A BRIEF GUIDE TO

DOING BUSINESS
IN UGANDA, 2019
BOWMANS

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 A Brief Guide to Doing Business in Uganda, 2019

Contents
06 INTRODUCTION

07 The Country at a Glance

07 General Considerations

08 ESTABLISHING A BUSINESS

09 Business Vehicles

12 Exchange Controls

12 Import/ Export Regulations

14 OPERATING A BUSINESS

15 Employment

16 Tax

20 Competition

21 Intellectual Property

21 Consumer Protection

22 Insurance

23 Data Protection

24 E-Commerce

24 Fintech

25 Environmental Considerations

26 Dispute Resolution

27 Anti-Corruption, Money Laundering and Bribery

30 DISSOLVING A BUSINESS

32 OUR FIRM

33 OUR FOOTPRINT IN AFRICA

34 KEY CONTACTS

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Foreword

This guide provides

answers to questions that
are frequently asked by
Ugandan business people
and foreign investors with
an interest in Uganda.
It gives a broad overview
of the legislative regime
applicable to business in
the country.

I t has been prepared by a team of

our Ugandan lawyers who specialise
in various relevant areas of law.

We hope you find it useful.

For further information or specific

assistance, please do not hesitate to contact
any one of our lawyers in Uganda.

William Kasozi
Managing Partner, Uganda

The contents of this guide are for reference purposes only

and should not be considered to be a substitute for detailed
legal advice. It is correct as at August 2019.

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 A Brief Guide to Doing Business in Uganda, 2019

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INTRODUCTION

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 A Brief Guide to Doing Business in Uganda, 2019

INTRODUCTION 2. What are the key recent legal developments

affecting doing business in Uganda?
The Country at a Glance
Recently enacted laws include: Data Protection
Uganda’s economy has expanded steadily and Privacy Act 2019, Investment Act, 2019,
over the past decade with a marked National Environment Management Authority
growth in the construction, oil and gas Act, 2019, Security Interests in Movable
and telecommunications sectors. Property Act, 2019, Civil Aviation Authority
(Amendment) Act, 2019, African Export Import
The economy is highly dependent on Bank Agreement (Implementation) Act, 2019
agriculture and natural resources. It was and Human Rights Enforcement Act, 2019.
recently revealed that 60% of the oil–rich
areas in the country remain unexplored The establishment of a new center for
and the Government is planning to arbitration and mediation in Kampala, the
award more exploration licences. International Centre for Arbitration and
Mediation in Kampala (ICAMEK), is a recent
development worth noting. ICAMEK is an
General Considerations independent NGO dedicated to advancing
alternative dispute resolution in Uganda
1. What is the legal system in Uganda? and across east Africa. It is a private sector
led institution which was backed by the
Uganda, commonly referred to as the Uganda Law Society and the Uganda Bankers
‘Pearl of Africa’, became a Republic Association to compliment the current
following its independence from the judicial system with fair, expeditious, efficient
United Kingdom on 9 October 1962. and flexible dispute resolution methods.

The political system is a parliamentary The Uganda Registration Services Bureau

constitutional democracy. There are has recently introduced the one-page
three arms of Government: Executive, memorandum and articles of association
Judiciary and Parliament. known as the ‘lean MEMARTS’ which enable a
potential business to open for business without
The Ugandan judiciary operates a necessarily drafting bulky documents for the
hierarchical structure, which consists of memorandum and articles of association.
Magistrate’s Courts, the High Court, Court
of Appeal, and the Supreme Court. Mobile money tax and social media tax
which impose a 0.5% tax on mobile money
The country’s legislative system is transactions and UGX 200 per day on
grounded and pivoted in the Constitution Over The Top (OTT) services respectively,
of the Republic of Uganda, 1995 (as have greatly affected doing business in
amended 2005), Statutory law enacted Uganda. This is because the majority of
by Parliament, case law, English common the economy is private sector driven with
law, and African customary law. English a great part of the population relying
case law continues to persuade and impact on mobile money platforms to save and
decisions in the Ugandan courts of law. transact in their business operations.

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ESTABLISHING A
BUSINESS

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 A Brief Guide to Doing Business in Uganda, 2019

ESTABLISHING A BUSINESS can reserve the proposed company

name for a period of 30 days within
Business Vehicles which period it shall be valid for use
(i.e. incorporation of the company).
3. What are the most common forms of
business vehicles used in Uganda? • Registration/ Incorporation at the
Registry: The Companies Act, 2012,
The most common form of business vehicle in provides for model articles, which can be
Uganda is a private limited liability company. adopted by a company when registering.
Notably, shareholders can take any form from Once the memorandum and articles
natural persons to corporate bodies or Ugandan of association have been executed by
and non-Ugandan directors and shareholders. at least one subscriber, they are then
A private limited liability company may also stamped with a duty currently levied
have one member/ shareholder. However, at 0.5% and a registration fee levied at
the membership should not exceed 100. 1% of the nominal share capital of the
company. All the constitutive documents
The most common form of business vehicle are then registered by the Registrar and
used by foreign investors in Uganda is the company number is accorded.
a private limited liability company.
Registration can take between three and
Another common alternative is for a foreign five days from the date of submission
incorporated company to register to do of the documents to the Company
business in Uganda as a branch. Once a foreign Registry. Among the documents that
company is registered as a branch, it becomes have to be filed with the Registry
regulated in largely the same way as if it was are a form notifying the directors
incorporated under the laws of Uganda. and shareholders of the company, a
statement of nominal capital and a
4. In relation to the most common form of notice of the address of the company.
corporate business vehicle used by foreign
companies in Uganda, what are the • Reporting requirements
registration and reporting requirements?
A Ugandan company must notify the
• Registration Registrar of any changes within the
company that relate to its:
The procedure for the incorporation of
a private company is as follows: • memorandum and articles of association;
• director, secretary and auditor’s details;
• N
 ame reservation: A prospective • change of share capital and
company makes an application to the allotment of shares;
Registrar of Companies requesting • change of company name; or
for a company name search in their • changes in the company assets.
database. Following the successful
search where there is no existing This information is often updated in the
similar company name, the company annual returns which have to be filed

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with the Registrar once a year within as well as all companies and all partnerships
42 days of the Annual General Meeting. in which the controlling interest is owned by
For public companies, a copy of the a person who is a citizen of an East African
audited financial statements is required to Community Partner State are considered
be filed together with the annual return. domestic investors under the New Code.

