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Doing business in Uganda

UK Trade & Investment Doing business in Uganda

Innovation & Skills (BIS) The purpose of the Doing Business guides. none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities. No liability is accepted by UKTI. Further assistance is available from the UKTI team in Uganda. business culture. Exporting companies are responsible for checking that their goods can be exported and that they are using the correct licences. commodities or any other form of financial instrument. Innovation and Skills (BIS)) as to the accuracy of the Report.Are you a member of a UK company wishing to export overseas? Interested in entering or expanding your activity in the Ugandan market? Then this guide is for you! The main objective of this Doing Business Guide is to provide you with basic knowledge about Uganda. In particular. Important Information . an overview of its economy. prepared by UK Trade & Investment (UKTI) is to provide information to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. but no representations or warranties. Further information is available on the Department for Business. its completeness or its suitability for any purpose. Novice exporters. potential opportunities and an introduction to other relevant issues. express or implied. are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business. in particular will find it a useful starting point.Sanctions and Embargoes Some countries maybe subject to export restrictions due to sanctions and embargoes placed on them by the UN or EU. UK Trade & Investment Doing business in Uganda . Full contact details are available at the end of this guide. the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report. The Report’s contents were believed (at the time that the Report was prepared) to be reliable.

Language and Culture What are the challenges? How to Invest in Uganda Contacts Resources/Useful Links 4 9 10 14 15 16 17 18 UK Trade & Investment Doing business in Uganda .Content Introduction Preparing to Export to Uganda How to do business in Uganda Business Etiquette.

000 bpd in 5 – 10 years. The official language is English but Swahili is widely spoken. 6. agro-processing and manufacturing. The banking industry has also seen strong growth recently. Uganda’s GDP has grown by more than 6% on average for the last decade. construction and civil works and training Non Oil & Gas Energy: Comprising of hydro-electric power. It also shares a border with Rwanda.commercial viability of reserves is confirmed and reserves are estimated at 2bn barrels.Introduction Uganda is a landlocked independent republic with a democratic government. Strengths of the market 1. Important opportunities lie in both upstream and downstream activities including exploration. and by 7. engineering consultancy and services. refinery. flowers and vanilla now account for significant shares of Uganda’s Exports. building up to 150. Important areas are the design and construction of hydro electric power stations. Major investments were made in mobile communications. consultancy and engineering. Production will begin in late 2010 or early 2011 with an early production scheme of 3000 – 5000 bpd. 3. In 2009 Uganda’s GDP was $14. Uganda’s agricultural potential and untapped mineral resources have also attracted foreign investment. The capital city is Kampala and other major towns are Jinja. 4. new and renewable energy sources. With this development Uganda is becoming a regional hub for education UK Trade & Investment Doing business in Uganda . banking. petroleum exploration. 2. Financial services are becoming more efficient with the presence of major banks and an increasing number of new commercial banks. The UK is Uganda’s largest Foreign Direct Investor with investments worth $1. and generators Education: The education sector has undergone rapid transformation from government funding to private investment. Uganda’s traditional agricultural exports continue to present opportunities. and Masaka. The government is in talks to build a refinery and pipeline to the Indian Ocean coast. tea and cotton. Stable. 5. Sudan and Kenya and forms part of the East African Region. construction. Non traditional goods such as fish. Opportunities by Sector: Oil & Gas: New but fast growing .4% in the 2008/9 financial year. Coffee. Uganda has a year-round agricultural season and a location in the centre of a regional trading network. Mbale. Uganda’s largest exports have increased both by quantity and value over the past several years. It lies between the Democratic Republic of Congo (formerly Zaire). Uganda has seen its regional trade grow strongly. liberalised economy Strong Natural Resource Base Government commitment to private sector Low-cost and trainable workforce Investment Incentives and security with total repatriation of profits Re-export Support Schemes Opportunities in Uganda With new stability in Southern Sudan and demand increasing in the DRC and Rwanda.1bn. The local currency is the Ugandan shilling.5bn.

