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In the bid to attract and facilitate new investments, the Government of Rwanda has revised the investment law

Introduction

In the bid to attract and facilitate new investments, the Government of Rwanda has revised the investment law to facilitate the attraction and growth of new sectors as provided in the new investment law (official gazette No special of 27/05/2015). The new law comes with a new package of incentives that are critical towards driving the growth of key priority sectors which include; exports, energy, ICT, transport and logistics, health, financial services, and affordable housing. Meanwhile Investors will still continue to apply for incentives at the One Stop Center at the Rwanda Development Board.

Eligibility

There’s no minimum capital required for new investors registering their projects at the One Stop Center. This decree applies to investors registering their projects from Rwanda, EAC, COMESA and other foreign nationals. However, the following criteria of investment project evaluation will apply to new projects registering at One Stop Center.

Criteria for investment project evaluation
  1. Non trading activity
  2. Creation of quality jobs
  3. Transfer of Skills and knowledge
  4. Use of local raw materials
  5. Potential for export
  6. Potential to create backward and forward linkages
  7. Innovation and creativity
How to apply for an incentives

The Rwanda Development has developed an online registration system to make the process more efficient and cheaper. The process involves submitting an application for investment and EIA certificate online. For more details please visit osc.rdb.rw

Steps:

  1. Application for investment registration;
  2. Notice of acceptance or refusal and Issuance of investment registration certificate

The application for investment registration involves the following:

  1. Application letter addressed to the CEO RDB requesting for investment registration;
  2. Submission of a business plan or a feasibility study;
  3. Certificate of legal personality of the business company.
  4. License granted by the business sector in which the investor intends to operate.
  5. Proof of payment of registration fee of $ 500 or its equivalent in Rwandan francs to the RDB account in Bank of Kigali, account No. 0281441-77 for United States Dollars only and Account No. 0281460-96 for Rwandan francs only.

Your investment application letter should clearly indicate following:

  1. The name and address of the proposed business enterprise, and its legal form;
  2. The nature of the proposed business activity and the level of planned capital investment;
  3. The estimated number of persons to be employed and categories of jobs to be created;
  4. The nature and volume of waste which shall be generated by the enterprise’s operations, and the proposed methods, of its management;
  5. The nature of support and facilitation which the investor is seeking from RDB.

Your investment business plan or feasibility study should clearly indicate following:

  • Name of the project and detailed information on the project in which the investment will be made
  • Action Plan
  • The date of commencement of operations
  • Detailed information on any raw materials sourced in the country or in locality where the investment is operation
  • Detailed information on any financing and assets to be sources from outside of Rwanda, including the timeframe in which these finance and assets will be invested
  • A market survey
  • Details of the projected technology and knowledge transfer
  • A table indicating 5 year income projections for the investment project
  • The project’s EIA certificate issued in accordance with the relevance. (This should be submitted sparely from the business plan).
  • Project number of employees and categories of employment
  • Loan amortization schedule for the bank loan (if any);
  • Project implementation plan/ schedule)
  • Notes on assumption made in the business plan.
Notice of acceptance or refusal

Once your application for investment registration is approved, an acceptance letter will be issued within a period of two days. The acceptance letter will indicate the details of a focal person/Key account manager to be assigned to your project.

In case an investment application is refused, a notice of refusal and the reason for the refusal are sent to the applicant. In case the documents are not in order or the documents provided is inadequate, we will advise for improvement. Upon receiving an investment registration certificate, the investor automatically qualifies for facilitation and other services as provided for in the investment law.

