How To Start A Business in Rwanda
Steps to Starting a Business Starting a business in Rwanda requires an entrepreneur to plan, make decisions in relation to location, Size, investment required, supportive institutions, and if you don’t want to remain in the informal sector, then ensuring that you are registered at the Business Registration Office, Rwanda Development Board.
Step1: Market Research (Market Needs Identification)
Most businesses don’t conduct a market research, but this is a very essential part of business that wants to provide goods or services that are market driven and satisfy the needs in the market.
It also provides relevant information during your business planning process.
Step 2: Business planning
Old school Rwandan entrepreneurs have their business plans in sketchy notes or in their minds. Modern entrepreneurs develop a business plan or feasibility study depending on the size of the Business.
The written and clearly elaborated business plan will help you map out how you will start and run your business successfully in a given period of time. Remember a business plan is a dynamic document.
Step 3: Business Location
Choose a business location that is conducive to your business category, in terms of your business daily operations and target market or shipping facilities to the target market. Consult local leaders and environmental experts to learn about key issues to consider before stating your business in that specific locality.
Step 4: Financing your business
Identify reliable sources of finance i.e. your own money or use financial institutions. Find out if there are any sector specific financial schemes that can support your business.
Step 5: Registering your business
Business registration takes 24 hours at Rwanda Development Board and you have your trading license. A photocopy of your ID is required, go with it.
Here you will have to decide on the type of company you want to run, you will get TIN No. And all issues relating to the Social Security of your employees are solved from this one stop center office.
Step 6: Decentralized taxes
Depending on the location of your business in terms of the district and Sector, find out how much is the local taxes and make sure you make payments for what we normally refer to as “IPATANTE” in Kinyarwanda.
Step 7: Other obligations from the local authority
In the sector where you have decided to locate the operations of your business, inquire if there are no special payments made to the local authority. These payments may be payments for garbage collection, security among others
Step 8: Becoming an entrepreneur at your own level
At this stage you are probably thinking about hiring competent employees and harmonizing earlier developed business plan with the changes that have taken place while you were busy establishing your business. It is important to check the following information again:
• Determination of adequate inventory to keep
• Your raw materials suppliers,
• The production process,
• The cost of products or services and the price,
• Delivery of your products or services to the target markets,
Starting a business has never been simpler or faster. To register a local enterprise or a foreign subsidiary, the RDB provides a quick and efficient registration service allowing you to have your business incorporated within 6 hours.
This process involves simultaneously obtaining the certificate of incorporation (business registration), Tax Identification Number (tax registration) and the Social Security registration for employee pension submission.
View the table below to see how you can start, add or cease business activities in Rwanda
Registering a local company
- Copy of ID/Passport
- Complete two copies of Memorandum of Association Art 14 (downloaded on our website here)
Registration fee : Free
Registering a branch of foreign company in Rwanda
- Power of attorney to present the company in Rwanda.(Notarised)
- A duly authenticated copy of the memorandum Articles of Association. (Notarised)
- Certificate of Registration/Incorporation issued by the registration authority in the country of incorporation. (Notarised)
- Notarised resolution from the authorized agency authorizing to open a branch.
- Passport copies of the shareholders/directors.
- List of directors residing in Rwanda (atleast One )
Opening a local branch
- Notarised Resolution to open branch
- Complete the application form
- Payment of 5,000 rwf at RDB
Additional activities for individual businesses
- Completed application forms provided for changing of particulars
- Original registration certificate
- Payments slip (Receipt) 2,000
Additional activities for companies
- One (1) notarized minutes of the Board meeting authorizing the filing of additional activities.
- Original Registration certificate.
- Payment of 7,000 rwf at RDB
Cessation of trading activities
Letter addressed to the Registrar General, stamped by the Rwanda Revenue Authority (RRA). A copy to RRA
Tax clearance certificate from RRA
Original Registration certificate
Minutes of Association notarized
Cessation fee RWF 5,000
Starting a Foreign Business in Rwanda
This piece highlights issues for consideration when starting a foreign business in Rwanda in four areas: 1) foreign business start-up, 2) access to industrial land, 3) foreign ownership issues across sectors, and 4) commercial dispute arbitration.
Foreign Business Start-Up
With only 3 procedures and 4 days, the process of establishing a foreign-owned limited liability company (LLC) in Rwanda (Kigali) is among the fastest of the countries surveyed by IAB globally. A foreign company requires no additional procedure other than obtaining a trade license if it wishes to engage in international trade, which takes only 1 day. Applying for an investment approval is optional for foreign investors unless they wish to benefit from the various investment incentives provided by the law. Rwanda offers an efficient “one-stop shop,” the Rwanda Development Board, which centralizes start-up procedures and handles company registrations. The business registration process is not yet available online. Of the 21 Sub-Sahara African countries surveyed by IAB only Mauritius allows electronic registration. Foreign investors can open and maintain commercial foreign-currency bank accounts in Rwanda. Rwanda does not impose a minimum capital requirement on investors, nor does it impose any restrictions on the composition of the boards of directors of wholly foreign-owned companies.
Access to Industrial Land
All land in Rwanda belongs to the government. It is possible, however, to lease land. If the land is developed in accordance with statutory requirements, the lessee may then have the option to buy the land. Both privately and publicly held land may be leased. The lease of publicly held land requires approval from the relevant public authority. Government bureaucracy may delay this process. The process of leasing public land is faster if a foreign company accesses land through the Rwanda Development Board. Land can be leased for a maximum duration of 49 years. There are no restrictions on the amount of land that may be leased. Lease contracts offer the lessee the right to transfer, subdivide, or sublease the land, subject to the terms of the contract. Most land-related information in Kigali may be found in the Registrar of Lands.
Foreign Ownership Issues across Sectors
Without any legal ownership restrictions on the 33 sectors covered by the report, Rwanda is one of the most open countries to foreign equity ownership. In practice, though, a number of sectors are characterized by monopolistic or oligopolistic market structures dominated by publicly owned enterprises, making it difficult for foreign investors to enter. The electricity and transportation sector groups, as well as the media industry, in particular, are dominated by monopolies.
Commercial Dispute Arbitration
Law No. 005/2008 on Arbitration and Conciliation in Commercial Matters regulates both domestic and international arbitrations in Rwanda. It is based on the UNCITRAL Model Law. Commercial matters can generally be submitted to arbitration. Parties are free to select arbitrators of any gender, nationality, or professional qualifications in both domestic and international arbitrations, and foreign counsel may represent the parties in arbitration proceedings. Online arbitration is not available in Rwanda. Moreover, although there is an arbitral institution in Rwanda, the Rwandan Arbitration and Expertise Centre, it does not currently administer arbitrations. A new arbitration center is planned for the Private Sector Federation. Practitioners report that the lack of a domestic arbitral institution is a major impediment to domestic and international arbitration. Rwandan courts generally uphold arbitration agreements and support arbitration. Arbitration awards are enforced in the High Court, and decisions that uphold or deny enforcement can be appealed to the Supreme Court. On average, it takes around 15 weeks to enforce an arbitration award rendered in Rwanda, from filing an application to a writ of execution attaching assets (assuming there is no appeal), and 15 weeks for a foreign award. Domestic litigation is the preferred technique for resolving disputes involving the state.