Your Guide to Uganda Company Formation

Located in East Africa and bordered by Kenya, Uganda presents a wonderful landscape for entrepreneurs around the globe. Creating a conducive business environment, the Ugandan government is providing foreign investors with attractive perks like tax exemptions and profit repatriation, simplifying the market entry process. The country’s steady economic growth, coupled with its diverse sectors spanning agriculture, energy, infrastructure, and tourism, presents a great place for entrepreneurs to start Uganda company formation.

 

Pick and Reserve a Business Name

Before starting your business in Uganda, you’ll need to choose and reserve a unique business name. You can check if the name you want is available by searching the Uganda Registration Services Bureau’s (URSB) website. Once you’ve found a name you like, you can reserve it for a fee of UGX 24,000. This will give you exclusive rights to use the name for six months.

This will take: Three hours.

 

Choose a Business Structure

Before you begin the process of setting up a business in Uganda, it is essential to familiarize yourself with the different types of business structures and their unique characteristics.

Sole Proprietorship

• Solo business entity
• Easy to establish
• Involves unlimited liability

Partnership

• Business entity involving two or more persons
• Easy setup process
• Liability shared based on an agreement
• Can be structured as General Partnerships or Limited Liability Partnerships (LLPs)
• Taxed as a firm
• General Partnerships have unlimited liability; LLPs offer limited liability

Public Company

• Separate legal entity from owners
• Shares are freely transferable
• If shareholders fall below two, liability becomes unlimited after six months
• Minimum requirement: two directors, five shareholders

Private Company

• Separate legal entity from owners
• Shares entail transfer restrictions
• Liability limited to invested amount in the company
• Requires a minimum of one director

 

Prepare the Memorandum and Articles of Association

The Memorandum and Articles of Association serve as the foundational documents governing the company. These documents outline crucial details such as the company’s name, objectives, capital structure, and other essential elements. Engaging the services of a legal professional may be advisable to ensure the accurate preparation of these documents when incorporating a company in Uganda.

 

Select Company Leaders and Register Your Company

Proceed to submit essential registration documents to the URSB once directors and shareholders are appointed. These papers encompass the Memorandum and Articles of Association, along with the roster of directors and shareholders.

Requirements

• Directors and Shareholders
• At least one director for private companies; At least two directors for public companies
• Directors handle company management; Shareholders own the company. No specified maximum limit for directors or shareholders.

Director’s Residency and Meetings

• Directors can be residents or non-residents.
• Non-residents must have a valid passport and visa for Uganda.
• Electronic participation is allowed in board meetings if physical attendance isn’t possible.

 

Secure a Certificate of Incorporation

Once the necessary company registration documents are submitted, the URSB promptly issues a Certificate of Incorporation. This certificate validates the legal registration of the company. The associated costs, however, vary depending on the specific company.

This will take: Up to six hours.

 

Acquire a Taxpayer Identification Number (TIN)

For tax compliance, the company must obtain a unique Taxpayer Identification Number (TIN) from the Uganda Revenue Authority (URA). You can apply for TIN via the URA’s website online or in person.

This will take: Three working days.

 

Register with the National Social Security Fund (NSSF)

Prioritizing employee welfare and social security, businesses in Uganda must register with the NSSF. This accessible procedure ensures that all eligible employers with five or more employees can fulfill their legal obligations and provide essential social security benefits to their workforce by completing the required registration form. This has no cost.

This will take: Seven days.

 

Hold On, There’s More You Need To Know…

UIA Requirements for Foreigners Seeking an Investment License	Minimum investment of US$250,000 Generation of at least ten job opportunities for Ugandan citizens Investment in a sector must be crucial to the nation’s development
Investment License	Required for companies engaged in restricted activities (mining, healthcare, fishing, forestry, etc.) Will take two – five days to process No cost involved
Trade License	Required for operating a business within a designated municipality Varies from one municipality to the next Company Setup Costs up to $500 USD
Physical Office Address	Required for mailing purposes
Tax Requirements	Value Added Tax (VAT) – 18% Income Tax – 40% for individuals; 30% for companies Corporation Tax – 30% Capital Gains Tax – 30% Withholding Tax – 5%
Business Applications and Forms	Available on the URSB website

*The tax rates provided are as of November 2023 and are subject to change. For the most up-to-date information, please consult with 3E Accounting.

 

Now is The Time to Start

Uganda is a compelling choice if you’re a foreign investor eyeing the African continent. However, starting a business in a new country (or continent) can become challenging! Dealing with piles of paperwork and navigating unfamiliar legal procedures can be a time-consuming challenge on top of starting a business.

Here’s where we step in. At 3E Accounting, our expertise lies in setting up businesses worldwide, including in Uganda. Let us expedite your journey into entrepreneurship, facilitating a smooth Uganda company formation process. Contact us today, and let’s start your business as soon as possible!