Fisheries: Uganda has stocks of Nile perch and tilapia which is locally processed and exported. cellular telephone systems. commercial construction and residential construction are growing. travel agencies. Telecommunications: The telecommunications sector boasts five internationally owned operators. Important opportunities lie in setting up institutions. construction. materials related to construction and operation of fish processing facilities and chemicals used for value added fish products. Important products to consider include. bottling and other packaging equipment and related materials. Important products to consider are fishing equipment. valves and related materials. tropical fruits. UK Trade & Investment Doing business in Uganda . Important products to consider are mining equipment. Important opportunities exist in cosmetics. Products to consider include. switchers and routers. used clothing. flowers.and knowledge ranks as the best in the region (UNDP Education Index). production of drugs. Foods – processed and foods processing/packing: Agricultural processing is growing and there are investment opportunities in processing and packaging coffee. Health: The government spends 7. fibre optic equipment. Mining activities may offer good investment opportunities for experienced firms. civil engineering services. preservatives. Travel/ tourism services: The tourism sector is growing at 20%. Sales opportunities exist for food processing equipment. with low temperatures and two seasons of good rainfall for the Southern half of the country. canning. Important products to consider are processing equipment. edible oils. power generation equipment. data transmission equipment. provision of e-health services and other related opportunities. There are opportunities for tourism management. educational materials. computers and peripherals. bio fuels. Agriculture: Uganda’s land is considered among the best in Africa. Also with an estimated 300. edible oil production. Mining: Uganda is endowed with a diversity of geological formations and structures. building of private hospitals. security printing of certificates and ICT. pumps. footwear and beverages. infrastructure design. Infrastructure: There is a pressing need for road and power improvements and international financial institutions are interested in these projects. processing equipment. However. generators and transformers. storage facilities. architecture. environmental consultancy and analysis. the industry has been hit by diminishing sources of fish in Lake Victoria. wireless access equipment. construction and operation – particularly energy related.000 housing units needed per year. staple food crops processing. A Ugandan company as now been certified by the WHO to produce HIV and malaria drugs. voice over internet telephony. VSAT. consultancy services. fruit and vegetable processing. livestock and food products. fruit juices and non traditional crops. construction equipment. Uganda boasts several national parks. truncated mobile phone systems and paging systems. Important opportunities lie in supply of medical equipment and consumables. for game and gorilla watching. Light Manufacturing: Manufacturing has increased significantly in Uganda over the past 5 years with a focus on exports to regional markets of products such as plastic goods and consumer products. construction and management. chemicals and additives. hotel design.4% of GDP on health and works closely with international organisations and donor agencies to ensure the development of the health sector.

Services accounts for 49% of GDP. well above the average of Sub-Saharan Africa (average rank 3. with GDP growth averaging 6% per annum over the past decade. The manufacturing of textiles. In recent years agriculture hás played a decreasing role in the economy with industry increasing.5 (on a 7-point scale) in macroeconomic performance. Government policy promotes and supports private sector-led development.7). cooking oil. The World Economic Forum ranked Uganda 4. Agriculture employs 80% of the population.Trade between the UK and Uganda Bilateral trade between the UK and Uganda in 2009 was: UK exports to Uganda £50m (goods) and £59m (services) while imports were at £12m (goods) and £42m (services). made up mostly of fish processing. tea & Spices £4m £3m £1m Politics and the Economy Economic: Uganda is one of the fastest growing economies in Africa. sugar. UK Trade & Investment Doing business in Uganda . to the current 22% and 29% respectively. The main industry sectors in the country are agro-processing oriented. paper products and tobacco also takes place. breweries and soft drinks. Bilateral trade in goods: (£ million) 2005 2006 UK Exports UK Imports Balance Source: HMRC 2007 47 16 31 2008 50 19 31 2009 50 12 38 37 12 25 39 13 26 Bilateral trade in services: (£ million) 2005 2006 2007 2008 2009 UK Exports UK Imports Balance 41 33 8 33 39 -6 36 31 5 52 25 27 59 42 17 Source: ONS UK Balance of Payments Top exports of goods from the UK to Uganda in 2009 are: Specialized machinery Road Vehicles General Industrial Machinery Power generating Machinery Miscellaneous manufactured articles £6m £6m £5m £4m £4m Top imports of goods to UK from Uganda in 2009 are: Vegetables and fruit Electrical Machinery Coffee. tea. dairy processing.

