Rwanda has a history of strong economic growth and a reputation for low corruption. Though Rwanda averaged high GDP growth of 7.1 percent from 2009-2019, its economy suffered from the COVID-19 pandemic. According to Government of Rwanda (GOR) statistics, GDP growth was 9.5 percent in 2019 before the economy went into its first recession since 1994 with a 3.4 percent GDP contraction in 2020. The Rwandan economy is now showing signs of recovery, as GDP grew 10.9 percent in 2021. Rwanda has relied on a multi-round domestic economic stimulus plan to fuel a recovery, though some worry about the effect of these policies on the country’s sovereign debt. In late 2020 and early 2021, the GOR took significant policy reforms intended to return the economy to growth, improve Rwanda’s competitiveness in selected strategic growth sectors, increase foreign direct investment (FDI), and attract foreign companies to operate in the newly created Kigali International Financial Centre.
The country presents several FDI opportunities in sectors including: manufacturing, infrastructure, energy distribution and transmission, finance, fintech, off-grid energy, agriculture and agro-processing, affordable housing, tourism services, and information and communications technology (ICT). Rwanda has a partnership with Qatar to construct a new greenfield international airport at Bugesera, just outside of Kigali (estimated completion in 2025 or 2026). This project has already generated significant opportunities for foreign investment and will continue to do so as related projects (roads, hotels, logistics, etc.) come online.
The Rwandan Investment Code calls for equal treatment for both foreigners and nationals in certain operations, free transfer of funds, and compensation in cases of expropriation. Some investors have voiced concerns that a new land law passed in 2021 may run counter to some of the provisions in the Investment Code and similar provisions in the 2008 U.S.-Rwanda Bilateral Investment Treaty (BIT).
Many companies report that although it is easy to start a business in Rwanda, it can be difficult to operate a profitable or sustainable business due to a variety of hurdles and constraints. These include the country’s landlocked geography and resulting high freight transport costs, a small domestic market, limited access to affordable financing, payment delays with government contracts, challenges with tax administration, low-level corruption, and issues in competing with state-owned or affiliated enterprises. Government interventions designed to support overall economic growth can significantly affect investors, with some expressing frustration that they were not consulted prior to the abrupt implementation of government policies and regulations that affected their businesses.
The American business community in Rwanda is well-established and represents a variety of sectors. The American Chamber of Commerce-Rwanda was founded in 2019. As of March 2022, it had 39 members.
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
Over the past decade, the GOR has undertaken a series of policy reforms intended to improve the investment climate, wean Rwanda’s economy off foreign assistance, and increase FDI levels. Rwanda enjoyed strong economic growth until the start of the COVID-19 pandemic in March 2020, averaging 7.1 percent annual GDP growth over the prior decade. Rwanda also enjoys a reputation for low corruption. In 2020, Rwanda experienced a 3.4 percent GDP contraction, marking its first recession since the 1994 genocide. Rwanda’s economy is now showing signs of recovery, as GDP grew 10.9 in 2021.
The Rwanda Development Board (RDB) was established in 2006 to fast-track investment projects by integrating all government agencies responsible for the entire investor experience under one roof. This includes key agencies responsible for business registration, investment promotion, environmental compliance clearances, export promotion, and other necessary approvals. New investors can register online at the RDB’s website and receive a certificate in as few as six hours, and the agency’s “one-stop shop” helps investors secure required approvals, certificates, and work permits. In February 2021, Rwanda made significant changes to the Investment Code to address previous investor complaints and included new incentives to attract investments in strategic growth sectors. The GOR created the Rwanda Financial Intelligence Centre (FIC), passed an anti-money laundering and counter-terrorism financing law, and passed a law on mutual legal assistance in criminal matters to fully criminalize money laundering and terrorism financing and align the country with OECD rules. The GOR also amended the Company Act and passed a law on partnerships to allow professional service providers to register as partners rather than limited liability companies.
Several investors have said tax policy implementation is a top concern affecting their operations in Rwanda. Investors cited instances in which tax incentives and deals negotiated with RDB and line ministries were interpreted differently by the Rwanda Revenue Authority (RRA). Several investors reported their initial tax incentives packages were well-respected by all government agencies, including the RRA, but later attempts to expand the business or scale up faced significant obstacles when some of the investment incentives were changed or no longer honored. Officials at RRA recognized these gaps but stated investors were welcome to work with them to resolve tax disputes. RRA officials added that the RRA’s supervisory ministry, the Ministry of Finance and Economic Planning (MINECOFIN), was often called upon to resolve line ministries’ divergent interpretations of tax policy.
Under Rwandan law, foreign firms should receive equal treatment regarding taxes and equal access to licenses, approvals, and procurement. Foreign firms should receive value added tax (VAT) rebates within 15 days of receipt by the RRA, but firms complain that the process for reimbursement can take months and occasionally years. Refunds can be further delayed pending the results of RRA audits. A few investors cited punitive retroactive fines arising from audits that took many years to complete. RRA aggressively enforces tax requirements and imposes penalties for errors – deliberate or not – in tax payments. Investors cited lack of coordination among ministries, agencies, and local government authorities (for example, district-level officials) leading to inconsistencies in implementation of promised incentives. Others pointed to a lack of clarity on who the regulator is on certain matters.
Limits on Foreign Control and Right to Private Ownership and Establishment
Rwanda has neither statutory limits on foreign ownership or control nor any official economic or industrial strategy that discriminates against foreign investors. Local and foreign investors have the right to own and establish business enterprises in all forms of remunerative activity.
