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2016 Country Commercial Guide for US Companies

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2016 Country Commercial Guide for US Companies Doing Business in Uganda: 2016 Country Commercial Guide for U.S. Companies INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2016. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES. Table of Contents Doing Business in Uganda ______________________________________________________ 4 Market Overview __________________________________________________________________ 4 Market Challenges _________________________________________________________________ 5 Market Opportunities ______________________________________________________________ 6 Market Entry Strategy ______________________________________________________________ 7 Political Environment __________________________________________________________ 8 Political Environment _______________________________________________________________ 8 Selling US Products & Services ___________________________________________________ 8 Using an Agent to Sell US Products and Services _________________________________________ 8 Establishing an Office _______________________________________________________________ 8 Franchising _______________________________________________________________________ 8 Direct Marketing __________________________________________________________________ 8 Joint Ventures/Licensing ____________________________________________________________ 8 Selling to the Government ___________________________________________________________ 9 Distribution & Sales Channels ________________________________________________________ 9 Express Delivery ___________________________________________________________________ 9 Selling Factors & Techniques ________________________________________________________ 10 eCommerce ______________________________________________________________________ 10 Trade Promotion & Advertising ______________________________________________________ 10 Pricing __________________________________________________________________________ 12 Sales Service/Customer Support _____________________________________________________ 12 Due Diligence ____________________________________________________________________ 12 Local Professional Services _________________________________________________________ 13 1 Principal Business Associations ______________________________________________________ 13 Limitations on Selling US Products and Services _________________________________________ 14 Web Resources ___________________________________________________________________ 14 Trade Regulations, Customs, & Standards ________________________________________ 15 Import Tariff _____________________________________________________________________ 15 Trade Barriers ____________________________________________________________________ 15 Import Requirements and Documentation _____________________________________________ 16 U.S. Export Controls _______________________________________________________________ 16 Temporary Entry __________________________________________________________________ 17 Labeling/Marking Requirements _____________________________________________________ 17 Prohibited & Restricted Imports _____________________________________________________ 17 Customs Regulations ______________________________________________________________ 17 Trade Standards __________________________________________________________________ 18 Trade Agreements ________________________________________________________________ 20 Licensing Requirements for Professional Services _______________________________________ 20 Web Resources ___________________________________________________________________ 21 Investment Climate Statement _________________________________________________ 21 Executive Summary _______________________________________________________________ 21 Openness to and Restrictions upon Foreign Investment __________________________________ 23 Conversion and Transfer Policies _____________________________________________________ 26 Expropriation and Compensation ____________________________________________________ 27 Dispute Settlement _______________________________________________________________ 27 Performance Requirements and Investment Incentives __________________________________ 29 Right to Private Ownership and Establishment _________________________________________ 32 Protection of Property Rights _______________________________________________________ 32 Transparency of the Regulatory System _______________________________________________ 33 Efficient Capital Markets and Portfolio Investment ______________________________________ 34 Competition from State-Owned Enterprises ____________________________________________ 35 Responsible Business Conduct _______________________________________________________ 36 Political Violence _________________________________________________________________ 36 Corruption ______________________________________________________________________ 37 Bilateral Investment Agreements ____________________________________________________ 43 OPIC and Other Investment Insurance Programs ________________________________________ 44 2 Labor ___________________________________________________________________________ 44 Foreign Trade Zones/Free Ports/Trade Facilitation ______________________________________ 46 Foreign Direct Investment and Foreign Portfolio Investment Statistics ______________________ 46 Contact for More Information on the Investment Climate Statement _______________________ 47 Trade & Project Financing _____________________________________________________ 48 Methods of Payment ______________________________________________________________ 48 Banking Systems __________________________________________________________________ 48 Foreign Exchange Controls __________________________________________________________ 48 US Banks & Local Correspondent Banks _______________________________________________ 48 Project Financing _________________________________________________________________ 48 Web Resources ___________________________________________________________________ 49 Business Travel ______________________________________________________________ 51 Business Customs _________________________________________________________________ 51 Travel Advisory ___________________________________________________________________ 51 Visa Requirements ________________________________________________________________ 52 Currency/Money _________________________________________________________________ 52 Telecommunications/Electric _______________________________________________________ 52 Transportation ___________________________________________________________________ 53 Language ________________________________________________________________________ 53 Health __________________________________________________________________________ 53 Local Time, Business Hours and Holidays ______________________________________________ 55 Temporary Entry of Materials or Personal Belongings ____________________________________ 55 Travel Related Web Resources ______________________________________________________ 55 Leading Sectors for US Exports & Investments _____________________________________ 56 Energy __________________________________________________________________________ 56 Agricultural Sector ________________________________________________________________ 57 Construction _____________________________________________________________________ 58 Oil and Gas ______________________________________________________________________ 60 Mining and Minerals ______________________________________________________________ 61 Telecommunications Industry _______________________________________________________ 62 Medical Equipment _______________________________________________________________ 63 Pharmaceuticals __________________________________________________________________ 64 Travel and Tourism ________________________________________________________________ 65 3 Doing Business in Uganda Market Overview All figures in this report are the most recently available. In some cases, data was available for 2015, but not yet 2014. In other cases, 2013 was the most recent figure. According to the Uganda Bureau of Statistics, Uganda’s gross domestic product (GDP) was USD 22.6 billion (assuming a UGX 3300 to USD 1 exchange rate) in FY 2015/16, with GDP per capita around USD 710. The Ugandan economy grew by 4.6 percent in fiscal year (FY) 2015/16, compared to 5.3 percent the previous year. The Government predicts that economic growth is expected to accelerate to 5.5 percent in FY 2016/17 due primarily to an increase in public investment. The Government of Uganda (GOU) medium term growth estimates call for an average of 6 percent over the next five years, though actual growth may come in lower due in large part to the ongoing global macro-economic deterioration. Uganda’s budget for FY 2016/17 is UGX 21.3 trillion (USD 6.4 billion), an 11 percent increase from last year’s budget. The budget increase reflects in large part a growth in debt servicing costs attributed to the GOU’s prioritization to finance infrastructure projects. In 2015, total trade was USD 8.8 billion, with USD 2.7 billion worth of exports, and USD 6.1 billion worth of imports. Uganda’s trade deficit has increased to USD 3.5 billion, from 3 billion in 2013. Wholesale and retail trade contributed 12.2 percent of GDP. In 2014, Foreign Direct Investment (FDI) is estimated at about USD 1.2 billion by the World Bank. The UNCTAD World Investment Report shows that Uganda remains
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