Zero duty on most goods originating and traded within East Africa. The President. Common external Tariff on all goods imported into the region.3% $453 Getting here and advice about your stay FCO Travel Advice The FCO website has travel advice to help you prepare for your visits overseas and to stay safe and secure while you are there. 2. UK Trade & Investment Doing business in Uganda . Zero duty on most capital goods. Oil production in Uganda is expected in late 2010/ early 2011. the National Resistance Movement (NRM) has been in power since 1986. agricultural inputs. manufacturing under bond. The next presidential and parliamentary elections are due in March 2011. medicines and medical equipment. The government with a relatively stable polity and a pro-business oriented president continues to attract foreign investment and promote both regional and international trade. 31m (2009) 3. For advice please visit the FCO Travel section Getting here By air There are direct flights between London and Entebbe by British Airways and international flights to and from Entebbe leave daily.With the discovery of commercially viable quantities of oil and their subsequent development. duty drawback for manufacturers of goods for export. 4. Intra community tariffs are gradually being reduced: 1. Growing impact of East African regional integration: The East African Community comprises a market of over 130m consumers and total GDP of $40bn. raw materials and chemicals. HE Mr Y K Museveni has been in office throughout this time. Uganda’s socioeconomic profile: Population: Population growth rate: GDP per capita: Political: Uganda is a democratic presidential republic. The ruling party. It is a multi-party parliamentary system with universal suffrage of all citizens over the age of 18 years. Tax incentives for producers of goods for exports through various export schemes covering export processing zones. SN Brussels and KLM offer non-stop flights to other destinations in Europe 3 or 4 times weekly. inward processing. 3. the oil and gas sector is expected to become a leading driving force for economic development both through direct revenue and spill-over effects.

Buses connect the entire country. Your visa allows re-entry to Uganda after visits to Kenya or Tanzania. UKTI Uganda can help you plan your business visit to Uganda. Driving is on the left-hand side of the road. By Road Nearly all major towns are connected by tarmac roads. Passports should be valid for at least three months beyond the date of the end of your visit. Your stay The Uganda Tourist Board (www. Visas may be obtained on arrival by air with a cash payment of US$50 but it is recommended that visas are obtained in advance through a travel agent or from a Uganda High Commission or Embassy. UK Trade & Investment Doing business in Uganda . Visas British Nationals require a visa to enter is a good source of information and can help you plan your trip. as in the UK.visituganda.At the airport Taxis from Entebbe Airport to Kampala cost about £25. The journey may take up between 45 and 90 minutes depending on traffic.

com) can also help.Preparing to Export to Uganda In the first instance. The Uganda Investment Authority (www. Regular visits to the market are important. In addition. as an initial step to establishment. To find out more about commissioning work. See also: www. British companies wanting to enter the Ugandan market are advised to research the market prior to engaging in business so as to understand the opportunities and competitiveness of the market for their products and services. The UKTI team in Uganda provides a range of services to British-based companies wishing to grow their business in the Ugandan and larger East African market.ugandainvest. the Embassy’s Trade & Investment Advisers. You can commission our Overseas Market Introduction Services to assist your company to enter or expand your business in Uganda. who have wide local experience and knowledge. distributors or potential partners. especially during the early phases to establish links and Companies wishing to set up a local base may also benefit from support and advice by the UKTI Section of the British High Commission in Kampala. can identify business partners and provide the support and advice most relevant to your company's specific needs in the market. most companies do business in Uganda through an agent or distributor.ukti. UK Trade & Investment Doing business in Uganda . Our services include the provision of market information. UKTI can also organize and host events for UK companies so as to network and/or promote products/services. Under this service. key market players or potential customers. We also establish the interest of such contacts in working with the UK Company and arrange appointments where please contact your local UKTI office. validated and/or warmed up lists of agents.

