Rwanda Standard Incentives for Investors

Posted in Investment Guide

1. Preferential corporate income tax rate of zero percent (0%)
   

   An international company which has its headquarters or regional office in Rwanda is entitled to a preferential corporate income tax rate of zero per cent (0%) if it fulfils the following requirements:
   1. to invest the equivalent of at least ten million United States Dollars (USD 10,000,000), in both tangible or intangible assets, in Rwanda;
   2. to provide employment and training to Rwandans;
   3. to conduct international financial transactions equivalent to at least five million United States Dollars (USD 5,000,000) a year for commercial operations through a licensed commercial bank in Rwanda;
   4. to be well established in the sector within which it operates;
   5. to use the equivalent of at least two million United States Dollars (USD 2,000,000) per year in Rwanda;
   6. to set up actual and effective administration and coordination of operations in Rwanda and perform at least three (3) of the following services in Rwanda:
      1. procurement of raw materials, components or finished products;
      2. market control and sales promotion planning;
      3. information and data management services;
      4. treasury management services;
      5. research and development work;
      6. training and personnel management.

2. Preferential corporate income tax rate of fifteen percent (15%)
   

   A preferential corporate income tax rate of fifteen percent (15%) is accorded to:
   1. A registered investor, exporting at least fifty percent (50%) of turnover of goods and services produced in Rwanda, including business processing outsourcing. This incentive excludes unprocessed minerals, tea and coffee without value addition according to the provisions of this Law.
   2. A registered investor undertaking one of the following operations: energy generation, transmission and distribution from peat, solar, geothermal, hydro, biomass, methane and wind. This incentive excludes an investor having an engineering procurement contract executed on behalf of the Government of Rwanda;
   3. A registered investor in the sector of transport of goods and related activities whose business is operating a fleet of at least five (5) trucks registered in the investor’s name, each with a capacity of at least twenty (20) tons.
   4. A registered investor operating in mass transportation of passengers and goods with a fleet of at least ten (10) buses registered in the investor’s name, each with a capacity of at least twenty-five (25) seats;
   5. A registered investor in the Information and Communications Technology (ICT) Sector with an investment involving one of the following activities: service, manufacturing or assembly. This incentive excludes ICT retail and wholesale trade as well as ICT repair industries and telecommunications;
   6. A registered investor operating in the following financial services: global business activities, private equity funds, fund management, wealth management; mutual funds, collective investment schemes, captive insurance schemes, venture capital, and asset backed securities. This incentive excludes locally oriented fund and wealth management, retail banking and insurance activities.
   7. An investor registered in building low-cost housing and upon fulfilling the criteria provided under the instructions of the Minister in charge of housing.
   8. An investor registered in any other priority economic sector as may be determined by an Order of the Minister in charge of finance.

3. Corporate income tax holiday of up to seven (7) years
   

   A registered investor investing an equivalent of at least fifty million United States Dollars (USD 50,000,000) and contributing at least thirty percent (30%) of this investment in form of equity in the sectors specified below is entitled to a maximum of seven (7) years corporate income tax holiday:
   1. Energy projects producing at least twenty-five megawatts (25 MW). This incentive excludes an investor having an engineering procurement contract executed on behalf of the Government of Rwanda and fuel produced energy;
   2. Manufacturing;
   3. Tourism;
   4. Health;
   5. Information and Communication Technology (ICT) Sector with an investment involving manufacturing, assembly and service. This incentive excludes communication, ICT retail and wholesale trade as well as ICT repair companies or enterprises and Telecommunications;
   6. Export related investment projects;
   7. An investor registered in another priority economic sector as may be determined by an Order of the Minister in charge of finance.

4. Corporate income tax holiday of up to five (5) years
   

   Microfinance institutions approved by competent authorities are entitled to a tax holiday of a period of five (5) years from the time of their approval. However, this period may be renewed upon fulfilling conditions prescribed in the Order of the Minister in charge of finance.

5. Exemption of customs tax for products used in Export Processing Zones
   

   A registered investor investing in products used in Export Processing Zones is exempted from customs taxes and duties according to the provisions of customs rules and regulations of the East African Community.

6. Exemption of Capital Gains Tax
   

   A registered investor does not pay capital gains tax. However, income derived from the sale of a commercial immovable property shall be included in the taxable income of the investor.

7. Exemption of Value Added tax on Raw materials and Machinery on Manufacturing and Mining industries

upon approval of the list of these materials by Ministry of Finance and Economic Planning.

8. Value Added Tax refund
   

   The refund of the Value-Added Tax paid by investors shall be made within a period not exceeding fifteen (15) days upon receipt of the relevant documents by the tax administration authority.

9. Accelerated depreciation
   

   A registered investor is entitled to a flat accelerated depreciation rate of fifty percent (50%) for the first year for new or used assets if he/she meets the following criteria:
   1. Invest in business assets worth at least fifty thousand US dollars (USD 50,000) each;
   2. Operate in at least one of the sectors below and meet the requirements: export projects; manufacturing; telecommunications; agro processing; education; health; transport excluding passenger vehicles with less than nine (9) people seating capacity; tourism investments worth at least one million eight hundred thousand United States Dollars (USD 1, 800,000); construction projects worth at least one million eight hundred thousand United States dollars (USD 1,800,000); and any other sectors provided the investment is worth at least one hundred thousand United States dollars (USD100,000)
   3. Meet the obligations defined below:
      1. keep the assets for at least three (3) years after benefiting from the accelerated depreciation;
      2. inform the Commissioner General of the Rwanda Revenue Authority of the disposal of the business assets in case such disposal is made before three (3) years.

10. Carry forward of losses in income tax law
    

    If the investment allowance (accelerated Depreciation) results into the company making losses, then the loss and other verified business losses are carried forward for next 5 fiscal years.

11. Immigration incentives
    

    A registered investor and his/her dependents shall be issued with a residence permit in accordance with relevant laws. A registered investor who invests an equivalent of at least two hundred fifty thousand United States Dollars (USD 250,000) may recruit three (3) foreign employees without necessarily demonstrating that their skills are lacking or insufficient on the labour market in Rwanda.