|Official name||Republic of Rwanda|
|Surface area||26,338 km2|
|Population||10.5 million (est 2012)|
|Administrative regions||Four Provinces and Kigali City|
|Local currency||Rwandan Franc (RWF))|
|Exchange rate||1 USD = 638 RWF|
|Official language(s)||Kinyarwanda, French, English|
|Other national language(s)||Kiswahili|
|GDP per capita||644 USD|
All investors must register their companies at the Rwanda Development Board, either in person or online. A certificate of registration is delivered in six hours. The RDB business registration service also allows registration for taxes and employee social security.
|eRegulations Links||Register a foreign company in person Register a foreign company online Register a domestic company in person Register a domestic company online Register as an enterprise (individual trader) in person|
|Relevant documents||Companies Act, 2009|
|Relevant institutions||Rwanda Development Board-Business registration|
The Rwanda Development Board was established in 2009 with the express intention of integrating all government agencies responsible for the entire investor experience under one roof. This includes key agencies responsible for business registration, investment promotion, environmental clearances, privatization and specialist agencies which support the priority sectors of ICT and tourism as well as SMEs and human capacity development in the private sector. The aim is to provide investors with a one-stop shop.
The RDB reports directly to the President and is guided by a board that includes ministers dealing with finance, commerce, infrastructure, agriculture. As such, it plays an influential role in Rwanda private sector and infrastructure development.
The RDB modelled on international best practice examples of Singapore and Costa Rica and works closely with those countries and with multilateral development organizations.
An Investment Certificate can be obtained at the RDB as long as investors meet the required threshold of US$ 250,000 for a foreign investor and US$ 100,000 for a local or COMESA investor. For investment in existing projects, one remains on the original investment certificate issued for the project and the investment is captured as reinvestment.
The RDB is required to make and communicate its decision regarding the Investment Certificate within one working day after receiving a complete application.
|Relevant documents||Investment Law, 2005|
|Relevant institutions||Rwanda Development Board - Investment certification|
Investors with projects in industry, road construction, housing, tourism, water and sanitation, energy, railways and airports, fisheries, mining, agriculture and forestry are required to carry out an EIA prior to receiving a certificate of clearance from the RDB.
|eRegulations Links||Obtain EIA|
|Relevant documents||Law on protection, conservation and promotion of environment, 2005 Ministerial orders implementing the law on the environment, 2008|
|Relevant institutions||Rwanda Development Board - Environmental compliance|
Investors cited the speed and simplicity with which they were able to register their businesses (two to three days). They appreciated the transparency of the system and that the rules were closely followed. Furthermore, they generally did not report encountering significant difficulties with obtaining the licenses necessary to establishing and maintaining their operations. Investors also noted that obtaining work permits did not present a challenge.
The Rwandan population is estimated at 10.5 million, with the highest density in Africa (440 inhab/km2). Life expectancy at birth is 51 years. It is overwhelmingly rural but the urban population, currently at 18 percent is increasing at an estimated rate of 4.2 percent per year.
|Relevant institutions||National Institute of Statistics of Rwanda|
Literacy rates for the 15-24 age group are at 77 percent. Education is free for the first nine years of school. Primary school enrolment is therefore 96 percent. Enrolment in the 405 secondary schools is at 22 percent.
There are seven public universities, with a total of 30,000 students enrolled. This is complemented by a further 14 private universities. The most prominent universities are the National University of Rwanda in Butare and the Kigali Institute of Science and Technology (KIST) in Kigali (see text box).
With the aim of addressing the skills gap, the education system now accounts for 15 percent of the national budget.
Thirty-six percent of enrolments in Rwanda's educational programme are in its technical and vocational education training system. The Ministry of Education's Workforce Development Authority offers short courses in a range of trades through schools, training centres and at the workplace to suit the needs of different employers. This is complemented by the state-run Integrated Polytechnic Regional Centres (IRPCs). In addition, vocational courses are offered by a vast network of NGOs and private institutions.
|Relevant institutions||Kigali Institute of Science and Technology|
KIST was established in 1997. It has three faculties (engineering including IT, applied sciences and architecture). There are 2,850 students enrolled with 700 expected for the next intake. The institute offers degrees at bachelors and masters levels.
KIST's approach is to respond to gaps in the labour market. To this end it liaises with the private sector and various ministries in developing its curriculum. It also examines the situation in the wider regional market.
The institute is working hard to support national economic development. Aside from courses provided, it has set up a consulting firm and has established an incubation centre in partnership with the University of Cambridge, where it trains students in creating an income-generating business. It is also working with the private sector to develop a placement system, which would at the same time decrease reliance by investors on expatriate staff.
International partnerships have also been made with the Massachusetts Institute of Technology, the Leeds Institute of Transport, the University of Ghana and a number of universities in South Africa.
There is no legal minimum wage in Rwanda. However typical private sector salaries faced by investors are indicated in the table.
|Senior manager||USD||1500-3000||2012||per month|
|Middle manager||USD||800-1500||2012||per month|
|Graduate entry||USD||300-700||2012||per month|
|Office assistant||USD||200-600||2012||per month|
|Highly skilled technician||USD||150-200||2012||per month|
|Shop assistant||USD||100-200||2012||per month|
|Unskilled labourer||USD||80-100||2012||per month|
|Security guard||USD||70-90||2012||per month|
All employers are required to contribute quarterly to the Rwanda Social Security Board for their employees' social security. The contribution rates are set below.
