Business entity types & details

Sole proprietorships

Sole proprietorships are essential forms of business in Rwanda. In these, one person owns the whole company. The owner, therefore, handles every debt and responsibility of the company.

Partnerships

Two or more people or organizations form a partnership to run a business. The partners’ liabilities may be general or limited, making the collaboration either general or limited.

Limited liability company (LLC)

An LLC is a legal entity apart from its owners, offering its members (owners) limited liability protection. Therefore, stakeholders' assets are safe from liquidation if the company incurs debts. Many small—to medium-sized firms in Rwanda often choose this business format.

Corporations

A corporation is a stand-alone legal body that shareholders own. It offers its shareholders limited liability protection, meaning that their personal property may not be liquidated if the corporation is in debt. Though corporations are complex to operate, they are beneficial regarding ownership transferability, capital availability, and scalability.

Branch office

A foreign company registered outside Rwanda may seek to expand by setting up a branch in Rwanda. The branch office will, therefore, be subject to Rwandan rules and regulations and function under the same legal structure as the parent firm.

Non-Governmental Organisation (NGOs)

NGOs are entities that do not seek to make profits. These businesses mainly focus on charity, social, religious, cultural, or humanitarian endeavors. 

Cost Of Registering a Business in Rwanda

1. Registration costs:

• For sole proprietorships: Approximately RWF 10,000 to RWF 30,000
• For partnerships: Approximately RWF 50,000 to RWF 100,000
• For Limited Liability Companies (LLC): Approximately RWF 150,000 to RWF 300,000
• For Public Limited Companies (PLC): Approximately RWF 300,000 to RWF 500,000.
• For trademarks: Approximately RWF 200,000 to RWF 500,000.
• For Domain Registration: Approximately RWF 10,000 to RWF 30,000.

2. Legal consultation costs:
You will require legal counsel to register your business efficiently efficiently. Depending on your business format and other complexities, it usually costs approximately RWF 50,000 to RWF 200,000.

3. Notarization costs 
 You must notarise all your business paperwork, which usually costs approximately RWF 10,000 to RWF 30,000 per document.

4. Publishing fees
When registering your business, you may need to publish newspaper notices, which usually cost approximately RWF 20,000 to RWF 50,000.

5. Licensing costs 
A trade license costs around RWF 20,000 to RWF 50,000; however, Value-Added Tax (VAT) and Income tax registration are free.

Business Registration Requirements

1. Business name reservation
2. Identification documents (National ID or passport)
3. Company structure
4. Business address
5. Business plan
6. Shareholder and director information
7. Capital requirements
8. Tax registration (TIN)
9. Sector-specific licenses
10. Compliance with local regulations
11. Application submission
12. Payment of registration fees
13. Proof of financial capacity (for foreign investors)

Steps of Registering a Business in Kenya

1. Selecting an ideal business structure

Investors can register partnerships, limited liability companies, branch offices, and sole proprietorships, among other business forms. Each format is subject to unique registration costs, operating policies, and annual filing requirements.

2. Name your business

Before selecting a business name, understand your objectives, revenue predictions, and legal policies. Choose a name that is captivating and functional yet distinct from those of existing businesses. Submit the name to the Rwanda Development Board (RDB) for reservation. 

3. Prepare registration and constitutive documents

When registering your business in Rwanda, you must submit the credentials and residential addresses of all the directors and shareholders. Other constitutive documents you must submit to the RDB depend on your business format. The documents typically include an article of association, prospectus, statutory declaration of compliance, declaration of capital, and memorandum of association.

4. Obtain a Tax Identification Number (TIN)

For your business to operate legally in Rwanda, it has to be recognized by the Rwanda Revenue Authority (RRA). The RRA issues all registered businesses with a Tax Identification Number (TIN).

5. Submit all registration documents and make payments

You should submit all the registration, constitutive documents, and Tax Identification Numbers to the RDB at this stage. Make registration payments and collect the receipts as evidence.

6. Wait for your documents to be approved

The RDB will confirm that the paperwork filed complies with all applicable laws and regulations. The agency will approve the registration and issue you a business registration certificate if all requirements are satisfied.

7. Open a bank account

Use the approval certificate, Tax Identification Number, and business name to open a bank account for your business. Ensure you have all the required licenses before starting your business in Rwanda. Register your business for the social security fund with the Rwanda Social Security Board (RSSB). 

Business Registration Requirements

1. Business name reservation
2. Valid passport
3. Proof of residency (if applicable)
4. Company structure
5. Your business address in Rwanda
6. Business plan
7. Shareholder and director information
8. Minimum capital requirement
9. Tax registration (TIN)
10. Sector-specific licenses (if needed)
11. Compliance with local regulations
12. Application submission
13. Payment of registration fees
14. Proof of financial capacity
    
    

Steps:

1. Determine the business structure you want to register

In Rwanda, foreigners can register partnerships, corporations, branch offices, and limited liability companies. Choose a business form that is ideal for your business goals and has favorable legal policies.

2. Reserve a business name.

The Rwanda Development Board  (RDB) oversees the naming of all businesses in the country. Visit their offices or website to reserve a feasible business name. You will avoid copyright penalties by reserving your unique business name.

3. Prepare necessary paperwork

Prepare all necessary documents needed to register your particular business form. The documents typically include:

• Directors’ details, including their IDs or Passports
• Name reservation certificate
• Your business’s physical address
• Article of association
• Memorandum of assocoaiton
• Prospectus (if offering shares to the public).
• Statutory declaration of compliance.
• Declaration of capital

4. Register with the RDB

After preparing all the registration documents, drop them at the RDB’s office and await approval. Don't forget to cover registration costs and keep the receipts.

5. Register with the tax authority.

Register your business with the Rwanda Revenue Authority (RRA) and obtain a Tax Identification Number (TIN). Remember to enroll if your business is eligible for value-added tax (VAT).

6. Open a bank account

Since your business will handle money at some point, opening an official bank account in your name is essential. The bank will need your business’s Tax Identification Number.

Annual filing documents & requirements

Financial statements

Every business in Rwanda is required to fill out financial statements such as income statements and balance sheets.

Tax returns

You are mandated to file your annual tax returns to the Rwanda Revenue Authority (RRA). The tax returns should highlight your business’s earnings, outlays, and any taxes due.

Annual returns

Businesses in Rwanda are mandated to file annual returns detailing their internal changes, such as office addresses, directors, and shareholders.

Licence renewal

To guarantee compliance, you must renew your business licenses and permits annually. 

Rwanda is a fantastic place to invest, thanks to its booming economy, supportive government, welcoming investment environment, and easy access to East African markets. Before you dive into business operations in the country, just make sure to get your business registered.

Registering your business not only gives you legal recognition but also opens doors to credit opportunities. Plus, whether you're a local or a foreigner, you can explore various business forms in Rwanda—each with its own little twists in the process. Remember, keeping up with the annual requirements with the RRA is essential to steer clear of any unnecessary penalties.

Frequently Asked Questions

In Rwanda, how long does it take to register a business?

The time it takes to finish the registration procedure varies from a few days to a few weeks, depending on the complexity of the business structure and how well all the requirements are met.

Does registering my business require that I have an actual office space?

Depending on the business, you may be required to provide a physical address for registration, which might be a residential address or a business office location in certain situations.

Are there any incentives for foreigners seeking to invest in Rwanda?

Yes, foreign investors in Rwanda are offered investment guarantees, tax Incentives, and easy repatriation of profits. Further, Rwanda has established Free Trade Zones (FTZs) where foreign investors can enjoy tax holidays, duty-free importation of raw materials and machinery, and simplified customs procedures.