Investment Incentives

Uganda has put in place incentives to attract Foreign Direct Investment which includes:

• Ten-year tax holidays.
• Concession rates on import duties.
• Exemption from payment on import duty.
• The drawback on duties is payable on imported inputs.
• Investment Capital Allowances.
• Deductible Annual Allowances.
• Duty- and Tax-free import of plant and machinery.
• First arrival privileges for personal effects and motor vehicles.
• Export zones.
• No restriction to 100% ownership of investments.
• No barriers to remittances of dividends.
• Fully convertible shilling, stable over last decade.
• Capital account transactions and exchange market fully liberalised.
• No restrictions on capital transfers.
• No restrictions on capital transfers

The Government has provided for a comprehensive package of incentives for holders of Free Zone Developer, Operator or Manager Licenses which include:

1. 10-year Income Tax Exemption for Free Zone Developer whose investment capital is at least USD 50,000,000 (United States Dollars Fifty Million) from the date of commencement of business.
2. 10-year Income Tax Exemption for Free Zone Operator whose investment capital is at least USD 10,000,000 (United States Dollars Ten Million) for Foreigners and USD 2,000,000 (United States Dollars Two Million) for Ugandan Citizens from the date of commencement of business.
3. Exemption from taxes and duties on all Export Processing Zone imported inputs that are for the exclusive use in the development and production output of the business enterprise (raw materials and spare parts).
4. Unrestricted remittance of profit after tax.
5. Exemption from tax on income from Agro-processing.
6. Exemption on income derived from the operation of aircraft in domestic and international traffic or the leasing of aircraft.
7. Exemption from tax on plant and machinery used in the Free Zones for 5 years and 1 day upon disposal.
8. Exemption from all taxes, levies and rates on exports from the Free Zones.
9. Exemption from import duties and taxes on all goods entering a Free Port Zone.
10. VAT exemption on the following supplies i.e. animal feeds and premixes crop extension services, irrigation works, sprinklers and ready to use drip lines, deep cycle batteries and composite lanterns.
11. Exemption of Withholding Tax on petroleum, petroleum products, plant and machinery, human or animal drugs and supply/ importation of raw material.
12. Initial allowance for eligible property/industrial buildings situated 50Km from Kampala put into use for the first time (rates are 50% and 20% respectively).