Why invest in Uganda?
Why Invest in Uganda?
Uganda has been able to achieve macro-economic stability when clouds of uncertainty rocked many regions of the world.
- Stable economic growth averaging 5.1% in 2012/13
- Maintained a competitive real exchange rate that supports export growth
Fully Liberalized Economy:
- All sectors liberalized for investment
- Free inflow and outflow of capital
- 100% foreign ownership of investment permitted
- Ranked the 8th freest economy out of the 46 Sub-Saharan Africa countries by the 2013 Index of Economic Freedom.
- Uganda is a member of the Common Market for Eastern and Southern African states (COMESA), a region with a market of about 400 million people in 19 countries.
- Uganda is a member of the East African Community (EAC) comprising Burundi, Kenya, Rwanda, Uganda, and Tanzania with a population of over 140 million people.
- Duty and quota free access into China (quota free access for over 650 products), the USA (AGOA), Generalized System of Preferences (GSP) scheme and EU (EBA) markets.
Strong natural Resource Base
- Rich endowment of rainfall, soils, and favorable temperature range. A number of crops are grown organically
- Unexploited mineral deposits and tourism opportunities. Confirmed deposits include Phosphate, Gold, Zinc, Wolfram, Petroleum, Diamond, Vermiculite, Silica etc
Government Commitment to Private Sector
- Government and private sector dialogue in policy formulation through business and investment associations e.g. Private Sector Foundation Uganda, Uganda Manufacturers Association, Uganda National Chamber of Commerce and Industry, among others
- Continuous improvement in provision of infrastructure and other social services
- Uganda presently produces over 15,000 University graduates per year
- Quality of labor is one of the biggest attractions
- The National Development Plan focuses on skilling the labour force to match the needs and opportunities for investment in the country
Security of Investment
- Guaranteed under the Constitution and the Investment Code 1991
- Uganda is a signatory to major international investment related institutions such as:
- Multi lateral Investment Guarantee Agency (MIGA)
- Overseas Private Investment Corporation (OPIC) of USA
- Convention on the Recognition and Enforcement of Foreign Arbitral Award (CREFAA)
- Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC)
- International Centre for settlement of Investment Disputes (ICSID), Agreement on Trade Related Investment Measures (TRIMS), General Agreement of Trade in Services (GATS), and Agreement on Trade related Aspects of Intellectual Property Rights (TRIPS)
The Incentive Regime:
Along with an excellent macro-economic record, Uganda provides a competitive incentive regime for private sectors: –
- Uniform corporation tax of 30%, which is the lowest in the region
- Import duty exemptions for plant and machinery
- Duty draw-back facility for exporters
- A fully liberalized foreign exchange regime with no restrictions on the movement of capital in and out of the country.
- A freely convertible and stable currency
- Special initial allowance (accelerated depreciation) of 50 – 75 per cent on plant and machinery
- 100% initial allowance for training, scientific research and mineral exploration expenditures
- Value Added Tax (VAT) deferral facilities for plant and machinery
- First Arrival Privileges in the form of duty exemptions for motor vehicle and personal effects to all investors and expatriates coming to Uganda
Floriculture gives the most attractive return on investment in agriculture in Uganda (30-40%) but requires high investment. The industry requires expansion and new enterprises, and the market can absorb an increase in production. Opportunities include production and supply of propagation materials to farmers, manufacture of greenhouse construction and packaging materials,
Fish and Fish Farming Industry:
The industry has emerged in recent years to become one of Uganda’s leading foreign exchange earners. Opportunities include the processing of value added products such as canned fish, aquaculture, and fish leather processing.
Cotton and Textile Industry:
A number of investment opportunities exist in the textile sector. These include growing of cotton for export, establishment of ginneries, and supply of inputs to farmers and production of edible oil from cotton.
Building and Construction Industry:
Opportunities include the provision of low cost housing in the urban and semi-urban areas, provision of housing and mortgage finance, and provision of construction equipment and building materials.
Foods and Beverages Sector:
Investment opportunities do exist mainly utilization of local agricultural raw materials to manufacture agro-processed products with higher export potential. Additional opportunities exist for support industries to the sector for example in packaging; value added processing and cold storage at export points.
There are more opportunities in the education sector most especially at post primary level. These include secondary education, technical and vocational education, development of computer skills, managerial skills training.