Foreign nationals may hold shares in locally incorporated companies. The GOR has continued to privatize state holdings, though the government, ruling party, and military continue to play a dominant role in Rwanda’s private sector. Under the 2021 land law, foreign investors can acquire real estate subject to a general limit on land ownership. Some foreign investors expressed fear implementation of the land law would pose new barriers to investment and/or place existing investments at risk due to the law’s requirements for foreign investors to acquire investment certificates. Freehold is granted only to Rwandan citizens for properties of no more than two hectares but may also be granted to foreigners for properties in designated Special Economic Zones or through a Presidential Order for exceptional circumstances of strategic national interests. Long-term leases (emphyteutic leases) in residential and commercial areas are available to both citizens and foreigners acquiring land through private means. These leases typically last 99 years and are renewable. Foreign investors can also acquire land through concessional agreements to use government private land. Such agreements cannot exceed 99 years but can be renewed.
Other Investment Policy Reviews
In February 2019, The World Trade Organization (WTO) published a Trade Policy Review for the East African Community (EAC) covering Burundi, Kenya, Rwanda, Tanzania and Uganda, along with an annex specific to Rwanda .
RDB offers one of the fastest business registration processes in Africa. New investors can register online at RDB’s website ( https://rdb.rw/neworg1/business-registration/ ) or register in person at RDB offices in Kigali. Once RDB generates a certificate of registration, company tax identification and employer social security contribution numbers are automatically created. The RDB “One Stop Center” assists firms in acquiring visas and work permits and connections to electricity and water. It also provides support with conducting required environmental impact assessments.
The Investment Code provides incentives for internationalization. A small- or medium-sized registered investor with an investment project involved in export is entitled to a 150 percent tax deduction of all qualifying expenditures relating to internationalization. Emerging investors are entitled to the same deduction. Eligible registered investors receive pre-approval of qualifying expenditures through a joint review process administered by the RRA, RDB and the Ministry of Trade and Industry (MINICOM). The Commissioner General of RRA ultimately approves qualifying expenditures in consultation with the CEO of RDB. An eligible registered investor may claim the tax deduction on a maximum of $100,000 of qualifying expenditures each year. There are no restrictions limiting domestic firms seeking to invest abroad.
2. Bilateral Investment and Taxation Treaties
Rwanda is a member of the WTO, the EAC, the Economic Community of the Great Lakes, the Economic Community of Central African States, and the Common Market for Eastern and Southern Africa (COMESA). Rwanda has been and continues to be a strong supporter of the African Continental Free Trade Area agreement (AfCFTA), having ratified the agreement in 2018.
The United States and Rwanda signed a Trade and Investment Framework Agreement (TIFA) in 2006 and a BIT in 2008. Information on Rwanda’s other trade treaties can be found here . After Rwanda implemented higher tariffs on imports of secondhand clothing and footwear in 2016, the U.S. government partially suspended African Growth and Opportunities Act (AGOA) benefits for apparel products from Rwanda, effective May 2018. Many other Rwandan exports to the United States are still eligible for trade preferences under the Generalized System of Preferences and AGOA. In recent years, Rwanda has usually had a trade surplus with the United States, but in 2021, Rwanda had a trade deficit of $18.2 million with the United States due to the fact that it received a large number of U.S. COVID-19 vaccine donations (which are technically treated as imports).
Rwanda does not have a bilateral taxation treaty with the United States, though it has expressed desire for one. Rwanda has double taxation agreements with Barbados, Mauritius, the Belgium-Luxembourg Economic Union, the Bailiwick of Jersey, Singapore, South Africa, Morocco, Turkey, United Arab Emirates, and Qatar, PRC, and the Democratic Republic of the Congo (DRC).
3. Legal Regime
Transparency of the Regulatory System
The GOR generally employs transparent policies and effective laws that are largely consistent with international norms. Rwanda is a member of the UN Conference on Trade and Development’s international network of transparent investment procedures. The Rwanda eRegulations system is an online database designed to bring transparency to investment procedures in Rwanda. Investors can find further information on administrative procedures here .
The GOR publishes Rwandan laws and regulations in the Official Gazette, which is available online here . Government institutions generally have clear rules and procedures, but implementation can sometimes be uneven. Investors have cited breaches of contracts and incentive promises and the short time given to comply with changes in government policies as hurdles to complying with regulations. Government institutions generally have clear rules and procedures, but implementation can sometimes be uneven. Investors have cited breaches of contracts and incentive promises and the short time given to comply with changes in government policies as hurdles to complying with regulations.
There is no formal mechanism to publish draft laws for public comment, although civil society sometimes has the opportunity to review them. There is no informal regulatory process managed by nongovernmental organizations. Regulations are usually developed rapidly to achieve policy goals. Some investors have complained this process results in new regulations being adopted without the backing of scientific or data-driven assessments. Regulators do not publicize comments they receive. Public finances and debt obligations are generally made available to the public before budget enactment. Finances for State Owned Enterprises (SOEs) are not publicly available, though in 2021 some limited financial information for a small group of large SOEs was made public. Civil society organizations may request SOEs’ financial information by providing a legitimate reason, but these requests are not routinely granted.
There is no government effort to restrict foreign participation in industry standards-setting consortia or organizations. Legal, regulatory, and accounting systems are generally transparent and consistent with international norms but are not always enforced. Consumer protection associations exist but are largely ineffective. The business community has been able to lobby the government and provide feedback on some draft government policies through the Private Sector Federation (PSF), a business association with strong ties to the government. In some cases, the PSF has welcomed foreign investors’ efforts to positively influence government policies. On the other hand, some investors have criticized the PSF for advocating for the government’s positions more so than conveying business concerns to the government.