The pension is a defined benefit scheme, based on years of service (2 % a year for a minimum of 15 years) and average of the last three years of salary. It is portable between employers.
The medical insurance provides beneficiaries with 85 % coverage of all medical costs incurred within Rwanda.
The occupational safety insurance covers beneficiaries for all medical costs incurred within Rwanda, and where authorized abroad, related to work-related injuries.
|Category||Percentage of gross salary|
|Medical insurance, employer contribution||7.5 %|
|Medical insurance, employee contribution||7.5 %|
|Pension, employer contribution||3 %|
|Pension, employee contribution||3 %|
|Occupational safety, employer contribution||2 %|
|Relevant institutions||Rwanda Social Security Board|
Employment in Rwanda is covered by the Labour Law 2009. Contracts for a period of six months or more must be written while those of a shorter period may be oral. Article 34 of the law provides for contract termination in case of changing economic conditions and skill requirements of an employer. Termination indemnities and other penalties are only payable to employees with continuous service of at least 12 months.
Employment contracts can be of three types; fixed term, open ended or for a defined work. Fixed term or work-defined contracts are automatically terminated at the end of the defined period or work. Open-ended contracts may also be ended at any time by either party for legitimate reasons and with prior notice. While renewal of fixed term contracts is allowed based on mutual consent, such renewal does not lead to the fixed term contract becoming indefinite.
|Relevant documents||Labour Law, 2009|
|Less than 5||One month|
|Over 25||Six months|
The provisions of the Labour Law 2009 also apply to the employment of foreign workers. They require both work and residence permits, which can be issued by the RDB.
Work permits are usually issued to key personnel or for expatriates coming to work in an occupation for which there is a shortage of locally available labour. The permits need to be renewed on an annual basis. However, an investor who invests more than US$ 100,000 is automatically allowed to hire up to three expatriate employees, with the residence and work permit fees of the investor and up to three expatriate employees waived for the first year. In case there is a need for more than three expatriate employees, the enterprise can apply to the agency and will be subject to the regular conditions for work permits stated above.
Fees for work permits fall into two categories. Workers who earn more than RWF 500,000 are classified as Category A and pay RWF 50,000 per year. Those earning under RWF 500,000 are Category B and pay RWF 10,000. Workers from EAC countries do not have to pay a fee.
|Relevant documents||Immigration and Emigration Law, 2011 Ministerial Order implementing the Immigration and Emigration Law, 2011|
|Relevant institutions||Directorate General of Immigration and Emigration|
Investors have noted that finding suitably qualified and able human resources locally could be a challenge, especially for managerial positions. Companies had to invest significantly in training and complement with senior ranks with expatriate labour, often from Kenya (although obtaining work permits was problem-free). However, local staff learnt quickly and were reliable and hard working. No industrial labour problems were mentioned.
Electrification is concentrated in urban areas and is less available elsewhere. Current domestically generated installed capacity stands at 112 MW . As demand exceeds supply, a further 15.5 MW is imported from neighbouring countries. To address the shortfall, EWSA, the country's national power and water distributor has adopted an open approach in signing agreements with independent power producers (IPPs) targeting a range of energy types. These include methane extraction, geothermal, hydro power and peat. There are two rates for electricity consumption.
|Electricity||USD||0.20||2012||1 Kwh industrial consumption day time|
Water is provided at the following rates.
|Water||USD||0.94||2012||1 m3 industrial consumption|
Rwanda has a liberalized telecommunication sector. Its infrastructure benefits from a 2,300 km fibre optic backbone, which runs through the country, connecting to the Seacom submarine cable. Operators lease capacity from it.
|Mobile phone call||USD||0.10||2012||1 minute national peak|
|Mobile phone call||USD||0.19||2012||1 minute regional peak|
|Mobile phone call||USD||0.31||2012||1 minute international peak|
|Fixed line call||USD||0.25||2012||1 minute international peak|
|Fixed line call||USD||0.03||2012||1 minute national peak|
Seventy-five percent of the population has internet access with a network that combines the fibre optic backbone with microwave transmitters on telephone towers. The same network connects schools, universities, government departments and 65 RDB telecentres providing business development services to small enterprises.
Fixed line broadband is provided by Rwandatel and MTN.
|Broadband||USD||178||2012||256 kbps unlimited for a month|
Rwanda’s road network covers approximately 14,000 km, of which 1,083 km are paved and much of that the subject of a road upgrade programme and in a good state. The network, which links Eastern Africa with the DRC is one of Rwanda’s advantages as a potential hub for the region. The main road arteries are in good condition. However, the feeder roads from rural areas are poor or missing, making it difficult to reach markets in the interior. It is estimated that close to 50 percent of the mostly rural population live more than an hour away from the nearest market.
A key concern is the time, ranging from three weeks to a month, for goods that arrive at the ports of Mombassa or Dar-es-salaam to clear customs and travel to Kigali. The approximate cost for a container is below.
