Uganda: Commercial Law In Uganda

Last Updated: 20 December 2018
Article by Adams & Adams


Uganda, an independent republic within the British Commonwealth, is situated in East Africa. It is a landlocked country bordered by South Sudan in the north, Democratic Republic of Congo in the west, Rwanda, Tanzania and Lake Victoria in the south, and Kenya in the east.

Area: 241 038 km2

Population: 33.4 million

Capital: Kampala

Currency: Ugandan Shilling

GDP: USD 41.7 billion (2010)

Internet domain: .ug

Languages: English (official language), Swahili, Luganda

Working week: Monday – Friday

Exports: Coffee; cotton; tea; gold; fish products; horticultural products

Imports: Petroleum; cereals; medical supplies; capital equipment; vehicles


Business vehicles

There are three forms of companies commonly used by foreign investors:

  • Companies limited by shares.
  • Companies limited by guarantee.
  • Unlimited liability companies.

Companies limited by shares can be a private company limited by shares or a public limited liability company.

The company must have a registered business address within Uganda. This may be filed at the time of submitting documents for the incorporation of the company or within twenty one days from the date of incorporation of the company.


The following steps need to be taken in order to incorporate a company:

  • A name reservation form will need to be submitted to the Uganda Registration Services Bureau (URSB) where payment will need to be made. Availability of the name is by way of a search and approval of the name in the Company Registry by the Registrar of Companies to verify the suitability of the selected name.
  • A signed declaration of compliance before a commissioner of oaths and proof of payment of the registration fee and the stamp duty needs to be submitted to the URSB.
  • The registration documents are filed at the office of the Registrar, where a certificate of incorporation will be issued.
  • A tax identification number from the Register for Taxes at the Uganda Revenue Authority must be obtained.
  • Trading licenses will need to be obtained from the National Social Security Fund.
  • Inspection of the business premises may be carried out by the licensing officer.
  • A company seal must be made. The approximate timeframe for the incorporation of a company in Uganda is 1 month.

Reporting requirements

Submission of an annual tax return and monthly filings in respect of VAT is required.

Share capital

The currency allowed for shares is Ugandan shillings. There is currently no minimum authorised share capital for companies.

Shares can be paid for in cash or other valuable consideration. Return of allotment of shares must be filed with the Registrar of Companies within sixty days from the date of such allotment.

Management structure

The directors are elected into office by the shareholders. The directors then have a duty to appoint the management team of the company to run it profitably for the shareholders.

Some or all the directors can be involved in its management especially small and family owned companies. The minimum number of directors is 2 and maximum number is fifty for private companies. There is no maximum number of directors for public companies. Local directors are not required; however, the company secretary must be resident in Uganda.

Are local shareholders required?

Local shareholders are not required.

Is it possible to establish a branch and, if so, what is the procedure?

It is possible to establish a branch in Uganda. Foreign companies establishing a place of business in Uganda are obliged to register as foreign companies.



Uganda currently has no national competition law or policy in place. Draft legislation has been prepared, namely the Competition Bill of 2004, however it has not yet been tabled before Parliament.


Further to the paragraph above, competition law is not regulated in Uganda and there are, accordingly, no specific merger controls in place.

Restrictive practices

Competition is not regulated in Ghana and restrictive practices are therefore not regulated.

Abuse of dominance

Owing to the lack of competition regulation in Uganda, there are no abuse-of-dominance provisions to contend with.


As Uganda has no competition legislation and/or policy in place, there are no specific sanctions with regard to competition law.


Currently Uganda does not have any promulgated consumer protection laws. However, Uganda may have some specific statutes which contain provisions that directly or indirectly relate to consumer protection under specific circumstances. An example of this would be the Bank of Uganda's Financial Consumer Protection Guidelines published under Uganda's banking legislation, which, among other things, sets out a consumer's rights when concluding transactions with banking institutions in Uganda.

Lastly, Uganda is a member of the Common Market for Eastern and Southern Africa (COMESA) which has been established to primarily regulate competition law amongst the different economies of its member states and to ensure that a fair and effective regional competition law framework exists.

COMESA also has powers regarding consumer protection matters and promotes transparency among economic operators in the region. As such the key aspects of consumer protection dealt with in the COMESA Regulations will also impact consumer protection in Uganda.


Currently Uganda does not have any data protection laws. This matter is largely regulated by the provisions of the Constitution of the Republic of Uganda, which sets out a person's general right to privacy, as well as other legislative provisions that address this issue indirectly in a piecemeal manner.

In light of the above the following are the most relevant provisions pertaining to the regulation of data protection:

  • A person may not access information where the release of such information is likely to interfere with the right to the privacy of any other person.
  • An information officer must refuse access to health records, the disclosure of which would constitute an invasion of personal privacy.
  • An information officer can refuse a request for access information if its disclosure would involve the unreasonable disclosure of personal information about a person, including a deceased individual.