A foreign company is obliged to submit The definition of a foreign investor under

documents and information at the the New Code now also includes:
Company Registry within 30 days of
its establishment. A branch of a foreign • every natural person who is not a
company is required to file any alterations citizen of any of the East African
to any information relating to the company Community Partnership States;
(such as charters, memorandum and • a company incorporated under the laws
articles, principal place of business, names of any country not being any of the East
and addresses of persons authorised to African Community Partner States; and
receive service on behalf of the foreign • a company incorporated under the
company) with the Registry within 60 days. laws of Uganda in which the majority of
the shares are held by a person who is
5. What grants or incentives are available not a citizen of any of the East African
to investors? Community Partner State or a partnership
in which the controlling interest is owned
Uganda’s laws and policies are generally by a person who is not a citizen of an
favourable towards foreign investors. Free East African Community Partner State
trade zones and privatisation programs have and holds an investment licence issued
been created to encourage foreign investors. in accordance with the New Code.

Local and foreign investment in Uganda This implies that all citizens, companies
was previously regulated by the Investment and partnerships of any of the East African
Code Act Cap 92 (Old Code). In light of the Community Partner State are no longer
growing investment sector in Uganda and considered foreign investors under the Laws
the investment regulatory framework at a of Uganda and for investment purposes will
regional level, Parliament enacted the new be treated as though they were Ugandans.
Investment Code Act, 2019 (New Code).
This further implies that any of the already
Unlike the Old Code, the New Code defines an existing investors from any of the East African
investor to include a foreign and/ or a domestic Community Partner States do not have to
investor. To qualify as a domestic investor, an apply for renewal of their investment licences.
individual has to be a citizen of an East African
Community Partner State. These include Contrary to the Old Code where a foreign
Burundi, Kenya, Rwanda, South Sudan, Tanzania investor was required to obtain an investment
and Uganda. Therefore, every citizen of any of licence before operating a business, the
the East African Community Partner States, all New Code strictly, requires all investors to
companies incorporated under the laws of any register with the UIA before making any
of the East African Community Partner States investment in Uganda or before participating

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 A Brief Guide to Doing Business in Uganda, 2019

in the operations of any investment activity An investor importing any plant, machinery,
in Uganda. This means that foreign investors equipment, vehicles or construction
must register with UIA before making materials for an investment project will
any kind of investment in Uganda. benefit from the concessional rates of import
duty and other taxes as may be specified
Under the New Code the application for an in the finance acts from time to time.
investment certificate is made to the Secretariat
in a prescribed form indicating the full name and Under the Old Code, in order to qualify for
address of the applicant, the shareholding and incentives, the foreign investor had to have
nationality of the business enterprise, the nature satisfied three or more of the objectives
and capital structure of the business as well as specified under the New Code. However,
the business plan and the amount invested. under the New Code, notwithstanding
incentives granted under other laws, an
Upon investment registration every applicant is investor who meets any of the following
required to provide the following information: qualifications for incentives and commences
operations after the commencement of
• certificate of registration of the business; the New Code, qualifies for incentives:
• business plan (containing details such as
action plan, commencement of operations, • has the minimum investment capital
raw materials sourced in Uganda, for the investment as required in
financing and assets to be sourced outside the relevant Acts of Parliament;
Uganda, land required for the investment • engages in any of the priority areas
including certificate of land title); specified in Schedule 2 of the New Code
• environmental impact assessment (such as agro processing, food processing,
certificate issued in accordance medical appliances, building material,
with the relevant laws; lighting, automobile manufacturing and
• the projected number of employees; and assembly, household appliances, furniture,
• licence granted by the business sector in tourism, mining, real estate development,
which the investor intends to operate. pharmaceuticals and telecommunications);
• exports a minimum of 80%
After application for registration, the applicants of the goods produced;
are either issued an investment certificate or • provides for substitution of 30% of
notified of the refusal. This is within five working the value of imported products;
days after the UIA receives the application. The • sources 70% of the raw
duration and the terms of the certificate will materials used, locally;
be indicated on the investment certificate. • directly employs a minimum of
60% Ugandan citizens, or
Furthermore, both domestic and foreign • introduces advanced technology or
investors are required to have a minimum upgrading of indigenous technology.
amount in investment capital to qualify for
registration and obtain an investment licence
from UIA. The minimum investment capital is
USD 50 000 and USD 100 000 respectively.

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The 1991 Investment Code Act of Uganda Exchange Controls

(Investment Code) established the Uganda
Investment Authority, which promotes, 7. Are there any exchange controls or
facilitates and supervises foreign investment currency regulations?
while providing incentives to foreign
investors (which include exemptions The Government encourages foreign
from import duties and sales tax). investment. Therefore, it has not enacted
exchange controls or restrictions save for
• Licences and permits: A foreign investor the requirement that all remittances and/
must deposit a sum of USD 100 or its or repatriations to and from Uganda be
equivalent in Ugandan Shillings. This made through a duly licensed financial
is a prerequisite for the acquisition of institution or a person or entity duly licensed
an entry permit which is imperative to conduct money transfer business.
for an investor’s enjoyment of the
incentives under the Investment Code. Further, the Financial Institutions (Anti-
Money Laundering) Regulations of 2010,
• Custom duty incentives: Foreigners make it a requirement for a financial
are exempted from paying import institution to report, on a monthly
duties and sales tax on any plant, basis, any transaction amounting to
machinery, equipment, vehicles or USD 10 000 or its equivalent in any
construction materials they import other currency involving cash or ‘near
for an investment project. cash’ such as travellers’ cheques, to the
national law enforcement agencies and
6. Are there any restrictions on foreign provide a copy to the Central Bank.
investments (including authorisations
required by the central or local Government)?
Import/ Export Regulations
Uganda’s Investment Code provides
for unrestricted foreign ownership of 8. Are there any import/ export regulations?
investments and partnerships with Ugandan
nationals, except in the lease or ownership The core regulation governing the
of land for crop or animal production. import and export frontiers in Uganda
is the regional statute enacted by the
The Investment Code was created to simplify East African Legislative Assembly,
the investment procedure. Under this law, the East African Community Customs
an investment licence is a prerequisite Management Act, 2004 (EACCMA).
for foreign investors in Uganda.
In addition, Uganda has enacted the
In addition, the Government has started Excise Duty Act, 2014, which is a duty
implementing national content requirements on imports and exports of goods.
embedded in each of the various
industries and/ or sectors in Uganda, The Uganda Revenue Authority (URA) has
for instance in the oil and gas sector. the mandate to collect taxes and supervise
and implement tax laws in Uganda.

