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An overview of the changes in the Employment (Amendment) Bill 2022

Abstract

As a country, Uganda has various laws which govern employment including The Employment Act 2006, The Employment Regulations 2006, The Labour Dispute Arbitration and Settlement Act, The Labour Unions Act, The Occupational Safety and Health Act 2006, Workers Compensation Act Cap 225, The Employment (Recruitment of Migrant Workers) Regulations, 2005 among others. These laws govern various aspects of labourers and employers including their rights, working conditions, dispute resolutions, dos and do nots among others.

The current law which governs individual employment relations is the Employment Act 2006. This Act was enacted to revise and consolidate the laws governing individual employment relationships, and to provide for other connected matters.

Credit: Unsplash

At the end of the day, the true value proposition for education is employment.

Sebastian Thrun

Introduction

The Parliament of Uganda has recently tabled a private member’s Bill the Employment (Amendment) Bill 2022 mainly seeking to address some defects in the current Employment law addressing casual laborers/employees, domestic workers, migrant workers, breastfeeding mothers, sexual harassment in employment and severance allowance among others

Sexual Harassment in Employment

Whereas the current law only defines what constitutes sexual harassment, the procedure for a complaint in case of sexual harassment at work and limits the requirement for sexual harassment procedures to employers with more than twenty-five employees, the Bill further proposes prohibition of mistreatment, harassment and violence at the workplace. In addition, to define what constitutes mistreatment, harassment and violence at the workplace, under the Bill, it is mandatory for all employers to put in place measures to prevent sexual harassment and it is an offense for any person who does not comply with this provision.

Employment of Children

The Employment Act allows the employment of children below the age of fourteen in light work under the supervision of an adult. The Bill increases this age limit for light work to sixteen years to protect children from exploitation and child labor.

Protection of Employees

The Bill further proposes an expansion of the definitions of contract of service and employee to cater for casual and domestic work while prohibiting employers from retaining or withholding original personal or professional documents of an employee.

The Bill protects special categories of employees including persons with disabilities, domestic workers and casual laborers by granting the Minister authority to prescribe a complaint handling mechanism to govern the employment of this category of workers who need special protection.

Casual Employees

The Bill proposes that any form of casual employment exceeding four months be converted to a term of employment thus entitling the casual laborer to a written contract and all rights and benefits enjoyed by employees.

Migrant Workers

In respect to migrant workers, the Bill provides for specific obligations for employers of migrant workers while creating an offense for non-compliance. The Bill further defines what a recruitment agency is, the obligations such as the orientation of workers, keeping records ensuring that the workers’ contracts are in compliance with employment laws among others, the minimum employment standard requirements of the agencies, and clarifies who is eligible to be licensed to engage in recruitment and placement of migrant workers.

Repatriation Allowance

The Employment Act currently provides that on termination of an employment contract, repatriation allowance should be given to employees who worked one hundred kilometers away from their homes, and automatic repatriation allowance for employees that have worked with the employer for more than ten years. The Bill reduces the distance to fifty kilometers and five years for automatic repatriation allowance in case of termination of an employee.

Severance Allowance

Previously, the Employment Act left a gap in the calculation of severance allowance leaving it to be arrived at by negotiations between the employer and employer. The Industrial Court in various complaints established a formula for the calculation of severance allowance which had become the practice. The Bill has addressed this lacuna by explicitly providing for the formula for calculating this allowance.

Breastfeeding Mothers

The Employment Act currently provides for maternity leave in respect of the protection of female employees, the Bill strives to further protect new and breastfeeding mothers by providing for thirty-minute breastfeeding breaks daily in every two hours or a reduction in the contractual hours for an additional sixty days to allow her to breastfeed her child. The employer is also obliged to establish a lactation place at work to allow breastfeeding mothers to breastfeed their children during these breaks.

Outsourcing services

The Bill introduces a new provision on outsourcing of services requiring contracts with a third party to make sure that the contracts of the employees of the third party are in compliance with the employment law before engaging their services.

