What Makes Rwanda The Best Spot For Investments?
Rwanda is still a desirable destination for foreign investment. It has one of the fastest-growing economies in the world, a supportive business environment, a developing private sector, and significant infrastructure development initiatives. Rwanda has created industrial parks to boost investment growth, particularly in the manufacturing sector. Leading international companies have a presence in Rwanda, including Volkswagen, Motorola Solutions, Andela, and Radisson. Mara Phones just inaugurated the first smartphone factory in Rwanda. Universities with a focus on knowledge, like Carnegie Mellon, have established campuses there.
The nation still has a wealth of untapped investment opportunities as well as ambitious social and economic development policies and strategies.
Private investment
Recently, Rwanda changed its tax laws, passed new legislation on arbitration, insolvency, and other topics, and opened a financial intelligence center. The latter is intended to bolster and safeguard the nation's fiscal stability and give its quickly expanding economy a boost. Cumulatively, these laws are designed to facilitate international business and further improve the investment climate. It only takes six hours to start a business.
Rwanda has progressive personal income tax rates that can reach 30%. The corporate income tax rate is 30% and the VAT rate is 18%. The East African Customs Union (EACU) Agreement governs customs regulations. For imports from outside the EAC, Rwanda has implemented a three-band duty structure: finished goods (25%); intermediate goods (10%); and raw materials (0%).
Law No. 006/2021 of 05/02/2021 on Investment Promotion and Facilitation provides various incentives to private investors. It identifies the following activities as priority economic sectors: (a) export, (b) manufacturing, (c) energy generation, transmission, and distribution, (d) information and communication technologies, business process outsourcing, and financial services, (e) mining activities, (f) transport, logistics, and electric mobility, (g) construction or operations of specialized innovation or industrial parks, (h) affordable housing, (i) tourism; (j) horticulture; and (k) film industry. The law ensures the repatriation of capital, profits derived from business activities, debt payments and interest on foreign loans, proceeds from the liquidation of investments, and other assets of the investor.
Investment Sectors
The nation still has a wealth of untapped investment opportunities as well as ambitious social and economic development policies and strategies.
Incentives
Investors may profit from a variety of incentives, including:
A reduced rate of corporate income tax of:
0% for international companies with their head office or regional office in Rwanda.
3% for Rwanda-based holding companies, collective investment schemes, or investment SPVs.
3% on foreign-sourced trading income for Rwanda-based but internationally operating trading companies.
3% on foreign-sourced royalties for Rwanda-based IP companies, 15% for sectors, such as energy, transport, ICT, tourism, affordable housing, and financial services, 15–25% for companies exporting goods and services, a 7-year corporate income tax holiday for selected sectors, such as manufacturing, energy, ICT, health services, and export-related investment projects.
Preferential withholding tax rates of 0% on interest, dividends, and royalties for investors benefiting from the 3% and 15% preferential corporate income tax rates. Accelerated depreciation of 50% for companies in sectors such as export projects, manufacturing, telecommunications, agro-processing, education, health, transport, and tourism, capital gains tax exemptions and expedited VAT refunds.
Opportunities
Below, an overview of investment and business in several selected sectors is given.
Information and Communication Technology
Rwanda is promoting a progressive ICT sector as part of a strategy to become a ‘tech hub’ and has laid fiber-optic broadband cables across the country. Kigali Innovation City, a flagship project with an investment value of USD 1.9 billion, is aimed at providing world-class ICT infrastructure, products, and services. It focuses on knowledge management, data centers, business continuity centers, universities, and multinational financial services firms.
Finance & Banking
Rwanda aims to become the financial hub of the region. It has recently established the Kigali International Financial Centre (KIFC), an initiative that seeks to position Rwanda as a preferred financial jurisdiction for investments into Africa as well as reform the domestic industry. Rwanda is home to a number of regional and international commercial banks. Opportunities include:
1- Investment banking services
2- Asset management
3- Insurance schemes
4- Private equity funds
5- Venture capital and mutual funds.
6- Mortgage and agricultural banks
7- Brokerage activities (Rwanda Stock Exchange).
Agriculture
Rwanda’s economy is predominantly dependent on agriculture, and the sector is the principal contributor to employment, creating jobs for about 80% of the population. In agriculture, the two main export products are coffee and tea. The goal of the government's diversification and productivity initiatives. Opportunities exist in the production of fruits and vegetables for export, such as potatoes, French beans, peas, African eggplants, and fruits like apples, pineapples, bananas, passion fruits, and avocados, as well as horticulture and mechanization.
Tourism
The sector is one of the leading foreign exchange generators. Rwanda has unique assets, such as Mountain Gorillas, a great variety of bird species and primate species, game reserves, an equatorial forest, and the most remote source of the Nile. A single tourist visa has been introduced to ease the movement of both domestic and foreign tourists in the three EAC countries (Uganda, Kenya, and Rwanda). In Rwanda, major hotel chains from around the world have operations. Investors can invest in the Kigali cultural village and Kivu Belt projects, among others.
Glass
The primary raw materials needed to manufacture float glass are abundant in Rwanda. A glass container factory could be established to provide bottles and drinking glasses to the local beverage industry. For the construction of buildings, float and architectural glass are in high demand.
Pharmaceuticals
Rwanda provides widely available health insurance schemes, which has increased the demand for pharmaceutical drugs in Rwanda. Generic versions of name-brand products can be produced, and public-private partnerships with the government can be formed.
Mining
There are opportunities for mining and trade in:
-Tin, tungsten and coltan
-gemstones. such as beryl (aquamarine), corundum
-industrial minerals and rocks, such as silica sands, limestone, talcum, kaolin, and vermiculite; -diatomite, clay, gypsum, and pozzolan.
There is also an interest in the upgrade of mining technology and the establishment of ore smelting and processing plants.to smelt ores
Textiles and leather
Currently, there is no operational tannery, and all hides and skins are exported as raw material. Opportunities exist in the production of garments for the local and export markets, where materials can be sourced locally or imported.
Current trademark system in Rwanda
Trademark applications are reasonably simple in this jurisdiction. Rwanda has been a member of the Paris Convention since 1984 and of the World Trade Organisation’s Agreement on Trade-Related Aspects of Intellectual Property since 1996. It has also been a member of the Madrid Protocol on Trademarks since March 2013.
Protection is possible either through national registration in the local trademark office or international registration via WIPO or the Madrid Protocol. Types of trademarks in Rwanda include those for goods and services as well as collective and certification trademarks.
It is also possible to claim priority in this jurisdiction. The Nice Classification applies, and Rwanda is a multi-class jurisdiction. The protection of well-known trademarks is also possible.
A trademark search before filing is not mandatory, although it is highly recommended. The official search will take 10 to 12 days to be concluded.
Applicants must provide the following documents:
Power of Attorney, notarized Applicant data (i.e., full name and address)
A sample of the mark (not required for word marks);
A list of goods and/or services;
A certified copy of the priority document (if priority is claimed).
The registration process usually takes 12 to 18 months and is composed of the following steps:
Filing the request before the Patent and Trademark Office (PTO) and issuing of application filing receipt with the application filing number; a formal and substantial exam conducted by the PTO;
issuance of the report of acceptance by the PTO;
publication of the application in the IP Bulletin;
a 60-day window for third parties to file oppositions if they feel they will be harmed by the trademark's registration; the issuance of the registration certificate.
In Rwanda, trademarks are good for ten years after filing and may be renewed consecutively for the same time frame. The non-use period is three years in relation to the use requirement and cancellation.