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OPERATING A
BUSINESS

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 A Brief Guide to Doing Business in Uganda, 2019

Employment 11. Do foreign employees require work

permits and/ or residency permits?
9. What are the main laws regulating
employment relations? Yes, foreign employees require work permits
and/ or residency permits. The permits allow
The main law governing employment the applicant to live and work in Uganda.
relations in Uganda is the Employment The validity period of the permit ranges from
Act of 2006 (Employment Act). While six months to 36 months renewable at the
employment relations are embedded in the end of the period.
Employment Act, there are other laws that
govern employment relations such as the Work permits are classed under different
Occupational Safety and Health Act of 2006, classes such as:
the Uganda Retirements Benefits Authority
Act of 2011 and the Workers Compensation • Class A2 - Government contractors
Act of 2000. • Class B - Investment in agriculture
• Class E - Manufacturing
Employment relations are also determined by • Class A - Diplomatic service
the employer and employee through contract. • Class D - Business and trade
Therefore, the terms of services, rights and • Class G1 - Missionaries and volunteers
obligations are stipulated under contract law • Class C - Mining
with specific reference to minimum standards • Class G2 - Expatriate employees
set within the Employment Act. • Class A - Official service
• Class F – Professionals
10. Is a written contract of employment
required? If so, what terms must be The award of a work permit is greatly
included in it? Do any implied terms dependent on the contribution the foreigner is
and/ or collective agreements apply likely to make to the Ugandan economy.
to the employment relationship?
Additionally, foreign employees can choose
A written contract of employment is not required to subsequently acquire residence permits
as per the Employment Act, 2006. depending on the duration of time they have
spent in Uganda. Ordinarily, if they have lived
Notwithstanding this, an employee is equally in Uganda for a minimum of 10 years, they
entitled under the law to receive written become eligible for a residence permit under
particulars of employment including: the ‘due to long stay’ category. Furthermore,
where a foreigner marries a Ugandan citizen
• job description; and the marriage subsists for at least three
• place and hours of work; years, he or she is eligible for a residence
• duration of the contract; and permit due to the marriage.
• remuneration details (wages due, rate
of overtime applicable, allowances and
when they are payable).

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12. Are employees entitled to management An individual whose employment is terminated by

representation and/ or to be consulted in summary dismissal, is not entitled to a severance
relation to corporate transactions (such as allowance.
redundancies and disposals)?
14. Are redundancies and mass layoffs
Employers must make some notification regulated?
of collective redundancies to the relevant
authorities. For example, notifying the The Employment Act regulates redundancies
Commissioner Labour about the pending and mass layoffs. The substantive reasons
collective redundancy. for redundancies and mass layoffs should be
economic, technological, structural or of a
Employees, aggrieved following a redundancy similar nature.
and disposal, can be represented by a
Labour Union before a labour officer when The procedural requirements include a notification
a dispute arises as to the rights or liabilities to the representative of the employees at the
under a contract of employment or under the labour union providing information on the
Employment Act, 2006. undertaking, and it should be given in good time.
The Commissioner Labour must be notified of the
13. How is the termination of individual reasons for the collective termination, workers
employment contracts regulated? likely to be affected, and the time within which the
collective termination is to be effected.
Under the Employment Act, termination
of employees must be both fair and lawful.
Termination is deemed to have taken Tax
place where:
15. When is a business vehicle subject
• the contract of service is ended by the to tax in Uganda and what are the main
employer with notice; taxes that apply to a business?
• a contract expires following the completion
of the specified tasks; or The Income Tax Act imposes income tax on
• the contract of service is ended by the every person, both natural and artificial, who
employer with or without notice, because has a chargeable income (derived from a source
of unreasonable conduct by the employee. in Uganda) for a year of income.

The Employment Act and practice in courts of The tax rate for companies is 30%.
law, have shown that employers must always
assign reasons for a termination and hold a fair
hearing before the termination.

Ultimately, the Employment Act governs the

dismissal of an employee (either by summary
dismissal or termination by notice), the requisite
notice period, and any remedies for any
unfair dismissal.

