Company registration

Contents

• Registering a new company
• Closing a business
• Tips

Rwanda Development Board (RDB)

Rwanda Revenue Authority (RRA)

Veibeg Medical

Do you have any particular tips or advice for people considering coming to East Africa?

#insights #advice

I think a lot of people come to Africa, or hear about Africa, and see the huge potential. But you shouldn’t forget that it really is a long-term project and investment. It’s a long-term endeavour.

It is very difficult (almost impossible) to come here and immediately make huge profits. It depends on the industry, but in most cases, it takes time. This is why I really recommend to everyone to be patient.

I’ve seen people who’ve come to Rwanda, and after two years or so did not get what they expected in terms of returns and then they left again. I might have done the same if I’d come here with the same expectation. But I have seen that after the third or fourth year, you get to know the country, build the customer base, and get into some big projects.

So, be patient, keep working and think long-term.

I really see that you can be very successful and then really expand to other African markets and I believe that’s the future. Especially looking at Rwanda. The way it grows every year, the policies that are put in place, the stability. It is perceived as the new Singapore, and it might be, you never know what might happen. I think it looks very promising.

#advice

Another thing I’d like to mention here is that (especially for younger people) If you want to start something in Africa, you have to have capital – I believe. Because as I said it takes time until something works out, and then you have your living expenses as well. I have seen people fail because they ran out of money.

One thing that I wish I had done myself: If you have a good CV and a good level of Education you could start with a normal job here working for a startup or a company. So you get a good salary – because the salaries for ex-pats are generally quite good (you can even save money) – and get to know the market. You’ll also have the chance to see if this is a country that you want to live in. Then you could start a company while you’re still working and wait till you’re ready to make the switch.

I know people who have successfully done that. I’ve seen that they really have had a lot less pressure than all those entrepreneurs who came to Africa and who’ve had to be resilient – myself included. So, this is something that I would really recommend to young people.

And, I’m not sure how true this is but I’ve heard that it’s easier to get a job in Rwanda when you apply from abroad. Because if you’re here you might be perceived to be a little bit more desperate for it as you’d need the job for your visa.

These big organisations are looking for talent, and they know that if you’re in Europe you’re kind of hard to get.

So they’re more likely to offer you more in terms of benefits and salary. Those are things I’ve heard. I can’t guarantee they are true though.

BAG Innovation

What advice do you give to prospective ed-tech start-up entrepreneurs considering bringing their existing solutions into (or finding a solution for) the Rwandan market?

#advice #startingStrategy #collectingMarketData

I would advise you not to expect too much in the first two years.

You can expect to need a mixed financing model at the beginning, working between loans, grants, and other kinds of revenues.

You’re also likely going to have a very hard time sourcing statistics and data. From early on, you’ll need to figure out a way to gather that information by yourself. Don’t be reliant on any government or university entity. You’ll need to have a lot of patience in terms of getting your stuff through.

It took us three to three-and-a-half years to get recognized by the Ministries and finally get picked up. Even though everyone else was recognising us from the beginning, it took longer to be officially recognised.

Revenue is extremely hard to get by. Most companies use Rwanda as a pilot country: If you can make it in Rwanda, with even minor revenues, it means you are most likely going to make it if you scale into East Africa. This is what most solar companies do: they come in here, prove their technology and then go into Ethiopia etc.

Rwanda is the prefect playing ground. It’s very forgiving, in the sense that if you fail, you can still have the chance to try again and do it better.

Whereas in Sweden (or even in Nairobi) if you launch a company and it didn’t work, it’s very hard for you to relaunch it.

At BAG innovation we’ve pivoted our business model, our value proposition, and our problem statement so many times. Yet still, it has been very forgiving, and we still managed to grow despite that. It’s a very “relaxed” market in that sense.

Also, the market here doesn’t move that fast, so you have a little bit more time to develop your product compared to another country where you’d have 10 competitors right away before you’ve even launched.

[…]

Do you have any advice for aspiring entrepreneurs who regard Africa as a place of great opportunity?

#advice

I survived on monthly costs of around USD 500 – 600. Rent, food, and everything. People have this perception that it’s more and that it’s expensive to come here, but you can even survive on USD 400. With that budget (500 – 600) it’s comfortable, you can still go to the restaurant once a week, and you can still enjoy yourself, without being privileged. Might not be able to travel too much. If you have a certain standard of living then you might spend something closer to USD 2,000, and you should probably not come here as a start-up entrepreneur.

#insights

It’s a very fun environment. It’s an exciting environment, in the sense that in the past 5 years every industry has boomed. There was no coffee industry 5 years ago and today there are cafes popping up everywhere. It’s the same in any industry, there’s so much money being pushed into all these sectors. Not always in the right way and not necessarily sustainable, but it’s everywhere and you can see it. That means that there are a lot of opportunities to tap into.

As an ex-pat, it’s very easy to come here and identify a problem and build a solution to address it. Then you get investment and grant funding to run that for a few years. From there, sustainability will come if you’re able to scale it outside of Rwanda — or if you’re selling in some key industries like the pharmaceuticals.

In terms of the environment there’s no better country in Africa to come and start up, because the safety, the cleanliness, the people.

My other advice is: Don’t do your market research at home. Come here. You have to get into the deep waters. Live here for three months and work hard. Those are the people who start and succeed. The people who are here for 2 weeks on a vacation, and then go back home and start doing research and try to communicate with me about helping them with market research for them it never works. You need to dedicate a considerable amount of time and you need to see yourself staying. You can’t be dependent on building up a local team and then leaving.

I’ve seen that with many Swedish companies: They come here and then ask us to train the team, and when they think it’s good enough, they leave, but then it’s never good enough. You need to be the supervisor for longer than you think.

During the initial 3-month period, a network like EBCR can be a great accelerator. For someone new coming and having access to that right away it’s great.

People here are also very reserved they need to have a relationship with you for one year or two before you eventually enter their circle. If you want to succeed in Rwanda, you have to get into the Rwandan circles.

That’s the biggest mistake I see is ex-pats coming here and having only expat-clients, and doing business with each other. But that’s not sustainable.

Sandberg ldt

How was it when you went back to Denmark?

#advice

What was interesting from that experience was that I really had high hopes that I could have a couple of consultants in Kigali running the business, earning the money, and that I would have something that could look like a passive income.

That would have been really great, but as soon as I left one of my clients stole my consultants because they were really good.

Everybody warned me that you cannot have a business in Africa without being there yourself.

I soon discovered that this was the truth. And also, how disconnected you are from the market and from your clients when you’re so far away. Trying to be close to the process and close to the people while having another job in Denmark was really hard. I could see that my company was suffering from me not being there.

Then you have to keep in mind that this is also a very “relationship-based society”. You have your clients because you have a relationship with them. It’s not just about the work that you’re doing, it’s also about who you are.

In principle, I was back in Denmark for 1,5 years, but in practice half of that year, I was back here in Rwanda doing projects.

Did you consider transposing your business to Denmark?

#advice #insight

Transposing your business back to Europe from here is not evident at all. You have to have some sort of niche experience that will help you compete with other European businesses. In my case, the only interesting option in the Danish context for HR in Africa would have been Doctors without Borders, but I chose not to do that.

BDO East Africa

In Rwanda, the system is more effective at enforcing tax regulation. These neighbouring countries are sometimes more “relaxed” with enforcement.

If you compare Tax Revenues with the Country’s GDP, you see that Rwanda is the most effective at collecting tax in the East African region.

Also, when you compare how much tax the Government collets and how much the public feels the benefit of public investments, Rwanda is again the best in the region. People feel like they are getting back what they are putting in. You see security, you see cleanness, a well-maintained road network, you see a vibrant city and you know this comes from the taxes. No one here will tell you they don’t feel like they are not getting something out of their taxes.

People might tell you taxes here are ‘very touch’, but not because the rates are particularly high or because they are applied differently, it’s just because of the difference in enforcement and the greater regularity of the checks.

For example, with the new EBM (Electronic Billing Machine) system the Rwanda Revenue Authority (RRA) is trying to get your tax performance before you even come to declare it. Neighbouring countries are also implementing the EBM system, but not at that level of, let’s say “intelligency”.

Then, of course, if you have been operating in a country where you’ve been able to easily play the system without paying taxes, you’ll come here and you’ll find it disappointing.

Find out about the EBM II the next generation of Electronic Billing Machines currently in pilot phase.

[…]

Regarding taxation, what word of advice do you have to give to foreign companies considering a move to Rwanda?

#advice #tax

As a tax professional, I know that the easiest way to come and operate in a new country is to get a local partner who understands the business itself and who also understands the “dos and don’ts”, including regarding exposure for tax and compliance.

Hollandia Fair Foods

Launching a new product is probably a year-long process which we own entirely because what we’ve learned is that whenever we outsource it’s not done well.

When you want something done properly, try to do it as much as possible yourself.

(Which is possible because labour is cheaper here so you can get a good team.)

Not everyone would agree with me but, what I would say is to find a very good marketing strategist who helps you put your product in the market.

So, for us in Uganda, we’ll set up a similar factory there, but with our marketing, we’ll have a different approach than in Rwanda.

I think your market strategy for your brand at the start is the most important thing. So, for your local marketing strategy, I would advise starting with a consultant.

But as soon as marketing becomes part of your operations takes it over yourself. These people are expensive. You don’t want to use them for a long time. As a general rule remember to always follow up to stay in control.

The most up-to-date laws governing the registration of a new company or the cessation of an existing company can be found on the procedure’s relevant page at the very bottom.

• Register a new company
• Cessation of trading activities
  • Companies
  • Entreprises
  • Submit a claim for insolvency

Download: TRAIDE: Open & Close a Business in Rwanda 

General advice

Contents

• Think long-term
• A developing market is not a “developed” market
• Should I bring capital?
• Rwanda is likely to be your East African start-up’s best starting point
• Make sure to pay your taxes
• Be on the ground
• You need a local network to succeed
• Where else to source information?

This tab is empty.

Veibeg medical

Do you have any particular tips or advice for people considering coming to East Africa?

#insights #advice

I think a lot of people come to Africa, or hear about Africa, and see the huge potential. But you shouldn’t forget that it really is a long-term project and investment. It’s a long-term endeavour.

It is very difficult (almost impossible) to come here and immediately make huge profits. It depends on the industry, but in most cases, it takes time. This is why I really recommend to everyone to be patient.

I’ve seen people who’ve come to Rwanda, and after two years or so did not get what they expected in terms of returns and then they left again. I might have done the same if I’d come here with the same expectation. But I have seen that after the third or fourth year, you get to know the country, build the customer base, and get into some big projects.