Impracticability and Enforceability of the bill once enacted

Domestic Workers

The Bill categorizes domestic workers as employees. This means that every single person in Uganda who employs a person including housemaids, nannies, shamba-boys, gardeners, drivers, etc. should have to sign a contract of service with each one of them entailing their scope of work, pay, leave, rights among others in addition to payment of the statutory contributions of their employees.

This implication is that in addition to looking for and saving money to pay basic household bills, necessities, school fees, etc. any person in Uganda employing a domestic worker whether temporarily or not would have to put aside money earned from their business if any, salaries, etc. to pay for their domestic workers’ contributions like NSSF, PAYE and terminal benefits among others. This is quite expensive for an average Ugandan household to do.

Further, the Bill is not mindful of the fact that there are very many people in towns and in villages all over Uganda with persons helping them with different kinds of domestic work at home and not all of these “employers” are salaried workers. Most of these people are earning daily and the relationship with their domestic workers is of payment in kind e.g. food, and rent.

Domestic worker relationships in Uganda is mostly informal, flexible, simple, and reciprocal. In addition, many people doing domestic work do not want to be confined to one employer thereby working for multiple people in a day or week. A question then arises on the practicability in such circumstances, would the domestic worker “employee” be under a contract of service for all their multiple employers, and whether each of them would be paying for that single worker NSSF contribution, payee, terminal benefits, and severance allowance amongst others.

The issue of domestic workers should be left to be handled on a case-by-case basis without this blanket regulation thereby allowing those that wish to be under contracts of service to do while those that desire informal arrangements to opt for them.

Casual Laborers

In Uganda, most casual workers work temporarily, hourly, or daily to make ends meet and some casual workers work in more than one place of work.

The challenge will then set in for casual workers engaged with more than one employer continuously for the four months. What will happen when both contracts become permanent after continuous engagement? Automatically making these workers whose aim is to work in a temporary setting clearly restricted on their freedom.

Some jobs are seasonal e.g. for harvest or planting times. The idea that an employee is going to cease being a casual worker with employment benefits is impracticable since this kind of arrangement calls for work only during a particular season. During the other periods, the casual worker is most probably working with another employer.

Outsourcing of Services

The proposition by the Bill is broad and difficult to implement. Services is such a wide scope including food services at work, for functions, labor services for work or functions, independent contractors goes against the laws of confidentiality of contract. The requirement of due diligence on every single employee’s contract of a third-party one is outsourcing is impractical since it is the duty of the employer to make sure that their employees have valid contracts of service when recruiting them.

Conclusion

The Bill seeks to prevent the exploitation and abuse of various categories of employees as seen above by addressing lacunas that previously existed thus ensuring that Employment laws are up to date with international labor laws and standards.

The Bill is a welcome move by the Parliament to protect these categories of workers. However, it broadly addresses most of the aspects such as the regulation of domestic and casual workers in a blanket manner that is quite impracticable in the local circumstances. There is a need to make the law more open to allow employers and employees with the option to be regulated by this Act or special arrangements between them.

REBRANDING

When Facebook announced that they were rebranding and changing their name to Meta with the strategic plan to create a metaverse- a virtual world in which a consumer spends increasing parts of their lives based on AI and virtual reality, many of us asked why?

This announcement alone expands the digital world that we have become accustomed to in the past two years and yet Facebook has already taken over the digital market with various products including the acquisition of WhatsApp and Instagram.

The reason Mark Zuckerburg gave for this decision is that the company wants to move past the ‘confusion and awkwardness’ of sharing a name with its main app thus calling for a much-needed rebrand that doesn’t limit their scope to social media.

Rebranding is the process of changing the corporate image of an organization. This marketing strategy involves giving a new name, symbol, or change in design for an already-established brand to create a different identity for the brand.

Rebranding

A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.

Seth Godin

WHY WOULD A COMPANY REBRAND ITSELF?

Rebranding is not a decision that should be taken lightly, there are so many factors to consider, however it is an option that would change the trajectory of your business as a whole.

  1. Reflecting new goals, products, offers or values.

The best way to show that your business is evolving would be through rebranding yourself. Businesses grow in various ways and it would be unfair not to consider that a company may grow to include more services, set new goals, and offer new products. A rebrand could be necessary to reflect that.