International Regulatory Considerations
Rwanda is a member of the EAC Standards Technical Management Committee. Approved EAC measures are generally incorporated into the Rwandan regulatory system within six months and are published in the Official Gazette like other domestic laws and regulations. Rwanda is also a member of the Standards Technical Committee for the International Standardization Organization, the African Organization for Standardization, and the International Electrotechnical Commission. Rwanda is a member of the International Organization for Legal Metrology and the International Metrology Confederation. The Rwanda Standards Board represents Rwanda at the African Electrotechnical Commission. Rwanda has been a member of the WTO since May 22, 1996, and Rwanda notifies the WTO Committee on Technical Barriers to Trade on draft technical regulations.
Legal System and Judicial Independence
The Rwandan legal system was originally based on the Belgian civil law system. Following the revision of the legal framework in 2002, the introduction of a new constitution in 2003, and the country’s entrance to the Commonwealth in 2009, the Rwandan legal system now consists of a mixture of civil law and common law. The judiciary addresses commercial disputes and facilitates enforcement of property and contract rights. Though it suffers from a lack of resources and capacity, it continues to improve. The judiciary is generally independent and impartial in civil matters, with some exceptions involving state interests. Investors state the government occasionally takes a casual approach to contract sanctity and sometimes fails to enforce court judgments in a timely fashion.
Laws and Regulations on Foreign Direct Investment
National laws governing commercial establishments, investments, privatization and public investments, land, and environmental protection are the primary directives governing investments in Rwanda. Since 2011, the government has reformed tax payment processes and enacted additional laws on insolvency and arbitration. The Investment Code establishes policies on FDI, including dispute settlement (Article 13). The RDB publishes investment-related regulations and procedures here .
According to a WTO policy review report dated January 2019, Rwanda is not a party to any countertrade and offsetting arrangements or agreements limiting exports to Rwanda.
The most recent laws (passed between 2020-22) on FDI are below:
Competition and Antitrust Laws
The GOR created the Competition and Consumer Protection Unit at MINICOM in 2010 to address competition and consumer protection issues. The government is now setting up the Rwanda Inspectorate, Competition and Consumer Protection Authority (RICA), a new independent body with the mandate to promote fair competition among producers. The body will reportedly aim to ensure consumer protection and enforcement of standards. To learn more on competition laws in Rwanda, please review the law and related policy here .
Market forces determine most prices in Rwanda, but in some cases, the GOR intervenes to fix prices for items considered sensitive. On international tenders, a 10 percent price preference is available for local bidders, including those from regional economic integration bodies in which Rwanda is a member.
Some U.S. companies expressed frustration that while authorities require them to operate as a formal enterprise that meets all Rwandan regulatory requirements, some local competitors are allowed to operate informally without complying fully with all regulatory requirements. Other investors have claimed SOEs, ruling party-aligned, and politically connected business competitors receive preferential treatment in securing public incentives and contracts. Some investors reported it was not always possible to compete aggressively in some sectors in which the existing domestic competition enjoyed strong political ties. Those who attempted to compete aggressively in those sectors risked losing their investment because of political interference, they explained. More information on specific types of agreements, decisions and practices considered to be anti-competitive in Rwanda can be found here .
Expropriation and Compensation
The Investment Code forbids the expropriation of investors’ property in the public interest unless the investor is fairly compensated. A 2015 expropriation law includes explicit protections for property owners.
A 2017 study by Rwanda Civil Society Platform stated the government conducted expropriations on short notice and did not provide sufficient time or support to help landowners negotiate fair compensation. The report included a survey that found only 27 percent of respondents received information about planned expropriation well in advance of action. While mechanisms exist to challenge the government’s offer, the report noted that landowners are required to pay all expenses for the second valuation, which represents a prohibitive cost for rural farmers or the urban poor. Media have reported that wealthier landowners used their position to challenge valuations and have received higher amounts. Political exiles and other embattled opposition figures have been involved in taxation lawsuits that resulted in their “abandoned properties” being sold at auction, allegedly at below market values.
ICSID Convention and New York Convention
Rwanda is a signatory to the International Center for Settlement of Investment Disputes (ICSID) and the African Trade Insurance Agency (ATI). ICSID seeks to remove impediments to private investment posed by non-commercial risks, while ATI covers risk against restrictions on import and export activities, inconvertibility, expropriation, war, and civil disturbances.
Rwanda ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 2008.
Investor-State Dispute Settlement
Rwanda is a member of the East African Court of Justice for the settlement of disputes arising from or pertaining to the EAC. Rwanda has also acceded to the 1958 New York Arbitration Convention and the Multilateral Investment Guarantee Agency convention. Under the U.S.-Rwanda BIT, U.S. investors have the right to bring investment disputes before neutral, international arbitration panels. Disputes between U.S. investors and the GOR in recent years have been resolved through international arbitration, court judgments, or out of court settlements. Judgments by foreign courts and contract clauses that abide by foreign law are accepted and enforced by local courts, though these lack capacity and experience to adjudicate cases governed by non-Rwandan law. There have been a number of private investment disputes in Rwanda, though the government has yet to stand as complainant, respondent, or third party in a WTO dispute settlement. Rwanda has been a party to three cases at ICSID since Rwanda became a member in 1963; one of these cases is an ongoing case brought by an American investor against Rwanda. SOEs are also subject to domestic and international disputes. SOEs and ruling party-owned companies party to suits have both won and lost judgments in the past.
