Yes, a foreigner can own a company in Uganda. The Companies Act places no nationality restriction on who may be a shareholder or director of a Ugandan company, so a foreign national can own all of the shares. However, a foreign investor must also register with the Uganda Investment Authority (UIA) before operating, and foreign-controlled companies face limits on owning land.
If you are asking "can a foreigner own a company in Uganda?", the short answer is yes, but ownership is only the first step. This guide explains the options, the rules that apply specifically to foreign investors, and the practical steps to get your business running lawfully.
Can a foreigner own a company in Uganda? The legal position
Companies in Uganda are incorporated under the Companies Act (now the Companies Act, Cap. 106 in the 2023 revised laws) and registered by the Uganda Registration Services Bureau (URSB). The Act does not require a Ugandan shareholder or a Ugandan director for a private company. A foreign national can therefore:
- incorporate a new private company limited by shares and hold 100% of the shares;
- be a director of a Ugandan company;
- buy shares in an existing Ugandan company; or
- own the Ugandan company through a foreign parent company.
A single founder can also register a single member company. Our guide on whether one person can register a company in Uganda explains how that works.
Subsidiary or branch?
A foreign business has two main routes. It can incorporate a subsidiary, a new Ugandan company that is a separate legal person, or it can register its existing foreign company as a branch (a foreign company with a place of business in Uganda). A subsidiary usually limits the parent's exposure to Ugandan liabilities, while a branch is simply an extension of the parent. We compare the two in can a foreign company open a branch in Uganda.
Rules that apply to foreign investors
Owning shares is allowed, but the law treats foreign investors differently in several important ways.
Registration with the Uganda Investment Authority
The Investment Code Act, 2019 defines a "foreign investor" to include a person who is not a citizen of an East African Community (EAC) Partner State, a company incorporated outside the EAC, and a company incorporated in Uganda in which the majority of shares are held by persons who are not EAC citizens. Under section 19, a foreign investor may not invest in or take part in the operation of any investment activity in Uganda before registering with the UIA. Breaching this is an offence punishable by a fine of up to 1,000 currency points (UGX 20 million at UGX 20,000 per currency point), up to four years' imprisonment, or both.
The Act states that the UIA should issue an investment certificate within five days of receiving a complete application. In practice, the UIA asks for documents such as the company's registration documents and a business plan, and timelines depend on how complete the application is.
Minimum investment capital
Section 15 of the Investment Code Act leaves the minimum investment capital for domestic and foreign investors to be set by the Minister of Finance by statutory instrument. You will see different figures quoted online, so confirm the current threshold with the UIA or with us before you plan your capital.
Activities closed to foreign investors
The Minister may, with Cabinet approval, specify investment activities that are not open to foreign investors. Many sectors also have their own licensing rules, for example banking, insurance, mining, oil and gas, telecommunications and pharmacy. Check the sector rules before you commit funds.
Land ownership limits
This is the restriction that surprises many foreign owners. Under the Constitution and section 40 of the Land Act, a non-citizen may hold land in Uganda only on leasehold, for a term of up to 99 years, and may not acquire or hold mailo or freehold land. A company counts as a non-citizen where the controlling interest lies with non-citizens, for example where the majority of its shares are held by non-citizens. A foreign-owned company that needs premises, a factory or farmland must therefore plan for a lease. Take advice before signing anything, because a land deal that does not comply with these rules can put your investment at risk.
Immigration and work permits
Owning a Ugandan company does not by itself give a foreigner the right to live or work in Uganda. Foreign shareholders who will run the business, and foreign staff, need the correct entry permit (work permit) from the immigration authorities.
Step-by-step: how a foreigner sets up a company in Uganda
- Choose the structure. Decide between a subsidiary and a branch, and between a single member and multi-member company. Consider tax, liability and future investors.
- Reserve the name and incorporate with URSB. Registration is done online. Foreign directors and shareholders use their passports for identification. Our earlier guide to company registration covers the detailed process.
- Declare beneficial owners. Companies must disclose the individuals who ultimately own or control them.
- Register with the UIA. Apply for registration and an investment certificate before you start operating.
- Register for tax. Obtain a Tax Identification Number (TIN) from the Uganda Revenue Authority and register for the taxes that apply to your business.
- Obtain licences. Get a trading licence from the local authority and any sector licence your activity requires.
- Sort out immigration. Apply for the right entry permits before foreign shareholders or staff begin work.
- Plan premises. If you need land, structure the acquisition as a lease that complies with the Land Act.
Common mistakes foreign owners make
- Starting operations before registering with the UIA.
- Buying freehold or mailo land through a company that is foreign-controlled, or through a local nominee without understanding the legal risks.
- Assuming that company ownership automatically gives the right to work in Uganda.
- Using standard Articles of Association when foreign and local shareholders need a tailored shareholders' agreement.
- Forgetting ongoing obligations such as annual returns and tax filings.
Does the company need a Ugandan partner?
For most businesses, no. A foreign national can own and direct a private company alone. Some sectors, however, set local ownership or licensing conditions of their own, and some government contracts give preference to local companies. If your business plan depends on a sector licence or public procurement, check those conditions before you finalise your shareholding.
How Mercio Advocates can help
Our business law team advises foreign investors on setting up in Uganda. We can help you choose between a subsidiary and a branch, incorporate the company with URSB, prepare shareholders' agreements, guide you through UIA registration and regulatory compliance, and structure property leases. To discuss your plans, call +256 785 390 207, email info@mercio.org or book a consultation with our business lawyers. Our office is at Plot 10 Luwum St, California Plaza, Kampala.
This article provides general information about the law in Uganda and is not legal advice. Laws, thresholds and procedures change, and how they apply depends on your facts. For advice on your situation, please contact Mercio Advocates.
