Rwanda company registration

DOING BUSINESS IN RWANDA IN 2019

Rwanda is one of the safest investment locations in sub-Saharan Africa, with lower corruption, higher growth and easier company formation than the majority of countries in the region. The only weaknesses Rwanda has, as an investment location is its unfavorable corporate tax rate and some general limitations on limited companies. Rwanda can be the perfect choice for any entrepreneur looking for a secure entrance to the African markets.

Since 2003, Healy Consultants Group PLC has assisted our Clients with business registration in Rwanda. Our services include i) Rwanda company registration ii) Government license registration iii) Business bank account opening iv) Employee recruitment v) Visa strategies and vi) Office rental solutions.

Summary table of Rwanda company registration

SummaryTax resident LLCTurnkey solutionFree zone LLCRepresentative officeBranch office
Also known asPrivate companyShelf companyEPZ companyROBranch
Best use of company?All products and servicesClose a customer deal nowManufacturing and export tradingMarketing & researchSpecific projects
How soon can you invoice Clients/sign sales contracts?6 weeks2 weeks3 monthsCannot trade6 weeks
How soon can you hire staff?6 weeks2 weeks6 weeks6 weeks6 weeks
How soon can you sign a lease agreement?1 week1 week2 weeks1 week1 week
How long to supply corporate bank account numbers?6 weeks4 weeks6 weeks6 weeks6 weeks
How long to supply company registration/tax numbers?6 weeks3 weeks6 weeks6 weeks6 weeks
Corporate tax rate on annual net profits?30%30%15%Cannot trade30%
Limited liability entity?YesYesYesNoNo
Government grants available?YesYesYesNoYes
Government approval required for foreign owners?NoNoNoNoNo
Resident director/partner/manager/legal representative required?NoNoNoYesYes
Minimum paid up share capital?US$1US$1US$50,000US$1US$1
Can bid for Government contracts?YesYesYesNoYes
Corporate bank account location?BPR AtlasmaraBank of KigaliCogebanqueI&M BankEcobank
Can secure trade finance?YesYesYesNoYes
VAT payable on sales to local customers?18%18%18%Cannot trade18%
Average total business set up engagement costs?US$16,240US$16,240US$21,140US$16,390US$17,240
Average total engagement period?4 months3 months4 months4 months4 months

Rwanda company registration summary

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  • Advantages and disadvantages

    Advantages of Rwanda company registration

    business registration in Rwanda

    1. Rwanda has been a member of the World Trade Organization since 1996, and thus, enjoys all the benefits provided by membership;
    2. The Rwandan economy has a strong agricultural sector, which is responsible for the majority of economic activity in the country. Rwanda also has a growing mining and manufacturing industry, which has seen rapid expansion in the wake of investment friendly policies implemented by the government;
    3. Rwanda has an abundance of lakes and streams that make it an ideal climate for hydroelectric power. This industry is relatively untapped, leaving plenty of opportunity for future investment;
    4. Rwanda has grown steadily over the past decade, avoiding a recession during the global downturn in 2008. Since the downturn, growth has increased rapidly, with the economy growing 7.2% in 2010 and 8.6% in 2011;
    5. A Rwanda limited liability company (LLC) requires only 1 shareholder and 1 director. A Rwanda LLC can be entirely foreign owned with no restrictions place on foreign owners;
    6. Thanks to recent reforms, a Rwanda LLC requires no minimum share capital;
    7. Registering a company in Rwanda is relatively easy. With the assistance of a global services specialist, incorporation can be completed in an average of just 3 days;
    8. Rwanda is positively ranked as the 55th least corrupt country in the world, according to the 2014 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians. Rwanda is the 3rd least corrupt country in sub-Saharan Africa;
    9. Rwanda is positively ranked as the 52nd easiest country to do business in. The International Finance Corporation study also ranks Rwanda as the 8th easiest country to start a business in, with ease of getting credit and paying taxes also listed as strengths;
    10. The government of Rwanda has implemented an ambitious development plan called the “Rwanda Vision 2020”. This economic strategy program would benefit all the businesses in Rwanda by:
      • Bringing agricultural transformation in the economy through increasing openness and integration with the private sector;
      • Making Rwanda a knowledge-based economy by educating the population in science and technology and ICT skills as well;
      • Improving the infrastructural facilities of the country by i) land use management; ii) urban development; iii) developing alternate low-cost modes of transport; iv) increased internet access and v) sustainable waste management.
    Employees

