Uganda has put in place a number of incentives to ensure that foreign investors get the suitable environment for both profit making and development of the country.
According to information provided to the East African Community (EAC) secretariat by Uganda, various incentives are provided depending on the investor’s capital and nature of products being manufactured.
First and foremost, a foreign investor in Uganda is required to obtain an investment licence from the Uganda Investment Authority (UIA).
“A foreign investor qualifies for incentives where the investor makes a capital investment or an equivalent in capital goods worth at least $500,000 by way of capital invested,” the government says.
According to John R Musinguzi, the Commissioner General of Uganda Revenue Authority, “Local and foreign investors can equally access non- tax incentives like land in the industrial parks, facilitation for infrastructure needs and policy advocacy for conducive environment.”
Tax incentives are divided into stamp duty, income tax and Value-Added Tax. In addition, there are also tax incentives for various sector dealers such as agriculture and health.
For instance, any developer of an industrial park/free zone is exempted from paying income tax of income derived from renting out or leasing facilities established in an industrial park or free zone for 10 years. However, such an investor must invest a minimum of $50m for foreign investors or $10m for EAC citizens. “Incentive takes effect from the date of commencement of construction. Also applies to an existing investor making an additional investment of the same value.”
Relatedly, incentives are available for foreigners who operate in an Industrial Park or Free Zone who invests in processing agricultural products; manufacturing or assembling medical appliances, medical sundries or pharmaceuticals, building materials, automobiles and house hold appliances; manufacturing furniture, pulp, paper, printing and publishing of instructional materials; manufacturing chemicals for agricultural use, industrial use, textiles, glassware or leather products.
The same applies to those dealing in industrial machinery, electrical equipment, sanitary pads and diapers as well as those establishing or operating vocational or technical institutes; or carrying on business in logistics and warehousing, information technology or commercial farming or manufacture of tyres.
Exporters of finished consumer and capital goods are not taxed for a period of 10 years as long as they export 80% of their finished products.
More incentives that are indefinite are given to those in the mining and petroleum sector as well as aircraft operators.
Investors from countries which have Double Trade Agreements with Uganda enjoy a variety of tax incentives. Such countries include the United Kingdom, Denmark, Norway, South Africa, India, Italy, the Netherlands and Mauritius.
For details and full list of incentives for investors in Uganda: https://www.ugandainvest.go.ug/wp-content/uploads/2022/08/Tax-Incentive-Guide-2022-2023.pdf