So, be patient, keep working and think long-term.

I really see that you can be very successful and then really expand to other African markets and I believe that’s the future. Especially looking at Rwanda. The way it grows every year, the policies that are put in place, the stability. It is perceived as the new Singapore, and it might be, you never know what might happen. I think it looks very promising.

#advice

Another thing I’d like to mention here is that (especially for younger people) If you want to start something in Africa, you have to have capital – I believe. Because as I said it takes time until something works out, and then you have your living expenses as well. I have seen people fail because they ran out of money.

One thing that I wish I had done myself: If you have a good CV and a good level of Education you could start with a normal job here working for a startup or a company. So you get a good salary – because the salaries for ex-pats are generally quite good (you can even save money) – and get to know the market. You’ll also have the chance to see if this is a country that you want to live in. Then you could start a company while you’re still working and wait till you’re ready to make the switch.

I know people who have successfully done that. I’ve seen that they really have had a lot less pressure than all those entrepreneurs who came to Africa and who’ve had to be resilient – myself included. So, this is something that I would really recommend to young people.

And, I’m not sure how true this is but I’ve heard that it’s easier to get a job in Rwanda when you apply from abroad. Because if you’re here you might be perceived to be a little bit more desperate for it as you’d need the job for your visa.

These big organisations are looking for talent, and they know that if you’re in Europe you’re kind of hard to get.

So they’re more likely to offer you more in terms of benefits and salary. Those are things I’ve heard. I can’t guarantee they are true though.

BAG Innovation

What advice do you give to prospective ed-tech start-up entrepreneurs considering bringing their existing solutions into (or finding a solution for) the Rwanda market?

#advice #startingStrategy #collectingMarketData

I would advise you not to expect too much in the first two years.

You can expect to need a mixed financing model at the beginning, working between loans, grants, and other kinds of revenues.

You’re also likely going to have a very hard time sourcing statistics and data. From early on, you’ll need to figure out a way to gather that information by yourself. Don’t be reliant on any government or university entity. You’ll need to have a lot of patience in terms of getting your stuff through.

It took us three to three-and-a-half years to get recognized by the Ministries and finally get picked up. Even though everyone else was recognising us from the beginning, it took longer to be officially recognised.

Revenue is extremely hard to get by. Most companies use Rwanda as a pilot country: If you can make it in Rwanda, with even minor revenues, it means you are most likely going to make it if you scale into East Africa. This is what most solar companies do: they come in here, prove their technology and then go into Ethiopia etc.

Rwanda is the prefect playing ground. It’s very forgiving, in the sense that if you fail, you can still have the chance to try again and do it better.

Whereas in Sweden (or even in Nairobi) if you launch a company and it didn’t work, it’s very hard for you to relaunch it.

At BAG innovation we’ve pivoted our business model, our value proposition, and our problem statement so many times. Yet still, it has been very forgiving, and we still managed to grow despite that. It’s a very “relaxed” market in that sense.

Also, the market here doesn’t move that fast, so you have a little bit more time to develop your product compared to another country where you’d have 10 competitors right away before you’ve even launched.

[…]

Do you have any advice for aspiring entrepreneurs who regard Africa as a place of great opportunity?

#advice

I survived on monthly costs of around USD 500 – 600. Rent, food, and everything. People have this perception that it’s more and that it’s expensive to come here, but you can even survive on USD 400. With that budget (500 – 600) it’s comfortable, you can still go to the restaurant once a week, and you can still enjoy yourself, without being privileged. Might not be able to travel too much. If you have a certain standard of living then you might spend something closer to USD 2,000, and you should probably not come here as a start-up entrepreneur.

#insights

It’s a very fun environment. It’s an exciting environment, in the sense that in the past 5 years every industry has boomed. There was no coffee industry 5 years ago and today there are cafes popping up everywhere. It’s the same in any industry, there’s so much money being pushed into all these sectors. Not always in the right way and not necessarily sustainable, but it’s everywhere and you can see it. That means that there are a lot of opportunities to tap into.

As an ex-pat, it’s very easy to come here and identify a problem and build a solution to address it. Then you get investment and grant funding to run that for a few years. From there, sustainability will come if you’re able to scale it outside of Rwanda — or if you’re selling in some key industries like the pharmaceuticals.

In terms of the environment there’s no better country in Africa to come and start up, because the safety, the cleanliness, the people.

My other advice is: Don’t do your market research at home. Come here. You have to get into the deep waters. Live here for three months and work hard. Those are the people who start and succeed. The people who are here for 2 weeks on a vacation, and then go back home and start doing research and try to communicate with me about helping them with market research for them it never works. You need to dedicate a considerable amount of time and you need to see yourself staying. You can’t be dependent on building up a local team and then leaving.

I’ve seen that with many Swedish companies: They come here and then ask us to train the team, and when they think it’s good enough, they leave, but then it’s never good enough. You need to be the supervisor for longer than you think.

During the initial 3-month period, a network like EBCR can be a great accelerator. For someone new coming and having access to that right away it’s great.

People here are also very reserved they need to have a relationship with you for one year or two before you eventually enter their circle. If you want to succeed in Rwanda, you have to get into the Rwandan circles.

That’s the biggest mistake I see is ex-pats coming here and having only expat-clients, and doing business with each other. But that’s not sustainable.

Sandberg ltd

How was it when you went back to Denmark?

#advice

What was interesting from that experience was that I really had high hopes that I could have a couple of consultants in Kigali running the business, earning the money, and that I would have something that could look like a passive income.

That would have been really great, but as soon as I left one of my clients stole my consultants because they were really good.

Everybody warned me that you cannot have a business in Africa without being there yourself.

I soon discovered that this was the truth. And also, how disconnected you are from the market and from your clients when you’re so far away. Trying to be close to the process and close to the people while having another job in Denmark was really hard. I could see that my company was suffering from me not being there.

Then you have to keep in mind that this is also a very “relationship-based society”. You have your clients because you have a relationship with them. It’s not just about the work that you’re doing, it’s also about who you are.

In principle, I was back in Denmark for 1,5 years, but in practice half of that year, I was back here in Rwanda doing projects.

Did you consider transposing your business to Denmark?

#advice #insight

Transposing your business back to Europe from here is not evident at all. You have to have some sort of niche experience that will help you compete with other European businesses. In my case, the only interesting option in the Danish context for HR in Africa would have been Doctors without Borders, but I chose not to do that.

BDO East Africa

In Rwanda, the system is more effective at enforcing tax regulation. These neighbouring countries are sometimes more “relaxed” with enforcement.

If you compare Tax Revenues with the Country’s GDP, you see that Rwanda is the most effective at collecting tax in the East African region.

Also, when you compare how much tax the Government collets and how much the public feels the benefit of public investments, Rwanda is again the best in the region. People feel like they are getting back what they are putting in. You see security, you see cleanness, a well-maintained road network, you see a vibrant city and you know this comes from the taxes. No one here will tell you they don’t feel like they are not getting something out of their taxes.

People might tell you taxes here are ‘very touch’, but not because the rates are particularly high or because they are applied differently, it’s just because of the difference in enforcement and the greater regularity of the checks.

For example, with the new EBM (Electronic Billing Machine) system the Rwanda Revenue Authority (RRA) is trying to get your tax performance before you even come to declare it. Neighbouring countries are also implementing the EBM system, but not at that level of, let’s say “intelligency”.

Then, of course, if you have been operating in a country where you’ve been able to easily play the system without paying taxes, you’ll come here and you’ll find it disappointing.

Find out about the EBM II the next generation of Electronic Billing Machines currently in a pilot phase.

[…]

Regarding taxation, what word of advice do you have to give to foreign companies considering a move to Rwanda?

#advice #tax

As a tax professional, I know that the easiest way to come and operate in a new country is to get a local partner who understands the business itself and who also understands the “dos and don’ts”, including regarding exposure for tax and compliance.

Hollandia Fair Foods

Launching a new product is probably a year-long process which we own entirely because what we’ve learned is that whenever we outsource it’s not done well.

When you want something done properly, try to do it as much as possible yourself.

(Which is possible because labour is cheaper here so you can get a good team.)

Not everyone would agree with me but, what I would say is to find a very good marketing strategist who helps you put your product on the market.

So, for us in Uganda, we’ll set up a similar factory there, but with our marketing, we’ll have a different approach than in Rwanda.

I think your market strategy for your brand at the start is the most important thing. So, for your local marketing strategy, I would advise starting with a consultant.

But as soon as marketing becomes part of your operations takes it over yourself. These people are expensive. You don’t want to use them for a long time. As a general rule remember to always follow up to stay in control.

This tab is empty.

Human resources

Contents

• Hiring employees
• Being self-employed
• Social Security
• Termination of employment
• Recruiting options
• Talent market overview

⚖️ The law requires the employer to register their employees for pension scheme and occupational hazards with Rwanda Social Security Board (RSSB) within the first 8 days of work, whether they are permanent or temporary staff. (RDB Business Procedures)

Penalties and Tax declaration & payment deadlines can be found in the RRA Tax Handbook

⚠️ Note: Some EBCR members have reported issues with cases of termination of employment as a result of non-performance or gross misconduct. Indeed, according to Labour Law employees have the right to legally pursue the employer on the grounds of "unfair dismissal". Hence, to prevent potentially costly legal proceedings some EBCR members advise to simply negotiate the employ's voluntary resignation in exchange of carrying on paying one-to-six months of salary.

• Rwanda Social Security Board (RSSB)
• Rwanda Revenue Authority (RRA)

Veibeg medical

What was your experience in recruiting local talent?

#hr

My Kenyan partner had been in Rwanda for 10 years working for one of the biggest Medical Supplies companies in East Africa, so he knew a lot of people in the industry. We invited some of these people for interviews. We were also lucky that we had a big pool of people that were recommended to us.

So generally, when it comes to hiring for managing positions, we usually try to find people coming from the medical supplies industry. But with some other positions, such as admin, operations, and IT, it’s been very difficult to find the right people, because we don’t have any referrals. Some of our hires for these roles have turned out to be good, others not so much.

We do try to provide training to all of them, and a lot of them are already enrolled in an educational program in parallel such as a master’s degree.

As a general rule, the level of education is not as high as it is in Europe. I don’t think that’s a secret, but it is a problem. You’d expect someone with an MBA to have a certain skill level, while in fact, the level of practical experience is often really low here.

So, if you found someone who studied computer science, you might be surprised to find out that they don’t really know how to program.