International Commercial Arbitration and Foreign Courts
In 2012, the GOR launched the Kigali International Arbitration Center (KIAC). KIAC case handling rules are modeled on the United Nations Commission on International Trade Law (UNCITRAL) arbitration rules. According to the KIAC’s 2020 activity report, KIAC had reviewed 160 cases by June 2020. Close to 40 percent of those cases were international with parties from more than 20 nationalities (Burundi, China, Ethiopia, Egypt, France, India, Italy, Kenya, Korea, Pakistan, South Africa, South Korea, Singapore, Rwanda, Spain, Switzerland, Turkey, Uganda, the United States, and Zambia). Arbitrators appointed were from Rwanda, Kenya, Malaysia, Nigeria, Canada, the United States, and Singapore. Of the 89 KIAC-approved international arbitrators, only four are of Rwandan nationality. All 38 domestic arbitrators are Rwandan nationals.
Some businesses reported being pressured to list the Rwanda-based KIAC as the seat of arbitration in contracts signed with the GOR. Some of these companies have indicated they would have preferred arbitration take place in a third country, noting that KIAC has a short track record and is domiciled in Rwanda. Moreover, some companies have reported difficulty in securing international financing due to the KIAC provision in their contracts.
Rwanda ranked 38 out of 190 economies for resolving insolvency in the World Bank’s 2020 Doing Business Report and is number two in Africa. It takes an average of two and a half years to conclude bankruptcy proceedings in Rwanda. Per the World Bank 2020 Doing Business Report, the recovery rate for creditors on insolvent firms was reported at 19.3 cents on the dollar, with judgments typically made in local currency.
In April 2018, the GOR instituted a new insolvency and bankruptcy law. One major change was the introduction of an article on “pooling of assets” allowing creditors to pursue parent companies and other members of the group (for example, in cases in which a subsidiary is in liquidation). The law can be accessed here . .
On February 8, 2021, Rwanda passed a new Company Act with several bankruptcy and insolvency provisions. The new law can be found here .
On February 17, 2021, Rwanda published a new law on partnerships with several provisions on partnerships’ insolvency. The new law can be accessed here .
4. Industrial Policies
The Investment Code offers a package of benefits and incentives for registered investors in priority and strategic growth sectors under certain conditions. These benefits and incentives include preferential corporate income tax, withholding tax, tax holidays, exemption from custom duties for products used in export processing zones, and internationalization.
More information on incentives and benefits related to philanthropic investors, the mining sector, the film industry, industrial and innovation parks, angel investors, start-ups, immigration, accelerated depreciation, and capital gain tax exemption, can be found in the annex of the Investment Code here .
In addition, MINECOFIN, upon recommendation by RDB’s Private Investment Committee, can issue a Ministerial Order offering more incentives for investments deemed of strategic importance.
According to some investors, poor coordination between the RDB, RRA, MINICOM, and the Directorate of Immigration and Emigration led to inconsistent application of incentives. Investors reported tax incentives included in deals signed by the RDB were not honored by the RRA in a timely manner or sometimes were not honored at all. For its part, RRA noted investors who started with one agreement with RDB often saw their tax incentives shift when they entered into new arrangements with a line ministry. Senior RRA officials stated they were aware of this disconnect but said they were obligated to fulfill their mandate to grow the domestic revenue base through the application of tax law. Additionally, investors continue to face challenges with receiving payment for services rendered for GOR projects, VAT refund delays, and expatriation of profits. In 2016, the GOR instituted a law governing public-private partnership (PPPs) as a step toward courting investments in key development projects. The law provides a legal framework concerning establishment, implementation, and management of PPPs. Detailed guidelines for the law can be accessed here .
Foreign Trade Zones/Free Ports/Trade Facilitation
Kigali’s Special Economic Zone (KSEZ) is regulated by the SEZ Authority of Rwanda (SEZAR), which is based at the RDB. Land in KSEZ is acquired through the Prime Economic Zone Secretariat, a private developer, under the regulations of SEZAR. The price per square meter is $62, and the minimum size that can be acquired is one hectare (2.5 acres). Bonded warehouse facilities are now available both in and outside of Kigali for use by businesses importing duty-free materials. The GOR has established a list of benefits for investors operating in the SEZs. These include tax and land ownership advantages. A company basing itself in the SEZ can also opt to be a part of the Economic Processing Zone. Several criteria must be satisfied to qualify. These include requirements to maintain extensive records on equipment, materials and goods, suitable offices, and security provisions.
Holding an Export Processing Zone (EPZ) license allows a company to operate in the KSEZ and will exempt a company from VAT, import duties, and corporate tax. The company is then obliged to export a minimum of 80 percent of production. Even after considering savings due to these government incentives, a few investors reported that land in the SEZs was significantly more expensive than land outside the zones. The GOR has stated that there are no fiscal, immigration, or customs incentives beyond those provided in the Investment Code, though media have occasionally speculated that certain investors received additional incentives. The negative list of goods prohibited under the EAC Customs Management Act applies in SEZs. In November 2018, the GOR approved the Bugesera Special Economic Zone (BSEZ), located 45 minutes from Kigali. A new airport is under construction near the BSEZ as well. Procedural information about operating in SEZs can be accessed here . The SEZ policy was revised in 2018. Under the new policy, foreigners and locals may only lease land (formerly, foreign investors were able to purchase land outright in SEZs). To learn more, please review the new policy here .
For a quick survey of companies currently operating in Rwandan special economic zones, please visit the Economic Zone catalogue here .
