Foreigner Business in Uganda

Any person in Uganda who is not a citizen of Uganda is considered to be a foreigner.

The Constitution of Uganda, defines a citizen of Uganda to be a person who is born in Uganda one of whose parents or grandparents is or was a member of the indigenous communities existing and residing within the borders of Uganda as at the first day of February 1926, and every person born in or outside Uganda one of whose parents or grandparents was at the time of that person’s birth a citizen of Uganda by birth. Any person not a citizen of Uganda by birth may become a citizen by registration or by naturalization.
By elimination therefore, if your status in Uganda is not provided for above, then you are not a citizen do not automatically have the right to start a business in Uganda.

According to the investment law of Uganda, a company which is incorporated in Uganda with over 50% of its shares being owned by a foreigner is itself a foreign company. And so such companies are considered foreigners and should follow the spirit of the law as presented herein.

WHY WOULD I WANT TO START A BUSINESS IN UGANDA?
The advantages of starting a business in Uganda are many and the benefits numerous- this notwithstanding the difficulty you may have to endure before getting a “foot in the door”, a process which can take some time and effort to complete.
According to the World Bank Group, Uganda ranks very low (168 out of 189 countries) in starting a business. This means that it is not very easy, and to be honest with you- not a very fun process to go through. Estimated at taking approximately 27 days, with about 15 procedures, the bureaucracy can be painful. If you already have a lawyer helping you out with this process, you may need to understand when you are told it is going to take more than a week to get something done.

Once you are able to get all your documents, permits and licenses in order and ready to start operation however, then the advantages kick in like you could not believe.

With a population of an estimated 38.8 million people over half of which is made up children and young adults, the working population in Uganda is huge, which in turn means that there is a huge population of consumers- or potential consumers at least.
In addition to the large numbers of working age people, the per capita income in Uganda is estimated at just over US Dollars 600- which also means that labour costs in Uganda are very low as compared to most of the rest of the world.

All of this notwithstanding that Uganda has got a constant trade deficit, most recently recorded at US Dollars 178 million for the month of January 2016, means that the domestically produced goods and services are insufficient to meet the market demands and given the vast resources in the Country, means that there is ample investment space in Uganda.

HOW CAN I START A BUSINESS IN UGANDA AS A FOREIGNER?

Foreigners enjoy the rights that are provided for in the Constitution and these include  exercising their legal right to practice their profession and their economic rights, however, as a foreigner your rights can only be enjoyed to a limited extent subject to the law, the limitations include-

  1. Being able to own land. A foreigner cannot own land forever unlike a national. Foreigners can only own land in the way of a lease for a specific period of time that can go up to 99 years.
  2. Being employed. As a foreigner you cannot automatically get a job and conversely you cannot automatically employ your foreigner friends. In order to get a job, a foreigner must have permission from Internal Affairs, in the form of a Pass.

In order to start a business in Uganda, as a foreigner, you will need to be;

  1. Legally in Uganda. This means that you need to have entered the Country with the preferred documentation. A passport and a visa or another pass as legally required depending on the nature of the business.
  2. have an investment license, which must be applied for and which states the limitations you will have placed upon you in regards to what businesses you can and cannot do in Uganda.

If you need any further guidance on investing in Uganda as a foreigner, contact us.

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