Wednesday, July 15, 2009

Starting a business in East Africa

As in all parts of the world the business idea, plan and win strategy are the first and most important parts of starting a business. Any entrepreneur planning to turn their ideas into commercial productivity will need to register the business in the geographical regions they plan to operate. East African countries are working on common platform of operation with a single currency. However this is not yet ready and each country has its own policy's, legislature and procedures of business registration. We will therefore look at the processes involved for each.

Rwanda has the shortest and easiest business registration process. With the recently launched One-Stop business registration center, it will take 24 hours to complete the whole registration process provided all documents are in order. Plans are underway to create an online service that will reduce the time taken to 12 hours and the system is expected to be operational by December this year. The center incorporates functions of the Registrar, Rwanda Revenue Authority and the Social Security Fund of Rwanda in one center and introduces a payment office in the registrar's general office. Company law no longer requires notarization of documents and publication into the official gazette. Only standard articles of Association are required and a flat fee of FRW. 25,000 is charged.

Other East African countries (except Burundi) have similar procedures for registration that flow as follows with a few specific items to each countries listed further below.

In Kenya, Uganda and Tanzania, you can register a business name (liability lies with the business name owner/s, this can be sole proprietorship, partnership or name owned by a company) or a register as company which is a legal entity on itself.

To register a business name one will require to: Do a name search at the registrar's office. When a name is approved, the statement of particulars form is completed and partneship documents are signed, legal fees may apply here. A certificate of registration is then issued. A business name can later be converted into a company as well

To register a company, you start with a name search, once the name is approved and reserved, then stamp the memorandum and Articles of association and nominal capital documents, this costs 1% of the nominal capital plus stamp duty. Then you register with the Tax Department for tax, here you get a PIN/TIN/TIP number depending on country, then register for VAT and other taxes like PAYE, this is free and takes a day. To trade, you will also need to apply for a business permit from the City/town council you are trading on, NHIF and NSSF as well. You will need to make a company seal after the certificate of incorporation is issued.

Matters of cost and other items are specific to country as below.


Business name: total cost ksh.900+
Company:Totals cost (appx)
Number of Days taken 30
Number of procedures 11

In Uganda the tax department URA will need to inspect the business premise before registration as well as all other procedures above.
Total Cost (appx) USH. 463,000-471,000
Number of days it takes 24
Number of procedures involved 11

Check, doing business in Uganda on the link below


In Tanzania the land or town officer will need to inspect the business premise before registration, you also have to register for workmen compensation at the National inspection corporation or take an alternative insurance policy as well as all other procedures above.

Total Cost(appx) TZsh. 206,200
Number of days it takes 34
Number of procedures involved 18


Registering a company in Burundi is much different fro the countries above, the process below is followed. It will take you a minimum of 43days to go through the 11 process and cost you approximately BIF.252,900.

1.Notarize Articles of association and signing of the Notary to be published in the
official journal.
2. Deposit required minimum capital
3. Publication in the legal journal
4. Extraction of criminal records for the first two directors
5. Registration with commercial registry, tax department, local authority, ministry
of trade & industry, ministry of labour department of inspection and the National
institute of social security.
6. Finally one will get a company seal.

Figures given above are based on approximation and most data according to 2008 figures though little has changed since then.

No comments:

Post a Comment

your view here