  1. Set yourself apart from your competitors.

No business is void of competitors and standing out may be a bit of a challenge. Rebranding can be the most effective way to set what a company offers and its approach apart. Rebranding shows the customer that your services are unique. A company may desire to rebrand to create a personality for itself that appeals to its audience.

  1. Connect with new customers.

Rebranding allows businesses to reach new customers. The key to this lies in a company focusing mainly on promoting different aspects of their business to the crowd for people to take notice. It offers the stimulation a business needs to create new growth in the market.

  1. Boosting profits.

Sometimes as you embark on a business venture, it is not uncommon for sales to reach a plateau. In such a scenario, rebranding is a great way to boost profits. A new look or new name opens a business up to more possibilities and higher profit margins.

HOW TO REBRAND IN UGANDA

Rebranding a business is quite simple and if you recall the steps we used to register a trademark, then this will be an easy step-by-step guide. Rebranding may require a person to change their mark, logo or name. Before deciding on the mark that a corporation or business decides to adopt, a search must be performed to ascertain whether the trademark exists in the register. An application is then filed upon payment of application fees. The application should contain the mark proposed to be used, the class of goods or services, and the name, address and signature of the applicant.

To get the consumer excited about the new name or mark, it would be important for a company to run a promotion that would enable the customer to engage with the new product, accustom themselves to the new trends and offers and lastly grow the business.

To read more about registering a trademark, click the link here.

MUSEUM AND MONUMENTS ACT, 2022

The Ministry of Tourism, Wildlife and Antiquities tabled the Museum and Monuments Act before parliament which was aimed to repeal and replace the Historical Monuments Act, Cap 26. The bill has recently been passed by parliament, but not without objections from concerned parties.

The law provides for the development, management, and maintenance of museums and monuments and formalize, control, and protect tangible and intangible heritage and works of art collection, however, museum operators have expressed that this appears to be slowing them down. 

There have been various developments that have happened over the years, some of which have been detrimental to our heritage as a country. If you have followed the news lately, you might have paid attention to the fact some historical sites have been affected by rapid demolition, fires and war encroachment that has led to the loss of cultural heritage across the country. Other developments, nationally, regionally and internationally have necessitated reviews in the policy, legal and institutional frameworks, conventions and protocol (which to some Uganda is a signatory to) but are no longer supported by the current Act, rendering some of its tenets obsolete. 

 “Africa’s story has been written by others; we need to own our problems and solutions and write our story”.

President of Rwanda, Paul Kagame, 2013.

OBJECTIVES OF THE ACT

 a) To ensure the protection of cultural and natural heritage resources and the environment.

(b) To give effect to the UNESCO Convention of 1972 on the Protection of Cultural and Natural heritage.

(c) To strengthen the legal and regulatory framework through the conservation, preservation, protection, and management of cultural and natural heritage resources.

(d) To strengthen and provide set up of an institutional structure of effective management of the museums and monuments subsector including through enhancing the capacity of the Department for collective governance of the subsector.

(e) To prohibit illicit trafficking of protected objects, to Local content of cultural and natural heritage.

(f) To provide for progressive rehabilitation of heritage sites; to promote regional and international cooperation.

g) To promote research and development of natural and cultural heritage.

(h) To promote and guide public-private partnerships in the conservation and preservation of cultural and natural heritage.

OBJECTIONS TO THE ACT

Several parties concerned with the enactment of this law have come out with their concerns. To be more specific, the impact the new law has on the private museums which are provided for under section 18 of the Act.

Section 18 of the Act provides that any person wishing to establish a private museum must apply to the Commissioner for a license that allows them to operate a private museum made under the Act. However, Section 98 of the Act states that only those museums with a license issued under the old Act would exist on day one of enacting the bill into law.

Unfortunately, this does not put into account any of the non-state museums as the repealed law did not recognize non-state museums since no one envisaged in 1967 that Uganda would one day have more non-state museums. The repealed law therefore only recognizes the Ugandan Museum as the only museum. 