Rwanda's main international gateway is at Kigali, which enjoys direct flights to Addis Ababa, Amsterdam, Brazzaville, Brussels, Bujumbura, Dar es Salaam, Dubai, Entebbe, Istanbul, Johannesburg, Libreville, Mombasa and Nairobi. Kigali is also the base for national airline Rwandair. The main foreign airlines flying to Kigali are Brussels Airlines, Ethiopian Airlines, Kenya Airways, KLM, Qatar Airways and Turkish Airlines.
The number of passengers, both foreign and domestic, using Kigali airport was around 450,000 in 2011. With only a small terminal building, plans are in place to build a larger airport 30 km from the city at Nyamata. Kigali airport does enjoy cold storage facilities.Domestic airports and airfields include Butare, Cyangugu, Gisenyi (on the border with DRC), Nemba and Ruhengeri.
There is some internal lake transport, although only that on Lake Kivu is of significant economic value, as it connects Rwanda to the DRC market. Studies are being made on the navigability of the Kagera River (and its tributaries) which passes through nearly all the provinces of the country and serves as a border with Tanzania and Uganda.
The cost of transporting a 40 foot container from Mombasa to Kigali is below.
|Freight transport||USD||6000||2012||40' container from main (national or foreign) seaport to main commercial city|
For indicative purposes, a basket of goods and services that investors may face in Rwanda are included below.
|Coca Cola||USD||1.11||2012||50 cl plastic bottle|
|Imported beer||USD||1.59||2012||33 cl|
|Local beer||USD||0.72||2012||33 cl|
|Bottled water||USD||0.95||2012||1.5 litres|
|Wheat flour||USD||1.27||2012||1 kg|
|Maize flour||USD||1.59||2012||1 kg|
|Whole chicken||USD||5.88||2012||1 kg|
|Minced beef||USD||4.77||2012||1 kg|
|Bottled gas||USD||39.75||2012||15 kg not including cost of bottle|
|Hotel 3 star||USD||120||2012||Standard room including breakfast|
|Hotel 4 star||USD||170||2012||Standard room including breakfast|
|Hotel 5 star||USD||360||2012||Standard room including breakfast|
|Taxi journey||USD||7.95||2012||Journey within town|
Overall investors were positive about several aspects of the country’s infrastructure. This included roads within the country, telecommunications and the availability of fibre optic connections to the outside world.
Concerns were raised about road transport to the surrounding region and specifically about getting containers from sea ports to Kigali. Delays of three weeks to one month were cited although it was made clear that this was due to factors beyond the jurisdiction of the Rwandan authorities. Indeed, Rwandan customs clearance was praised for its speed and efficiency. Power supply within Kigali was reliable but was not present everywhere in the country. Investors, especially in the tourism sector, were pleased with the efforts being made by the Government to attract foreign airlines and to expand the reach of the national carrier.
With regards to financial infrastructure, investors noted that the arrival of more foreign banks had increased competition and driven down costs. However, while improving, access to liquidity remained a concern.
The Land Law, 2005 governs the use and management of land in Rwanda; it stipulates that all land belongs to the Government (the State, the cities and districts). Both domestic and foreign investors in Rwanda enjoy the same rights with respect to investment in land.
|Relevant documents||Law determining the use and management of land in Rwanda, 2005 Ministerial Orders on procedures for land lease, 2008|
Public land is reserved for public use or environmental protection while private land can be allocated by the Government to natural or legal persons. It then becomes individual land.
Individual land can be requisitioned by the Government in case it is degraded and unexploited for a period of three consecutive years, unless there is a reason why the land was not utilized. The owner of the requisitioned land can however request for repossession by demonstrating commitment to productively exploit the land within a year of repossession.
Customarily occupied land refers to land that has been governed by traditional rules and inherited from parents. Such occupation can be officialized by signing up at the local district office and obtaining a customary title. Much land is still owned customarily and the process of registering it all will take time. Hence investors may often have to buy land that is customarily owned but then further ensure that the official customary title is converted into either a lease or ownership title to be formally registered and recognized by the law.
Individual land is leased for up to 99 years through a lease contract and against payment of an annual lease fee. The lessee can obtain an ownership certificate by paying 10 years of lease fee in advance and by constructing a building on the land (or by improving/exploiting it conforming to its intended use). Land rights can be transmitted through sale, donation or inheritance.
Rights to land may be transferred between individuals or they may be guaranteed through succession; they may be donated, leased or sold; rights may also be mortgaged according to requirements and procedures are provided for by ordinary civil law without prejudice to specific provisions of the Land Law.
|eRegulations Links||Register individual land in Kigali and obtain an ownership title Transfer individual land in Kigali with full ownership title Transfer individual land in Kigali with certificate of registration Acquisition of private district land in Kigali Kigali one stop centre|
|Relevant documents||Procedure for Acquiring Land|
|Relevant institutions||Kigali City Council|
|Office space||USD||12-20||2012||in main commercial city, per m² per month|
|Commercial shopfront||USD||15-30||2012||in main commercial city, per m² per month|
|Warehouse||USD||5-8||2012||5 km from main commercial city, per m² per month|
|Furnished expatriate house||USD||1500-2500||2012||3-bedroom with garden, in main commercial city, per month|
|Unfurnished expatriate house||USD||1000-1500||2012||3-bedroom with garden, in main commercial city, per month|
Land dispute matters are heard by competent courts after certain steps to resolve the dispute have been taken by the parties. According to Article 57 of the 2008 Ministerial Order relating to requirements and procedures for a land lease, the following steps must be followed:
|Relevant documents||Ministerial Order on land registration, 2008|
Obtaining a construction permit takes 30 days and can be done at the Kigali One Stop Centre. The documents that are obtained include deed plans, location contract, building permit, occupational permit and access to utilities such as water, electricity and telephone.