machinery. (f) Joint Ventures / Licensing There are no restrictions on joint ventures with local investors. British companies can approach the Ugandan market in several ways: (a) Direct Export A number of international firms export directly to customers. A recent expansion in the establishments of large supermarkets and convenience stores has increased the use of this for consumer goods. which often require detailed knowledge of the local conditions and bureaucracy. (b) Using an agent or distributor This involves entering contractual agreements with local agents and distributors. (g) Selling to Government The government conducts most of its purchases through public tendering. (e) Direct Marketing In spite of the rapid expansion in use of cellular telephones and computers. customs matters. The Public Procurement and Disposal of Assets authority (PPDA) audits government tenders. With a large number of new office buildings in Kampala. cosmetics and food. tax. Rwanda and Burundi and will see the free movement of goods and services within this region and further expanding trade activities. With regard to the UK.How to do business in Uganda Market Entry Strategy Uganda has signed a Common Market Protocol with other members of East African Community which are Kenya. this is increasingly becoming important. immigration. Tanzania. Most foreign products are marketed through an experienced local company. sub-licences and permits. A good local agent may play an important role in bids on tenders. However. For consumer goods other methods are used. this system is mainly for machinery and highly technical equipment. (d) Franchising A number of UK companies have established franchises. Uganda currently does not present strong opportunities for telephone or internet marketing. The CTB advertises tenders in local newspapers. controlled by the Central Tender Board (CTB). quality office space is available. ranging from electrical equipment. licensing. Other Start up Considerations (a) Distribution and Sales Channels UK Trade & Investment Doing business in Uganda . (c) Establishing an office The Uganda Investment Authority facilitates the registration and licensing of foreign firms and advises on registry.

UK Trade & Investment Doing business in Uganda . Other large towns of significant importance include Jinja. road signage. (e) Sales Service / Customer Support Customer support can be a major boost for UK companies. Mbarara and Mbale. Support on most of the above issues can be attained from the UKTI team at the British High Commission Kampala. (d) Pricing Price competition from Asian producers means UK products are generally considered expensive. DRC.Consumer products in Uganda are generally distributed through regional wholesalers. It is therefore important that they should carefully select. albeit of high quality. The Uganda Revenue Authority and the Uganda National Bureau of Standards regularly seize counterfeit goods. although many do have websites. newspapers. Mobile phone banking and trade is increasing both in-country and within the East African region. With entry of large retailers. who in turn supply small and rural shops. Masaka. Uganda’s location in the heart of East Africa makes it an important linkage to the East African Community region. Sudan and the DRC. political and business capital for Uganda. Imports into Uganda are mainly from the port of Mombasa in Kenya and then by road to Malaba or Busia and finally to Kampala or onward transit to Sudan. especially when dealing with new clients. Gateways/Locations – Key Areas of Business Kampala is the financial. Few Ugandan companies sell their products through the internet. train and monitor service providers for their products. (b) Selling Factors / Techniques Companies commonly market through billboards. although many are readily available. Sellers are advised to deal in cash transactions or use a letter of credit from a reputable bank. (c) Electronic Commerce E-commerce is still undeveloped in Uganda. Companies should check document accuracy with financial institutions or through a commercial law firm. Companies have also promoted themselves through music concerts and by supporting sports and other community events. suppliers can now deal directly with major purchasers. radio and television advertising. It is common for experienced buyers to favour products from the UK and other European producers based on quality. (g) Due Diligence Credit reporting is in its infancy in Uganda and due diligence is difficult to perform. Rwanda and Burundi. although police and courts are slow in prosecution. (f) Protecting Intellectual Property Uganda has started to improve the protection of intellectual property rights.