The same is true for other fields like Finance, Accounting, Administration etc. My advice, if you want to hire graduates or near-graduates, is to be patient, hire people based on their mindset, and dedicate some time to training them.

How long would you dedicate to training a young computer graduate here?

#hr

Normally a computer science graduate in Europe has 3-4 years of practical programming experience. (Without considering that, often computer science students have coding as a hobby.) Plus, through their university degrees, they have a lot of resources, with 1-on-1 and mentoring with professors, and are met with numerous opportunities to develop their skills throughout.

Whilst here, some of the graduates coming out of university, are not even junior developers. They’re real beginners. As a part of a computer science degree at a university here, you could expect that someone might have just done one or two projects – that’s all. So it would take a lot of months of training to get them to the European equivalent graduate level.

So, if they intend to work in the field, graduates often have to learn everything, nearly from scratch. This is why you see a lot of people who study computer science go and do some educational programs like Andela – which are great by the way.

What can you tell me about vocational training programs like Andela and WeCode?

#hr

Andela, WeCode, and various other programs funded by GIZ as well as other organisations offer training for people in Rwanda who want to learn to program or improve their programming skills. In general, these programs have the virtue of teaching people enough of the basics so that they can then go on and learn more code on their own. And the more they write the more they learn.

So, these programs are good but still only really teach the basics. When people come out, you shouldn’t expect them to even be at the level of Junior developers. But once they’ve done those programs, they might be able to go do an internship. Then, after the internship, hopefully, those companies will actually employ them and help them build their skillset even further.

The only issue is that there only are limited job opportunities – especially now after Covid. So, a lot of people might not immediately get a job. Some might go ahead and find work on platforms like UpWork and other freelance platforms to get more experience, or even start their own start-up.

Have you ever reverted to hiring someone from abroad, e.g. from Europe in order to fill a particular position for which you couldn’t find the right person in Rwanda?

#hr

Yes. The issue with, for example, Senior Engineers is that people that are really good here are in very high demand.

Because a lot of organizations want really good people locally, and the salaries are quite high. So, a senior engineer in Rwanda can cost $3,000 per month. This means that before tax, it can cost you almost $5,000

If you compare that to a Software Engineer in Ukraine who might have the same or even higher skill level could get them for $1,500. This is a huge problem in this market because hiring the right Senior Engineer or CTO is crucial.

I have hired someone on a $3,000 salary for my other company before and it was a mess. It wasn’t worth the money. Some people even asked for six, seven-thousand-dollar salaries.

So, despite wanting to be an African company and hiring Africans, it is sometimes tempting to hire someone from abroad. Sometimes there are some positions that you just can’t fill otherwise. For instance, for our current CFO, we were not able to find someone who was good with tax law, so we hired an external CFO who’s based in Rwanda but who’s originally from the UK and India.

How do the regulations and laws around employees in Rwanda compare to your home country?

#tax #hr

I would say it is easier compared to most places in Europe. Things like laying off employees etc are either similar or easier to do in Rwanda, to the benefit of the employer.

⚠️ Note: Some EBCR members have reported issues with cases of termination of employment as a result of non-performance or gross misconduct. Indeed, according to Labour Law employees have the right to legally pursue the employer on the grounds of "unfair dismissal". To prevent potentially costly legal proceedings some EBCR members advise to simply negotiate the employ's voluntary resignation in exchange of carrying on paying one to six months of salary.

You can find the latest Labour Law in the *publications* of the Ministry of Public Service & Labour This is the latest Labour Law as of July 2021 which also covers "Termination of employment"

The process for hiring employees is easy too and doesn’t take too long. You just have to register as a company. Register your new employee at RSSB and then you start paying them.

Employee Registration can be done online via the RSSB website under Online Services

What can be tricky, is calculating the PAYE tax to pay for each employee, and making sure you don’t make mistakes. Then there’s the RSSB contribution (Pension & Medical insurance), and the various allowances for every employee. So, it is something that is a bit more complex, but the contracts and laws are quite straightforward and similar to Europe.

☝ Pension Scheme: Enrolling for pension benefits is compulsory for all salaried workers (regardless of nationality) ****The contribution rates are 3% paid by the employer and 3% by the employee. (RRA)

☝ Medical Insurance Scheme: The contributions paid to RSSB represents 15% of employee’s basic salary. It is paid by both the employer and the employee at the rate of 7.5% each. [...] The employer is responsible for deducting, declaring and paying their employee’s contribution to RSSB. The contribution is deducted on a monthly basis and paid not later than the 10th day of the following month. (RRA)

In our case, it has been our accountant sorting these things out for us, such as how much tax we have to pay etc. But even then, despite having an accountant some mistakes were made at the beginning.

When you’re a big company, doing business in Rwanda is a lot easier because you can get the right people and the right advisers to help you. You also benefit from the extra help from RDB, which includes having a key account manager [see RDB Aftercare Service] etc.

While as a small company, and you want to do everything yourself, things can be a bit more complicated in the beginning.

BAG Innovation

If indeed the educational level is quite low locally, how have you managed to build your capacity at bag innovation? Where have you sourced the talent?

#hr

We have sourced it locally; all our staff are Rwandan.

You can find talent, it’s just very hard. But since we were also running a recruitment company we were going through over 10 of thousands of people in our database which meant we had the luxury of the first selection. So, the people we interviewed and engaged with, from the different universities were eventually hired through BAG.

There are actually a lot of talented people, it’s just that competitiveness is not really there yet, and the market is not developed yet. With students in Europe, you can see peers compete with each other and this healthy competition actually increases everyone’s capacity. In Rwanda, it’s still not at that stage.

What are the preferred jobs in Rwanda? Are people excited at the idea of working for start-ups? Do top applicants consider working for start-ups?

#hr

Compared to big institutions someone would rather work for a start-up. But 9/10 times top-quality candidates are going to compete for the non-profit jobs.

Because, while a start-up might pay a salary of USD 300 per month, a non-profit might pay a salary of USD 3,000 per month. This is completely unrealistic compared to the market but unfortunately, there are so many non-profits in the country that they effectively drain the top talent out of the market.

Which is understandable. You can’t compare these two salaries. That’s the equivalent of a graduate in Sweden getting a salary of USD 10,000 per month, without any experience.

For us, we’re 9 people, plus 4 developers (outsourced to a local Rwandan agency). So about 13. And every year, some of our staff get poached by non-profits.

Sandberg ltd

Where would you recommend that someone looked for a local partner?

#startingStrategy

There are opportunities through some of these more established networks like EBCR to try and find the right people to work with.

#hr

I think it is beneficial to do your recruitment through an HR company here. Because they can do the background checks, they know the market, they know the players, they know the reputation of the people you’re recruiting.

Sometimes people can look good on paper, but their history here makes it difficult for them to operate in the market. So, getting local companies to help you find your business partner here I think can be really beneficial and can help you avoid mistakes from the beginning.

OX Rwanda

How did you find your Driver plus?

#hr

This was mainly done by Sam. I think he posted the adverts for “Driver Plus” jobs on RwandaJob.com.

Within a month we had about 855 applicants. At that point, we didn’t yet know where the depo would be so it was mentioned in the ad that accommodation, meals, and transport back and forth would be covered – and that is the kind of working environment we’ll be looking to offer in general.

From the 855 applicants, I think we interviewed about 30 – 40.

Unfortunately, we only had 4 female applicants. We interviewed all of them, but it didn’t work out. (Though I think one of the ladies that we interviewed will become an admin as soon as we start building up our admin team).

We have plans for the next depo – which is likely to be in Nyamagabe – to be fully staffed by women, including female Driver’s Plus.

Overall, we’re aiming to get a 50/50 gender ratio across drivers, mechanics, assembly engineers and admin staff. To help us achieve that, within the 2 to 3 months before opening the next depo we will ask the women that we’ve hired to work with our current Drivers Plus in Nyamasheke so that they get to know the systems, the processes and so that they get comfortable with the trucks.

So, for the hiring, we haven’t gone through a recruitment agency. Our main person of support has been Sam. Sam had used RwandaJobs.com before and he’d hired for numerous companies in Rwanda like that.

BDO Rwanda

How do you source local talent?

#hr

Sourcing talent is a challenge. But then you also need to ask yourself: what are you trying to build?

If you’re building a “profit-focused” business you can do what the others do: Fly people in when they have assignments or run a very lean team and source consultants as required.

On the other hand, if you’re building a business in the long run and you’re looking to create a truly locally established company, with a 5-year vision of growing presence and portfolio then you need to build your capacity and do training. And the best way to do training is to get fresh learners.

Here, we get about 10 graduates annually for 6-month internships. From those, more or less 60% will become permanent staff. So, after 6 or 7 years of operation, you have close to 30 – 40 people who you have trained internally and who have grown into management levels. Of course, an audit firm is an easy place to head-hunt from, but you also have a natural rotation. In our case, we have about 20% resignations per year. But that’s the only way to build a company long-term. If I judged my performance solely on annual profit, I would not invest in training people.

#insight

We have been experiencing very big economic growth, especially in the services sector and we feel the shortage of talent. At the same time, we are exposed to losing people because they get easily hired elsewhere (even with our own clients as they like to have their auditor become their finance manager). It is part of the dynamics. But still, the only way to build organisational stability is to train. Even if that means the best talent goes first.

Employee Registration can be done online via the RSSB website under Online Services

Where do your staff go when they leave?

#hr

Often, they go into other businesses, some go to work for the Government. So far, we haven’t lost much staff to the non-profit.

Hollandia Fair Foods

How have you sourced the right people for your organisation?

#hr #startingStrategy

We used a lot of interns to start with. Then we kept the good ones. That’s how we’ve done most of our recruiting. Some of it has also been through references from our people.

For the most part, it’s worked fine like that. The only area we’ve had issues in was accounting…

Where did you go to source the interns in the first place?

#hr

We’ve never advertised jobs. We just go to universities, like the University of Rwanda, INES Ruhengeri-Institute of Applied Sciences, or Akilah Institute for Women.

Who did you contact at the university?

#hr

We didn’t actually try to approach them. They contacted us.

• This is the latest Labour Law as of July 2021 which also covers “Termination of employment”
• For the most up to date version look in the Ministry of Public Service & Labour under Publications > Laws.

Investing in Rwanda

Contents

• Overview
• Due diligence
• Adding shareholders
• Sector-specific incentives
• Repatriation of capital
• Investor certificates
• Environmental Impact Assessment (EIA)
• Capital Gains Tax (CGT)

⚖️ Upon fulfilling tax obligations in Rwanda, an investor is allowed to repatriate the following: the capital; profits derived from business activities; debt and interest on foreign loans; proceeds from the liquidation of investment; other assets of an investor. (Investment Law, 2021)

Find the full process breakdown here.