Performance and Data Localization Requirements
There is no legal obligation for nationals to own shares in foreign investments and no requirement that shares of foreign equity be reduced over time. However, the government strongly encourages local participation in foreign investments. According to the Data Protection Law of 2021, storage of personal data outside Rwanda is permitted only if the data controller or processor holds an authorization certificate from a competent supervisory authority. Investors have expressed strong concerns over the implementation of this law and are working to negotiate the implementing regulations of the law. There is also no requirement for foreign IT providers to turn over source code and/or provide access to encryption technology. IT companies dealing with government data cannot store it outside Rwanda or transfer it without GOR approval. Rwandans’ private data must be stored in Rwanda. There is no formal requirement that a certain number of senior officials or board members be citizens of Rwanda unless as a pre-condition to benefits from increased investment incentives. For example, the Investment Code specifies that for an international company that moves its headquarters or regional office to Rwanda to be able to recruit any number of required managerial, professional, and technical foreign employees, at least 30 percent of professional staff must be Rwandan. A preferential corporate income tax rate of three percent is granted to collective investment schemes, special purpose vehicles, and pure holding companies if at least 30 percent of their professional staff are Rwandans and at least two professional or qualified Rwandan residents are members of their board of directors.
While the government does not impose conditions on the transfer of technology, it does encourage foreign investors to transfer technology and expertise to local staff to help develop Rwanda’s human capital. There is no legal requirement that investors must purchase from local sources or export a certain percentage of their output, though the government offers tax incentives for the latter.
5. Protection of Property Rights
The law protects and facilitates acquisition and disposition of all property rights. Investors involved in commercial agriculture have leasehold titles and can secure property titles if necessary. The Investment Code states that investors shall have the right to own private property, whether individually or collectively. According to the 2021 land law, which can be accessed here , foreign investors can acquire real estate, though there is a general limit on land ownership. Freehold is granted only to Rwandan citizens for no more than 2 hectares (5 acres) and to foreigners for properties located in designated Special Economic Zones, or through a Presidential Order for exceptional circumstances of strategic national interests. Through the new land law of 2021, the GOR increased the length of long-term leases (emphyteutic leases) in residential and commercial areas for both citizens and foreigners acquiring land through private means to 99 years. Foreign investors can also acquire land through concessional agreements to use government private land. Such agreements cannot exceed 99 years but can be renewed. Mortgages are a nascent but growing financial product in Rwanda, increasing from 770 properties in 2008 to 13,394 in 2017, according to the RDB. In 2020, RDB reported registering 16,624 mortgages in 2019.
Foreign investors have noted challenges related to the maintenance of their existing leases and some investors fear provisions of the 2021 Land Law will lead to significant investment risks. These investors noted foreigners may face barriers to gaining an investment certificate needed to develop land. Investors also expressed fear that once granted, an investment certificate could be revoked by the government, leading to a loss of assets. Implementation of the law is ongoing.
Intellectual Property Rights
The RDB and the Rwanda Standards Board (RSB) are the main regulatory bodies for Rwanda’s intellectual property rights law. The RDB registers intellectual property rights, providing a certificate and ownership title. Every registered IP title is published in the Official Gazette. The fees payable for substance examination and registration of IP apply equally for domestic and foreign applicants. From 2016, any power of attorney granted by a non-resident to a Rwandan-based industrial property agent must be notarized (previously, a signature would have been sufficient).
Registration of patents and trademarks is on a first time, first right basis so companies should consider applying for trademark and patent protection in a timely manner. It is the responsibility of the copyright holders to register, protect, and enforce their rights where relevant, including by retaining their own counsel and advisors. Through the RSB and the RRA, Rwanda has worked to increase protection of IP rights, but many goods that violate patents, especially pharmaceutical products, make it to market nonetheless. As many products available in Rwanda are re-exports from other EAC countries, it can be difficult for authorities to take action against counterfeit goods without regional cooperation. Also, investors reported difficulties in registering patents and having rules against infringement of their property rights enforced in a timely manner. In 2021, the GOR submitted a new IP law to Parliament that will organize a patent and trade office for Rwanda.
As a COMESA member, Rwanda is automatically a member of the African Regional Intellectual Property Organization. Rwanda is also a member of the World Intellectual Property Organization (WIPO) and is working toward harmonizing its legislation with WTO trade-related aspects of IP. Rwanda has yet to ratify WIPO internet treaties, though the government has taken steps to implement and enforce the WTO TRIPS agreements. Rwanda is not listed in USTR’s 2019 Special 301 report or the 2019 Notorious Markets List. In July 2020, Rwanda acceded to the Marrakesh Treaty to facilitate access to published works for persons who are blind, visually impaired, or otherwise print disabled. For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles here .
6. Financial Sector
Capital Markets and Portfolio Investment
In February 2021, the GOR introduced new incentives to support the Rwanda Stock Exchange and the Capital Market Authority through the Investment Code. A preferential withholding tax of five percent is applicable to dividends and interest income paid to investors in companies listed on the Rwanda Stock Exchange. A preferential corporate income tax rate of three percent applies to collective investment schemes. A preferential corporate income tax rate of fifteen percent applies to fund management entities, wealth management services, financial advisory entities, financial technology entities, captive insurance schemes, mortgage finance institutions, fund administrators, finance lease entities, and asset backed securities.
In December 2017, the GOR established Rwanda Finance Limited (RFL), a state-owned enterprise charged with creating the Kigali International Financial Centre (KIFC). The goal is to create a conducive ecosystem to entice pan-African and international financial service providers and investment funds to Rwanda. KIFC is scheduled to be launched on the sidelines of the Commonwealth Heads of Governments Meeting (CHOGM) taking place in Kigali in June 2022. RFL has successfully pushed the GOR to change many Rwandan investment, banking, and commercial laws to align with OECD/EU and AML/CFT requirements.