Section 6 of the Act which provides for the management and administration of museums places this responsibility upon the Department of Museums and Monuments. This department is responsible for overseeing, managing, and regulating museums and monuments under the general policy direction of the Minister. This, therefore, places private museums under government administration which would be impossible to maintain. 

 Section 16 provides that the Minister may, by statutory instrument, declare an area within the jurisdiction of a community museum that serves the interest of the history or culture of the community or an indigenous group. However, it was noted that one area may have many museums that may specialize in different aspects of heritage which makes this particular section difficult to enforce. 

Section 34 which provides for the protection of burial grounds and sites was found to be exclusive of some areas. The Uganda Law Society suggested that clause 8 should extend its protection to burial grounds and graves of victims citing the Lukodi graveyard in Gulu District where at least 60 civilians were massacred by the Lord’s Resistance Army in 2004 as the owner of the land wanted his property back yet it would count as a significant memorial sits on it.

We agree that it is important for us to preserve our historical heritage. These amendments, even with the current objections do not take away from this necessity.

ARGUMENT FOR CUSTODY

Parenting is one of the most critical assignments we could ever have as humans. It is probably not the first time you have heard that a child has been mistreated by a parent or a guardian within Uganda. These abuses include physical violence, gender-based violence and sexual violence all a serious detriment to a child. At times, this abuse has extended to children being forced into child labour.  

Parenting is nurturing, socialising and providing for a child’s holistic growth and development. The Children’s Act stipulates under the second schedule that it is the parent, and guardian’s duty to provide education and guidance, immunization, adequate diet, clothing, shelter, and medical to a child and also gives any person who has custody of a child shall protect a child from discrimination, violence, abuse and neglect.

There is no limitation to parenthood within Uganda, this responsibility is extended to grandparents, stepparents, foster parents, adoptive parents and even communities and each of these people plays an essential role to play in the upbringing of a child. 

“Parental love is the only love that is truly selfless, unconditional and forgiving.”

– Dr. TP Chia

In an ideal world, custody of a child goes to both parents, however, in the legal world, there are moments when the custody of a child may be in question and the court would have to decide who would cater for the responsibilities we have mentioned earlier. Custody is usually in question in instances of divorce and separation.  In the case of Rwabuhemba Tim Musinguzi v. Harriet Kamakume Supreme Court, Civil Application No. 142 of 2009, it was stated that parents have a fundamental constitutional right to care for and bring up their children.

The welfare of the child is a consideration to be taken into account, and at times may be the paramount consideration in determining the custody of a child. A parent can only be denied the right to care for and raise her children when it is clear and has been determined by a competent authority, in accordance with the law, that it is in the best interest of the child that the child be separated from the parent. Both parents have similar and equal rights with regard to their children.

WHAT DOES THE COURT CONSIDER WHEN GRANTING CUSTODY?

  1. The welfare of the child

In the case of  Re M (an infant), Adoption cause No. 9 of 1995, the court stated that in all matters relating to children, the welfare and best interests of a child shall be paramount. This is further stipulated in Section 3 of the Children Act. Welfare in this case means all circumstances that would affect the well-being and upbringing of the child.

  1. Age of the child

In instances where the custody of a child is in question before a court or local council within Uganda and said child is of tender years, custody must and will be granted to the mother.

  1.  Wishes of the child

While determining the question relating to the upbringing of a child within custody, the court will take into consideration the wishes of said child. Of course, this may be done with wisdom because the court may need to consider the age of the child before basing their decision on their wishes. Even still, the court will respect the wishes of the older children who are of age and are able to make up their minds as to what they think is best. 