⚠️ Before applying for an investment certificate businesses are strongly advised to consult the RDB aftercare department on the eligibility of their business as well as their business proposal. In this way, the number of ‘rejected’ applications can be minimised.

The list of types of projects that require EIA is set out by the Ministerial order No 001/2019 of 15/04/2019 (See Annex I).

☝ Capital gains tax is charged on the direct or indirect sale or transfer of shares or debentures. The capital gains tax is charged at the rate of 5% of the capital gain. The capital gain on sale or transfer of shares is determined as the difference between the acquisition value of the shares and their selling or transfer price. PWC

• Rwanda Development Board (RDB)
• Rwanda Revenue Authority (RRA)

East Africa Investments

Would you recommend performing due diligence before investing in a company in Rwanda?

#investing

When looking to invest in a business any investor anywhere in the world should do some due diligence.

In the UK you can generally Google the company or find them in some sort of business database. Here, accessing the right kind of information about a business can be very tricky. The reason is that market and business data are just not readily available and often require a lot of legwork to uncover. Usually, this will take coming here and doing research on the ground to check the validity of some of the statements made by the entrepreneurs etc.

EBCR can be really helpful for this kind of thing because members know the markets quite well and can address the validity or the even normality concerns of new potential investors.

How do you move funds from the UK company to Rwanda?

#investing

At the moment I just have a personal bank account in my name, and I literally just hold the funds on behalf of the UK company.

Rwanda Finance is aware of this kind of practice which is why they have been pushing for these new investment codes because at the moment this is not necessarily a good environment for investors.

What other costs are associated with you bringing money into the country?

#investing

It’s really easy to bring money into the country. We usually do a transfer with TransferWise (now called Wise) from the UK account to the Rwandan entrepreneur’s business account.

Apart from the usual bank fees, there are no other extra charges. Generally speaking, there are no regulations prohibiting you from bringing money into the country.

What about taking money out of the country?

#investing

As investors, when we want to cash in some of the returns from our investments here, we simply have to pay Capital Gains Tax (CGT).

[…]

What is Capital Gains Tax (CGT) ?

#investing

#tax

☝ Capital gains tax is charged on the direct or indirect sale or transfer of shares or debentures. The capital gains tax is charged at the rate of 5% of the capital gain. The capital gain on sale or transfer of shares is determined as the difference between the acquisition value of the shares and their selling or transfer price. PWC

There is a particularity in Rwanda when you sell your shares in a business in terms of paying CGT. The Capital Gains Tax is not paid by the selling or the purchasing party, but by the actual business entity being sold.

Let me give you an example to make it clear:

Let’s say I buy 10 shares in ABC.inc. and I hold the shares for 5 years, during which time ABC.inc makes 1 million dollars in revenue, which is fantastic. Then, after those 5 years, as the entrepreneur has made some money they want to buy the shares back from the investor.

In theory, this transaction has nothing to do with ABC.inc. It’s just a transaction between two private individuals. But here, the law states that the company (i.e. ABC.inc) is the one that has to pay Capital Gains Tax to the Rwanda Revenue Authority (RRA).

East African Investments Ltd. faced this exact scenario when selling some of our shares in one of our companies back to the founders. The main challenge then was that the founders themselves were not particularly well informed in terms of corporate finance law. So, we went to find the truth at the source: the RRA. But unfortunately, nobody at the RRA understood either!

So, I called PWC and they confirmed that it was indeed the business entity that had to pay CGT I called our private accountant and she confirmed that as well.

So in the end, we managed to convince the founders that even though they were the ones buying the shares from us it was the businesses that had to pay CGT, and so they did it.

CGT is 5% of the price of the sale. So, we agreed that they would pay us 95% of the agreed price and they would “give” 5% to the business which would then go to pay the CGT to the Rwanda Revenue Authority.

So, in essence, EAI paid the CGT, which makes sense since it’s EAI that made the profit.

We know that this particularity about the company having to pay the CGT has been raised as an issue by a number of accountants to the RRA and Government, but changes haven’t been implemented yet.

[…]

How do you add a shareholder to a company?

#investing

In Rwanda, the law says that when adding a new shareholder to a company, then all shareholders, past and new, need to sign a new document altogether.

So, if there currently are 10 investors in a company and you want to add one more investor to your current group of investors. Then, all 11 of those shareholders have to physically come on the same day and at the same time from the of the same notary to sign the document that agrees to sell the shares to this new investor. This is highly impractical.

So far our main way around it has been to effectively give the power to one or two of the larger shareholders, which allows them to sign on behalf of all of the investors. This, of course, can be problematic because you are effectively putting a lot of trust in those one or two individual shareholders.

BAG Innovation

Would you recommend prospective start-up entrepreneurs to come here with some initial capital? How much?

#investing #startingStrategy

For us, as a tech company offering services right from the onset, we managed to make a little revenue very quickly. But it wouldn’t have worked if I demanded a salary to cover all my costs.

If you’re coming as a foreigner, you have to be able to survive from 6 months to a year at least without getting a salary. Essentially to cover your own living costs. Then, depending on the industry, you might have to make some small initial investments too.

I would definitely recommend bringing some capital. And it doesn’t require much: if you come with USD 10 to 20 thousand you can start pretty much anything.

Where did you find investments? Was it foreign or Rwandan investment?

#investing

It was a mix. We had one convertible dept of around USD 100,000 from a local tech company that agreed to develop the initial four phases of the platform. That was a cheap way to build the technology – which was our biggest cost.

Then we got grants. Competitive grants where we competed against other start-ups. We got anything from USD 500 to USD 10,000.

Then there were some private investments from my side as well. But we haven’t given away any private equity yet.

Have you ever considered getting a holding company abroad to facilitate foreign investments?

#investing #startingStrategy

I’ve considered starting up in Sweden several times.

What most people do is that they open a for-profit here and then they open a non-profit in their home country. And then they’ll use the non-profit to sell the “social impact” and get money into their organisations.

So, if you’re a fintech, you don’t say that you “make money by providing financial solutions”, but that “you empower people with finance”. And like that, you might get 100K from a government or an investor in your country. You then use that money to pay your local company as a “consultant”. (Again, this is coming back to the dysfunctional business model.)

On our end, we work with youth empowerment, youth development, employability etc. We’re “ticking all the right boxes” for social investment. That’s why we haven’t done any proper raising, Because if we wanted 100K we’d have to give away 30-40% of the business and we’re not interested in that.

[…]

What would be the best channels to find private investment for a company in Rwanda?

#investing

There are no official channels for finding investors in Rwanda. It’s all just networking. That’s partly why people are in networks like EBCR because there might be one person who has an investor in their home country interested in let’s say ed-tech and therefore they will connect them to us since we’re in ed-tech.

The best way to find a potential investor is to find someone who has an interest, so it’s always connected to their network – usually from abroad.

The investment scene is getting better here, and governments, privates, and VCs have started opening up here since this year.

That’s because in the past 5 years everyone’s said that their biggest problem is access to finance. So, this time next year, I don’t think [access to finance] would be as big a problem as it is now.

For me personally, the best place to find private investors is definitely back home, through my network in Sweden. Going into the private owners, the private networks, and the private impact investors who are willing to take 2% equity.

Again, that’s the advantage of coming from abroad. For us finding USD 50,000 could be very easy. But for a Rwandan entrepreneur, it’s almost unthinkable.

OX Rwanda

What is the corporate relationship between the UK and the Rwandan parts of OX?

#registration #importExport

OX Rwanda is 100% owned by the UK holding company. We will continue this model for the other countries too i.e. OX Uganda, OX Kenya etc. (Unless we enter into joint ventures in those countries of course.)

#investing

So our investors actually invest in the UK holding company and the holding company has given a couple of shareholder loans to OX Rwanda. This seem to be the most efficient way to get your money back as a foreign investor.

• New Investment Law 2021
• Ministerial order No 001/2019 of 15/04/2019 (See Annex I)
• Entrepreneurs Guide to Investment in Rwanda
• Investment Promotion & Facilitation in Rwanda

Download: TRAIDE: Investing in Rwanda

IP & Trademark

Contents

• Overview
• Register for copyright
• Register a trademark
• Register a patent
• Register a utility model
• Register an industrial design

☝ RDB must publish the trademark in the official gazette in order to allow for any potential claims of the trademark. This means the time to trademark something can take between 1 to 3 months from the time of submitting the application. (RDB - Trademark Registration)

⚠️ Please mind that, unless under special circumstances, you are not allowed to trademark a product or company name that has the word "Rwanda" in it. (Case Study → Rwandan Adventures)

⚖️ In order to maintain the patent or patent application in force, an annual fee shall be paid by the patent owner or the depositor in advance to the empowered authority (i.e. the RDB) [...]. (Intellectual Property Law) The annual fee is 100,000 RWF (approx. 85 EUR) (Ministerial order n°24 of 17/03/2016 determining fees payable for registration services of intellectual property, p.75)

• Rwanda Development Board (RDB)

Rwandan Adventures

#IP & trademark #institutions

Back in the day, I owned a bicycle business called ‘Rwandan Adventures’ which I wanted to trademark. I visited the trademark desk located in a small office in the RDB building. It’s very convenient because you can literally just walk in to get help.

For a full list of services offered by RDB including details on prices and required documents please visit RDB's Service Charter (Sep 2020)

But, as I learned, you cannot trademark a business name that contains the word ‘Rwanda‘ in it.

As I eventually sold the business, I never went as far as resolving the issue. But as with a lot of things with the Rwandan institutions you often just have to get past the first layer of people to get problems resolved. Once you get to the higher levels of management you start being able to explain the situation and work things out with them.

So, for this trademark, it would have been possible to get some letters of support from the Head of Tourism and other various people and then I would have likely been able to move forward.

Download: Intellectual property law

Download: Ministerial order n°24 of 17_03_2016 determining fees payable for registration services of intellectual property

Local Insights

Contents

• Overview
• Competing with the non-profit sector
• Working with the public sector
• Rwanda as a pilot-market
• The Rwandese snack opportunity

To learn more about each unique case we encourage you to read the individually-linked Case Studies

To better understand this mechanic and its consequences for the private sector and the Rwandan economy please see the relevant section in this Case Study → BAG Innovation

This mentality is briefly described in these Case Studies → BAG Innovation, Tobias Reiter & OX Rwanda.