Money and Banking System
Many U.S. investors express strong concern over local access to affordable credit and advise that those interested in doing business in Rwanda arrive with their own financing already in place. Interest rates are high for the region, banks offer predominantly short-term loans, collateral requirements can be higher than 100 percent of the value of the loan, and Rwandan commercial banks rarely issue significant loan values. The prime interest rate is 16-18 percent. Large international transfers are subject to authorization. Investors who seek to borrow more than $1 million must often engage in multi-party loan transactions, usually by leveraging support from larger regional banks. Credit terms generally reflect market rates, and foreign investors can negotiate credit facilities from local lending institutions if they have collateral and “bankable” projects. In some cases, preferred financing options may be available through specialized funds including the Export Growth Fund, BRD, or FONERWA.
The banking sector holds more than 67 percent of total financial sector assets in Rwanda. In total, Rwanda’s banks have assets of around $3.8 billion, which reflects an 18.5 percent increase from June 2018 to June 2020, according to the National Bank of Rwanda (NBR). Rwanda’s financial sector remains highly concentrated. The share of the three largest banks’ assets increased from 46.5 percent in December 2018 to 48.4 percent in December 2019. The largest, the partially state-owned Bank of Kigali (BoK), holds more than 30 percent of all assets. The total number of bank and micro-finance institution (MFI) accounts increased from 7.1 million to 7.7 million between 2018 and 2019.
Local banks often generate significant revenue from holding government debt and from charging a variety of fees to banking customers. The capital adequacy ratio decreased to 23.7 percent in June 2020 from 24.1 percent over the year but was still well above the prudential minimum of 15 percent, suggesting the Rwandan banking sector continues to be generally risk averse. Non-performing loans increased from 4.9 percent in December 2019 to 5.5 percent in June 2020 due to the COVID-19 pandemic’s disruption of economic activities.
The IMF gives the NBR high marks for its effective monetary policy. NBR introduced a new monetary policy framework in 2019, which shifted toward an inflation-targeting monetary framework in place of a quantity-of-money framework. In April 2020, the NBR arranged a $53.4 million liquidity fund for local banks facing challenges from COVID-19. The NBR allowed banks to restructure loans affected by the pandemic by authorizing an average of four months in loan holidays. Additionally, in March 2020, the NBR took a decision to suspend distribution of dividends from profits generated in 2019.
Foreign banks are permitted to establish operations in Rwanda. Several Kenya-based banks operate in the country.
In November 2020, the GOR signed an MOU with the African Export-Import Bank (Afreximbank) to host the permanent headquarters of Afrexim Fund for Export Development in Africa (FEDA) in Kigali.
Rwandans primarily rely on cash or mobile money to conduct transactions, though use of debit and credit cards is expanding. Use of mobile money has grown by more than 500 percent since March 2020 due in part to changes brought about by COVID-19 and business closures.
Foreign Exchange and Remittances
In 1995, the government abandoned a dollar peg and established a floating exchange rate regime under which all lending and deposit interest rates were liberalized. The NBR publishes an official daily exchange rate, which is typically within a two percent range of rates seen in the local market. Some investors report occasional difficulty in obtaining foreign exchange. Rwanda generally runs a large trade deficit. Rwanda’s trade deficit was estimated at more than ten percent of GDP in 2019. Transacting locally in foreign currency is prohibited in Rwanda. Regulations set a ceiling on the amount of foreign currency that can leave the country per day. In addition, regulations specify limits for sending money outside the country; the NBR must approve any transaction that exceed these limits.
Most local loans are in local currency. In December 2018, NBR issued a new directive on lending in foreign currency which requires the borrower to have a turnover of at least RWF 50 million ($50,000) or equivalent in foreign currency and have a known income stream in foreign currency not below 150 percent of the total installment repayments. Moreover, the repayments must be in foreign currency. The collateral pledged by non-resident borrowers must be valued at 150 percent of the value of the loan. In addition, NBR requires banks to report regularly on loans granted in foreign currency.
Investors can remit payments from Rwanda only through authorized commercial banks. There is no limit on the inflow of funds, although local banks are required to notify NBR of all transfers over $10,000 to mitigate the risk of potential money laundering. Additionally, there are some restrictions on the outflow of export earnings. Companies generally must repatriate export earnings within three months after the goods cross the border. Tea exporters must deposit sales proceeds shortly after auction in Mombasa, Kenya. Repatriated export earnings deposited in commercial banks must match the exact declaration the exporter used crossing the border.
Rwandans working overseas can make remittances to their home country without impediment. It usually takes up to three days to transfer money using SWIFT financial services. The concentrated nature of the Rwandan banking sector limits choice, and some U.S. investors have expressed frustration with the high fees charged for exchanging Rwandan francs to dollars.
Sovereign Wealth Funds
In 2012, the Rwandan government launched the Agaciro Development Fund (ADF), a sovereign wealth fund that includes investments from Rwandan citizens and the international diaspora. By September 30, 2019, the fund was worth 235.02 billion RWF in assets ($235 million). The ADF operates under the custodianship of the NBR and reports quarterly and annually to MINECOFIN. ADF is a member of the International Forum of Sovereign Wealth Funds and is committed to the Santiago Principles. In addition to returns on investments, voluntary contributions from citizens and the private sector, and other donations, ADF receives around $5 million every year from tax revenues and five percent of proceeds from every public asset that the GOR has privatized. The fund also receives five percent of royalties from minerals and other natural resources each year. ADF invests mainly in Rwanda. While the fund can invest in foreign non-fixed income investments, such as publicly listed equity, private equity, and joint ventures, the AGDF Corporate Trust Ltd (the fund’s investment arm) held no financial assets and liabilities in foreign currency, according to the 2018 annual report (the most recent report available).