Non-Fiscal incentives
  • Facilitation with obtaining Visas and work permits
  • We conduct environmental impact assessments and evaluations
  • Facilitation with tax related services and exemptions
  • Facilitation for land acquisition and construction permits in collaboration with the Kigali City Council One Stop Center for construction.
  • Access to utilities (water and electricity)
  • Notary services
  • We assign Key Account Managers to provide support to registered investments/projects.
Fiscal incentives

1. Preferential corporate income tax rate of zero per cent (0%):

An international company which has its headquarters or regional office in Rwanda will be entitled to a preferential corporate income tax rate of zero per cent (0%) if it fulfils the following requirements:

  • To invest the equivalent of at least ten million United States Dollars (USD 10,000,000), in both tangible and intangible assets in Rwanda;
  • To provide employment and training to Rwandans;
  • To conducts international financial transactions equivalent to at least five million United States Dollars (USD 5,000,000) a year for commercial operations through a licensed commercial bank in Rwanda;
  • To be well established in the sector within which it operates;
  • To use the equivalent of at least two million United States Dollars (USD 2,000,000) per year in Rwanda;

To set up actual and effective administration and coordination of operations in Rwanda and perform at least three (3) of the following services in Rwanda

  • Procurement of raw materials, components or finished products
  • Market control and sales promotion planning;
  • Information and data management services;
  • Treasury management services;
  • Research and development work;
  • Training and personnel management.

2. Preferential corporate income tax rate of fifteen percent (15%):

A preferential corporate income tax rate of fifteen percent (15%) shall be accorded to:

  • A registered investor, exporting at least fifty percent (50%) of turnover of goods and services produced in Rwanda, including business processing outsourcing. This incentive excludes unprocessed minerals, tea and coffee without value addition according to the provisions of this Law.
  • A registered investor undertaking one of the following operations: energy generation, transmission and distribution from peat, solar, geothermal, hydro, biomass, methane and wind. This incentive excludes an investor having an engineering procurement contract executed on behalf of the Government of Rwanda;
  • A registered investor in the sector of transport of goods and related activities whose business is operating a fleet of at least five (5) trucks registered in the investor’s name, each with a capacity of at least twenty (20) tons;
  • A registered investor operating in mass transportation of passengers and goods with a fleet of at least ten (10) buses registered in the investor’s name, each with a capacity of at least twenty five (25) seats;
  • A registered investor in the Information and Communication Technology (ICT) Sector with an investment involving one of the following activities: service, manufacturing or assembly. This incentive excludes ICT retail and wholesale trade as well as ICT repair industries and telecommunications

3.Corporate income tax holiday of up to seven (7) years:

A registered investor investing an equivalent of at least fifty million United States Dollars (USD 50,000,000) and contributing at least thirty percent (30%) of this investment in form of equity in the sectors specified below will be entitled to a maximum of seven (7) year corporate income tax holiday:

  • Energy projects producing at least twenty five megawatts (25 MW). This incentive exclude an investor having an engineering procurement contract executed on behalf of the Government of Rwanda and fuel produced energy;
  • Manufacturing;
  • Tourism;
  • Health;
  • Information and Communication Technology (ICT) Sector with an investment involving manufacturing, assembly and service. This incentive excludes communication, ICT retail and wholesale trade as well as ICT repair companies or enterprises and Telecommunications;
  • Export related investment projects;
  • An investor registered in another priority economic sector as may be determined by an Order of the Minister in charge of finance.

4. Corporate income tax holiday of up to five (5) years:

Microfinance institutions approved by competent authorities will be entitled to a tax holiday of a period of five years (5 years) from the time of their approval. However, this period may be renewed upon fulfilling conditions prescribed in the Order of the Minister in charge of finance.

5. Exemption of customs tax for products used in Export Processing Zones:

A registered investor investing in products used in Export Processing Zones shall be exempted from customs taxes and duties according to the provisions of customs rules and regulations of the East African Community.

6. Exemption of Capital Gains Tax:

A registered investor shall not pay capital gains tax. However, income derived from the sale of a commercial immovable property shall be included in the taxable income of the investor.

7. Value Added Tax refund:

The refund of the Value Added Tax paid by investors shall be made within a period not exceeding fifteen (15) days upon receipt of the relevant documents by the tax administration authority.