Read Winnaz crisps' story for an insider's perspective on how Rwandese tastes are changing. Case Study→ Holladia Fair Foods

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Local Institutions

Contents

• Overview
• Institutions you will definitely need
• Institutions you might need
• All governmental institutions
• Key educational institutions
• Other useful organisations & networks

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East Africa Ventures

How has it been dealing with the Rwanda Revenue Authority?

#institutions

Dealing with Rwanda Revenue Authority (RRA) can be quite troublesome. The reason is that the vast majority of people there don’t necessarily understand how businesses work.

For instance, when I sold the shares back to the founders, the founders did not initially believe me that CGT needed to be paid by the company. So, we went to the RRA to sort the matter. There, we found the Commissioner-General (who’s the second level of management).

During our meeting, the founders started saying that they wanted to buy back the shares using company money! Of course, we told them that was not possible, as this was not their money, it was the company’s money. Yet, when asking the Commissioner-General, he said he agreed with them, and didn’t see the difference…

The people at Rwanda Finance and the RDB’s investment after-care service are more reliable and have proven to be very useful when dealing with these kinds of matters. I’ve used them once on an immigration issue and that went very smoothly.

☝ For any bottlenecks that may arise, an aftercare officer will be assigned to follow up and fix the problem especially those that relates to issues arising between the investor and government authorities. Issues related to land, utilities and points of interaction with government bodies are mediated and resolved with the least possible impact to the investor. RDB - Aftercare

Is it easy to get legal documents recognised in Rwanda?

#institutions

In the UK it’s easy to get a document accepted as legal. Sometimes you’ve just got to sign the back of your passport picture and things like that. But it’s generally easy.

In Rwanda, the starting assumption is that you’re faking a document. So, to get a legal document recognised by a government or other institution, you very often have to get it notarized.

This has caused us numerous problems because in the UK there are notaries, but they are very few and extremely expensive. In Rwanda, if you go to get something notarized it costs less than a dollar. In the UK it is over £ 150 per page!

Plus, Rwandan authorities won’t always accept the way a document has been certified by a foreign authority. So, when trying to register a new shareholder in a Rwandan business it’s possible that your documents would get rejected.

This has happened to us when trying to register a new shareholder in the past. In order to do this, we had to prove who East Africa Investments Ltd was through our company certificate. But we just don’t do those in the UK anymore, because everything is now digitised. So I applied to HM Companies House for a company certificate’s “original print-out“ which cost about £ 200. This document showed our registration certificate and articles of association and was stamped on the rear of each page saying: ‘this is an authentic original document’.

But then when we uploaded that to the RDB system here, they told us that: “A notarised document can’t be stamped on the rear of the page”…

I ended up having to email the Registrar General for the whole country, saying: ‘this is an original document, can you please ask your colleagues from the RDB to accept this as a valid document?”. He did it, and after that, our documents were accepted.

Further contact details for the Office of Registrar General

I believe the American embassy in Rwanda has a service that allows the certification of American documents, which makes their lives easier. But as far as I know, European embassies do not. At least not the UK embassy.

[…]

Is it easy to access the right people in these institutions?

#institutions

The great thing about Rwanda is that, as a general rule, higher managers in the institutions are a lot more accessible compared to the UK.

You can even see it when visiting the websites of the various government agencies. There you’ll almost always be able to find the names, contact details, and even pictures of the relevant people from each department. There’s a real culture of transparency like that.

The advantage of being an EBCR member is that you can first come to discuss your problems with members of the EBCR community to get advice on what to do, rather than going straight to those people in the government agencies and “overusing” them.

As a general rule it’s a lot more effective if EBCR, who already know the right people to talk to, simply reach out to them on your behalf.

Sandberg Ltd.

Which institutions have you had to deal with while setting up and operating your business?

#registration

RDB – that’s it.

How was your experience with RDB?

#institutions

It has been smooth.

OX Rwanda

How was the company registration process?

#registration #institutions

We initially wanted to set up a subsidiary company in Rwanda, but we had some Covid-related delays on our side in the UK in terms of getting the documentation.  So I worked closely with the Rwanda Development Board (RDB) and the Registrar General of the Notary public and they advised on what documents we could use and how to overcome the Covid problems in the UK to get the documents signed by all the relevant parties. They were really helpful.

[…]

#institutions

Another crucial point in choosing Rwanda was its ease of doing business. Rwanda is famously a great market for proof of concept and prototyping. Companies like Zipline or Ampersand are a great demonstration of Rwanda’s enabling environment.

For us, this has been proved out in retrospect too.

I honestly can’t think of another country where 7 months in we’d have a company, we’d have bank accounts, I’d be working here with a decent visa, we’d have 5 employees, we’d have leased trucks, and we’d be running around making money and paying taxes. Where else can you do this in 7 months? Rwanda’s enabling institutions are really what allow this.

#institutions

In terms of the service they offer, the RDB is far better than other countries’ equivalent services that I know.

[…]

#institutions

The RDB Manufacturing team has reached out a couple of times as well, saying to be ‘aware of “X”‘, or ‘this is coming up. The Director of Transport at RURA (the utilities regulatory authority), has been helpful, particularly for things like the regulatory sandbox that OX will use to run the pilot.

As a general rule, you can find a lot of the laws online. The New Times and various publications also often publicise them.

Our accountants have also flagged up a couple of things along the way.

Hollanda Fair Foods

Which are the particular regulations around food processing/production/distribution in Rwanda?

#institutions

Rwanda is known to be quite strict about food regulations – which is good. They are also very good at showing up; they visit us to check regularly.

The Rwanda Food & Drug Administration (RFDA) are mandatory. You really need to comply with these.

Find out more about RFDA Guidances & Guidelines for various product categories and others.

The S-Mark is more of a quality mark. It’s something you can use for marketing. But, although it’s not mandatory, everyone says it’s a must.

[…]

How has the communication with the Rwanda Revenue Authority (RRA) been?

#institutions

With the Rwanda Revenue Authority (RRA) we’re just used to not getting replies…

I just try to at least get my proof that I’ve been trying to change things if they don’t reply that’s not my problem. That’s why I always keep the proof that we’ve sent a letter.

But we have not yet received a fine.

If I really think it’s urgent, I go via the Rwanda Development Board (RDB). I have my own account managers there. Two people that I can go to whenever I have issues. They also sometimes call me to ask me how I’m doing and if I need some help.

The RDB is very helpful, but just cos I go through them, that doesn’t mean that I always solve the problem. They sometimes also get lost in the RRA system and can’t get through to them.

Are the RDB account managers accessible to any entrepreneur?

I think that’s once you reach a certain size of business. And when you also need to have an investment certificate.

☝ For any bottlenecks that may arise, an aftercare officer will be assigned to follow up and fix the problem, especially those that relate to issues arising between the investor and government authorities. Issues related to land, utilities and points of interaction with government bodies are mediated and resolved with the least possible impact to the investor. RDB - Aftercare

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Taxes & Accounting

Contents

• Overview
• Taxpayer registration & Various Taxes
• Capital Gains Tax
• Taxpayer de-registration
• Electronic Billing Machine (EBM)
• Tax incentives
• Accounting

⚖️ Obligations of a registered business:

a) Centralised Taxes: Must file tax returns such as Personal Income Tax (PIT), Corporate Income Tax (CIP), VAT (for those registered for VAT), PAYE (for those qualifying), Consumption Tax (for those qualifying), Withholding Tax of 3% and 15% for those qualifying. Each tax declared must be paid immediately as provided by the law.

b) Decentralised Taxes: Must file these taxes and Fees: Trading License Fees, Fixed Assets Tax, Rental Income Tax and Cleaning Fees. (RRA - Taxpayer Registration)

⚠️ As an EMB user it is important that you understand your obligations on the RRA's EBM General description document

???? More information on EBM (Electronic Billing Machine) including technical specifications can be found on RRA's relevant webpage.

iCPAR : List of Members List of Practitioners List of Firms

• Rwanda Revenue Authority (RRA)

East African Ventures

What is Capital Gains Tax (CGT)?

#investing #tax

☝ Capital gains tax is charged on the direct or indirect sale or transfer of shares or debentures. The capital gains tax is charged at the rate of 5% of the capital gain. The capital gain on sale or transfer of shares is determined as the difference between the acquisition value of the shares and their selling or transfer price. PWC

There is a particularity in Rwanda when you sell your shares in a business in terms of paying CGT. The Capital Gains Tax is not paid by the selling or the purchasing party, but by the actual business entity being sold.

Let me give you an example to make it clear:

Let’s say I buy 10 shares in ABC.inc. and I hold the shares for 5 years, during which time ABC.inc makes 1 million dollars in revenue, which is fantastic. Then, after those 5 years, as the entrepreneur has made some money they want to buy the shares back from the investor.

In theory, this transaction has nothing to do with ABC.inc. It’s just a transaction between two private individuals. But here, the law states that the company (i.e. ABC.inc) is the one that has to pay Capital Gains Tax to the Rwanda Revenue Authority (RRA).

East African Investments Ltd. faced this exact scenario when selling some of our shares in one of our companies back to the founders. The main challenge then was that the founders themselves were not particularly well informed in terms of corporate finance law. So, we went to find the truth at the source: the RRA. But unfortunately, nobody at the RRA understood either!

So, I called PWC and they confirmed that it was indeed the business entity that had to pay CGT I called our private accountant and she confirmed that as well.

So in the end, we managed to convince the founders that even though they were the ones buying the shares from us it was the businesses that had to pay CGT, and so they did it.

CGT is 5% of the price of the sale. So, we agreed that they would pay us 95% of the agreed price and they would “give” 5% to the business which would then go to pay the CGT to the Rwanda Revenue Authority.

So, in essence, EAI paid the CGT, which makes sense since it’s EAI that made the profit.

We know that this particularity about the company having to pay the CGT has been raised as an issue by a number of accountants to the RRA and Government, but changes haven’t been implemented yet.

Viebeg Medical

How was the tax registration process for you?

#accounting #tax #registration

I did find it somewhat tricky because when I registered the company at the RDB I expected that I would automatically also be registered for tax. What I didn’t know was that I also had to go to the Rwandan Revenue Authority (RRA) to do that separately. Likely I had an accountant that helped me with that.

Register a company through RDB You can register for a TIN number at RRA

 ☝ Note: The company code on the incorporation certificate also serves as tax identification number (TIN) and social security number.