The RDB also provides assistance, with in-house EWSA staff to help businesses connect to water and electricity. The EWSA client charter limits waiting times for connections for water and electricity to two days upon application and payment.
|eRegulations Links||Apply for a construction permit|
|Relevant documents||Instruction 01/10 on construction permits Prime minister's instructions relating to implementation of Client Charter on land administration and land acquisition, 2010|
A free economic zone is currently in place on the outskirts of Kigali. Phase 1, which is in operation, sits on 98 hectares. Phase 2, currently under development, will occupy 178 hectares and is due for completion by end 2013. A further phase is being planned and will cover 134 hectares.
Facilities include tarmacked roads and access to the road network, fibre optic internet access, water supply and storm water drainage.
The zone has been designed to accommodate the following structures:
All companies must register at the Rwanda Revenue Authority. The corporate tax year is based on the calendar year. A taxpayer wishing to use another date must apply to the Minister of Finance and Economic Planning for permission.
Losses may be carried forward for up to five years, earlier losses being deducted before later losses.
Companies with turnover of less than 200 million RWF may choose to pay their PAYE and VAT on a quarterly instead of monthly basis.
|Turnover (RWF)||Tax rate|
|Greater than 50 million||30 % of profits|
|12,000,001 to 50 million||3 % of turnover|
|10,001,000 to 12,000,000||300,000 RWF|
|7,001,000 to 10,000,000||210,000 RWF|
|4,001,000 to 7,000,000||120,000 RWF|
|2.000,000 to 4,000,000||60,000 RWF|
|eRegulations Links||Obtain a tax identification number (TIN) Declare and pay annual corporate income tax Make a quarterly prepayment Pay as you earn (PAYE)|
|Relevant documents||Law on Direct Taxes, 2005 Law on Tax Procedures, 2005 Commissioner General's Rules|
|Relevant institutions||Rwanda Revenue Authority - Domestic Tax Department|
VAT is payable at 18 percent. Exports of goods and services are zero-rated and, barring need for further verification, refunds take place within 30 days of a claim being made. Agricultural products, pesticides and fertilizers used in agriculture, health services and supplies, education services and the supply of education materials to learning institutions, bus transport services and water supplies to rural areas are exempt from VAT.
|eRegulations Links||Register for VAT Declare and pay VAT|
|Relevant documents||Law on Code of Value Added Tax, 2001 Law modifiying Code of Value Added Tax, 2010|
|Relevant institutions||Rwanda Revenue Authority - Domestic Tax Department|
Soft drinks and alcoholic beverages as well as cigarettes and telephone communications are subject to excise duties specified in the table.
|Fruit juices||5 %|
|Mineral water||10 %|
|Wines and liquors||70 %|
|Vehicles||5 % to 15 % depending on engine size|
|Powdered milk||10 %|
|Telephone communications||5 %|
As a member of the East African Community (EAC) customs union, all goods manufactured in one EAC country and sold in another and which meet rules of origin criteria are treated as if they were manufactured locally, by virtue of there being no internal tariffs between partner countries. The same countries also levy a common external tariff for goods entering the EAC, with the aim of promoting manufacturing and the processing of raw materials. Investors in free economic zones (FEZs) are exempted from paying import duties.The full schedule of tariffs is available in the EAC Common External Tariff Handbook below in document.
|Raw materials||0 %|
|Intermediate goods||10 %|
|Finished goods||25 %|
|eRegulations Links||Customs clearance|
|Relevant documents||EAC Common External Tariff Handbook.|
|Relevant institutions||Rwanda Revenue Authority - Customs Services Department|
A number of withholding taxes are payable. These are specified in the table.
|Withholding tax on payments: dividends; interest on deposits, bonds; royalties, management and technical fees; and performance payments||Flat rate of 15 %|
|Withholding tax on imports||5 % on CIF of value of goods imported for commercial use|
|Withholding tax on public tenders||3 % of the sum of the invoice|
|Quarterly prepayment||Quarterly prepayment of 25 % of previous income tax declared|
|eRegulations Links||Steps to obtain, submit and pay withholding tax|
|Relevant documents||Law on Direct Taxes, 2005|
|Relevant institutions||Rwanda Revenue Authority - Domestic Tax Department|
Income is taxed progressively at 0, 20 and 30 percent. It is withheld by the employer under pay as you earn (PAYE). Self-employed persons must declare and pay their own PAYE on a monthly basis.