HOW TO APPLY FOR CUSTODY IN UGANDA

  1. A person presents an Application for Custody praying to be granted custody and obtain maintenance orders for the child. A person who applies for custody/maintenance is called an applicant while the party against whom the application is brought is called a respondent.
  1. The application must be supported by an Affidavit in Support stating the reasons why he or she should be granted custody and/or maintenance orders for the child.
  1. When filing the application in court, the requisite filing fees (UGX 6,000) must be paid in the bank and evidence of payment attached to the application.
  1. The applicant then extracts a summons from the court requiring the respondent to either file an affidavit in reply or to appear in court on a day specified therein and serve it together with the application, on the respondent within 21 days after the court issues the summons.
  1. Once the summons is served on the respondent, the applicant must file an Affidavit of Service in court clearly stating how he/she served it on the respondent.
  1. Upon receipt of the summons and application, the respondent is required to file an affidavit in reply within 15 days from the date of receipt of the summons or before the date he/she has been summoned to appear before the court.
  1. The affidavit in reply and all its accompaniments must be served on the applicant by the respondent.
  1. In scenarios where the respondent fails to file an affidavit in reply within 15 days or fails to appear in court on the date mentioned in the summons, then the court may hear the application in the absence of the respondent.
  1. At the hearing, the court will receive evidence from the applicant with respect to his/her application and the respondent with respect to his/her affidavit in reply.
  1. After hearing from both parties or from only the applicant where the respondent does not file an affidavit in reply, the court will go ahead to either grant or refuse to grant the custody and maintenance orders to the applicant.

How to form a SACCO in Uganda

If you are a regular Ugandan living in this current economy, you have probably joined or thought about starting a SACCO. A SACCO (Savings and Credit Cooperative Organization) is a group of people with similar interests who come together to form a credit union. The union is registered with the Ministry of Cooperatives, which in turn authorizes the SACCO to receive deposits and provide loans to its members.

SACCOs are a unique, democratic, member-driven, and self-help cooperative organization where members agree to save their money together and offer loans to each other at reasonable rates of interest. Interest is charged on loans, to cover the interest cost on savings and the cost of administration. SACCOs are a great way to save money and grow your income base.

To form a SACCO, members must satisfy the conditions under S. 4 of the Cooperative Societies Act. A SAACO must be comprised of at least 30 members, and all must be qualified by S.13 of the Act. Said member to qualify must have attained the age of 18 years and should be a resident or in occupation of land within the society’s area of operation.

“Small amounts saved daily add up to huge investments in the end.” 

– Margo Vader

REQUIREMENTS

A SAACO is a legal entity and therefore is required to satisfy all the legal requirements to be registered.

1. Name of community

Like anything, the name of any organization or company is the most important thing. While picking a name, the law requires that said name should reflect elements of domicile, and economic activity of its members and should bear the words Saving and Credit Cooperative Society.

2. Members

The minimum number of members required to start a SAACO is thirty members. This means that once a group has below 30 members/ individuals, it cannot register as a cooperative company. The beauty of it all is that the law does not really provide for an upper cup and therefore the members can be as many as possible.

Another major requirement for members is for them to have a common bond with other members. A person should either be a resident or own land in the area where they are registering the cooperative society. This is a form of accountability for members and makes it easy for members to trace each other in case loans are taken on and members disappear without a known identity. 

Requirements for Registration of a Cooperative Society

A license or Permit to operate a SACCO can be obtained from Uganda Microfinance Regulatory Authority. A SACCO shall not carry on the business of financial Services unless it is

  1.  A  registered society
  2. Licensed under the Act.

Prepare the necessary background and relevant information then fill up the appropriate application form as described by the Microfinance Regulatory Authority. The documents to be attached to the application form include:

  1. a certified copy of the certificate of registration issued under the Cooperative Societies Act;
  2. the organizational structure and management of the registered society;
  3. the business plan of the registered society;
  4. the credit policies and lending policies of the registered society.

After filling out the form proceed to pay the prescribed fee. Submit the duly filled-in form and attached it with the pay slip to the Finance Officer in charge of SACCO Registration.

Ensure that the application fee is submitted and all required information is included with the application.

Collect your SACCO License certificate from where your application was submitted within 21 days from the date the application was received at Microfinance Regulatory Authority in case there is no rejection.

Instructions To Register SACCO In Uganda

OFFENCES: The Computer Misuse (Amendment) Act 2022

The industrial age is done and we now live in the present digital age. You must have noticed that the generation that we live in today is practically a digital kingdom. Every household today will possess a computer, phone or digital device. With this fact, we are constantly transferring information daily with a simple double tap and click of the share button.