What would have helped, however, is if there had been a bit more clarity in terms of which taxes I needed to pay. For example, at the beginning for my smaller company TechEnfold we did not know we had to pay the cleaning fees. As it turns out, every month you have to pay 10,000 RWF (approx. 8.74 EUR) in “cleaning fees”, which is something that we don’t really have in Europe.

☝ Cleaning Fees: Payable by each branch of a business or institution. RWF 500 to RWF 10,000 per month depends upon the location and nature of activity. (RRA Tax Handbook p. 33, 2019)

☝ Obligations of a registered business:

a) Centralized Taxes: Must file tax returns such as Personal Income Tax (PIT), Corporate Income Tax (CIP), VAT (for those registered for VAT), PAYE (for those qualifying), Consumption Tax (for those qualifying), Withholding Tax of 3% and 15% for those qualifying. Each tax declared must be paid immediately as provided by the law.

b) Decentralized Taxes: Must file these taxes and Fees: Trading License Fees, Fixed Assets Tax, Rental Income Tax and Cleaning Fees. (RRA - Taxpayer Registration)

My experience was that I didn’t really know which taxes were supposed to be paid and I found myself going door-to-door in order to ask and understand. The accountant we eventually found helped us out. He was found by my business partner who sourced her from the University.

She actually had an MBA, but still really lacked an understanding of basic accounting and regulations. As a general rule, there is a big gap between the educational level and the professional requirements. As a matter of fact, Rwandan accountants often don’t know the whole system and the laws in application in Rwanda. When they come out of University they just know the very basics and then often make a lot of mistakes in the beginning, such as forgetting to declare taxes etc.

EBCR actually helped a lot with that. Discussing with the members and participating in working groups over time has really helped me gain a lot of clarity in terms of what taxes I have to pay and how things work.

It is not uncommon for Rwandese SMEs to get big fines when there is an audit because they often don’t know a lot of things about tax regulation.

Even CPAs (Certified Public Accountants) and tax advisors are likely to make a lot of mistakes because they don’t always properly know the laws. It can be hard to find a reliable source of information for these matters, and for many things, EBCR has provided exactly that.

Did you ever face any difficulties when it came to paying taxes?

#tax

No. With the exception of the cleaning fees – for which we ended up having to pay a small penalty – we have had no problems with paying taxes so far. Mostly because from the beginning I made sure to discuss with and gather information from the other European entrepreneurs here. Learning how to avoid mistakes, and generally how to do things.

Other than that, our initial investment allowed us to always have a good cash flow and therefore always be able to pay taxes on time.

How do you maintain visibility/control over your taxes and VAT declarations?

#tax #accounting

We tried with internally hired accountants and we tried with CPA (Certified Public Accountants) too. Quite frankly, in both cases, we were disappointed with the quality and reliability of the work. As a matter of fact, the advice we were given did not always match with what the RRA stipulated. So, we’d always had to double-check.

For instance, I went to the RRA to find out: How do you tax a bonus? And the CPA who’d been working on the market for 20 years and advised more than a hundred companies on that exact matter said that you only had to pay Withholding tax (WHT) which is 15%. But then I went to the RRA and learned that you actually have to declare all and pay all the liable taxes I.e. including PAYE (Pay as you earn), and RSSB Contributions which are almost 42%! So quite a big difference.

☝ WHT of 15% of the total amount, excluding VAT, is required to be accounted for on payments or other methods of extinguishing an obligation made by resident individuals, including tax-exempt entities. The WHT is due where such payments or other methods of extinguishing an obligation are made to a person not registered with the tax administration or to a registered person who does not have recent income tax declaration. (PWC, 2018)

I’m glad I didn’t just listen to the CPA without inquiring further as that could have cost a big fine. But for all the other companies who’ve made many mistakes over the years, it has been very expensive for them.

Recently we’ve found the right accounting firm to manage our accounts. We’ve also got an external CFO, which we found through an EBCR recommendation, so that network has been helpful for us.

Which is the tax that has the greatest impact on your organization at the moment?

#tax

The most we pay is PAYE (Pay as you earn) – which is what you pay for the employees on all the salaries – and Withholding tax (WHT). I think these two are almost the same every month. (We have a total of 25 employees: 14 in Rwanda and the rest are in our other East African Offices.)

For the first two years we were not yet profitable, so we did not pay Corporate Income Tax (CIT).

☝ The tax law requires that when an employer makes available employment income to an employee the employer must withhold, declare, and pay the PAYE tax to the Rwanda Revenue Authority within 15 days following the end of the month for which the tax was due.

BAG Innovation

What has your experience been with tax so far?

#tax #accounting

90% of foreigners who come and start a business here will hit a fine.

Because they don’t have a person telling them which are the basic things they have to do and which things they’ve got to look out for.

Likely I had a local accountant from the beginning who was very good at communicating those things. That was extremely lucky I think, because a lot of people miss out on the small things such as paying the public cleaning fee and patent annual fee, and the difference between paying the RRA and the RDB for whatever you’re doing. You have to figure those ones quickly, and it’s not complicated at all, you just need a 5-min discussion with someone who knows, and they’ll tell you.

☝ Cleaning Fees: Payable by each branch of a business or institution. RWF 500 to RWF 10,000 per month depends upon the location and nature of activity. (RRA Tax Handbook p. 33, 2019)

☝ In order to maintain the patent or patent application in force, an annual fee shall be paid by the patent owner or the depositor in advance to the empowered authority (i.e. the RDB) [...]. (Intellectual Property Law) The annual fee is 100,000 RWF (approx. 85 EUR) (Ministerial order n°24 of 17/03/2016 determining fees payable for registration services of intellectual property, p.75) 
Download documents: 
Intellectual property law,
Ministerial order n°24 of 17_03_2016 determining fees payable for registration services of intellectual property

See the procedure to register a patent here.

When it comes to paying on time, it doesn’t matter if you’ve got a hundred excuses. If you pay a second late, you’ll get a fine. That’s how it should be. But again, the amount doesn’t always feel proportional. We’ve also paid fines. Mainly due to lack of capacity and staff (accountants).

But the most common ones that people pay fines for are very easy to avoid. And VAT is not rocket science either, just pay before the deadline and you’re good.

Penalties and Tax declaration and payment deadlines can be found in the RRA Tax Handbook

Do you find that the time between the end of the taxable period and the deadline to file your VAT is quite short compared to other countries?

#tax

I haven’t struggled with it, but then my business doesn’t have to go through any complex processes to collect this data.

Sandberg Ltd.

From a regulatory perspective (looking for example at the kind of taxes that you have to pay) what are the key differences between having employees or contracting consultants?

#tax #hr

It’s much easier with consultants because you don’t carry the financial responsibility of paying their maternity leave, pensions, etc. so the tax looks different.

☝ Maternity contributions All workers are governed by labour law, general statutes for public service or special statutes.

0.6% of Gross salary (0.3% employer’s share and 0.3% employee’s share.) If an employee has more than one employer, each remits contributions. (RSSB Maternity leave)

Find out more about pension and other contributions on RRA's website under RSSB

While with consultants (on short-term contracts) you can just calculate 15% [Withholding Tax] and that’s your all you have to pay in taxes. So, it helps me as a company to work that way and not have staff to be responsible for. It makes my personal setup a little lighter.

Do you have an accountant to help you file your taxes?

#accounting

Yes, I have a “consultant-accountant” who helps me file my taxes. I don’t want to do that myself. I really need somebody who knows the system and who knows the Rwanda Revenue Authority (RRA) and can do the communication and can also fix invoices and EBM (Electronic Billing Machine) receipts.

Did you find the right accountant from day one?

#accounting

I’ve tried a few. I took a well-renowned company at the beginning, but they were very expensive. Today, I have a consultant that comes in from time to time and so it’s really a few things that he needs to do. I don’t have a high volume of transactions, so I just need somebody on a monthly basis, not on a weekly basis. So that’s a cheaper model.

Where did you find these accountants?

#accounting

The first ones I found through recommendations from my network. The latest one was by chance while sitting in a café. I needed help with the Electronic Billing Machine, and they called the accountant of the company to come to help me. We started chatting and like that randomly…

But I trusted the company I was sitting in, so I thought: ‘If he can do their accounting then he can do mine.’

OX Rwanda

Where did you find your accountants?

#accounting

We’ve found our current accountants through a recommendation from people who have worked with them in the past.

Banking and accountancy have been two important errors that we’ve learn to pay attention to.

One of our first hires, post-series A, will be a CFO for the UK holding company. We want to be sure to have somebody with experience in international finance and cross-border transactions as well as tax efficiency and IP agreements.

Until recently we’d hired an external accounting consultancy on a monthly retainer. But one of the employees who were really good there has moved, so we decided to move with her to the other accounting firm she joined.

BDO East Africa

Regarding taxation, what word of advice do you have to give to foreign companies considering a move to Rwanda?

#advice #tax

As a tax professional, I know that the easiest way to come and operate in a new country is to get a local partner who understands the business itself and who also understands the “dos and don’ts”, including regarding exposure for tax and compliance.

Another thing is that

someone might come from another country which is more “tax-strict” and think “Ok, now we’re going to Africa and in Africa you can easily dodge taxes”. But then, when they arrive in Rwanda, they quickly become disappointed…

Secondly, people think that because they are coming on the red-carpet laid out by the RDB they can easily grab tax incentives. But the RDB is doing its role of “marketing”. Then when you go to the Rwanda Revenue Authority (RRA) they might tell you: ‘Look, this is how the tax system operates. You’re in or you’re out.’

Just cos a minister signed for you a paper saying you are tax exempt doesn’t mean that you will necessarily be given a tax exemption. You need to make sure you double check with the RRA.

What are the key differences between tax systems in Rwanda and Kenya or Uganda?

#tax

Within this region, most tax systems are more or less harmonised. Even tax rates tend to be similar. The only difference is how rigorously a country enforces them.

In Rwanda, the system is more effective at enforcing tax regulation. These neighbouring countries are sometimes more “relaxed” with enforcement.

If you compare Tax Revenues with the Country’s GDP, you see that Rwanda is the most effective at collecting tax in the East African region.

Also, when you compare how much tax the Government collets and how much the public feels the benefit of public investments, Rwanda is again the best in the region. People feel like they are getting back what they are putting in. You see security, you see cleanness, a well-maintained road network, you see a vibrant city and you know this comes from the taxes. No one here will tell you they don’t feel like they are not getting something out of their taxes.

People might tell you taxes here are ‘very touch’, but not because the rates are particularly high or because they are applied differently, it’s just because of the difference in enforcement and the greater regularity of the checks.