Benefits in kind are also taxed. Taxes on these must be declared and settled on an annual basis. The following are not taxed:
|Annual income or benefit||Rate|
|First 360,000 RWF of annual income||0 %|
|Between 360,001 and 1,200,000 RWF of annual income||20 %|
|All annual income above 1,200,000||30 %|
|Company car||10 % of employment income excluding the value of the benefit in kind|
|Accomodation||20 % of employment income excluding the value of the benefit in kind|
|Interest on loan||10 % of income gained as a result of difference between interest paid and what would have been paid if the rate offered to commercial banks by the BNR had been used|
|All other benefits||Full market value is added to employment income and taxed as such|
|eRegulations Links||Obtain a tax identification number (TIN) Declare and pay personal income tax|
|Relevant documents||Law on Direct Taxes, 2005|
|Relevant institutions||Rwanda Revenue Authority - Domestic Tax Department|
|Partner||Type of agreement|
|Belgium||Income and capital|
The Government of Rwanda has put in place a number of legal and treaty measures to provide investors with protection of their investments.
The Constitution guarantees protection of property. At the same time Article 30 of the Investment Law 2006 stipulates that the Government is responsible for the protection of foreign investment. Expropriation of property may be carried out by the Government in the public interest defined as development, social welfare, territorial integration and security. However, there should be prior and just compensation that is calculated as being equal to the value of the land and the activities performed thereon by the expropriated person, calculated in consideration of market prices. Offences against property are punishable in accordance with the provisions of the penal code.
The Investment Law provides that in instances of fraudulent representation or the provision of false or incorrect material, the investment certificate may be revoked by RDB by giving a written notice to the investor requiring him or her to show cause within 10 days from the date of the notice why the certificate should not be revoked. If within that period a satisfactory explanation is not provided, the Board may withdraw the certificate. The entity affected may, however, continue to operate as a business in Rwanda while the legal process takes its due course or even after the certificate is revoked but then without the associated incentives.
In practice RDB has never revoked certificates. It normally relies on counselling to achieve the desired corrective action.
The National Bank of Rwanda governs matters relating to the management of foreign exchange. Financial transfers to service debt payments, dividends, royalties and profits are unrestricted. However, they are subject to a 15 percent withholding tax. There are some restrictions on the transfer of earnings by expatriate employees, subject to meeting fiscal obligations. There are also reporting and repatriation requirements for exporters with transactions exceeding US$ 10,000. Both residents and non-residents may open foreign currency accounts with domestic banks. Only authorized dealers are allowed to engage in the foreign exchange business, except where the National Bank of Rwanda permits a specific person or class of persons to do so, subject to the conditions it may impose.
|Relevant institutions||National Bank of Rwanda|
Rwanda's framework for dispute resolution consists of commercial courts, and arbitration and mediation. Rwanda is also a member of the International Centre for the Settlement of Investment Disputes (ICSID), the World Bank’s Multilateral Investment Guarantee Agency (MIGA), which offers insurance against non-commercial risk, and the African Trade Insurance Agency (ATI), which are supported by the World Bank and Lloyds of London. ATI covers risk against restrictions on import and export activity, inconvertibility, expropriation, war, and civil disturbances.
The commercial justice system covers commercial, financial, fiscal and other matters closely related to them, and consists of three commercial courts and a commercial high court. The three lower courts cover commercial disputes with a value less than US$ 37,000 while the high court covers disputes above this value as well as appeals against decisions from the lower courts.
The Arbitration and Conciliation Law, 2009 covers informal dispute resoultion. Arbitral rewards are treated as final and binding unless in certain specified exceptional circumstances. The law applies to both domestic and international commercial arbitration and conciliation with respective rules and procedures recognized as long as both parties agree to them. Moreover if during arbitral proceedings the parties settle the dispute, the arbitral tribunal shall terminate the proceedings thus encouraging peaceful agreement. The law also clarifies the case of bankruptcy, where a provision relating to arbitration specified in the contract relating to the bankrupt person, shall be enforceable by the trustee in bankruptcy.
|Relevant documents||Arbitration and Conciliation Law, 2009|
Rwanda has investment agreements with the countries listed below;
Belgium and Luxembourg
Intellectual property in Rwanda is governed by the Protection of Intellectual Property Law, 2009. The law regulates industrial property, and copyright and related rights.
Industrial property may be registered and obtained at the RDB. Protection for inventions is provided through patents that are issued for 20 years with no possibility for renewal. Trademarks may be issued for periods of 10 years and can be indefinitely renewed at the end of each term. Both patents and trademarks may be transferred or assigned. Copyrights and related rights are also available under the law; for natural persons such rights are guaranteed for life and up to 50 years after. Effective technical protective measures are protected against circumvention. Furthermore utility model certificates as well as protection rights for designs for layouts and industrial designs are provided, though on a more short term basis.
Procedures for registering industrial and intellectual property are provided below.
|eRegulations Links||Register a patent Register a trade mark Register utility model Register industrial design Registering a copyright|
|Relevant documents||Law on Intellectual Property, 2009 Ministerial Order on Intellectual Property, 2010|
|Relevant institutions||Rwanda Development Board- Intellectual Property|
|Relevant documents||WIPO Berne Convention|
The Paris Convention for the Protection of Industrial Property (1883) establishes industrial property protection rules regarding patents, marks, industrial designs, trade names, geographical indications and the repression of unfair competition, in the fields of national treatment, right of priority and common rules.
|Relevant documents||WIPO Paris Convention|
Enforcement of intellectual property falls in the jurisdiction of the commercial courts in Rwanda whose procedures include conservatory and provisional measures as well as injunctive relief. Criminal procedures are available for acts of infringement and include penalties involving imprisonment for up to five years and/or fines of up to 500 million RWF. Special Border Measures have been put in place by the law and the circulation of imported goods may be suspended if they are believed to infringe protected rights.