7. State-Owned Enterprises
Rwandan law allows private enterprises to compete with public enterprises under the same terms and conditions with respect to access to markets, credit, and other business operations. Since 2006, the GOR has made efforts to privatize SOEs; reduce the government’s non-controlling shares in private enterprises; and attract FDI, especially in the ICT, tourism, banking, and agriculture sectors, but progress has been slow. Currently there are 17 SOEs including water and electricity utilities, as well as companies in construction, ICT, aviation, mining, insurance, agriculture, finance, and other sectors. Some investors complain about unfair competition from state-owned and ruling party-aligned businesses. SOEs are governed by boards with most members having other government positions.
Rwanda continues to carry out a privatization program that has attracted foreign investors in strategic areas ranging from telecommunications and banking to tea production and tourism. As of 2017 (the latest data available), 56 companies have been fully privatized, seven were liquidated, and 20 more were in the process of privatization. RDB’s Strategic Investment Department is responsible for implementing and monitoring the privatization program. Some observers have questioned the transparency of certain transactions, noting that a number of transactions were undertaken not through public offerings but through mutual agreements directly between the government and the private investors, some of whom have personal relationships with senior government officials.
8. Responsible Business Conduct
There is a growing awareness of corporate social responsibility (CSR) within Rwanda, and several foreign-owned companies operating locally implement CSR programs. Rwanda also has guidelines on corporate governance by publicly listed companies. One of the most relevant sectors for CSR-minded investors is mining. Rwanda implements the OECD’s Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. Rwanda also implements the International Tin Supply Chain Initiative tracing scheme. In 2016, the Better Sourcing Program (currently RCS Global Group) began an alternative mineral tracing scheme in Rwanda. Rwanda is not a member of the Extractive Industries Transparency Initiative. Recent U.S. sanctions announcements against individuals fueling conflict in the eastern DRC via trafficking of illicit conflict minerals, including gold, mention Rwanda and Uganda as supply chain transit points.
In recognition of the firm’s strong commitment to CSR, the U.S. Department of State awarded Sorwathe, a U.S.-owned tea producer in Kinihira, Rwanda, the Secretary of State’s 2012 Award for Corporate Excellence (ACE) for Small and Medium Enterprises. In 2015, the U.S. firm Gigawatt Global was also a finalist for the Secretary of State’s ACE award in the environmental sustainability category. In January 2021, Illinois-based Abbot laboratories was given the ACE award in recognition of its work to expand preventative health care in rural areas of Rwanda.
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The GOR is known for aggressively pioneering environmental protection initiatives. For example, in March 2022, the fifth session of the United Nations Environmental Assembly adopted a resolution co-authored by Rwanda and Peru to end plastic pollution. Rwanda’s Parliament had in 2019 already passed a law banning single use plastic containers. The law built on an earlier ban on the manufacture and use of plastic bags. With respect to the ban on single use plastic containers, several investors complained that GOR did not consult effectively with concerned stakeholders and observed that alternative packaging materials were either unavailable or could only be obtained at high cost.
The Kigali Amendment to the Montreal Protocol was adopted in October 2016 in Rwanda, and 197 participating countries committed to cut the production and consumption of hydrofluorocarbons (HFCs) by more than 80 percent over the next 30 years.
The GOR manages the Rwanda Green Fund (FONERWA) to spur investment in green innovation. UK Aid and other donors have invested in the fund. FONERWA claims 46 projects it supports have created more than 176,000 green jobs and avoided emissions equivalent to 126,014 tons of carbon dioxide.
Rwanda is ranked among the least corrupt countries in Africa, with Transparency International’s 2021 Corruption Perception Index putting the country among Africa’s four least corrupt nations and 52nd in the world. The GOR maintains a high-profile anti-corruption effort, and senior leaders consistently emphasize that combating corruption is a key national goal. The government investigates corruption allegations and generally punishes those found guilty. High-ranking officials accused of corruption often resign during the investigation period, and the GOR has prosecuted many of them. Rwanda has ratified the UN Anticorruption Convention, is a signatory to the OECD Convention on Combating Bribery and is a signatory to the African Union Anticorruption Convention. U.S. firms have identified the perceived lack of government corruption in Rwanda as a key incentive for investing in the country. At the same time, some investors have reported widespread corruption at lower, administrative levels of government, including with customs, tax, and police officials. There are no local industry or non-profit groups offering services for vetting potential local investment partners. The Ministry of Justice’s online repository of judgments can be a useful source of information on companies and individuals in Rwanda. The Rwanda National Public Prosecution Authority issues criminal records on demand to applicants.
