Company Registration in Rwanda
Located in east-central Africa, Rwanda is a natural heaven brimming with jaw-dropping landscapes. The country has poised itself as a prime business destination for aspiring business minds globally – thanks to growing infrastructure projects, a lucrative private sector, nominal tax slabs, simplified incorporation legalities, and trade-friendly policies. The purpose of this briefing is to help you secure company registration in Rwanda while having a definite comprehensive of legalities.
Analyzing the Entrepreneurial Potential of Rwanda
- Foreign companies running offices in Rwanda have access to a preferential corporate income tax rate of 0%.
- Rwanda-based holding companies attract a nominal corporate income tax rate of 3%. The same tax rate applies to indigenous entities making money abroad via trading and royalties.
- A preferential corporate tax rate of 15% applies to sectors like tourism, energy, housing, transport, and financial services.
- Companies involved in the cross-border trading of products and services attract a tax rate ranging from 15-20%.
- Companies serving sectors like energy, production, health, and ICT are not required to pay a corporate tax for an initial 7 years.
- Investors have access to zero percent withholding tax on interest, dividends, and royalties.
- Companies belonging to sectors like export, production, agriculture, health, tourism, telecommunication, etc have access to accelerated depreciation of 50%.
- Tax exemptions are offered to investors generating capital gains. Also, they have access to expedited VAT refunds
- The ICT sector is brimming with endless potential as it attracts global financial services and data centers-reinforcing ideal growth opportunities for local and foreign investors.
- Kigali International Financial Centre (KIFC) is empowering Rwanda to become a financial hub – a potential jurisdiction for investments in Africa.
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Notable Considerations for Applicants Seeking Company Registration in Rwanda
- A registered foreign company seeking to run a business in Rwanda can do so by setting up an office or establishing share transfer and managing property through various means, including trustee or agent.
- Overseas entities are exempt from paying VAT until their turnover surpasses the threshold of Rwf 20 million within a year or Rwf 5 million over 3 continuous months. Registration must come into effect within 7 days of passing these thresholds.
- Small and medium enterprises (SMEs) with a net capital investment of up to Rwf 70 million, yearly revenue of up to Rwf 50 million, and up to 100 employees, are not required to pay the trading license tax for the first two years. The district-level registration is compulsory after the completion of this timeline.
- Large entities with a net capital investment of up to Rwf 70 million, yearly revenue of up to Rwf 50 million, and up to 100 employees must secure sector-wise registration and pay the trading license tax by Jan 31 each year.
Steps To Secure Company Registration in Rwanda
The given below are the steps for securing a company registration in Rwanda. Keep the document (cited in the next section) handy to avoid complications.
Step 1: File online application
Head to the online portal of the Rwanda Development Board (RDB). Create a valid account and then explore the application section. Locate the incorporation application and fill it out with the required details, including directors’ info, the company’s operation, etc.
Step 2: Verification
Upon receiving the registration paperwork, the RDB shall initiate the inspection process wherein officials vet the documents for accuracy and compliance. Make sure to double-check everything you enter into the application.
Step 3: Grant of Incorporation Certificate
The RDB will grant the incorporation certificate after being assured of the documents’ legitimacy and accuracy. The code on the incorporation certificate will also serve as a social security number as well as a tax identification number.
Step 4: Determine VAT Liability
Assess whether your entity requires VAT registration. If your turnover is likely to surpass Rwf 20 million within a year or Rwf 5 million in 3 consecutive months, ensure to register your entity under VAT within 7 days after passing these thresholds.
Note: You must visit the Rwanda Revenue Authority (RRA) for VAT registration.
Documents consideration for company registration in Rwanda
- Incorporation certificate
- Company statutes or articles of association
- Identification documents (passports or national IDs for directors and shareholders)
- Resolution from the board of directors
- Power of attorney (if applicable)
- Proof of address
- Bank reference or statement
- Completed application form from the Rwanda Development Board (RDB)
- Proof of payment for registration fees
- Tax identification number (TIN) application (if needed)
- Social Security registration documents (if applicable)
Post-registration compliance for holders of company registration in Rwanda
- Connect with the Rwanda Revenue Authority (RRA) for filing annual tax returns and pay corporate income as recommended by the authority.
- Register under trading license tax is mandatory. Once registered, pay such taxes annually by Jan 31st.
- It is mandatory to register your entity with the Rwanda Social Security Board (RSSB). Also, make timely contributions to employees’ social security.
- Documenting board meetings, shareholder details, etc is vital from a compliance standpoint.
- Abide by the Rwandan law for drafting and furnishing annual financial statements.
- Any significant change to business structure or management cannot happen without intimating the Development Board (RDB).
Conclusion
Securing Company Registration in Rwanda is all about adhering to Rwandan Laws and tax regulations. Once registered, your entity will become eligible for various schemes and incentives, allowing you to experience hassle-free business operations and growth.
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