Rwanda's Competition and Consumer Protection Law 2011 is enforced by the autonomous Rwanda Competition and Consumer Protection Commission. Competition and consumer protection disputes currently fall under the jurisdiction of the commercial courts.
Rwanda must also conform to regional competition policy requirements under both EAC and COMESA. This is overseen by the COMESA Competition Commission, which enjoys international legal personality, and the EAC Competition Regulations, which once applied will apply to cross-border economic activity.
|Relevant documents||Competition and Consumer Protection Law, 2011 EAC Competition Regulations, 2010|
|Relevant institutions||Rwanda Competition and Consumer Protection Commission COMESA Competition Commission|
No case of expropriation or any other investment protection issue has been reported by the investors surveyed.
Investors were impressed with the speed at which some legislation was being renewed. However, there were concerns that it could sometimes be hard to keep up and that legislative requirements were sometimes beyond the needs of a small developing country and the abilities of the kind of investors who would be attracted.
Some investors also raised concerns about the presence of Government-owned companies and agencies competing – some felt with an in-built advantage – with the private sector. This included in the sector of banking, pensions and insurance, although it was understood that the creation of such institutions had been an important stage in Rwanda’s early development path. Investors felt the Government sometimes needed to better understand the economic role that the private sector could play.
The focus of the Government has been on reforming the economy and promoting economic growth. The Government is also pursuing an ambitious programme for human resource development to rebuild the human capital lost or emigrated in 1994. This has led to some important socio-political achievements, including the restoration of peace, security, stability and personal safety; a zero-tolerance policy towards corruption; judicial and administrative reforms; regional integration; increased investment in education; and substantial progress towards national reconciliation.
The main contributor to growth has been services (government expenditure on education, health and public administration). The industrial sector picked up after 2008 downturn and reflects important government capital expenditure and greater investment in construction. Agriculture while occupying 79.5 percent of the labour force and growing at an annual rate of 5.17 percent over the previous five years, has been declining in proportion to the economy, marking Rwanda's gradual economic diversification to services.
The East African Community (EAC) comprises Burundi, Kenya, Rwanda, Tanzania and Uganda. Its membership means being part of a single market with a population of 138 million and a GDP of $82.1 billion.
As a member of the EAC single market, all goods manufactured in one EAC country and sold in another are treated as if they were manufactured locally, by virtue of there being no internal tariffs between partner countries. Non-tariff barriers to trade are also being removed. The same countries also levy a common external tariff for goods entering the EAC, with the aim of promoting manufacturing and the processing of raw materials. Under this scheme, raw materials are imported duty free, intermediate goods are charged 10 percent and finished goods 25 percent.
Future steps being considered include a monetary union and a political federation. Expansion is also being considered. In 2011 South Sudan, with its petroleum industry, applied to join, at the invitation of Kenya and Rwanda. DRC, with its vast mineral reserves has observer status.
|Relevant documents||EAC map (UN cartography)|
COMESA forms a major market place in Africa bringing together as it does 19 member states covering a total population of 444 million. A Free Trade Area (FTA) was created in 2000 and now encompasses 11 of the 19 member states. A customs union is planned in the close future with the eventual elimination of quantitative and non-tariff barriers for goods originating from within the region. Common external tariffs are also foreseen. Given the technical and legal challenges posed by a number of countries being both members of COMESA and the EAC single market, it is likely that the conditions of the COMESA union will be harmonized with that of EAC.
Its member countries are: Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, Zimbabwe.
Under European Union's Everything But Arms Initiative (EBA), least developed countries (LDCs) enjoy duty-free access to the EU market for all products except arms and ammunition. Sugar and other processed foods are permitted.
Developing countries benefit from preferential duty-free access to the United States for up to 5,000 products, under its Generalized system of preferences (GSP). Eligible include: most manufactured items; many types of chemicals, minerals and building stone; jewelry; many types of carpets; and certain agricultural and fishery products. Among the products that are not eligible are: most textiles and apparel; watches; and most footwear, handbags, and luggage products.
Under the African Growth and Opportunity Act (AGOA) Sub-Saharan African countries benefit from duty-free access to the United States for an additional range of 1,800 products that are excluded from the Generalized system of preferences. These include most textiles and apparel; watches; and most footwear, handbags, and luggage products. With regards to apparels, the textiles and yarns must in general originate from Sub-Saharan African countries or the United States.
Domestically generated installed
capacity stands at 112 MW. A significant portion of
that is generated from imported petroleum products. A further 15.5 MW is imported
from neighbouring countries. The gap between demand and domestic supply is
expected to grow as the country develops and more of it is electrified
(electrification stands at 11 percent). A 1,000 MW demand is forecast for
The country has substantial hydroelectric resources, as well as natural gas deposits under Lake Kivu (see box below), which could make Rwanda self-sufficient in electricity or, even, a net exporter. Detailed and promising geothermal explorations are taking place in the Volcanoes National Park and the faults associated with the East African Rift near Lake Kivu.