however Dar es Salaam is becoming increasingly important. You may contact UKTI Uganda for guidance in applying for a publicised tender. UKTI Uganda can advise on this. including used tires and certain types of batteries. Documentation Companies need a number of documents to set up in Uganda. education and health sectors. airfreight and to a limited extent rail. issued by the Ministry of Tourism.Trade Regulations and Standards Import Tariffs: Uganda. place of discharge. flight/vehicles details. Company PIN Number. Donor funded projects in agriculture. Trade Barriers: Uganda has few formal trade barriers. Kenya and Tanzania have adopted a three-band duty structure for imports from outside the customs union under the East African Customs Union (EACU) agreement. Import requirements and documentation: Import certificates. Government tenders may be issued through an open tender or through pre-qualified tendering. Getting your Goods to the Market Being a landlocked country. The bloc aims to have a common market by 2011. There are a number of clearing and forwarding UK Trade & Investment Doing business in Uganda . Labelling and Marking Requirements: Importer/Exporter name. number of packages. description of goods. Prequalification is usually done and reviewed once a year by various government bodies. Transit time is 7 days and goods require a transit permit from the Uganda Revenue Authority. Southern Sudan and Rwanda. bureaucratic inefficiencies. or on the website of the organisation issuing the tender. however. consignee. the main options for getting goods to Uganda are road. Projects which are considered an opportunity for UK companies will be published on the UKTI website under the ‘Business Opportunities’ section. Additional labelling requirements have been adopted for used clothing. airway bill number/bill of lading and county of origin/destination are required markings. intermediate products 10% and raw materials may still enter duty free. Trade and Industry are required for goods on a ‘negative list’. VAT Number. including: Certificate of registration. Temporary Entry: Many products are shipped through Uganda on their way to the DRC. These certificates have a six-month validity. It is also essential to obtain/issue receipts and invoices whenever transacting to avoid potential disputes. Finished products are subject to a 25% duty. which is currently at 18%. housing sales are exempted from Value Added Tax (VAT). container identity. high transport costs and an influx of counterfeit consumer products are the primary reasons for increased costs for foreign businesses. The main seaport used by Uganda is Mombasa (Kenya). Responding to Tenders All major tenders are mainly published in the major daily newspapers.

Please contact the UKTI office in Uganda if you need a list of recommended freight forwarders.agents who have offices in the UK and Uganda. UK Trade & Investment Doing business in Uganda .

Language Most business is conducted in English. However.Business Etiquette. British social habits are acceptable everywhere and people are generally friendly. UK Trade & Investment Doing business in Uganda . Personal contact with potential and existing partners/clients and regular visits to the market therefore of the utmost importance and it is natural for the business relationship to be built with time. Language and Culture Social customs vary according to race. they will gladly put the same effort into the partnership. Ugandans want to get to know people with whom they are dealing and begin most meetings with introductory conversation about people’s backgrounds and families. Business Customs Ugandan business decisions are often made by a group within the company and there is a premium on consensus. before making decisions. Therefore. if a potential partner demonstrates flexibility and willingness to commit. tribe and religion. The usual modes of address are as used in the UK. Greetings and acknowledgements invariably precede formal speeches in strict accordance with protocol. Swahili is often understood but not frequently used in Kampala where Luganda is largely used as a second language. Many Ugandans like to discuss business extensively. and usually seek external advice. There are no special factors for women business travellers. companies will respond to your approach in an equal manner. Negotiations When negotiating. Ugandans are generally conservative and formal when making speeches to a group. though many local languages exist in Uganda.

Affordable financing Lack of affordable financing is another impediment to business. It is advisable to quote amounts in Uganda Shillings so as to avoid losses that may occur through exchange rate fluctuations. The most common payment cycle is 90 or 120 days. In case of payment with order beware of cheque scams.What are the challenges? A number of challenges exist for UK companies intending to do business with/in Uganda. The best method of payment is a confirmed irrevocable letter of credit drawn on a reputable bank. particularly its systems of roads. providing quotes in dollars for foreign products is also used. rail. All the common forms of arranging payment are in use in Uganda. Payment and accounting systems are more advanced in the financial sector and in large businesses. enforcement authorities are ill equipped to fight this. In addition. little liquidity exists for loans over three years. Measures to reduce this are underway with the construction of new hydro-electric dams and power stations. Extended credit terms for large items of capital equipment are often critical to the success of a project. In addition to high rates. Counterfeits The sale of counterfeit goods smuggled into Uganda is a real challenge to legitimate companies. Over 80% of the country does not have access to grid electricity. Lists of local lawyers and chartered accountants are available on request from UKTI Uganda UK Trade & Investment Doing business in Uganda . Loans are generally short-term with interest rates ranging from 15-24%. Nevertheless. Cost of Energy Both the cost and availability of electricity remains a challenge. Getting Paid . in recent years the government has committed relatively large funds to their development in preparation both for the East African Common market and the production of oil. These include: Infrastructure Uganda’s infrastructure. The sophistication of counterfeits is growing and public awareness is not strong.Terms of Payment Credit is an important feature of the market. However. electricity and water is relatively poor.