For example, with the new EBM (Electronic Billing Machine) system the Rwanda Revenue Authority (RRA) is trying to get your tax performance before you even come to declare it. Neighbouring countries are also implementing the EBM system, but not at that level of, let’s say “intelligency”.

Then, of course, if you have been operating in a country where you’ve been able to easily play the system without paying taxes, you’ll come here and you’ll find it disappointing.

Find out about the EBM II the next generation of Electronic Billing Machines currently in pilot phase.

The Government in Rwanda is supporting and promoting certain sectors through various tax incentives. Do think these tax incentives are effective in the way that they are applied? Should foreign companies trust these tax incentives or do they risk being disappointed by the RRA later?

#tax

What is written in the investment law, is what’s effective. But people often prefer to hear than to read. So, if you hear what the RDB preach to you you’ll only hear about the tax incentives and exemptions. But when you come here, you’ll still need to see which exemptions you’re actually eligible for.

Someone might hear that “under certain conditions, we offer you 7 years tax-free!”. So, people like to retain the easiest interpretation which is: “tax-free!” but there are always some pre-requisites, and you have to pay attention to those.

Find more details about tax incentives for key sectors in the New Investment Law (2021)

What does it take for someone to navigate the Rwandan tax system? Would you say that entrepreneurs coming here can just get by on their own or would you say that it’s necessary that they get an accountant?

#accounting #advise

I would strongly advise him or her to get a tax advisor. It won’t cost a full-time job, but they’ll benefit from it a lot.

I don’t see someone doing their business with peace of mind without having a tax advisor.

Some will navigate of course, but the fines are so heavy that it’s easy to lose the entire business because of one.

Penalties and Tax declaration & payment deadlines can be found in the RRA Tax Handbook

Hollanda Fair Foods

How did you learn how to navigate the tax system?

#tax

A lot of ex-pats here complain about taxes.

Yet, a lot of things that they are complaining about are actually just straightforward.

The problem is that a lot of companies in the private sector (maybe 60% of them) that you’ll deal with do not want to follow the rules of the RRA. So, if you’re trying to be transparent with the RRA it becomes difficult because your suppliers or service provider will not always give you the right information and supporting documents. This can make things difficult and make your tax filings complicated and you risk the RRA telling you that your taxes are not in order.

Rwanda is changing very, very fast. For example, before June 2016 EBM (Electronic Billing Machine) were non-existent and everyone was using paper. Now everything is changing.

You have a big informal sector. Lots of payments with no proof whatsoever. Now you have to prove it. And to prove you need to pay for the billing machine, you have to connect it to the network, and you need the platform to deal with the RRA, and the connection isn’t always working… So the infrastructure is not quite yet ready and also the people don’t always know how to use it properly yet.

Learn more about the minimum requirements for the EBM - v2 software.

So in Rwanda, we’re living in two realities: One where you need to do all the paperwork perfectly and the other is the informal economy. But those two realities need to live together and sometimes the companies who are trying to be compliant live in the middle of these two realities…

How do you resolve this problem for Hollanda Fair Foods?

#tax

One thing is just to accept penalties. That’s what you don’t want.

The other thing is that you might lose clients. So, for example, some clients might even refuse to sign delivery receipts when they buy our crisps because they are afraid of anything that comes close to formal. So, there you have to think: “Do I accept this, or do I refuse this client?”

And there the client might see you as arrogant and think you just don’t understand their culture. So it sometimes gets tricky to deal with these things.

For us, sometimes we might choose to sacrifice a client for the sake of being compliant and other times the opposite. But we can still be compliant in the second case, it just means that it makes our book-keeping more difficult.

So, we still give a delivery receipt for every client, and we still pay VAT (same for our suppliers). And if a contracting consultant doesn’t provide the right paperwork, then we pay Withholding Tax.

So in the end, we are actually tax-compliant. Though sometimes, because you don’t always have the official documents things might slip through and your bank statements might show that you have paid, but your tax statements don’t. And if that’s the case that means something has happened informally.

You really need to keep on top of it and if you’re busy when you’re growing, you sometimes forget things like that.

For me, the last time I paid a fine was June 2016. So, I have been managing well.

Penalties and Tax declaration & payment deadlines can be found in the RRA Tax Handbook

How do you do the accounting?

#accounting

I outsource it.

Have you been happy with the accounting services?

#accounting

No. I have just had a meeting with my new accountants today…

I would also advise any new entrepreneurs coming here to ask for your accountants’ certification and double-check it.

So our new accountants now they are certified by iCPAR.

ICPAR: List of Members List of Practitioners List of Firms

How many different accounting firms have you tried so far?

#accounting

I’ve changed every 18 months.

Because after each year I did an audit. Which I passed but with one or two unacceptable comments.

(I’ve even had to bring in 4 different auditors because I was also not happy about the auditors we got.)

So every time you’ve had an audit or at the end of the fiscal year, you’ve personally gone back and double-checked your accounts?

#accounting

For us, we’re still a small business and we don’t have a turnover that would justify an audit. But I still have to do it for my investors.

• Laws, Policies & Rulings – Rwanda Revenue Authority
• RRA Tax Handbook
• PWC – Tax briefings
• Calculating PAYE
• RDB Business Procedures – Paying Taxes

Trading in the EAC

Contents

• Overview
• Rwanda as a gateway to EAC
• Fiscal Regime under the EAC Common Market
• Certificate of Origin
• Trading with the EU
• Export licences
• Import licenses

⚠️ The EAC Common Market vision is not fully implemented yet. Reviews of the relevant laws to ensure the smooth operation of the EAC Common Market is ongoing in all the Partner States.

The major limitation of the East African Community (EAC) is the fear among member countries of losing tax revenues as a result of tariff reductions, especially given that tax is the main source of revenue in developing countries. On the other hand, however, an equally convincing argument is that economic integration has a positive impact on revenue over time, particularly if trade liberalization leads to better resource allocation, thereby stimulating growth and, in turn, tax revenues. (JEI, 2016)

☝ The EAC Common Market protocol will aim to progressively eliminate all customs taxes, shift the customs borders between the Partner States to the peripheral as well as harmonise tax policies and laws to facilitate the free movement of goods, services, and capital and to promote investment within the Community. Find out more about the vision for the EAC Common Market in the EAC Customs Union Protocol.

Find out more about The Rules of Origin Criteria established in 2015.

See locations of all the RRA Stations & RRA Customs Offices

Learn more about the EU's EBA initiative.

☝ The "S-Mark" is a powerful marketing tool for all manufacturers, especially exporters. This eliminates the need for products to be re-tested all the time; Displaying the mark gives a product real point-of-sale differentiation resulting in more sales and greater revenue [...] (RSB)

To avoid needing an export license when trading with the Democratic Republic of Congo there is a practice of making a special arrangement where your customer comes to pick up the products at the border. (Case Study → Viebeg Medical)

• Rwanda Revenue Authority (RRA)

Viebeg Medical

As a general rule,

Rwanda is a great starting point for brining your product to the East-African market. It acts as a hub from which you can scout surrounding opportunities and then deliver services and goods to surrounding countries

that may, for example, have more civil unrest, and greater barriers to entry business-wise, such as bureaucracy, or even competition. #importExport

After Rwanda, which was the next East African market you went to?

#importExport

The next market we went to was Kenya. In part, because my business partner is from there, but also because after Rwanda it likely is the next easiest place to do business in (in East Africa).

[…]

What kind of import/export taxes are you subject to?

#importExport

There is a 7% import tax on medical products entering the country, regardless of where they are imported from the East African Community (EAC) and EU countries are treated the same for that.

☝ Rwanda is a member of the East African Community, which uses the East African Community Customs Act (EACMA) for levying import duty. The EACMA prescribes Common External Tariffs (CET) for goods originating outside the Customs Union. Goods are generally subject to an import duty of 0% for raw materials and capital goods, 10% for intermediate goods, and 25% for finished goods.Goods will only enjoy the preferential community tariffs if they meet the East African Community (EAC) Customs Union Rules of Origin. (PWC)

You can find more details on Custom's Tax by visiting RRA's relevant page

Do you have any advice for companies interested in entering the East African markets?

#importExport

My advice for companies looking to expand into EAC is don’t go too fast. There are a lot of things that could go wrong, politically, economically but also in terms of the competition. I’d advise waiting at least two years before expanding so as to make sure to first have a solid base in Rwanda.

It also takes time to adjust your product or service offering to the adjacent market. The products that we are selling in Rwanda are not always the best product-market fit for poorer countries like Burundi. Likewise, they are not always the best products for some richer countries like Kenya.

So you likely will need to do to adjustments to the products or software that you’re selling before entering the new market. Also, keep in mind that the competition is often higher in other countries like Kenya. These are things that it is important to take into consideration before making the jump.

How important is it to try and find a business partner in those countries before expanding there?

#importExport

I think it depends because you wouldn’t just trust anyone with your business. You have to be careful who you start a joint venture with because once you get started it might be tricky to pull back.

In our case, when moving to Kenya, we did it because we’d known the person for many years, and we trusted them. Still, our approach was very progressive to minimise the risk.

But, having a local business partner in some of those neighbouring countries does help a lot. They can really help you grow your company, help you understand the market conditions, and the regulatory situation and overall reduce risk. If you really know the person well, I’d advise it.

In some countries, like Tanzania, it is actually a legal requirement to have a partner (unless you invest over 750,000 USD). I’ve seen many companies fail because of that, and I’ve seen many companies succeed because of that.

What kind of hindrances has COVID caused to you in terms of being able to export to those countries?

#importExport

Huge. Normally a lot of our revenue comes from the DRC and Burundi. But the borders were completely closed – and are still closed for Burundi. So, we cannot really do trade with Burundi, Congo, and Tanzania.

We have also had a lot of difficulties importing products from Kenya and Uganda. So, the intra-African trade was really made more difficult because of it. Trading between these countries became harder and also financially less attractive. So for the moment, we’re refocused on Rwanda.

Are there any particular tax-related regulations that someone should be aware of before starting to export into EAC?

#tax #importExport

I’m not sure as we don’t actually do any exporting.

There are different ways to get products to other countries, but mostly you would need to apply for an export license.

At the moment we have special arrangements with our customers in Bukavu and Goma, where they just collect the products at the border. It’s 100% legal, and it means we don’t need an export license.

Also, it avoids us having to deal with the Congolese border as there can be a lot of corruption with these things and we don’t want to engage in that.

It’s actually the clients that advised us to do that. It is something that is common there.

