Legal requirements your business must meet

Starting a business presents a unique set of opportunities and challenges that require following the legal framework so that you are not caught off guard and on the wrong side of the law.

Before you invest in Uganda, businesses and investors have legal and regulatory obligations that they must fulfill to launch them in the right direction. 

Rhoda Basemera, a certified public accountancy professional and economist, says there is no better way to launch into business than by fulfilling regulatory requirements, some of which include the following:  

Registering the business

If your target is to do business formally and look at building a long-term entity, you need to have your business registered.

Depending on the type of business you want to do whether it is a partnership, single member company, private limited company, a trust, or a company limited by guarantee, you need to register it as required by the law.

And once this is fulfilled, you can proceed to obtain a Tax Identification Number (TIN), which is a unique identifier of a taxpayer. This is obtained from Uganda Revenue Authority (URA) and will be quoted on all tax-related payments. 

To get a TIN, URA will require you to have a certificate of registration, after which you will now have the privilege to open a company account in a bank of your choice. 

Investment license

After registering the business and fulfilling tax-related obligations, you can then proceed, if you are a foreign entity, to apply for an investment license that is issued by the Uganda Investment Authority. 

Whereas resident companies can operate without an investment license, those that have an investment threshold of $50,000 (about Shs192m), can obtain one, while foreign companies are required to have a capital threshold of $250,000 (about Shs959m) to obtain an investment license. 

According to UIA, individuals who plan to engage in trade do not require such a license but must prove that they have access to funds, which include operating capital of $100,000 before a trading license is issued. 

The investment license, in other words, is required for companies that plan to invest in heavy machinery, industrialisation, and other big capital investments. 

The license helps large businesses to benefit from incentives that are usually available for companies involved in manufacturing, value addition, and industrialization.

Work Permit

Companies that are allowed to employ a certain number of foreigners are required to obtain work permits issued by the Ministry of Internal Affairs under the Immigration Department.

The requirements and costs to process a work permit also differ depending on the nature of the business
 
Secondary license  

In some isolated cases, some businesses may be required to obtain a secondary license. This means that if you are involved in a business that has an impact on the environment, you are required to have an environmental permit and health and safety permit, especially for those involved in manufacturing to safeguard the health of the workers and surroundings.

Certification

The manufacturing industry, especially those involved in importation and exportation, must obtain the required certification from the Uganda National Bureau of Standards. 

A manufacturer needs to have a certificate that is given after ensuring that the goods they are putting onto the market meet both local and international standards. 

Manufacturers or importers will also need to obtain conformity certificates that ensure that the goods not only meet Ugandan standards but also meet standards set by various trading blocs such as East African Community and Common Market for Eastern and Southern Africa, among others. 

However, to get the necessary UNBS certifications, you must ensure that you have fully registered your business and meet the necessary tax obligations. 

KCCA license 

The location of your business will determine which license you will be required to obtain. However, if your business is located within Kampala, you will need a Kampala Capital City Authority (KCCA) trading license. 

The license, in the case of Kampala, is issued for businesses that operate in the Central Business District and in the four divisions of Nakawa, Kawempe, Makindye, and Rubaga.  The cost of a KCCA trading license also varies on the type of business you are involved in. 

ICT certificate 

If your business is in manufacturing or technology, it is important to register it with the National Information Technology Authority (NITA) Uganda.

NITA-U is mandated to register companies that process data. 

In addition, you will need to register with the Personal Data Protection Office, where you will be required to submit a written undertaking not to store or process personal data in a country outside Uganda.  

You are also required to submit a summary of all complaints that you receive from customers for purposes of future reference while government is evaluating and formulating policy.  
 
Anti-money laundering obligation 

If you are dealing with big money, you must comply with anti-money laundering obligations under the Uganda Anti Money Laundering Act, 2013.

As a business in Uganda, you are obliged to take measures that are required to avoid money laundering and terrorism financing.  

This helps to protect your business and company within the country. The Financial Intelligence Authority (FIA) regulates and monitors money laundering obligations.

Beneficial owners

As a requirement to fight money laundering and terrorism financing, companies are required to provide a list of beneficial owners to URSB. Beneficial owners are people who control the business directly or indirectly.  It can be a shareholder, a director, or none of the above. 

The measure seeks to declare personal interests in the business and it is mandatory under the law. 

The beneficial owners are updated regularly, failure of which the company is penalised or might be dissolved. 

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