    The computer literacy rate in Rwanda is 60%, one of the highest rates in Africa, thus more productive and efficient employees.

    Cost of living

    Rwanda is much cheaper than many African and developing countries. The average rent of three bedroom house is US$800 per month and average monthly salary for skilled labour is US$500.

    Business environment

    Recently Rwanda Development Board passed a new regulation; this new law in Rwanda allows a broader definition of what can be used as collateral in loan transactions. This can include inventories, vehicles, agricultural produce and accounts receivable. Thus, it will allow easy access to credit.

    Disadvantages of Rwanda company registration

    Rwanda corporate tax
    1. A Rwanda LLC is liable for a corporate tax rate of 30%, and may also be liable to pay a VAT rate of 18%;
    2. Rwanda is negatively ranked as the 62nd most competitive economy in the world in the Global Competitiveness Report 2014 – 2015;
    3. Rwanda was negatively ranked as the 63rd freest economy in the Heritage Foundation’s 2013 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets. An ineffective legal system and limited access to banking and other financial services were listed as the main reasons behind the low rank;
    4. The Rwandan government has placed limitations on the industries which a limited company may do business in. Banking, insurance, finance and leasing all require the formation of a public company;
    5. It can be difficult to open global corporate bank accounts to support company registration in Rwanda. Healy Consultants works with internationally recognized banks to provide corporate bank account services.
    Business costs
    1. The high cost of doing business is cited by SME owners as one of the biggest challenges. This is in terms of high energy and transport costs. According to the World Bank data, the price of gasoline in Rwanda is 1.53 EUR per litre and the price of diesel is 1.52 EUR per litre which is which is 35% and 50% respectively higher than the average world price;
    2. Due to low incomes and a large portion of the population being in poverty, the biggest factors holding its economy back are the poverty cycle, the lack of infrastructure and social/cultural factors.
    Language

    The English literacy rate in Rwanda is under 30%. Consequently, it is difficult for foreign entrepreneurs to efficiently grow their business in Rwanda as business communication must always be translated into French or Kinyarwanda, the native language.

    Landlocked country

    Rwanda is completely landlocked and has significantly high cost of transportation to the ocean ports of Kenya and Tanzania. Therefore, it is expensive for manufacturing and export-oriented companies to incorporate in Rwanda.

  • Best uses for a Rwanda company

    Industrial hub

    1. Industrial hub: Rwanda boasts an export processing zone, which offers duty free imports of machinery, plants, equipment and raw materials and tax free export operations. An additional benefit if operating in these zones is that the company enjoys a reduced income tax rate of 10% for ten years.

Company registration

  • Time to incorporate: Six weeks
  • Cost to set up: US$16,240
  • Minimum capital: US$850
  • Physical office required: No

Required appointments

  • Shareholders: 1
  • Directors: 1
  • Company secretary: No
  • Resident director: No

Key facts

  • Corporate tax rate: 30%
  • Corporate tax base: Territorial
  • Shelf companies: No
  • Main company type: Limited company

Frequently asked questions

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Contact us

For additional information on our company registration services in Rwanda, please contact our in-house country expert, Ms. Tatyana Kovpak, directly:
Consultant at HC - Tatyana
  • Ms. Tatyana Kovpak
  • Client Engagements Manager
  • Contact me!
unicef Rwanda psf Rwanda Rwanda government website bnr Rwanda rwanda chamber of commerce rdb Rwanda