All you need to know about starting up a business in Rwanda

Starting a business in another country can be challenging, but not in Rwanda. Its capital city, Kigali, is dubbed the “African Silicon Valley“, and the country is a safe investment country, a good location for entrepreneurs to grow their businesses, and starting a business is FREE.

According to the 2020 Word Bank “Doing Business”, The “Land of a thousand hills” remains the second easiest place to do business in Africa, behind Mauritius and the 38^th globally. This is partly because registering a business in the East African country is a straightforward process that can be completed relatively quickly.

The Rwanda Development Board is a helpful resource for navigating the registration process and can guide any additional steps required for your business.

Read Also: With new $1bn innovation hub, Rwanda is becoming Africa’s leading tech destination

What is Rwanda Development Board?

The Rwanda Development Board (RDB) is a government agency in charge of attracting, keeping, and facilitating investments in the national economy. It was created to boost Rwanda’s economic development by fostering private sector growth.

To keep Rwanda one of the most competitive business environments in Africa and the world, RDB is here to offer support throughout the complete investment journey. Additionally, it oversees all business operations and registration procedures in Rwanda.

Things to know before registering a business

• The company name must be approved before incorporation.
• Applicants can have as many shareholders as they wish. These shareholders can be nationals, foreigners, or legal entities; 100% non-local shareholding is allowed.
• After registration, there can be an amendment of company details (change of company name and address, business activities, change of director or board members, share issue, share transfer, and de-registration ) at the shareholder’s discretion through a notarized resolution.
• The business registration is completed within six working hours upon delivery of a certificate of incorporation.
• Applicant needs to provide a local, physical address as the company’s registered address.

Two main categories under business registration

Now that you know some of the key points, you need to know. It is also important to note that only two main categories are under business registration.

Individual Enterprise: An unincorporated business with a single owner pays personal income tax on business earnings. It is the easiest type of company to start, which makes it popular with freelancers, consultants, and small business owners. It’s not also required to create a trade or company name.

Limited Liability Company: These companies can own property (such as money, land, intellectual property, etc.) and be responsible for their debts. Under this category, the subcategories are private and public companies.

Read Also: Rwanda joins the WEF C4IR Network as the first African country

Requirements for Foreigners

• Power of attorney to present the company in Rwanda. (Notarized)
• A duly authenticated copy of the memorandum Articles of Association. (Notarized)
• Certificate of Registration/Incorporation issued by the registration authority in the country of incorporation. (Notarized)
• A foreign company registration necessitates a shareholder/board resolution to open a branch and appoint a branch representative residing in Rwanda. (Notarized)
• An active email address and ID card or passport.
• Particulars of Shareholders, Board members, and Directors. (Notarized)

The timing for the business registration and secured transactions services are different, but within 24 hours, except for services related to intellectual property. The time frame is as follows:

• Patent: 12 Months (minimum period)
• Utility Model: 12 months (maximum period)
• Trade Mark: 3 months
• Industrial Design: 6 months
• Copyright: 1 week

7 easy steps to register a business in Rwanda

• Choose a Business Name: The first step is to choose a name for your business. You must ensure that the name is unique and not already used by another business in Rwanda. You can check a name’s availability by searching on the Rwanda Development Board (RDB) website.
• Reserve Your Business Name: Once you have chosen a name for your business, you must reserve it with the RDB. You can do this by submitting an online application and paying a fee.
• Register for Taxation: All businesses in Rwanda must register for taxation with the Rwanda Revenue Authority (RRA). You must provide your business name and other relevant information to complete the registration process.
• Register with the Social Security Fund: Register your business with the Rwanda Social Security Board (RSSB). This will allow you to provide your employees with social security benefits such as health insurance and pension.
• Obtain Licenses and Permits: Depending on the type of business you are starting, you may need to obtain additional licenses and permits. The RDB can guide your business on which licenses and permits are required.
• Register with the Commercial Registrar: Register your business with the Rwanda Commercial Registrar. This will involve submitting your business name, location, and other relevant information.
• Open a Bank Account: Finally, you must open a bank account for your business. This will allow you to manage your finances and conduct transactions with other businesses and customers.

Challenges you might face as a foreign business owner in Rwanda

While the process might seem very easy, no country can provide 100% ease of doing business without any challenges. According to the International Trade Administration, here are some challenges you might face as a foreign business owner in Rwanda.

• High cost of electricity: It ranks among the top 10 most expensive tariffs in Sub-Saharan Africa. 
• Low purchasing power.
• Low level of human resource development: Rwanda has a general shortage of skilled labour. 
• Limited access to finance.  
• Competition from state-owned enterprises.
• Investor aftercare issues, e.g. implementation afterwards, additional tax assessments, and difficulty with the work visa application.

It is important to do adequate research to check your eligibility status before applying to start up a business in Rwanda. Good luck.