8. Accelerated depreciation:

A registered investor shall be entitled to a flat accelerated depreciation rate of fifty per cent (50%) for the first year for new or used assets if he/she meets the following criteria:

  • Invest in business assets worth at least fifty thousand US dollars (USD 50,000) each;
  • Operate in at least one of the sectors below and meet the requirements; export projects, manufacturing, telecommunications, agro processing, education, health;
  • Transport excluding passenger vehicles with less than nine (9) people seating capacity.
  • Tourism investments worth at least one million eight hundred thousand United States Dollars (USD 1, 800, 000).
  • Construction projects worth at least one million eight hundred thousand United States dollars (USD 1,800,000).
  • Any other sectors provided the investment is worth at least one hundred thousand United States dollars (USD 100,000).
  • Any other priority sector as may be determined by an Order of the Minister in charge of finance.

9. Immigration incentives:

A registered investor who invests an equivalent of at least two hundred fifty thousand United States Dollars (USD 250,000) may recruit three (3) foreign employees without necessarily demonstrating that their skills are lacking or insufficient on the labor market in Rwanda.

As a member of the East African Customs Union, Rwanda enjoys;

  • Duty free importation of machinery and raw materials as per the East African Community Customs Management Act regulation.
  • Also under the same arrangement, investors in the tourism and hospitality industry shall continue to benefit from exemptions on customs duties and VAT for imported hotel equipment provided that that they engrave and mark the equipment’s with the hotel logo imported by a licensed hotel for its use.
  • The key hotel equipment to be exempted include: Washing machines, Kitchen ware, Cookers, Fridges and freezers, Air conditioning systems, cutlery, televisions, furniture, linen and curtains, Gymnasium equipment

N.B: A list of agricultural inputs and other agricultural and livestock materials and equipment exempt from value added tax is available. Please check with Rwanda Development Board for details.

For more details about time line and costs of other services   click here

Environmental Impact Assessment (EIA)

The Government of Rwanda takes environmental protection very seriously and has taken significant steps to ensure a balance between economic development and environmental protection, as well as to prevent environmental degradation. Notable among the measure taken is the ban of manufacturing and use of polythene bags. The Government has established a clear legal and institutional framework for environmental protection. Rwanda Environmental Management Authority (REMA) is the principal agency responsible for the management of the environment in Rwanda and coordinates, monitors and supervises all activities in this field.

In addition, projects that affect the environment are subject to an Environmental Impact Assessment (EIA) prior to obtaining authorization for their implementation. Before commencing implementation of business projects, investors are required to cross-check whether their projects are required to undergo an EIA. Applications for EIA certificate should be addressed to RDB.

What is Environmental Impact Assessment?

Environmental Impact Assessment (EIA) is defined as a systematic process to predict, identify, and evaluate the environmental effects of proposed actions and projects. The process is used to prevent and mitigate adverse impacts, enhance positive impacts and assist the rational use of natural resources to maximize the benefit of socio-economic development projects and ensuring sustainable development.

What are the economic benefits of EIA process?

Once adverse impacts are identified from the proposed project, advance corrective measures can be incorporated into the project which helps developers to minimize environmental risks and financial costs. However, options are considered for the projects where damage is irreversible to assist developers to invest in profit making ventures which would have been lost due to environmental problems. The process ensures financially and economically efficient projects with guarantee to attain long term profits.

Which projects require EIA?

Projects with identified adverse impacts on environment call for a full EIA process for mitigation measures and thus the Ministerial Order N°004/2008 of 15/08/2008 establishing the list of works, activities and projects that have to undertake an environmental impact assessment highlights some projects as follows; construction and repair of international and national roads, large bridges, industries, factories, hydro-dams and electrical lines, public dams for water conservation, rain water harvesting for agricultural activities and artificial lakes, large hotels public building which accommodate more than one hundred daily, extraction of mines and public land fills among others..

Why carry out EIA process?

Carrying out EIA process enables implementation of environmental safeguards to mitigate significant impacts caused by execution of projects which avoids ecological damage and large-scale irreversible loss of natural resources.
However, various projects have different level damage or pollution to the environment depending on their activities, size and products among others

Who meets the cost of EIA?