Opportunities therefore exist in power generation and EWSA, the country's national power and water distributor is open to signing agreements with independent power producers (IPPs).
Investment opportunities in the energy sector
Incentives for potential investors in the power sector
Depending on the significance of the project, the Government is open to providing support in infrastructure, roads and transmission access.
Contour Global, the energy branch of United States based Reservoir Capital, is finalizing the first phase of a project to extract methane from the depths of Lake Kivu and use it to generate electricity. Its first phase, costing US$ 140 million is likely to yield 25 MW, and will operate under the name of the company’s Rwandan subsidiary, Kivuwatt. In its second phase it could yield 100 MW, some of which could be exported to neighbouring Uganda.
The extraction takes place 30 km offshore through four gas extraction facilities barges. These are connected by a pipeline ten metres below the surface of the lake to an onshore marine landing site. The generation plant itself is onshore at Kibuye. Under this technology, water is pumped up from depths of 360m, the methane is extracted, and the water, without methane, is pumped back to a depth of 240m. The technology still needs to be fully tested which is why the first phase is only for 25 MW. Risk factors include springs in the lake and uncertainty over how the rebalancing of water types will affect the lake.
The novel nature of this venture meant that no outside contractors could be found and Contour Global found itself having to manage the project. The design also had to change along the way in line with evolving Rwandan regulations. However, the company is positive about its experience working with the Government and about the project’s prospects.
Rwanda’s natural assets include six volcanoes, 23 lakes and numerous rivers. Spectacular volcanoes and dense tropical forests dominate the north of the country, while there are hills and valleys, lakes and rivers, and savannah as well as tropical vegetation in the rest of the country.
The Parc National des Volcans in northern Rwanda is home to the world’s largest number of endangered mountain gorillas, who live in a protected area and can be viewed in their natural habitats at a fairly close range. 670 different bird species have been recorded in Rwanda, as have 100 orchid species in the Nyungwe Forest National Park, also home to 13 species of primate. The third park in Rwanda, the Akagera National Park is a savannah park with typical wildlife – lion, buffalo, giraffe, elephant, hippopotamus, hyena, impala, gazelle – that is progressively being restocked. There are also water bodies ideal for water sports and fishing, particularly Lake Kivu in the west and Lake Muhazi in the east. Lake Kivu also offers beautiful beaches, jutting peninsulas and islands.
The Government is investing significant efforts in attracting meetings, incentives, conferencing and events tourism, making use of its good international air connections. To this end, it is building a convention centre and hotel, to be managed by Radisson, of which the biggest room would have seating space for 3,000 delegates. This would make Kigali the fifth largest convention centre in Africa after Cape Town, Marrakesh, Cairo and Nairobi.
The convention centre will add significant capacity to a growing conference market in Rwanda with the country already hosting a number of regional conferences focused on issues of conflict resolution, health and gender, three areas in which the country has made a mark for itself. Accommodation for conferencing will be supported by a number of business hotels opening their doors in Kigali. These include a Marriot and Sheraton.
Growth in all types of tourism is supported by increasing international airline connections. International airlines currently flying to Kigali include Brussels Airlines, Ethiopian Airlines, Kenya Airways, KLM, Qatar Airways and Turkish Airlines. Further growth is expected.
Opportunities for investment also exist in the following areas:
|Relevant institutions||Rwanda Development Board|
Already well established in the East African region, Tourism Promotion Services East Africa Limited (TPSEAL), owned by the Aga Khan Fund for Economic Development (AKFED) and operating under the Serena brand, has its sights set on Rwanda. Currently it operates two properties. The first is in Kigali and attracts principally business and conference visitors. It was taken over from the Government and is now majority-owned by the group. The second is at Gisenyi on Lake Kivu by the border with the DRC focusing mainly on tourism.
The chain has plans to expand to seven properties, which together will enable visitors to enjoy a 10-day circuit targeting long-haul travelers. The properties will include:
The Aga Khan Fund also has plans to establish in other sectors in Rwanda. As a majority shareholder of the Nation Media Group and with a newspaper and FM radio already operating in Rwanda, it also aims to bring in a TV station. Plans are underway to establish the Diamond Trust Bank and Jubilee Insurance. Aga Khan Health Services may open a hospital and medical faculty, which would be the second largest in the region after Kenya.
With Rwanda's duty-free access both across the EAC Common Market, Comesa and preferential access to the EU and US (see above), the country presents opportunity for export manufacturing. This is currently dominated by agro-processing, particularly in tea and coffee, and to a smaller degree in horticulture and floriculture.
While Rwanda’s internal market remains small, it runs a substantial trade deficit. There are therefore opportunities for small investors in import substitution, for example in consumer goods, the largest category of imports. Current manufacturing takes place in beer, soft drinks, cigarettes, sugar, wheelbarrows, soap, cement, mattresses, plastic pipe, roofing materials, textiles, and bottled water. Being a landlocked country with high transport costs, also means that there is a certain natural protection for investors in the country.