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Withholding tax is applied to payments of 17. Are there any thin capitalisation rules
dividends and interest. Specifically, it is applied (restrictions on loans from foreign affiliates)?
to interest payments made to a resident person.
Yes, there are thin capitalisation rules that relate
It however excludes interest paid: to the interest payable by the company during the
year of income. This is deductible on the part of
• by a natural person; debt that exceeds the 1.5 to 1 debt to equity ratio
• to a financial institution (other than for the period the ratio was exceeded.
interest on Government securities);
• by a company to an associated The new tax rules as of 2018, Section 25 of the
company; and Income Tax Act as amended, provide that the
• and exempt from tax in the hands amount of deductible interest in respect of all
of the recipient. debts owed by a taxpayer who is a member of a
group shall not exceed 30% of the tax earnings
The withholding tax rate applicable to interest before interest, tax, depreciation and amortisation.
payments to a resident person, excluding
interest on Government securities, is 18%. It further provides that a tax payer whose interest
exceeds 30% of the tax earnings before interest,
A resident company that pays a dividend to a tax, depreciation and amortisation may only carry
resident shareholder must withhold tax at the forward the excess interest for not more than three
rate of 18%. There is an exception where the years and the excess interest shall be treated as
dividend income is exempt from tax in the incurred during the next year of income.
hands of the shareholder.
The limitation of interest deductions and capping
There is no compensating tax in Ugandan law. it at three years could hamper the financing of
long-term projects, which usually face delays
16. How are the following taxed: in completion. Companies now have to look at
efficient ways of sourcing and using debt.
• Dividends paid to foreign corporate
shareholders? Dividends payable to This move was mainly based on concern within
non-resident persons are subject to the Uganda Revenue Authority that some
withholding tax at the rate of 15%. multinational companies were exploiting thin
• Dividends received from foreign capitalisation rules to abuse the tax system by
companies? Dividends received from limiting their tax bills. Many companies were
foreign companies are subject to said to be front loading debt, much of it through
withholding tax at the rate of 15%. shareholder loans into their Ugandan subsidiaries,
• Interest paid to foreign corporate as a way of reducing their tax burdens and
shareholders? Interest payable to extracting more revenues out of the country.
non-resident persons is subject to
withholding tax at the rate of 15%.
• Intellectual property (IP) royalties paid
to foreign corporate shareholders?
IP royalties paid to foreign corporate
shareholders is subject to withholding tax
at the rate of 15%.

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18. Must the profits of a foreign subsidiary The transaction value method is the primary
be imputed to a parent company that is method. It generally relies on the declared
tax resident in Uganda (controlled foreign cost, insurance and freight (CIF) value of the
company rules?) goods imported. The applicable customs duty
rate is prescribed in the EAC Custom External
Under the Income Tax Act, where a foreign Tariff, 2017 commonly referred to as the
controlled resident company (which is not a CET Code.
financial institution) has a foreign debt to foreign
equity ratio in excess of 2 to 1 at any time during • Value added tax
the year of income, a deduction is not allowed
for the interest paid by the company during that Value added tax (VAT) is chargeable on goods
year on the part of the debt that exceeds the and services imported into Uganda unless
2 to 1 ratio. the goods or services are exempted from
VAT. The standard rate is 18%. Zero rating and
19. Are there any transfer pricing rules exemption from VAT is granted sparingly to
essential goods and services.
The Income Tax (Transfer Pricing) Regulations
set the rules for transfer pricing in Uganda. The taxable value of imported goods for
The Regulations are applicable to transactions purposes of VAT is the sum of:
between associates where one party to the
transaction is located in and is subject to tax in • t he value of the goods ascertained for the
Uganda and the other party to the transaction is purpose of customs duty, in accordance
located in or is outside Uganda. with the EACCMA, whether or not any
customs duty is payable on the goods;
The Regulations seek to ensure that no party • t o the extent not included above (i) the
enjoys tax benefits as a result of non-arm’s cost of insurance and freight incurred in
length terms and conditions of a transaction. bringing the goods to Uganda; and (ii)
the cost of services treated as part of the
There are no specific transfer pricing penalties. imported goods; and
However, the Commissioner of Taxes can conduct • t he amount of customs duty, if any, paid on
an audit, make adjustments in the taxable profit, the goods.
and demand tax where applicable.
The VAT Act provides for zero rating of
20. How are imports and exports taxed? services exported out of Uganda. For services
to be deemed to have been exported out of
• Customs duty Uganda the direct beneficiary of the service
must be a foreign person and the service must
Customs duty is charged on goods imported be consumed (physical and final consumption)
into Uganda depending on their assessed outside Uganda.
customs value.
A recent development that is VAT exemptions
EACCMA provides for several methods of that were previously enjoyed for supplies of
ascertaining the customs value of goods passenger automobiles and entertainment
imported into the East African Community for the extractive sector and donor funded
(EAC) for purposes of levying customs duty. projects were scrapped. Under Uganda’s

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tax law, entertainment is defined to mean An individual is resident for tax purposes if
the provision of accommodation, food, he or she:
beverages and a couple of other amusement
activities. • has a permanent home in Uganda and
was present in Uganda for any period
The scrapping of this VAT makes it more in a particular year of income under
expensive for construction projects that are consideration;
in remote areas where things like food and • has no permanent home in Uganda, but was
accommodation are in short supply. present in Uganda for a period or periods
amounting in the aggregate to
• Excise duty 183 days or more in that year of income; or
• was present in Uganda in that year of
Excise duty is chargeable on the importation income and in each of the two preceding
of goods that are classified as excisable years of income for periods averaging more
goods pursuant to the Excise Duty Act, 2014 than 122 days in each year of income.
at the rate prescribed in the Act.
23. What income tax and social security
21. Is there a wide network of double contributions must be paid by the employee
tax treaties? and the employer during the employment
relationship?
Uganda is currently party to a number of double
taxation treaties. These include agreements with: The following are some of the mandatory
Demark, the EAC, Egypt, India, Italy, Mauritius, contributions:
Netherlands, Norway, South Africa, the United
Kingdom and Zambia. • Pay as you earn and personal income
tax returns
Double taxation treaties are pending with:
Belgium, China, Seychelles and the United This is collected on a monthly basis through
Arab Emirates. a system known as Pay As You Earn (PAYE).
The Income Tax Act obliges employers,
22. In what circumstances are employees while making payment of employment
taxed in Uganda and what criteria are used? income in any month, to withhold tax at the
prescribed withholding PAYE tax rates and
Income tax is imposed on income from business, pay the tax withheld by the 15th day of the
employment and property. The scope of liability following month to the URA.
for tax depends on a person’s residence status.
PAYE is the method of deducting income
For a resident person, income tax is charged on tax from salaries and wages. It applies to all
gross income from all over the world. The tax for income and benefits from any employment
a non-resident person is only charged on income (namely wages, salaries, bonuses,
derived from sources within Uganda. commissions, directors fees and
taxable benefits).