Resources to Report Corruption
Contacts at government agencies responsible for combating corruption include:
Ms. Madeleine Nirere, Chief Ombudsman, Ombudsman (Umuvunyi)
P.O Box 6269, Kigali, Rwanda Telephone: +250 252587308
firstname.lastname@example.org / email@example.com
Ms. Rosine Uwamaliya, Commissioner for Internal Audit and Integrity, Rwanda Revenue Authority
Avenue du Lac Muhazi, P.O. Box 3987, Kigali, Rwanda
Telephone: +250 252595504 or +250 788309563
Mr. Alexis Kamuhire, Auditor General, Office of the Auditor General
Avenue du Lac Muhazi, P.O. Box 1020, Kigali, Rwanda
Telephone: +250 78818980
Contacts at “watchdog” organizations include:
Mr. Apollinaire Mupiganyi, Executive Director, Transparency International Rwanda
P.O: Box 6252 Kigali, Rwanda
Telephone: +250 788309563
firstname.lastname@example.org / email@example.com
10. Political and Security Environment
Rwanda is a stable country with relatively little violent crime. According to a 2017 report by the World Economic Forum, Rwanda is the ninth safest country in the world. Gallup’s Global Law and Order Index report of 2020 ranked Rwanda as the second safest place in sub-Saharan Africa. Investors have cited the stable political and security environment as an important driver of investments. A strong police and military provide a security umbrella that minimizes potential criminal activity.
The U.S. Department of State recommends that U.S. citizens exercise caution when traveling near the Rwanda-Democratic Republic of Congo border, given the possibility of fighting and cross-border attacks involving armed rebel and militia groups. Relations between Burundi and Rwanda are currently warming but have been tense in recent years, and there remains a risk of cross-border incursions and armed clashes. Since 2018, there have been a few incidents of sporadic fighting in districts bordering Burundi and the DRC and in Rwanda’s Nyungwe National Park and Volcanoes National Park.
In 2021, Rwandan authorities arrested several individuals accused of being ISIS members. Authorities stated the individuals were planning an imminent attack in Kigali. There have been several reported cross-border attacks in Western Rwanda on Rwandan police and military posts since 2016. Despite occasional violence along Rwanda’s borders with the DRC and Burundi, there have been no incidents involving politically motivated damage to investment projects or installations since the late 1990s. Relations with Uganda have been tense in recent years, but leaders continue to emphasize they are seeking a political solution. As of March 2022, Rwanda-Uganda relations appear to be improving. For example, in early 2022, Rwandan and Ugandan officials agreed to reopen the largest border crossing between the two countries. The border crossing had been largely closed to regular traffic since February 2019.
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11. Labor Policies and Practices
General labor is available, but Rwanda suffers from a shortage of skilled labor, including accountants, lawyers, engineers, tradespeople, and technicians. Higher institutes of technology, private universities, and vocational institutes are improving and producing more highly trained graduates each year. The Rwanda Workforce Development Authority sponsors programs to support both short and long-term professional trainings targeting key industries in Rwanda.
Rwanda’s informal economy is concentrated in the agriculture sector, which contributes 24 percent of GDP but employs close to 70 percent of the country’s population. The Government of Rwanda has taken steps to formalize large portions of its informal economy, for example, by banning street vendors. Rwanda also requires all private sector employers to formalize contracts. The economic disruptions of the COVID-19 pandemic have eliminated many formal employment opportunities and forced many workers back into the informal sector.
Investors are strongly encouraged to hire Rwandan nationals whenever possible. According to the Investment Code, a registered investor who invests an equivalent of at least $250,000 may recruit three foreign employees. However, several foreign investors reported difficulties bringing in qualified staff in accordance with the Investment Code due to Rwandan immigration rules and practices. In some cases, these problems occurred even though investors had signed agreements with the government regarding the number of foreign employees.
Rwanda has ratified all the International Labor Organization’s eight core conventions. Policies to protect workers in special labor conditions exist, but enforcement remains inconsistent. The government encourages, but does not require, on-the-job training and technology transfer to local employees. The law restricts voluntary collective bargaining by requiring prior authorization or approval by authorities and requiring binding arbitration in cases of non-conciliation. The law provides some workers the right to conduct strikes, but due to numerous restrictions, workers rarely engage in strikes. In 2020, the government published additional specifications for labor representatives, regulations against strikes, and guidelines providing labor inspectors greater authority to access to workplaces and assess fines. The GOR has been known to take swift action against foreign companies with poor labor practices upon initial complaints from workers. There is no unemployment insurance or other social safety net programs for workers laid off for economic reasons. Labor laws are not waived to attract or retain investment. There are no labor law provisions specific to SEZs or industrial parks. Collective bargaining is a relatively new concept in Rwanda and is not common. Few professional associations fix minimum salaries for their members and some investors have expressed concern that labor law enforcement is uneven or opaque. The official minimum wage has not changed since 1974 and is 100 Rwandan francs ($0.10) per day.
12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs
DFC has provided financing and political risk insurance to more than a dozen U.S. projects in Rwanda since 1975. DFC officials have expressed interest in expanding the corporation’s portfolio in Rwanda and are currently evaluating potential projects. The DFC has a Nairobi-based investment advisor who oversees current investments and vets prospective investments for Rwanda, Kenya, Uganda, Tanzania, and Burundi. The Export-Import Bank maintains a program to ensure short-term export credit transactions involving various payment terms, including open accounts that cover the exports of consumer goods, services, commodities, and certain capital goods. The 1965 U.S.-Rwanda Investment Incentive Agreement remains in force; Rwanda and the United States are discussing potential updates to this agreement.
13. Foreign Direct Investment Statistics
* Source for Host Country Data: Rwanda Private Foreign Capital Survey , Rwanda National Institute of Statistics, 2019. Data on Rwanda’s FDI in the United States is not available.
Table 3: Sources and Destination of FDI
Inward Direct Investment according to IMF’s Coordinated Direct Investment Survey . Data on Rwandan outward FDI is not available.
Data on Rwanda’s equity security holdings by nationality is not available.
Table 4: Sources of Portfolio Investment
Data not available.
14. Contact for More Information
Economic and Commercial Officer
United States Embassy
30 KG 7 Avenue, P.O. Box 28 Kigali, Rwanda