Introduction
To enhance business investment in Rwanda, Rwanda made all business open for foreign investment and foreign capital inflow is firmly increasing. Through Rwanda Development Board (RDB), Rwanda granted foreign investors extensive ownership of domestic companies and assets. Foreign investment attracts capital inflow of foreign investors into local investments; capital inflow may either be in form of equity or asset with an aim of making profit (Article 2(16°) of Law N° 06/2015 of 28/03/2015 relating to investment promotion and facilitation). This creates opportunities to foreign investor to engage in any business sector in Rwanda and it opens doors for foreign capital inflow in the country.
What is Foreign Investment?
Foreign investment therefore refers to the investment in domestic companies and assets of another country by a foreign investor.
Who is an investor?
Legally an investor is a natural or legal person that invests in an investment enterprise in Rwanda (Article 2(22°) of Law N° 06/2015 of 28/03/2015 relating to investment promotion and facilitation). This implies that a foreign investor is a foreign individual or legal person (foreign company) that invests in any business sector in Rwanda besides retail and wholesale trading (Article 2(16°), ibid). However it is reasonably that a foreign investor needs to be having powers of control or say of the company and this will require him or her to be holding at least 10% shares of the investment share capital.
Investing in the business parse does not itself make you an investor, legally for the person to be recognized as an investor in Rwanda, he or she is required to register as an investor after which he or she shall be issued an investment certificate (Article 2(23°) of Law N° 06/2015 of 28/03/2015 relating to investment promotion and facilitation).
Article 10 of Law N° 06/2015 of 28/03/2015 relating to investment promotion and facilitation mandates an investor to be issued with an investment certificate determined by the Rwanda Development Board in order to qualify for the incentives provided for by the Law, he/she shall fill out an appropriate form indicating his/her identity and any other necessary details. Further the provision stipulates that the applicant shall pay a non-refundable registration fee determined by the regulations of the head of the Board. Under these circumstances, the board is considered to be an organ in charge of investment promotion in Rwanda
Article 11 of Law N° 06/2015 of 28/03/2015 relating to investment promotion and facilitation provides for the requirements needed for Investment registration and these include;
1. certificate of legal personality of the business company;
2. a business plan which must include at least;
a. the name of the project and detailed information on the project in which investment is or will be made,
b. action plan,
c. the date of commencement of operations,
d. detailed information on any raw materials sourced in the country or in the locality where the investment is operating,
e. detailed information on any financing and assets to be sourced from outside Rwanda including the time frame in which these finance and assets shall be invested,
f. a market survey and
g. details of the projected technology and knowledge transfer.
What business sector to be invested in?
All business sectors are open for investment regardless of the origin of the investor; however there are those that are recommended by the board known as priority sectors (Article 3 of Law N° 06/2015 of 28/03/2015 relating to investment promotion and facilitation). It is therefore to be appreciated that procedure for application of investment certificate is undertaken by a person who has already established the legal personality of his or her business as required by the law governing companies in Rwanda.
The content of this Article is intended to provide a general guide on the subject matter. Specialized legal advice should be sought about your specific circumstances and legal issues.