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• National Social Security Fund Competition

Social Security contributions are made to 24. Are restrictive agreements and practices
the National Social Security Fund (NSSF). regulated by competition law? Is unilateral
Participation in this fund is mandatory (or single firm) conduct regulated by
for every employer with more than five competition law?
employees and is intended to provide
a state retirement benefit for salaried There is no general competition law in Uganda.
workers. Contributions are made by both Instead, certain sectoral regulations have
the employer and the employee. The competition provisions or provisions governing
employee’s portion is deducted from his or amalgamation or transfers, which import
her salary and the total amount is paid by competition law aspects. For instance, the
the employer to NSSF. Uganda Communications Act, 2013, prohibits
restrictive agreements and practices in the
Under the current NSSF regime, 15% of communications sector.
an employee’s monthly earnings (with 5%
deducted from the employee’s earnings and Uganda is a member of the Common Market for
10% drawn from the employer) should be East and Southern Africa (COMESA). By virtue of
contributed into the Social Security Fund this membership, it has to abide by the COMESA
established by the Act. Competition Regulations, 2004. That said,
Uganda has not yet domesticated the COMESA
A key requirement in the remittance of Competition Regulations and they therefore
taxes and other mandatory deductions do not yet form part of Ugandan law. However,
is the registration and obtaining of a tax compliance with the regulations is advisable
identification number (TIN) from the because of the sanctions and reputational adverse
URA. The TIN is required for the following effects that can be suffered by an investor/
transactions: acquirer in other COMESA Member States or
interstate transactions.
• incorporation of companies;
• registration of property title and 25. Are mergers and acquisitions subject
stamping of instruments; to merger control?
• approval of plans and payments to the
country authorities; There is no general competition law in Uganda and
• acquisition of trade licences; as such mergers and acquisitions are not subject
• importation of motor vehicles; and to merger control. However, under the Uganda
• registration with the National Social Securities Listing Rules, 2003, there are approvals
Security Service. that must be obtained from the Capital Markets
Authority and Uganda Securities Exchange.
These may require the parties to a merger and
acquisition transaction to make some disclosures.
Specific sectors in Uganda have similar controls
such as the communications, insurance and
banking sectors.

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Intellectual Property Under the law a patent is granted where an

invention is novel and industrially applicable.
26. Is IP protected in Uganda? Utility models are granted where the invention
is new and industrially applicable. Technovations
Yes, the following Acts regulate IP in Uganda: that provide solutions to specific problems in the
field of technology, proposed by an employee of
• Constitution of the Republic of Uganda an enterprise, are protected.
of 2006;
• Industrial Property Act of 2014; The Trade Secrets Protection Act of 2009
• Trademarks Act of 2010; provides for the protection for, but not limited
• Trade Secrets Protection Act of 2009; and to a: formula, pattern, compilation, program,
• Copyright and Neighbouring Rights Act method, technique or process; or information
of 2006. contained or embodied in a product, device
or mechanism which may be used in trade or
Ugandan IP laws have been drafted to reflect business, that is not generally known in the trade
the international standards set in the TRIPS or business and is subject to efforts that are
Convention and ARIPO Convention that Uganda reasonable under the circumstances to maintain
is party to. These Conventions have greatly its secrecy.
impacted copyright, trade marks, industrial
property and patents laws in Uganda.
Consumer Protection
The Copyright and Neighbouring Rights Act
of 2006 mainly provides for the protection of 27. Are marketing agreements regulated?
literary, scientific, artistic, computer programmes
and electronic data banks, among others. Marketing agreements made between parties
are usually made with the intention of dictating
The Trademarks Act of 2010 provides for the quality of products to be maintained in
the protection of distinct trademarks upon the market; ascertaining the standardisation of
registration. The protection granted under packages and containers used; and regulating the
this law is territorial and not universal. The flow of products to the market. These agreements
law also protects registered trade marks from are not regulated by any governmental
infringement by any other person who is not the authorities and are commercially based.
registered owner of the mark.
Therefore, since marketing agreements are
The Industrial Property Act of 2014 aims to contract based, they are predominantly regulated
promote inventive and innovative activities; by the Contracts Act of 2010 (which is the main
facilitate the acquisition of technology through law regulating contractual relations in Uganda).
the grant and regulation of patents, utility
models, industrial designs and technovations; 28. Are there consumer protection laws and if
to provide for the designation and functions so, what are they?
of the registrar, and the establishment of a
register of industrial property rights; and for Uganda does not have a robust legislative
related matters. and policy framework to address consumer
protection.

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 BOWMANS

However, in 2018 a memorandum of 29. How are product liability and product
understanding was signed between the Ministry safety regulated?
of Trade, Industry and Cooperatives and Financial
Sector Deeping Uganda (FSDU), which seeks to Uganda does not have specific legislation on
cultivate a national consumer protection policy product liability and product safety. This field of
and to facilitate the creation of an exhaustive practice is mainly regulated by common law and
consumer protection law. decided cases.

In addition, the Consumer Protection Bill

was drafted and awaits cabinet approval and Insurance
parliamentary discussion to be passed into law.
30. How is insurance regulated?
The banking sector enjoys regulations that
address issues of consumer protection through Insurance in Uganda is regulated by the Insurance
the Bank of Uganda Consumer Protection Act of 2017 (Act) and the Insurance Regulations
Guidelines of 2011. These ensure fair and equitable of 2002 (Regulations).
financial services and increase transparency in
financial transactions. They establish principles of The Insurance Regulatory Authority of Uganda
fairness, reliability and transparency to direct the (IRA), established under the Act, is the regulatory
banker-customer relationship. body for insurance in Uganda. The main object of
the IRA is to ensure the effective administration,
Some of the provisions include: supervision, regulation and control of insurance
businesses in the country.
• Financial service providers are precluded
from recovering debt from third parties The Act makes provision for the IRA and
(such as the consumer’s referees, family stipulates its functions to include regulation,
members and friends), if they have not supervision, monitoring and control of the
signed contracts of guarantee. insurance sector. The Act also provides for the
• Debt recovery is required to be transparent Board, which is responsible for the general
with the cost of assets to be assessed at a direction and supervision of the IRA.
fair market value.
• A 10 days cooling off period within which The Act makes provision for classification of
to revoke any financial product agreement. insurance businesses to include life insurance
• The need for financial services providers to businesses and non-life insurance businesses.
highlight to consumers the fees, charges, It further provides for regulation of t, which is
penalties, relevant interest rates and any an arrangement between a financial institution
other consumer liabilities or obligations. and an insurer under which the financial
• Provision for safeguarding of consumer institution distributes to its customers through its
information relating to their accounts and distribution channels, an insurance product of the
any information about previous or existing insurer.
financial relationships.
• The requirement for promotional material The Act provides that only a company
to be fair, clear and not misleading. incorporated under the laws of Uganda, an
• Financial service providers are required insurance corporation established by law, or a
to establish and maintain appropriate and cooperative insurance society registered under
effective consumer complaints procedures. the laws of Uganda can operate an insurance