Upon the submission of the project, a developer is required to pay for an administrative fee to the environmental fund (FONERWA) to be determined by a percentage of the estimated cost of the investment as stipulated in the article of 69 of the Organic Law (No. /04/2005 of 08/04/2005, determining the modalities of protection, conservation and promotion of environment in RDA. This exercise, however, has not been operational because the Ministerial decree (order) has not been enacted as yet. EIA process is not time wasting or expensive but rather a planning tool for long term investments derived from equitable use of natural resources upon which people highly rely on for survival.

The One Stop Centre will help in processing and issuing duty exemption and other fiscal incentives in shortest possible time

The One Stop Centre will help in processing and issueing duty exemption and other fiscal incentives in shortest possible time;

The delegated staff from Rwanda Revenue Authority :

Issue tax exemptions provided by the Investment Code Tax Laws and the East African Community Customs Management Act;

  • Carry out all registration procedures required of a taxpayer (TIN number, VAT, TPR, Tax clearance certificate etc) for companies that qualifies with RDB registration;
  • Advise and educate the public and investors on issues regarding fiscal matters;
  • Interact with investors and provide necessary information the investors might require;
  • Ensure the availability of the required forms and other documentation;

Exemption form

Click here to download exemption form

Visa is required by all visitors to Rwanda

All people wishing to enter Rwanda must possess a valid passport or other internationally recognized travel documents, which, in principle, contains a visa corresponding to his/her purpose of entry into Rwanda obtained in advance from the nearest Rwandan embassy abroad.
Visa is required by all visitors to Rwanda excluding nationals of the United States of America, Canada, United Kingdom, Germany, Sweden, Hong Kong, Mauritius, South Africa, Kenya, Uganda, Tanzania, Democratic Republic of Congo and Burundi.
At the point of entry, a 15 days temporary permit is granted. Persons living far from Rwandan Embassies or diplomatic mission can apply for entry facility at www.migration.gov.rw.

Visa Information

1. Tourist Visa

For whom: All persons visiting Rwanda whether for business or leisure

Validity and Duration: Valid for 90 days Renewable once with justification. Multiple entries Issued within two days of submitting all required documents

Cost: RWF 25,000 (equivalent to USD 42)

Requirements:

  • Passport valid for at least six months
  • One Clear Coloured photo
  • Receipt of payment of RWF 25,000
  • Application letter to the Director General of Immigration and Emigration
  • Completed application form

2. Business Visa

For whom: All persons undertaking commercial pursuits in the Republic

Validity and Duration: Valid for 1 year Renewable. Multiple entries Issued within two days of submitting all required documents

Cost: RWF 50,000 (equivalent to USD 83)

Requirements:

  • Valid passport
  • One Clear Coloured photo
  • Receipt of payment of RWF 50,000 for Category A workers and RWF 10,000 for Category B Workers
  • Application letter to the Director General of Immigration and Emigration
  • Completed application form
  • Police clearance in English or French
  • Signed CV of applicant
  • A copy of business trading license
  • A copy of annual tax certificate
  • A memorandum of understanding for companies or associations
Processing of exemption on imported goods Capital goods, raw materials, other investment related inputs.
 TYPE OF SERVICES TIME LIMIT   COST
a) Provision of application forms& Information Immediate Free
b) Processing of investment certificate 2 days 500$USD
c) Access to utilities (water& electricity):
     Connection to the grid 24 hours 30,000 Rwf
     Line extension 1 month 6,000 Rwf
d) Processing of exemption on imported goods (Capital goods, raw materials, other investment related inputs ):
     Forms processing 15 minutes Free
e) Collection of non fiscal revenues Immediate Free
f) Notary services 30 minutes Variable fee
g) Immigration services
     Visa & work permit 2 Days 100,000 Rwf
     Renewal of Visa & Work permit 1 Day 100,000 Rwf
h) Environmental Compliance:
     – Project brief checklist Immediate Free
     – Site visit and issuance of Terms of reference 2 weeks Free
     – EIA report review and issuance of EIA Certificate 20 days Free