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Doing Business in Uganda

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Doing Business in Uganda doing business in Uganda country profile international treaties and memberships government Executive: The president is both the head of state and head of government. international African Continental Free Trade Area Agreement structure The president is directly elected by absolute majority popular vote, in two and regional African Development Bank Group rounds if needed, for a five-year term with no limits to the number of organisations African Union subsequent terms. The prime minister is appointed by the president. Cabinet and customs Common Market for Eastern and Southern Africa (“COMESA”) is appointed by the president. unions East African Community (“EAC”) Legislative: Uganda has a unicameral parliament. East African Development Bank Judicial: The highest court is the Supreme Court. The subordinate courts are Group of 77 the Court of Appeal (which also sits as the Constitutional Court), High Court Intergovernmental Authority on Development (includes 12 High Court Circuits and eight High Court Divisions), Industrial International Monetary Fund Court, Chief Magistrate Grade One and Grade Two Courts throughout the Islamic Development Bank country, Qadhis courts, and family and children's courts. Organisation of African, Caribbean and Pacific States Next presidential and parliamentary elections: January 2021. Southern African Customs Union economic Nominal GDP (USD billions): 37.73 Southern African Development Community Free Trade Protocol data GDP per capita (USD): 915.35 United Nations Inflation rate (% change): 4.18 World Bank Group Government revenue (% of GDP): 12.91 World Customs Organization Government gross debt (% of GDP): 46.05 Uganda receives preferential treatment under the agreements listed here: http://ptadb.wto.org/Country.aspx?code=800 *Source: IMF (November 2020) bilateral Uganda has bilateral investment treaties with Denmark, France, Germany, investment the Netherlands, Switzerland and the United Kingdom. Uganda’s economy is agriculture-based, with coffee as a major export treaties Treaties have been signed with the Belgium-Luxembourg Economic Union, commodity. Uganda also has small deposits of copper, gold, and other China, Cuba, Egypt, Eritrea, Nigeria, South Africa, the United Arab Emirates minerals. and Zimbabwe but these have not yet entered into force. Uganda also has some industrial activity, mainly dominated by manufacturing, but also including mining and quarrying. The main industries include sugar investment- African Growth and Opportunity Act processing, brewing, tobacco, cotton textiles, cement and steel production. related Cotonou Agreement Uganda’s main export partners are Kenya, the United Arab Emirates, agreements / Multilateral Investment Guarantee Agency Democratic Republic of the Congo, Rwanda and Italy. The main export institutions World Trade Organization commodities include coffee, fish and fish products, tea, cotton, flowers, horticultural products and gold. dispute Convention on the Settlement of Investment Disputes (“ICSID Convention”) Uganda’s main import partners are China, India, the United Arab Emirates, resolution Permanent Court of Arbitration Kenya, Japan, Saudi Arabia, Indonesia and South Africa. The main import United Nations Commission on International Trade Law (UNCITRAL) commodities include capital equipment, vehicles, petroleum, medical supplies United Nations Convention on the Recognition and Enforcement of Foreign and cereals. Arbitral Award (“New York Convention”) risk ratings World Economic Forum global competitiveness index (2019): 115/141 intellectual A comprehensive list of IP-related treaties signed by Uganda is available at: World Bank ease of doing business (2020): 116/190 property (“IP”) http://www.wipo.int/wipolex/en/profile.jsp?code=UG Corruption perception index (2019): 137/180 treaties See the trade marks section below for further detail. 1 doing business in Uganda legal regime employment applicable Uganda's legal system is primarily based on statute, supplemented by immigration Foreign employees require a special pass or a work permit in order to be legal regime common law, customary law and aspects of Islamic law. employed in Uganda. The Judicature Act (Cap.13) prescribes the laws applicable in Uganda as the A special pass is a short term work facility granted to foreign employees written law, and in so far as not covered by written law, the common law and whose term of employment is for a maximum aggregate period of five months, doctrines of equity, any established and current custom or usage. Where no whereas a work permit is granted to foreign employees whose term of express rule is applicable, the High Court may act in accordance with the employment is for six months to three years. principles of justice, equity and good conscience. As a prerequisite for obtaining the work facilities, the company seeking to dispute Uganda's Investment Code Act, 2019 lays out the procedure for the settlement employ a foreign employee must go through a profiling process and obtain a resolution of investment disputes through the following four channels: code number from the Directorate of Citizenship and Immigration Control (“DCIC”). Thereafter, the company can submit the application for the direct negotiations for an amicable settlement in accordance with the Arbitration and Conciliation Act (Cap 4); respective work facility online, using the code number issued by the DCIC. the ICSID Convention, within the framework of bilateral or multilateral There are no restrictions on the number of work permits available to a agreements on investor protection, to which both Uganda and the home company. country of the company are signatories; In practice, the DCIC approves applications for work facilities as long as the employer provides the required documentation and pays the prescribed fees an application to the High Court; or for the respective work facilities, and successfully demonstrates that expatriate any other international machinery. staff will contribute skills and knowledge to the company’s business that are The Arbitration and Conciliation Act allows international arbitration not readily available from local Ugandan employees. conventions to be applied to domestic and international trade disputes. The DCIC also sets out different specified requirements for the different Uganda has adopted the New York Convention and the ICSID Convention. sectors of employment. land Foreign investors are only allowed to enter into long-term leases for a local In terms of Uganda’s employment legislation, an employee may be seconded acquisition, maximum period of 99 years. employment to Uganda, as it is not a legal requirement for either local or foreign employees planning and Advocates / solicitors and estate agents can assist in locating and leasing vs to be employed by a local entity. use suitable and available land. secondment However, in terms of Uganda’s immigration legislation, employment by a local An application can also be made to the Uganda Investment Authority (“UIA”) entity is a prerequisite for applying for a work permit. for allocation of land for investment purposes. fixed-term Fixed-term contracts of employment that are either defined by time or purpose competition There is currently no operational competition law in Uganda. contracts and are allowed in terms of the Employment Act. The use of fixed-term contracts of There are, however, specific laws regulating competition in particular industries. temporary employment should, however, be approached with circumspection as there The Competition and Consumer Protection Bill was approved by the Cabinet of employment are risks associated with such contracts. Uganda in November 2015, but the Bill has not yet been brought into force by services The use of temporary employment services (private employment agencies) is Parliament. provided for, provided the agency is registered and licensed under the Uganda is a member of the regional competition bodies, COMESA and the Employment Regulations. EAC. Activities in Uganda should be conducted with these regional competition bodies in mind. payment in It is not a legal requirement for remuneration to be paid in local currency. local currency restraint of Restraint of trade agreements are prima facie valid and enforceable in trade Uganda, subject to the requirement that they must be reasonable. agreements 2 doing business in Uganda foreign investment regime industry- Industry-specific licences may also be required. investment The Investment Code Act governs investment in Uganda. specific regime The UIA serves as a one-stop centre for business registration and licensing. licences The Uganda Registration Services Bureau (“URSB”) is mandated to register incentives Incentives include: all business entities in Uganda, which are required to be registered under the various incentives promoting farming activities; relevant laws. tax holidays granted to industrial park or free zone developers or operators, depending on the amount of capital invested; and registration / Foreign companies intending to operate a business in Uganda must apply for licensing an investment licence, issued under the Investment Code Act, with the UIA. incentives available within the EAC, including duty drawback schemes requirements Investors in the energy-generation, mining, banking, air-transport, and no requirement for import or export licences within the region. pharmaceuticals production, education, health, telecommunications,
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