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 A Brief Guide to Doing Business in Uganda, 2019

business in Uganda. These requirements do not The Act establishes the National Information
apply to a foreign reinsurer that enters into a Technology Authority - Uganda as the regulator
reinsurance contract with a licensed insurer; or a in regard to data protection in the country.
retrocession agreement with a licensed reinsurer; The Act requires all persons or institutions that
or a foreign insurer that carries on insurance collect and process data to be registered on the
business in accordance with an exemption Data Protection Register.
granted by the IRA.
Under the Act, it is an offence to obtain, disclose
The Regulations provide for licensing of or procure the disclosure to another person
insurance companies, the mode of application, the personal data held or processed by a data
and the fees to be incurred while lodging the collector, data controller and data processor. It is
application. The Regulations further make also an offence to sell or offer for sale personal
provision for the paid-up capital for the different data of any person. In respect to corporations,
classifications of insurance businesses (which are these offences can attract a penalty of up to 2%
UGX 1 billion in the case of life or non-insurance of the corporation’s annual gross turnover.
businesses and UGX 2.5 billion in the case of
reinsurance businesses). It is also important to note that because the
GDPR has a universal reach, it would apply to
The Regulations further provide for insurance persons that deal with data of European Union
brokers, insurance agents, insurance surveyors, citizens in Uganda.
loss adjusters and loss assessors.
32. Are there laws protecting personal
information?
Data Protection
Article 27(2) of the Ugandan Constitution
31. Are there specific statutory data guarantees the right to protection of personal
protection laws? If not, are there laws information. This right is implemented in part
providing equivalent protection? through the provisions of the Data Protection and
Privacy Act recently passed. The Act generally
Uganda recently passed the Privacy and Data prohibits the collection and or processing of
Protection Act, 2019. The Act generally draws personal data without the consent of the data
inspiration from the European General Data subject except where the collection is pursuant
Protection Regulations (GDPR) and aims to to law, required for performance of a public duty,
protect the privacy of individuals and of personal required for national security or health reasons.
data by regulating the collection and processing
of personal information; and to provide for the The Act also prohibits the retention of data for
rights of persons whose data is collected and the a period longer than it is required for the purpose
obligations of data collectors, data processors it was collected and provides for the right to
and data controllers. The Act also regulates the be forgotten.
use and disclosure of personal information.

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 BOWMANS

E-Commerce • any code of conduct to which that person

subscribes and how the consumer may
33. Are there any laws regulating access that code of conduct electronically.
e-commerce (such as electronic signatures
and distance selling)? In the case of a legal person:

Electronic signatures and distance selling are • the registration number;

regulated by the Electronic Transactions Act • names of directors and place of registration;
of 2011 (Act) and the Electronic Signature • the physical address where the person may
Regulations of 2011 (Regulations). The Act be served with documents;
provides for the use, security, facilitation and • a description of the main characteristics of
regulation of electronic communications and the goods or services offered;
transactions. The Act mainly focuses on electronic • the full price of the goods or services,
signatures and their legal effect. including transport costs, taxes and any
other fees or costs;
Under the Act, electronic transaction means • the manner, terms and conditions of
the exchange of information or data, the sale payment; and
or purchase of goods or services, between • the time within which the goods will be
businesses, households, individuals, the dispatched, among others.
Government, and other public or private
organisations, conducted over computer- The Act further addresses the performance of
mediated networks, which is mainly e-commerce. an electronic transaction; invalidity of provisions;
cancellation of an electronic transaction after
The Act addresses the legal effect of electronic receipt of goods or services; and the liability of
records, use of electronic signatures, authenticity a service provider.
of data messages, admissibility and evidential
weight of data messages or electronic records Notably, the Act shall have effect in relation to
and consumer protection. any person, whatever his or her nationality or
citizenship and whether he or she is outside or
Under consumer protection, the Act requires a within Uganda.
person offering goods or services for sale, hire
or exchange through an electronic transaction
to provide (on the website or electronic Fintech
communication where the goods and services
are offered): 34. Is fintech regulated? If so, how?

• the full name and legal status of the person; In Uganda, the dominant activity within the
• the physical address and telephone number fintech sector is the provision of mobile money
of the person; services. Mobile banking is also gaining traction.
• the website address or email address of the
person; The Central Bank has issued guidelines to
• the membership of any self-regulatory or regulate the mobile financial service industry.
accreditation bodies to which the person They require that entities dealing in mobile
belongs or subscribes and the contact details financial services be registered limited liability
of that body; and companies. They are required to provide proof

CONTENTS PAGE 24
 A Brief Guide to Doing Business in Uganda, 2019

of their financial positions, business plans and Environmental Considerations

risk management proposals, and ought to have
appropriate and tested technology systems 35. Are there laws protecting the
in place. environment? If so, what are they?

The guidelines require that, where an entity is Uganda has a labyrinth of laws and policies
not a registered limited liability company subject to protect the environment while enabling
to the approval of the Bank of Uganda, it businesses to grow.
partners with a registered financial institution
and should have an escrow account with the The Constitution demands that laws are enacted:
financial institution. to protect and preserve the environment from
abuse, pollution and degradation; to manage the
The partnering licensed institution should ensure environment for sustainable development; and to
that the mobile money service provider has promote environmental awareness.
adequate measures to prevent money laundering
and terrorist financing and equally should comply Article 237(2) of the Constitution, requires the
with the requirements on consumer protection. State and local governments to safeguard and
protect the biodiversity of Uganda by conserving
The Central Bank is in charge of the approval and promoting the rational use of natural
and supervision of mobile money services. resources.

