental income in excess of UGX 2 820 000 per year.

Excise duty

Excise duties are imposed on various goods and services in Uganda which are considered luxurious such as soft drinks, cigarettes, alcoholic drinks and spirits. There is no uniform rate for excise duty; rather, the law prescribes different tax rates for the different excisable goods and services.

Customs duty

Customs duty is charged in respect of specified goods that originate from a country other than a member State of the Preferential Trade Area for Eastern and Southern African States, and which are imported into the Republic of Uganda. The rates of this import duty vary depending on the nature of the goods provided. However, the customs duty rates vary from 0% to 60% depending on the item imported.

Presumptive tax

This applies to Small and Medium Enterprises whose annual gross turnover is between UGX 50 million and UGX 150 million, subject to certain thresholds. The tax rates payable depend on the location of the business. However, a resident tax payer with a turnover of less than UGX 150 million may, on an application to the Commissioner, be taxed at 30% on chargeable income.

Withholding tax

Dividends and interest (save for interest on government securities) are subject to a withholding tax of 15% for both residents and non-residents. Interest payments on government securities to a resident person are charged at 20%. Dividend payments from companies listed on the stock exchange to individuals are charged 10%. However, interest paid abroad by a resident in respect of debentures issued by a foreign company for the purposes of raising loan capital to carry out business in Uganda is exempt.

A 6% withholding tax is imposed on any payment to a person in Uganda from the Government of Uganda, a government institution, a local authority, any company controlled by the Government of Uganda or any person designated in a notice issued by the Minister of Finance, of an amount in aggregate exceeding one million UGX for the supply of goods or materials of any kind or any service. The Minister of Finance has powers to exempt companies from paying withholding tax. In addition, non-residents are subject to 15% withholding taxes on royalties, management fees, entertainers and sports personnel income, natural resource payments and equipment leases on income earned from Uganda.

Key industry sectors: investment opportunities in Uganda

The following investment opportunities are available:

• Uganda has a burgeoning oil sector. Uganda has approximately 3.5 billion barrels of oil and 350 billion cubic feet of gas in the Albertine Graben region in the western part of the country. There are many opportunities in ancillary industries
• agriculture is one of the leading sectors. Uganda is one of the leading producers of coffee and bananas and a major producer of cereals, tea, vegetables and fruits. Agriculture value addition is a priority area
• Uganda has many high mineral potential areas which are inadequately explored. Minerals such as limestone for cement, gold, tin and tungsten are available for mining and value addition
• opportunities in the production of edible oils
• building and construction industry. Given the rate at which the Ugandan population is increasing, there is a need for affordable housing. Opportunities include the provision of low cost housing in urban and semi-urban areas, housing and mortgage finance and construction equipment and building materials
• opportunities in the production of electronics
• opportunities in the information and communication technology sector. Uganda has a supportive regulatory framework for developing ICT infrastructure
• opportunities in the tourism sector include tour operations, water sports and related activities, accommodation, conferences and incentives travel, national park concessions, privatisation and joint ventures with existing players
• there is great potential in the following financial services areas: fintech, merchant banking, development banking, commercial banking, discount houses, insurance services, leasing, mortgage financing, building societies, micro-financing services and specialised training institutions
• opportunities in pharmaceuticals.

Intellectual property

Intellectual property is protected in Uganda.

A registered trademark is valid for seven years from the filing date of the application and may be renewed for another ten-year period upon payment of the prescribed renewal fee.

A utility model is an exclusive right granted by the Government for an innovation/invention, which is either a product or process that offers a new technical solution to a problem. Their term of protection is 10 years.

A patent may be granted for an invention that is novel, inventive and is industrially applicable. The term of protection for patents is 20 years. For the patent to remain in force the patent holder is required to pay annual maintenance fees.

For natural persons, copyright is protected for the lifetime of the author and 50 years after his death. For corporations and companies, copyright is protected for 50 years after the date of the first publication. Anonymous work or works of unknown authors are protected for 50 years. Computer programs are protected for 50 years after the program becomes available to the public.

Industrial design rights are granted for five years renewable for two more consecutive five-year terms. Industrial design protection does not protect the technical features of the product.

International intellectual property treaties

Uganda subscribes to various international treaties and conventions including:

• Beijing Treaty on Audio-visual Performances (8 October 2012)
• the Nairobi Treaty on the Protection of the Olympic Symbol (21 October 1983)
• the Convention Establishing the WIPO (18 October 1973)
• the Paris Convention for the Protection of Industrial Property (14 June 1965)
• the Agreement on Trade-Related Aspects of Intellectual Property Rights (January 1995)
• the Banjul Protocol on Marks Within the Framework of the African Regional Intellectual Property Organisation (ARIPO) (21 November 2000)
• the Harare Protocol on Patents and Industrial Designs Within the Framework of the ARIPO (25 April 1984)
• the Lusaka Agreement on the Creation of the ARIPO (8 August 1978)
• the Nice Agreement on International Classification of Goods and Services 1957 (Uganda is not a party to this agreement, however, it has adopted use of the Nice Classification)
• the Berne Convention for the Protection of Literary and Artistic Works 1886
• Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled (23 July 2018)
• Patent Cooperation Treaty (9 February 1995)
• Patent Law Treaty (2 June 2000).

Legal system

The Ugandan legal system is based on English common law with a written Constitution which guarantees basic human rights. The Supreme Court is the highest court. The High Court of Uganda has unlimited original jurisdiction to hear and determine any proceedings under any law.

International organisations and agreements

Membership of international organisations includes the Common Market for Eastern and Southern Africa (COMESA), the Preferential Trade Area, the East African Community and the Commission for East African Co-operation (which comprises Kenya, Uganda and Tanzania). Uganda has, in addition to double taxation agreements, signed bilateral trade and investment promotion agreements with the United Kingdom, Italy, Kenya, Tanzania, South Africa, Egypt, India, China, Germany and the Netherlands.

Telecommunications

There are currently over ten mobile operators in the country including Uganda Telecommunications Corporation Limited (UTEL), Mobile Telephone Network Uganda (MTN Uganda), Lyca and Airtel Uganda. Email access is widely available throughout Kampala and other major towns. The Uganda Communications Act 2013 requires any person who wishes to establish a telecommunications station, provide telecommunications services or construct, maintain or operate telecommunications apparatus to obtain a licence from the Uganda Communications Commission.

Labour relations

There are several labour laws in Uganda including, but not limited to, the Employment Act and its regulations, the Labour Unions Act, the Labour Disputes (Arbitration and Settlement) Act (LADASA), the Occupational Safety and Health Act and the Workers’ Compensation Act. Uganda has two national trade union centres, namely the National Organisation of Trade Unions (NOTU) and the Central Organisation of Free Trade Unions (COFTU). The legal regime in Uganda provides for resolution of labour related disputes by the Labour Office and the Industrial Court.