A wide range of legal services are locally available. Uganda’s legal system is based on English law and practice. Considerable investments continue to be made throughout Uganda especially in infrastructure and energy. The road networks are being upgraded and expanded to improve connections between major centres while tenders for the port and rail system have been issued so as to expand trade capacity. The banking system The banking system has steadily improved and is stable and well capitalised. UK Trade & Investment Doing business in Uganda . However. 25 commercial banks and many micro deposit institutions and development banks. Getting Paid In Uganda. the African Development Bank as well as several European institutions.How to Invest in Uganda The principal types of business enterprises in Uganda are: • • • • • Registered Companies (Private and Public) Branch offices of companies registered outside Uganda Partnerships Sole Proprietorships Co-operatives Companies are registered as limited liability companies as in 1 and 2 above. but increasing cheque fraud makes this a highly risky proposition. and regulated by the Companies Act. The system includes the Bank of Uganda. Privatisation of various institutions has also been ongoing. education. retailers normally receive payment for consumer goods in cash. Major development projects in health. Ugandans may attempt to pay by cheque. exporters of capital goods or other equipment. Foreign exchange controls There are no foreign exchange controls affecting legitimate trade. Project Financing Multilateral institutions active in Uganda include the International Monetary Fund (IMF). the World Bank. machinery and services normally seek payment through wire transfers. agriculture and infrastructure are financed by bilateral donors and/or international organisations.

uk UKTI Uganda is a part of UKTI East Africa.kampala@fco.Contacts If you have a specific export enquiry about the Ugandan market which is not answered by the information on this report please contact: Fax: +256 414 334419 Kampala Tel: +256 414 222367 Fax: +256 414 286123 www. and inclusion does not constitute an endorsement or recommendation by UKTI Uganda Revenue Authority (URA) P O Box 7279. Please ask the contacts above for more information.Kampala 4 Windsor Loop PO Box 7070 Kampala.Olanya@fco. Kampala Tel: +256 417 442001 UK Trade & Investment Doing business in Uganda . Uganda Tel: +256 312 312 000 Fax: +256 414 257 304 Email: Mr Eric Olanya Trade Officer Tel: +256 312 312 222 Email: Uganda National Bureau of Standards (UNBS) P O Box 7279. Although these lists are not comprehensive. Tanzania. Kampala Tel: +256 414 301000 Fax: +256 414 342903 www. a regional team with trade experts located at the British High Commissions and Embassies in British High Commission .ug UK Trade & Investment Enquiry Service Tel: +44 (0)20 7215 8000 Fax: +44 (0)141 228 3693 Email: We have 2 staff working at the British High Commission in Kampala dedicated to helping British businesses to trade with Uganda: Mrs Margaret Magera Trade Development Manager Tel: +256 312 312 213 Email: Margaret. UKTI East Africa offers coordinated services for those wishing to explore similar business opportunities in the wider region. Uganda and Ethiopia.gsi. Others Uganda Investment Authority (UIA) P O Box 7418.ugandainvest. they are a useful starting point for firms that need professional services in

uk Import Controls and documentation (SITPRO): http://www. It also introduces exporters to the UK Trade Tariff.sitpro.ecgd. customs procedures.fco.hmrc. other regulatory information and export paperwork issues.htm SOLVIT – Overcoming Trade Barriers (EU Markets only) www.html/strategicexport-control/ Export Control Export Control Organization: UK Trade & Investment Doing business in Uganda Intellectual Property Intellectual Property Office: classifying and movement of Essential reading for exporters! Find out more at: http://www.html Export Finance and Insurance: ECGD: Market Access Market Access Database for Tariffs (for non-EU markets only): Customs & Regulations: HM Revenue & Customs: www.Resources/Useful Links Business Link: International Trade Business Link’s International Trade pages provide an overview of export basics including Country Information: BBC Website: Economic Information: Economist: http://www.stm FCO Country Profile:

com/en/sectorsandservices/Disciplines/ImportExport/ National Physical Laboratory: UK Trade Info: https://www.Standard and Technical Regulations: British Standards Institution (BSI): Travel Advice: FCO Travel: Trade Statistics: National Statistics Information: UK Trade & Investment Doing business in Uganda .uk/en/travel-and-living-abroad/ NHS: Travel health: Intellectual Property: http://www.travelhealth.