While this may be the world we live in today, the Ugandan Computer Misuse Act that was enacted in 2011 was drafted to enhance safety and security in our increasing digitalized environment through the prevention of unlawful access, abuse or misuse of information systems. Since then, the Computer (Amendment) Act 2022 has officially been passed into law. The Act promoter emphasized that the existing laws did not specifically address any regulations of information sharing on social media.

The need to amend the Computer Misuse Act, of 2011 rose due to advances in technology, an upsurge in cybercrime, and controversial provisions that rendered the law a tool for suppressing dissent.

The objectives of the amendment Act include;

i) To enhance the provisions on unauthorised access to information or data;
ii) Prohibit the sharing of any information relating to a child without authorisation from a parent or guardian;
iii) Prohibit the sending or sharing of information that promotes hate speech;
iv) Prohibit the sending or sharing of false, malicious and unsolicited information;
v) To restrict persons convicted of any offence under the Computer Misuse law from holding public office for 10 years.

“You are what you tweet.” 

Alex Tew, Founder & CEO of Calm

OFFENCES UNDER THE ACT.

An offence under this Act is committed when a person, without authorisation accesses or intercepts any program or data or video records, or voice or shares another person’s information that relates to that person commits an offence. This would mean that any tweet/retweet, share, or comment on any digital information without their permission would amount to an offence under the Act.

The Act also prohibits the unauthorised sharing of information about children. A person who wishes to share or transmit any information about a child on a computer must obtain consent from said child’s parent, guardian or any person having authority to make decisions on behalf of the child. This extends to social media as well.

Provisions in the Act tackle hate speech, providing that a person shall not write, send or share any information through a computer that is likely to ridicule, degrade, or demean another; creates division among persons; or promote hostility among the group of persons, tribe, ethnicity, religon or gender.

Sharing of unsolicited information, misleading or malicious information relating to that person is prohibited under the Act. Unsolicited information means information transmitted to a person using the internet without the person’s consent but does not include unsolicited commercial communication.

Cyber harassment is prohibited under the Act. The use of a computer for making any request, suggestion or proposal which is obscene, lewd, lascivious or indecent and threatening to inflict injury or physical harm to the person or property of any person or knowingly permitting any electronic communications device to be used for any of the purposes mentioned is cyber harassment.

Many concerns have arisen after the passing of the Act. The previous Act was used previously used to suppress digital rights including free expression and access to information which is a fundamental constitutional right. Despite this concern, the Act might be eminent to address the emerging technologies it seeks to address. Regardless like most laws passed only time will tell.

Investing in Oil and Gas in Uganda

Oil was discovered in 2006 in Uganda. Since this time, there has been a shift and a rising interest in the Oil and gas sector within Uganda. Not to say that oil was nonexistent before, but this was the first time we had enough oil to venture into the commercial market. According to the 1995 Constitution, the government holds ownership and control of all petroleum resources within the country and all laws that govern this are laid out in the Petroleum (Exploration, Development, and Production) Act 2013.

The government of Uganda’s goal is to ensure the sustainable utilization of petroleum resources. Policy guidance in the oil and gas sector is controlled by the Ministry of Energy and Mineral Development (MEMD). The Ministry is mandated to oversee the exploitation and development of natural and petroleum resources in Uganda; in particular, the Ministry manages private sector parties through the issuance of licenses and the negotiation of petroleum agreements. 

Credit: Independent.co.ug

The good Lord put oil and gas out there for us to find and use, and we’d better do it

Red Adair

The two regulatory institutions that regulate petroleum within Uganda are stipulated by legislation. These institutions assist the Ministry with its mandate and ensure effective management of the sector. These include;

Given the high demand for investments in the oil and gas sector, the head of the MEMD is empowered by the Upstream Law to enter into petroleum agreements with private investors. The Upstream Law gives effect to the constitution and regulates petroleum exploration, development, and production. 

We are currently working with a two-tier system licensing regime consisting of:

The license allows the licensee exclusive rights to execute petroleum operations within defined contract areas, as under an exploration license, and explore for petroleum. Where discovery is made, the licensee then applies for a production license.