Court structure

The Supreme Court stands out at the top of the judicial pyramid as the final court of appeal, has unlimited civil and criminal jurisdiction on appeal and has original jurisdiction in respect of presidential election petitions. The Court of Appeal is the second highest court in the land and handles appeals from the High Courts. It only has original jurisdiction when sitting as a Constitutional Court, otherwise, it has unlimited civil, criminal and constitutional jurisdiction in appellate matters. The High Court is the third court in the order of hierarchy and has unlimited original jurisdiction, which means that it can try any case of any value or crime of any magnitude; and also has appellate jurisdiction in respect of matters heard in the Magistrate's Courts. Below Magistrate's Courts, who hear smaller civil matters, are the subordinate courts which include Qadhis Courts for customary matters.


The court has the discretion to make any order against the defendant which the court shall deem reasonable.

Legal Practitioners

There is a single bar. Private practitioners are referred to as advocates, while advocates in the public sector are called state attorneys.

Alternative dispute resolution

Arbitration is a recognised form of dispute resolution and is regulated by the Arbitration and Conciliation Act (chapter 4). The Centre for Arbitration and Dispute Resolution (CADER) is the foremost arbitration institute.


Governing legislation

Employer Act, 2006; Employment Act regulations of 2011.

Particulars of employment

A contract of service, other than a contract which is required by the Act to be in writing, may be made orally, and except as otherwise provided by the Act, shall apply equally to oral and written contracts. The maximum length of a probationary period is 6 months, but it may be extended for a further period of not more than 6 months with the agreement of the employee. A contract for a probationary period may be terminated by either party by giving not less than fourteen days' notice of termination, or by payment, by the employer to the employee of 7 days wages in lieu of notice.

Forms of contracts

  • Fixed term contracts.
  • Contracts for an unspecified period of time: casual work; piece-work; and task work.

Termination of employment / dismissal

Termination shall be deemed to have taken place in the following instances: " Where the contract of service is entered by the employer with notice.

  • Where the contract of service, being a contract for a fixed term or task, ends with the expiry of the specified term or the completion of the specified task and is not renewed within a period of 1 week from the date of expiry on the same terms or terms not less favourable to the employee.
  • Where the contract of service is entered by the employee with or without notice, as a consequence of unreasonable conduct on the part of the employee towards the employer.
  • Where the contract of service is ended by the employee, in circumstances where the employee has received notice of termination of the contract of service from the employer, but before the expiry of the notice.
  • An employer may not terminate a contract of service without notice or with less notice than that to which the employee is entitled by any statutory provision or contractual term.
  • An employer is entitled to dismiss summarily, and the dismissal shall be deemed justified, where the employee has, by his or her conduct indicated that he or she has fundamentally broken his or her obligations arising out of the contract of service.

Dispute resolution mechanisms and remedies

Any complaints shall be referred to a Labour Officer. A Labour Officer may institute civil or criminal proceedings before the Industrial Court in respect of a contravention or alleged contravention of the Act or regulations made under the Act.


Uganda does not have exchange control regulations, but it is a requirement that foreign currency transactions are conducted through a local bank.


Income tax

The Ugandan tax system is residence based. Every corporate entity (excluding exempted entities) that has chargeable income for the year of income is subject to corporate income tax. Ugandan tax residents are subject to income tax on their world-wide income, whereas non-residents are subject to tax on income from a source in Uganda.

Types of taxable income

Types of taxes include income tax, withholding taxes (dividends, interest, royalties, management/professional fees, repatriated income on branches) and capital gains tax (CGT).

Tax rates

The basic income tax rate in Uganda is 30%. Mining companies and petroleum companies are subject to a corporate income tax calculated according to a specified formula. Small business taxpayers, with a turnover of between approximately USD 2 000 and USD 20 000, are taxed on a turnover basis. CGT are aggregated with business income and taxed at the corporate income tax rate of 30%.

Dividends paid to resident and non-resident companies are subject to 15% withholding tax, with an exemption available for resident companies controlling at least 25% of the voting rights of the company declaring the dividend.

Interest paid to residents and non-residents is subject to a 15% withholding tax. In the case of resident recipients, this is not a final tax. Interest payments on government securities are subject to a final 20% withholding tax. There is no withholding tax on royalty payments to resident companies, but royalties paid to non-residents are subject to a final 15% withholding tax. Management or professional fees paid to a resident company are subject to 6% withholding tax on the gross amount. A 6% tax is payable on the value of imported goods, which may be set off against the final tax liability of the importer. A 15% withholding tax applies to payments to non-residents including natural resource payments, management charges and Ugandan-sourced service contracts. A 15% withholding tax is payable on the "repatriated income" of branches.

Double taxation treaties

Uganda has entered into double tax agreements with Denmark, India, Italy, Mauritius, the Netherlands, Norway, South Africa, the United Kingdom and Zambia.

Published in April 2015

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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