Each mobile financial service provider is required The National Objectives and Directive Principles
to maintain a register of its agents and to execute of State Policy, require the State to promote
due diligence during the hiring and training of sustainable development and public awareness of
these agents. They should use systems that are the need to manage land, air and water resources
interoperable with other payment systems in the in a balanced and sustainable manner for the
country and internationally. present and future generations.

Furthermore, service providers are required to As an instrument for guarding the country against
adhere to international Know Your Customer unwanted alien species of plants and conserving
(KYC) standards so as to prevent money endemic species, The Agricultural Seeds and
laundering and terrorism financing. Mobile Plants Act, Cap 144 provides for the promotion,
financial service providers, as well as their agents, regulation and control of plant breeding and
should uphold the privacy and confidentiality of variety release, importing and quality assurance
their customer information, and data. of seeds and other planting materials.

In addition, the Electronic Transactions The law relating to environmental management

Act of 2011 was enacted to provide for the is consolidated through the Uganda Wildlife Act,
use, facilitation and regulation of electronic which aims to protect the flora and fauna by
communication and transaction. This law ensures providing for sustainable management of wildlife.
that all electronic transactions conform to the The Act establishes the Uganda Wildlife Authority,
best international practices and encourage which enforces sustainable management of
investment and innovation in information, wildlife conservation areas, and proposes policies
communications and technology. and procedures for the sustainable use of wildlife.

CONTENTS PAGE 25
 BOWMANS

The National Environment Act, Cap 156 Below the Constitutional Court is the High Court
establishes the National Environment of Uganda, which is the third Court of record and
Management Authority (NEMA) as the overall has original unlimited jurisdiction, meaning it may
body and principal agency responsible for hear any matter whether of a civil or criminal
coordinating, supervising and monitoring nature. The High Court is comprised of several
all aspects of environmental management divisions one of these being the Commercial
in Uganda. Division, which is dedicated to hearing disputes
of a commercial nature.
The Authority is mandated to integrate
environmental considerations into socio- Below the High Court are the Magistrate's Courts,
economic development policies and programmes; which have jurisdiction to hear disputes which fall
develop standards, guidelines, laws and other within the region of UGX 50 000 000 (approx.
measures in environmental management; and USD 13 298) and below. The Magistrate's Courts
coordinate government policies, liaise with lead are not courts of record.
agencies and international organisations in
environmental management. 37. Are there any alternatives to litigation?

The Act creates the requirement of completing Ugandan legal system and practice provides
environmental impact assessments (EIAs) for for and encourages the amicable settlement of
projects likely to have a negative effect on disputes. When a suit is filed in the High Court
the environment as an effective management of Uganda, parties are required to first attend
tool. In addition to the management of natural mandatory mediation and thereafter have the
resources, the Act provides for mechanisms of suit heard if they fail to have the matter settled
establishing environmental standards and criteria out of Court.
for environmentally acceptable behaviour.
If a valid arbitration clause exists in an
An entity which seeks to exceed these agreement, or the parties agree to refer a dispute
environmental standards is required to apply to arbitration on an ad hoc basis, any dispute
for a pollution permit to enable it carry out arising from such agreement must be submitted
its activities. to arbitration.

The Arbitration and Conciliation Act, Chapter 4

Dispute Resolution provides for domestic arbitration, international
commercial arbitration and defines the law relating
36. How are disputes resolved in Uganda? to conciliation of disputes in Uganda. It establishes
a Centre for Arbitration and Dispute Resolution
The judicial arm of the Government is at the and its accompanying arbitration rules provide for
forefront of dispute resolution in Uganda. enforcement of foreign arbitral awards.

The highest court in the land is the Supreme The arbitration law also provides for a mandatory
Court, which hears appeals. stay of court proceedings where a contract contains
an arbitration clause. In practice, the local courts
Below it is the Court of Appeal, which is also are very supportive of arbitration. They are capable
an appellate court but doubles as the of both enforcing the awards and staying court
Constitutional Court. proceedings until commencement of arbitration

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 A Brief Guide to Doing Business in Uganda, 2019

38. Are foreign judgments and international • appoint a money laundering control
arbitration awards enforceable in Uganda? officer to oversee the anti-money
laundering activities and control of
Uganda is a signatory to the New York terrorist financing programmes.
Convention on the Recognition and Enforcement
of Foreign Arbitral Awards of 1958 and as such, The law requires the accountable persons
foreign/ non-domestic arbitral awards may be to record each transaction exceeding 1 000
recognised and enforced in Uganda. currency points (UGX 20 000 000) and maintain
the record for a period of 10 years.

Anti-Corruption, Money The Act further provides for lifting of the

Laundering and Bribery corporate veil so as to impose personal liability
on a director of a limited company where the
39. Are there laws against money laundering company is involved in money laundering.
and corruption? If so, what are they?
The Financial Institutions (Anti-Money
The Anti-Money Laundering Act of 2013, Laundering) Regulations of 2010, require financial
criminalises the intentional conversion, transfer, institutions to record and report on a monthly
transportation or transmission, and concealment basis any transactions in excess of USD 10 000
of property knowing that such property is the to the Financial Intelligence Authority and to the
proceeds of crime. Central Bank.

The law imposes various obligations on The Financial Intelligence Authority exists to
accountable persons (who are: advocates, trust monitor, investigate and curb financial crime
companies, casinos, real estate agents, dealers in in Uganda.
precious metals and gems, financial institutions,
investment brokers and dealers, insurance The Anti-Money Laundering (Amendment) Act,
companies, the Registrar of Companies, the creates an obligation to implement appropriate
Registrar of Land, the Uganda Investment risk management measures where a customer
Authority, non-governmental organisations, is a politically exposed person and to report
churches and charitable organisations). suspicious transactions.

