Almost 20 years have passed since the 1994 Rwandan genocide, when ordinary doctors, politicians, miners, traders, and farmers killed about 800,000 of their own fellow citizens. And this is with a total population of 12 million people. Today, these 100 days of bloody horror are one of the most frighteningly effective massacres in modern history, and Rwanda (at least for the West) remains a symbol of chaos.
Rwanda company registration
Be that as it may, this East African country is beginning to draw attention to itself for other reasons.
Under the rule of President Paul Kagame (it was he and his then-rebel group “Rwandan Patriotic Front” who put an end to the genocide, despite the fact that no other state dared to intervene in the situation), the country’s GDP grew by an average of slightly more than 8% since 2001, which allowed a million citizens to get out of poverty.
The World Bank ranks Rwanda as the second African country with the most attractive business climate (32nd in the world) after the Republic of Mauritius, Transparency International considers it the least corrupt country in the region (49th in the world), while the non-profit organization ONE founded by Bono believes that Rwanda and Mali came closest to meeting the UN Millennium Development Goals (the list includes the development of the educational system, the fight against poverty, the modernization of health care, etc.). In terms of gender equality, 64% of the seats in the local parliament are held by women, making Rwanda the country with the highest proportion of women deputies.
Be that as it may, all these achievements look very modest given the long-term challenges facing the country. As follows from the government’s development program until 2020, Rwanda must achieve the status of a middle-income country: for this, it is going to jump over the stage of industrialization and develop an economy based on information and telecommunications technologies.
Invest in Rwanda
Foreign investors who want to expand their business in Africa should pay attention to the African state of Rwanda. This country is a member of the World Trade Organization and, accordingly, enjoys all the benefits of membership. The article was prepared for those wishing to expand the boundaries of their business, bring its economic market to Africa, and register a company in Rwanda.
Here you can open:
- Limited Liability Company (LLC);
- Open Joint Stock Company (PLC); and
- Representation.
Norms and requirements
When registering a company in Rwanda, you need to know the requirements for doing business. Therefore, we recommend that you pay attention to the following information:
- minimum permitted directors – 1 (no residency requirements);
- minimum number of shareholders – 1 (for PLC – 7);
- minimum authorized capital: for LLC – USD 850, for PLC – USD 170 thousand, for representative office – USD 0;
- filing a tax return is required (within 3 months after the end of the financial year).
Once you have chosen the type of company, you need to register the company name in Rwanda. To register as quickly and successfully as possible, you need to choose a name that is 100% unique. Acceptability and visual perception will also be important aspects so that the name will be easily remembered by future consumers.
The documents
The package of documents will depend on the type of company you are registering, but in any case, you will need:
- certified copies of passports of directors/shareholders;
- confirmation of the place of residence of the beneficiary (s);
- company charter; and
- proof of a local office.
Taxation in Rwanda
Before starting a business in Africa, we recommend that you study the tax system of the selected jurisdiction. In our case, before you open a company in Rwanda, pay attention to the types of existing taxes:
- Corporate Income Tax (CIT): The CIT rate is 30%. Micro-enterprises (with a turnover of less than Rwandan francs 12 million [RWF] per tax period) pay a fixed amount, while small legal entities (with a turnover of RWF 12 million to RWF 20 million per tax period) pay a one-time tax of 3% of turnover. The annual tax return is filed within three months after the end of the tax period.
- Personal income tax (PIT): 30%. The deadline for the return of personal income tax is March 31, paid monthly until the 15th day of the next month.
- Value Added Tax (VAT): standard – 18%.
- Capital gains tax is payable on the direct or indirect sale, as well as on the transfer of shares or debentures in the amount of – 5% of capital gains. Tax must be declared and paid within 15 days after the month in which the sale or transfer of shares took place.
- Objects of donation and inheritance are not taxed.
- Financial income – 15%. Finance income includes income from loans, income from deposits, and income from guarantees.
- Royalties are taxed at a flat rate of 15%.