Given the favourable climate, stable macro-economic environment and political stability, There is enormous potential in the following areas: Merchant Banking, Development Banking, Commercial Banking, Discount Houses, Insurance Services, Leasing, Mortgage Financing, Building Societies, Micro-Financing Services, Specialized Training Institutions
Fruits and Vegetables:
Opportunities include commercial farming of fruits and vegetables, processing, production and export of de-hydrated fruits, cold storage facilities at collection points, organic farming, and irrigation schemes for commercial farms to ensure harvest throughout the year
Opportunities include the establishment of service centres for the available brand radio, television and power conditioning equipment and the manufacture and assembly of computer equipment targeting the local and regional markets.
Major investments opportunities exist in the production of powder milk and long life milk such as condensed milk or ultra heat-treated (UHT) milk, processing of dairy products such as butter, cheese, ice cream, yoghurt and ghee. There also exist opportunities in dairy cattle and goat breeding and dairy farm management.
Opportunities in the sector include tour operations, water sports and related activities, accommodation, conferences and incentives travel, national park concessions, privatisation, and joint ventures with existing players.
More details on investment opportunities are available in the Sector Profiles and copies are available with the Uganda Investment Authority.
MIGA Coverage – Uganda became a member of the Multilateral Investment Guarantee Agency (MIGA) in 1992. Under this agency, foreign investors can insure their investment in Uganda against a wide range of non-commercial risks including expropriation, currency transfers, breach of contract and civil strife. Foreign investors can apply for MIGA coverage through UIA.
Overseas Investment Insurance Scheme – The scheme provides insurance cover for UK companies against the perceived political risks of investing in foreign markets.
Overseas Private Investment Corporation (OPIC) – An agreement signed in 1998 with the above US agency seeks to guarantee American investment in Uganda.
Uganda has also signed bilateral investment protection agreements with a number of other countries.
Uganda Investment Authority:
UIA is the agency set up by Government to promote investment in Uganda, to market Uganda’s investment opportunities to targeted investors all over the world; to coordinate the national investment-marketing program and to serve as a point of contact for investors interested in Uganda. As a business oriented agency, UIA is manned by prof3essional staff that help investors by facilitating them in implementing their planned investments with minimal problem. UIA also advises Government on appropriate investment friendly policies and is generally equipped to swiftly handle investors’ requirements for information or action.
Foreign investors can apply for loans from the local banking sector. Investors can also list their projects on the local stock exchange. A number of projects exist to support investors in given sectors. UIA can advise potential investors on the how and where to access existing financing options for their planned investors.
Visa/Entry (Work) Permit:
A visitor is given single journey visa to Uganda and on arrival he/she is issued with a visitor’s pass for purposes of either spending a holiday, travelling, or investigating the possibilities of caring on any business, trade or profession in Uganda (see fact sheet on visas for fees and countries exempted).
Multiple entry visas can be granted to business executives, who expect to make numerous visits either for business meetings or organization.
Entry Permit Classes:
A Persons in Government services, UN organizations, OAU, PTA and other Institutions approved by the minister.
A Contracting companies of the for said organizations
B-F Investors in various disciplines
Investors and employees are required by law to execute a security bond equivalent to the cost of a single economy class ticket to their country of origin. The money if necessary, is used for purposes of defraying expenses incurred or may be incurred by the Government in connection with maintenance and/or repatriation of the person of whom the deposit ahs been made.
No entry permit fee is charged for class A1.
For all other classes, the payments at published rates are made in foreign currency or its equivalent in local currency. Renewals of entry permits are provided at annual rates.
· All foreigners travelling to Uganda will be required to obtain visas from Uganda Diplomatic and Consular missions abroad prior to their travel.
· Visas can be obtained at entry point in cases where foreign nationals cannot access a Uganda Diplomatic and Consular missions abroad.
Visas requirements for countries are based on a reciprocal arrangement. The following countries are exempt:
· East African citizens
· Nationals of COMESA countries (Angola, Comoros, Eritrea, Kenya, Malawi, Mauritius, Madagascar, Rwanda, Seychelles, Swaziland, Tanzania, Zambia, Zimbabwe.
· Other countries e.g. Antigua, Bahamas, Barbados, Belize, Fiji, Gambia, Grenada, Jamaica, Lesotho, Malta, Sierra Leone, Singapore, Solomon Islands.