BAG Innovation

#importExport

Most entrepreneurs who come here have the intention to go to East Africa, but East Africa is not open yet. This means that you’re completely blocked in Rwanda. So, until it opens it’s going to be a very dysfunctional situation. But when it does open up it’s going to be the best situation ever. That’s what everyone is betting on (us included): that the politics are going to get better.

But there is no going around it:

If you want to make money in Rwanda, you need to go into Pharmaceuticals, or sell bricks, or sell something that’s “high volumes low margins”. But otherwise, the customer base is too small and the general public’s purchasing power too little.

[…]

What keeps the East African Markets closed?

#importExport

My second business is a game company that prints materials from Uganda. The first year we were here we were able to do all the printing and it went well.

But then relationships went South… imports and exports through Uganda just went down the drain and we haven’t been able to get a single thing into the country since then.

Our Rwandan staff can’t go into Uganda as there’s very bad blood between the countries. It’s mostly due to the bad relationship between the presidents. The same goes for Burundi.

Rwandans don’t really dare to go into Burundi, even if they can they don’t dare to go into Burundi (which is also one of our potential markets).

Tanzania, I think we’re fine with it. But at the same time, there’s no collaboration, there are no incentives to go deal with Tanzania. Import and export taxes are way too high still.

If someone could push a button and enable this East African Community (EAC), it would be such a massive super-power. But there are still small petty arguments standing in the way.

Is that true for all industries?

#importExport

I can assume that logistics and supply chain industries might find some benefits. So, if you have a logistics company you probably have some certificates because of the EAC.

Personally, the only way in which I’m currently benefitting from the EAC right now, is that I can enter Maasai Mara with a resident price…

OX Rwanda

How do you generally feel about transportation costs? In terms of bringing goods and people to Rwanda?

#importExport

I think it costs US$ 3,000 for a full container coming from Mombasa (1,468 km). Later on, when we have six (since we pack six trucks into a 40-ft container). It’ll be a shared-road transport cost, boiling down to about US$ 500 per truck, which is okay. But it’s kind of funny how it works at the moment. It seems like you get charged for the two-way trip: Mombasa – Kigali and return.

Hopefully, as Rwanda starts exporting more and more, this will drive the prices down. At the moment we’ve teamed up with a new company on the scene called Seafast Africa Logistics. We started talking to them because they’re getting involved in the cold chain in Rwanda. This is also something that we’re looking to start because it’s something that’s been identified as a strategic priority to reduce agricultural food waste.

So, while talking to them, we mentioned, that we have trucks that are going to be coming into the country and they said to count on them for the logistics.

[…]

After Rwanda, where are you planning on going next?

#importExport

At the moment, we’re 14 engineers and two-and-a-half business people. Soon we’ll be raising a Series A to hire more people, and this will allow us to look into the different options.

We’ve had a team of students from Warwick University (the university where I did my MBA) looking into options for us and recommending where we could go next. They looked into the various markets and the different value chains, the local availability of transport, etc and they suggested countries like Uganda, Kenya, and Tanzania. I’ve been looking into Zambia as well.

But the idea is to always have Rwanda as the hub for East Africa.

For instance, one of the things we do at OX is flat packing the vehicles, shipping them flat-packed into containers and then having them assembled on the continent. So, I think the location of the assembly – the “micro-factory” – will remain here in Rwanda and then we’ll just be exporting the assembled trucks to the different East African countries.

When do you think you’ll be ready to make the move to another country?

#importExport #collectingMarketData

Our objective for the moment is to put 150 trucks in Rwanda by next year. From there we want to double production to 320 in 2020, and then double each year from there. We’re aware that demand in Rwanda may not absorb these trucks. If that’s the case, we’ll turn to other countries.

From our market research, we’re quite certain that there is a demand in those countries. But we’d still need to figure out what this demand will actually look like, including what will be the typical drive-cycles and things like that.

We’ve already had some inbound queries, including a company in Kenya which is looking to buy 50 trucks to do their last-mile delivery. If we can figure out a business model, where they buy the trucks and then they give us an operating contract this could be one way to enter that foreign market. Alternatively, we’ll probably follow a similar strategy by first deploying some pilots to other countries.

Hollandia Fair Foods

Have you started exporting to other countries?

#importExport

We are trying to export.

Uganda is a very difficult market. Not because of Uganda itself but because of the relationship with Rwanda. There have been issues for many years…

We’re going to start building a second factory there now.

What makes export so difficult?

#importExport

The political situation. They’ve closed the borders because of political tensions between the two countries.

Our clients over there are reluctant to work with Rwandese companies. So as a foreigner I manage because it’s not obvious that I’m from Rwanda and they care less as well.

With Congo, it’s not a problem.

At the moment 65 to 70% of our turnover is still in Rwanda.

After how long did you start exporting?

#importExport #insight

After about 5 months, because the idea had been there since the beginning. We knew the Rwandan market was too small.

Do you need an export license?

#importExport

Yes. Especially for exporting food to East Africa, they ask for the Rwanda Standards Bureau (RSB)‘s Standardisation Mark — or “S-mark” — license. But otherwise, you don’t need a special license.

☝ The [S] Mark is a powerful marketing tool for all manufacturers, especially exporters. This eliminates the need for products to be re-tested all the time; Displaying the mark gives a product real point-of-sale differentiation resulting in more sales and greater revenue [...] (RSB)

• East Africa Community Customs Management Act
• EAC Regulations
• EAC Common External Tariffs
• The Rules of Origin Criteria
• Rwanda Trade Portal
• EAC Public Documentation
• PWC – Tax Summaries

Visa & Immigration

Contents

• Overview
• Visas
• Temporary Resident Permits (work permits)

Apply online through the Irembo portal

Rwandan Immigration policy is generally quite open and accommodating in terms of letting investors and entrepreneurs in the country. (Case Study → OX Rwanda)

• Directorate-General of Immigration and Emigration (DGIE)
• Rwanda Development Board (RDB)

BAG Innovation

What kind of visa did you require in order to come here initially?

#immigration

The first time I was here (working as an expansion manager with the entrepreneurship school) I was on the East African Visa. That was for 3 months.

That’s when I decided to come back and do the research for the business. They have this visa for when you want to come here and explore opportunities. I think it was called a “prospective investor visa”. You’re not allowed to make money and you can’t officially “do business” but you’re allowed to do the research for it.

☝ The Visa Subclass V6 is "issued to a foreign prospective investor, entrepreneur or trader who visits Rwanda to explore available business opportunities" (Immigration.gov)

You review all visa classes and work-permits here.

What kind of visa do you currently have?

#immigration

Good question; they give me a different one every time I apply… Most people will tell you that it doesn’t really matter what visa you choose on when you send in your application, they are going to give you another one. At the end of the day, they’ll do their own analysis and give you what you’re eligible for.

At the moment I think I’m on a Z1 or Z2, which is some kind of investor visa. In the beginning, I got an entrepreneurship visa but now, after a few years, I think I’m getting an investor visa.

☝ Citizens of all countries are allowed to get visa upon arrival without prior application. Citizens from certain countries are waived visa fees for a visit of 30 days. (Online Visa)

All visa applications can be completed online through the Irembo portal

Sandberg ltd

What kind of visa have you required in order to set up and operate your HR consultancy in Kigali?

#immigration

When I arrived back from Denmark and had to re-apply for a work permit (before COVID) in order to apply for a visa, I needed to “have an office with a door that closes”. And I also needed to have my “logo showing up on the street”, so people know that I have my office there.

These were the two requirements that immigration imposed on me when I had to renew my work permit last time. There are the things that are stated on the official website and then there are also the unofficial requirements. These couple of things were not very clear from the onset.

The official required documents can be found though RDB's Business Procedures webpage for each visa category.

Before that, I had my address at the Westerwelle. But the authorities didn’t really want foreign companies to be in co-working spaces, they really wanted us to find and rent our own offices. (Probably because they are building a lot of buildings and I guess they are empty). They were really pushing for foreign companies to have their offices.

For now, with Covid, these practices have changed, but they might come back.

OX Rwanda

What has been your experience with applying for visas so far?

#immigration

When coming to Rwanda with my wife who’s Egyptian, it was great to see that everyone is equal on arrival. Everybody gets a 30-day entry visa, whether you’re British, Egyptian or from wherever. I think this is a very forward-thinking open policy which is great to see.

☝ Citizens of all countries are allowed to get visa upon arrival without prior application. Citizens from certain countries are waived visa fees for a visit of 30 days. (Online Visa)

When I first arrived I applied for a the 3-month prospective investor visa. I applied through Irembo (the department of immigration‘s digital portal) which is a really good and straightforward service. The application process was very easy. Everything is very well laid out.

☝ The Visa Subclass V6 is "issued to a foreign prospective investor, entrepreneur or trader who visits Rwanda to explore available business opportunities" (Immigration.gov)

I asked Manufacturing Africa (the UFDO programme) for a letter saying what OX was about to do and recommending granting me a prospective investor visa. I uploaded everything on through the portal and within a week I was approved.

Then later, the delays we had in setting up the company meant that I had to apply for an extension on my prospective investor visa. But there were no problems with that at all.

At the same time, we applied for my wife’s 3-month tourist visa, through Irembo. Again, no problems at all.

And then as soon as OX Rwanda was incorporated as a 100% subsidiary of the UK company, I was made Managing Director of OX Rwanda, and so I applied for a work permit – again, through the Irembo portal. Within maybe three hours of pressing “submit”, I had a call from the department of immigration asking for some clarifications, following which I was granted an 18-month multiple-entry residence permit.

I’ve applied for working visas in countries like Egypt, India and Ghana, and this was by far the easiest it’s ever been.

The exact costs and procedures for all kinds of visas can be found on the RDB Business Procedures relevant webpage

How has it been for your wife to follow you here? Has she been able to tag along with that 18-month visa?

#immigration

My wife will probably be here about 6 months a year so we’ll apply for a dependent visa. A lot of people I’ve talked to said that dependent visas are not a problem. I don’t see why it wouldn’t work as long as you’ve got the paperwork. I know a lot of people here that have done the same.

• The annexe on page 75 of the Ministerial order from 06/2019 lists all Temporary Resident permits
• All laws, publications, and ministerial orders are from the Directorate-General of Immigration and Emigration’s official website.
• You can review all visa classes and resident permits here.
• Visitor Visa Classes
• Temporary Resident Permits under Class H – Worker with specific employment by a specific employer
• Temporary Resident Permits under Class Q – Foreigner undertaking a defined assignment for a specific period
• Occupations on Demand list (see Annex on page 7)