These are obligations to: There is a requirement to perform due

diligence in transactions involving cross-border
• maintain accounts in true names correspondent banking and enhanced due
and identities; diligence measures where the customer is from a
• undertake due diligence before initiating a country specified as high risk.
business relationship and further customer
due diligence during the existence of the
business relationship;
• undertake additional due diligence in relation
to cross-border correspondent banking;
• develop internal policies, procedures and
controls against money laundering and
terrorist financing; and

CONTENTS PAGE 27
 BOWMANS

Uganda subscribes to the East African

Community Directive/2014/14/ EAC Council of
Members, which was issued to guard against
regional money laundering activities. The directive
establishes guidelines to be followed by market
intermediaries in the securities markets of partner
states: Burundi, Kenya, Rwanda, South Sudan,
Tanzania and Uganda.

Uganda is also effectively a member of the

Eastern and Southern Africa Anti-Money
Laundering Group (ESAAMLG), which aims to
curb money laundering in Eastern and Southern
Africa by implementing the Financial Action Task
Force mechanisms.

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 A Brief Guide to Doing Business in Uganda, 2019

CONTENTS PAGE 29
 BOWMANS

DISSOLVING
A BUSINESS

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 A Brief Guide to Doing Business in Uganda, 2019

DISSOLVING A BUSINESS The dissolution of a business under the

Insolvency Act is twofold. It can be undertaken
40. Are there any considerations in either by the members themselves (members’
terminating a business? voluntary liquidation) where the company is
solvent, or by the creditors of the business
There are two main laws that govern the (creditors’ voluntary liquidation) where the
dissolution of a business: the Companies Act company is insolvent.
of 2012 (Companies Act) and the Insolvency
Act of 2011 (Insolvency Act). A branch of a foreign company may be
deregistered where a representative of
The dissolution of a business may be carried the branch itself makes an application to
out either voluntarily or involuntarily by either the Registrar indicating that the company
the members of the business itself or other ceases to have a place of business in Uganda.
parties, such as creditors. Thereafter it will give notice in writing and, as
from the date on which the notice is given,
A company may wind up for any reason as the obligation of the company to deliver any
long as it follows the due process under the document to the Registrar ceases and the
Companies Act. This may include: Registrar shall strike the name of the company
off the register.
• passing a special resolution;
• giving notice of the resolution in the Deregistration can also occur where the
Gazette and in a newspaper with a wide Registrar has reasonable cause to believe that a
national circulation; foreign company has ceased to have a place of
• registering a resolution for voluntary business in Uganda.
winding up with the Registrar of
Companies and sending a copy to the
official receiver; and
• the directors making a declaration in the
prescribed form to the effect that they
have made a full inquiry into the affairs
of the company and have formed the
opinion that the company will be able to
pay its debts in full with in a period not
exceeding 12 months.

CONTENTS PAGE 31
 BOWMANS

Our Firm

Bowmans is a leading African law firm.

Our track record of providing specialist legal
services, both domestic and cross-border, in the
fields of corporate law, banking and finance law
and dispute resolution, spans over a century.

W ith six offices in four African countries

and over 400 specialised lawyers, we
are differentiated by our independence and the
adviser in General Corporate Finance for both
transaction flow and value, and advised on
the Deal of the Year. In the Dealmakers South
quality of legal services we provide. Africa Awards for 2018, we were placed first
for deal flow in the General Corporate Finance
We draw on our unique knowledge of the category.
African business environment and in-depth
understanding of the socio-political climate to We were named South African Law Firm of
advise clients on a wide range of legal issues. the Year for 2018 in the Chambers Africa
Our aim is to assist our clients in achieving Awards for Excellence and African Law Firm
their objectives as smoothly and efficiently of the Year (Large Practice) at the African
as possible while minimising the legal and Legal Awards hosted by Legal Week and the
regulatory risks. Corporate Counsel Association of South Africa.
We were also one of only two firms that took
Our clients include corporates, multinationals home three practice awards - for Property and
and state-owned enterprises across a range of Construction Team of the Year, Energy and
industry sectors as well as financial institutions Natural Resources Team of the Year and TMT
and governments. Team of the Year.

Our expertise is frequently recognised by

independent research organisations. We were
ranked first by deal value and second by deal
count in Mergermarket’s 2018 Africa league
tables for legal advisors. We received awards
in five out of six categories at the Dealmakers
East Africa Awards for 2018: top legal adviser
in M&A for both deal flow and value, top legal

CONTENTS PAGE 32
 A Brief Guide to Doing Business in Uganda, 2019

Our Footprint
in Africa
W e provide integrated legal services
throughout Africa from six offices
(Cape Town, Dar es Salaam, Durban,
Johannesburg, Kampala and Nairobi) in
four countries (Kenya, South Africa,
Tanzania and Uganda).

We work closely with leading Nigerian

firm, Udo Udoma & Belo-Osagie, and
Mozambique-based boutique firm, Taciana
Peão Lopes & Advogados Associados. We
also have strong relationships with other
leading law firms across the rest of Africa.

We are representatives of Lex Mundi, a

global association with more than 160
independent law firms in all the major
centres across the globe. This association
gives us access to the best firms in each
jurisdiction represented.

CONTENTS PAGE 33
 BOWMANS

Key Contacts

WILLIAM KASOZI

Managing Partner, Uganda

Kampala, Uganda

T: +256 31 226 3757

E: [email protected]

CONTENTS PAGE 34
 A Brief Guide to Doing Business in Uganda, 2019

CONTENTS PAGE 35
 Cape Town
T: +27 21 480 7800
E: [email protected]

Dar es Salaam
T: +255 76 898 8640
E: [email protected]

Durban
T: +27 31 265 0651
E: [email protected]

Johannesburg
T: +27 11 669 9000
E: [email protected]

Kampala
T: +256 41 425 4540
E: [email protected]

Nairobi
T: +254 20 289 9000
E: [email protected]

Follow us on Twitter:
@Bowmans_Law

www.bowmanslaw.com

CONTENTS PAGE