Previously, any interested investors would express their interest directly to MEMD and the parties engaged in negotiations for the exploration license and the Petroleum Sharing  Agreements. Today, one acquires an exploration license through open bidding or direct applications. The Minister, upon obtaining approval from the cabinet then makes it known to stakeholders and interested parties when the bidding processes for petroleum exploration licenses will open. Interested investors then apply to the Minister in writing, expressing interest to participate in the bidding round, with the prescribed fee enclosed.

One would need to acquire the following requirements;

Any applicants must furnish security or a performance bond to execute obligations under the exploration license. Additionally, an applicant must present an insurance policy capable of covering liabilities while executing operations under this license.

Now you might have concerns as to what happens when the investors are foreign. We cannot ignore the fact that the majority of the investors in Uganda are and will be foreigners. Because of this, the government set up some regulations to govern this likelihood. According to Objective (vii) of the National Oil and Gas Policy, 2008, there should be optimum national participation in oil and gas activities. Ideally, Uganda must not be left behind. To achieve this, the following requirements are desired;

Investing in Uganda as a Foreigner

In the past two years, you might have noticed several foreign companies have said farewell to our Uganda borders and made decisions to invest in other countries. Companies like Shoprite, Vodaphone, and Pep, packed their bags one day and felt that Uganda was no longer conducive for their investments to thrive.

It is safe to say that this is the sort of break-up that is solely our fault. Their continued losses no longer justified their commitment to Uganda’s economy. This is something that was only escalated by the recent pandemic. It is no use crying over spilt milk, and though it may be an important topic for us to dive into, this article is more about how these foreign companies came to invest in Uganda in the first place. How can invest in Uganda today?

Credit: Government of Uganda

“An investment in knowledge pays the best interest.”

Benjamin Franklin

It is clear that with the number of foreign companies in Uganda today, the government of Uganda is interested in foreign investments. A foreign investor could be a natural person not a citizen of the East African Community countries, a company not incorporated under the laws of the East African Community states or with majority shares held by non-citizens or controlling interest in a partnership owned by persons not members of the East African Community states. The minimum investment capital requirement for foreign investors is USD 250,000. This is to enable them to qualify to register as an investor and receive an investment license.

For a person to register for an investment licence, they must do so by making an application: An application for an investment certificate shall be in a form prescribed by the Authority and shall include— 

(a) the full name and address of the applicant; 

(b) the shareholders and nationality of the business enterprise 

(c) the nature of the business, its capital structure, business plan and the amount to be invested

(d) such other information, documents or particulars as may be specified in the application form. 

What incentives are available for investors?

To maximize the returns of an investor in Uganda one must rely on various incentives. To acquire status to enjoy these incentives, an investor must meet various requirements established in the act. These include;

a) Meeting the minimum investment capital requirements 

b) Engaging in priority areas 

c) Exporting at least 80% of the produce

d) Providing at least a 30% substitution on the value of the imported goods 

e) Using at least 70% of locally sourced raw materials

f) Having at least 60% of employees as citizens 

g) Introducing advanced technology or upgrading the available technology.

This will enable the investor to qualify for a certificate for incentives. Though the law of Uganda adequately awards different incentives to investors, it also provides for specific foreign businesses that would not be privy to these benefits. These include any business that involves wholesale and retail commerce, personal service sector, public relations business, car hire services and operation of taxis, bakeries, confectioneries and food processing for the Ugandan market alone. 

There is a beauty that comes with investing in Uganda. Article 26 of the Constitution of Uganda, allows a person to own property. This does not exclude foreign investors. A foreign investor has a right to own and use the property. The Investment Code Act continues to emphasise this right, under section 26 stating that no business enterprise, interest or right of a registered investor shall be compulsorily taken or acquired from an investor except by the Constitution.

Restrictions:

The Investment Code Act states that they shall not carry on the business of crop production, animal production or acquire or be granted or lease land for crop production or animal production. An exception is provided for the provision of materials and any other assistance to Ugandan farmers in crop production and animal production or in cases of leasing land for purposes of manufacturing or carrying out the activities where foreign investors cannot get incentives and a priority area for investment.