The Government is making available industrial land through the Kigali Free Economic Zone (see Land tab).
|Relevant institutions||Rwanda Development Board|
The Government has invested heavily in developing ICT infrastructure to enable service delivery. This has included:
As a result, the ICT sector in Rwanda has been growing steadily over the last twelve years with ICT literacy levels also rising in the same period. University curriculums have been revised to contain both practical and theoretical aspects of ICTs.
With regards to the telecommunications industry, there are three internet and mobile telephony services providers: MTN Rwanda, Tigo Rwanda, and Bharti Airtel. Today, there are over 5 million mobile telephony subscribers.
Key investment opportunities exist in:
Commercial agriculture in Rwanda is characterized by three main sectors in descending order: coffee, tea and horticulture and floriculture. Agriculture contributes 33.6% to the national GDP. Export crops (tea and coffee) projected by the National Agriculture and Export Development Board to grow at 22% between 2012 and 2014.
Coffee is central to Rwanda’s economy. It is the
second largest export item by value. Coffee is cultivated by around 400,000 smallholders on 52,000
hectares. Most coffee is sold as green beans through farmers' cooperatives to
exporters who in turn sell to commodity traders. Coffee is 95 percent Arabica
and is mainly exported to the United States and Germany, where it is blended
with other beans. The little coffee that is roasted in Rwanda
tends to be sold locally, though coffee that has been exported unblended under
the Rwanda appellation has been recognized as a high quality product, winning
cupping contests internationally, and buyers are willing to pay a premium.
There are opportunities for investment in quality improvement and value addition through:
Tea is Rwanda's third export item by value. According to Rwanda’s national tea authority, OCIR-Thé, the sector employs an estimated 60,000 people and has 12,000 ha under cultivation. Nearly all the tea is grown at above 1,500 metres, in soils which permit the production of very superior tea. Like coffee, tea is also grown mainly by small-holders (67 percent) grouped into 13 cooperatives but, in addition, there are also 11 tea factories with associated estates.
Two kinds of tea are grown, swamp tea and mountain tea, of which the latter has a lower yield but higher quality. In general, yields per hectare are lower in Rwanda than in competitors like Kenya and Sri Lanka and studies show that yields of 3 tonnes of black tea per hectare could be reached in the marshlands and 2.5 tonnes in the hills, up from 1.5 tonnes currently.Most tea is produced by the CTC (cut, tear, curl) method and apart from a limited tea bag production for the local market, there is little value addition. Ninety percent of tea is sold directly at auction in Mombasa. The Government is keen to encourage investment in this sector to increase value-addition through blending, packaging and branding.
The Government encourages investors to set up independent tea factories and to establish contracts with surrounding grower cooperatives. To this end opportunities have been identified in Karongi District in Western Rwanda, at Gatare in Nyamasheke District and at Mushubi in Nyamagabe District. In order to increase value-added orthodox processing methods are also being encouraged.
Horticulture and floriculture
Horticultural exports include dry beans, green beans, carrots, fresh fruit and tropical fruit. With demand growing in both Western and Middle Eastern markets for fruits and vegetables, buoyed by a trend towards more healthy eating, opportunities exist in this sector. Opportunities also exist in selling highland crops grown in Rwanda to the lowland regions of the EAC and Central Africa.
With regards to floriculture, the Government has identified 200 ha of land in the Eastern part Province where a state of the art flower park will be established. The zone is close to a lake and the project is expected to generate and sell over 95 million stems annually both through auction (80%) and direct sales (20%).The development of a flower park is expected to attract cargo flights into the country hence lowering air flight costs. This will in turn attract more investors into the horticulture industry supporting value addition to fruits and vegetables for export.
Further opportunitiesHowever, opportunities are available in three further distinct areas:
Construction and real estate have seen recent growth with strong demand for residential and commercial buildings. This has been buoyed by growth in local and foreign investment.
Another sector with strong growth has been affordable housing, which is driven by among other factors, a growing population (2.89% per annum), an emerging and growing middle class, increased diaspora investment in Rwandan property markets and government investment in infrastructure expansion and modernization of urban and rural infrastructure.
The construction sector grew by 24% in the year 2011 compared to 9% in 2010, and contributed 8% to GDP. Dominant in the sector was the construction of hotels and commercial buildings.
The City of Kigali's conceptual master plan envisages that all areas in the city can be re-developed in the next seven years. According to this plan, there are over 35,590 ha of land for potential growth in the city.
Opportunities in the real estate and construction sector exist in:
There are currently 9 commercial banks in Rwanda as well as a number of microfinance institutions and rural savings and credit cooperatives. The sector is overseen by the National Bank of Rwanda.
Growth potential remains strong with 42% of the population in the formal financial system. The return on equity in the sector as of June 2012, according to the Rwanda Development Board, was 10.9%. There is also a stock exchange, overseen by the Capital Markets Authority (CMA).
All banks are subject to a five percent minimum reserve requirement. Banks wishing to install in Rwanda must apply for a license to the National Bank of Rwanda by presenting a business model showing that there is a gap in the market and demonstrating a minimum share capital of US$ 8.13 million.
In order to improve access to credit, a private credit reference agency bas been set up, of which all banks and other financial institutions must be members. Other companies such as utilities can be voluntary participants.
The three largest commercial banks in descending order of market share are:
Investment opportunities in the financial sector
|Relevant institutions||National Bank of Rwanda|