Knowing How To Company Incorporate in Uganda

Uganda, located in East Africa and bordering Kenya, offers a compelling landscape for entrepreneurs seeking business opportunities. The Ugandan government provides attractive incentives, including tax exemptions and profit repatriation for foreign investors, while their efforts to streamline business setup facilitate entry into the market. With steady economic growth and diverse sectors like agriculture, energy, infrastructure, and tourism, the environment offers ample potential for entrepreneurs to establish successful company incorporate in Uganda.

 

How Do I Begin To Set Up My Business Here?

Here are a few pointers for you on company incorporate in Uganda:

Pick a Business Structure

Before starting off your journey in setting up a business in Uganda, it is important to understand the types of businesses available and their characteristics. Take a look below.

Sole Proprietorship	One-person business entity Very easy to set up Unlimited liability
Partnership	Two or more person business entity  Easy to set up Liability is shared on an agreement  General partnerships or Limited Liability Partnerships (LLPs) It is taxed as a firm Unlimited liability for General Partnerships; LLP is limited
Public Company	A business entity that is a separate body from the owners Shares are freely transferable. If the number of shareholders is below two, the liability will become unlimited after six months Minimum of two directors, five shareholders
Private Company	A business entity that is a separate body from the owners Shares have restrictions on transfers Liability is limited accordingly investment amount in the company Minimum of one director

 

Choose and Reserve a Business Name

Firstly, pick a business name that is unique and appropriate. You can conduct a simple search of the URSB’s database of registered business names to see if the name of your choice is available. Once you have chosen a business name, you can reserve it with the URSB. Reserving the business name through the URSB takes about 1 to 3 hours to complete, at a cost of UGX 24,000. This will give you exclusive rights to use the name for a period of six months.

Draft the Memorandum and Articles of Association

The Memorandum and Articles of Association are the governing documents of the company. They set out the company’s name, objectives, capital structure, and other important details. You may require the assistance of a lawyer for this task to a company incorporate in Uganda.

Appoint Directors and Shareholders

According to the Companies Act, a private company must have at least one director, and a public company must have at least two. The directors are responsible for the management of the company, while the shareholders are the owners of the company. According to the Act, there are no specifications on the maximum number of directors or shareholders as of yet.

A director can live in or outside of the country. If you are a non-resident and plan to live outside of Uganda, you can do so but you will have to have a valid passport and visa to Uganda. As for meetings, it is permissible to join board meetings via electronic means, if you cannot make it there physically.

After the appointment, proceed to file the company registration documents with the URSB. The company registration documents include the Memorandum and Articles of Association, the list of directors and shareholders, and the payment of the registration fee.

Obtain a Certificate of Incorporation

Once the company registration documents have been filed, the URSB will issue a Certificate of Incorporation. To obtain this certificate is fairly quick, anywhere from four to six hours. This is the official document that proves that the company has been legally registered. The cost, however, varies from one company to another.

Obtain a Taxpayer Identification Number (TIN) and a Trading License.
The company will need to obtain a TIN from the Uganda Revenue Authority (URA). This is a unique identification number that will be used for tax purposes. The company will need to obtain a Trading Licence from the local municipal authority. This is a permit that allows the company to operate a business in the area.

Register With National Social Security Fund (NSSF)

To ensure employee welfare and social security, businesses in Uganda are required to register with the National Social Security Fund (NSSF). The process, managed by the NSSF agency, typically takes up to seven days and comes at no cost, making it easily accessible to all eligible employers with five or more employees. By completing the necessary registration form, businesses can fulfil their legal obligation and provide social security benefits to their workforce.

 

But Wait, That’s Not All

In Uganda, if the company is engaged in a restricted activity (such as mining, healthcare, fishing, forestry, etc.), it will need to obtain an Investment Licence from the Uganda Investment Authority (UIA). The Investment License takes about two to five days to process and it’s free of charge. The UIA imposes specific requirements on foreign investors seeking an investment licence. To qualify, the investment must be a minimum of US$250,000 and generate at least 10 job opportunities for Ugandan citizens.

Moreover, the investment should be in a sector deemed crucial to the nation’s development. Additionally, foreign investors may need to obtain a trade licence from the local municipal authority, granting them permission to operate their business within a designated location. The specific criteria for obtaining a trade licence can vary depending on the municipality in which the business intends to operate.

Moving on, when it comes to the registration process, do take note that the cost of setting up a company in Uganda can go up to $500 USD. Apart from this, you will also need to set up a physical office address, which will be used for official mailing purposes. Having a company in Uganda means you need to adhere to the local tax system, which includes Value Added Tax (VAT), Income Tax, Corporation Tax, Capital Gains Tax, and Withholding Tax. Currently, the corporate tax rate in Uganda is 30%. For more information on business applications and forms, you can have a look at it the official URSB site.

 

Let’s Get You Started!

Starting a business can be overwhelming – especially if it’s in a new country. There may be extensive paperwork, or several legal practices to be aware of. It can take up a lot of your time and headspace. That’s why you need to carefully plan your steps ahead before making your move into the industry. With 3E Accounting, you can leave all the administrative tasks to us, while you focus on building your business.