Company formation in Rwanda

Before deciding to set up a new company in Rwanda, read the information below to understand the characteristics of a Limited Liability Company (LLC):

Shareholders: the company is required to have at least 1 shareholder.

Director: at least one director must be appointed.

Company secretary: it is mandatory.

Minimum share capital: there is no minimum capital requirement.

Legal address: a registered office in Rwanda is mandatory.

Registered agent: not required in Ghana for an LLC, however, a local registered office may be necessary to handle legal matters.

Liability: the liability of its shareholders is limited to the amount of capital they have invested in the company through their shares.

Accounting: companies are required to maintain proper financial records and prepare annual accounts.

The standard CIT rate is 30%.

However, micro-enterprise companies (with turnover of less than RWF 12 million in a tax period) pay flat tax amounts depending on their turnover amounts, and small businesses (whose turnover is between RWF 12 million and RWF 20 million in a tax period) pay a lump sum tax at the rate of 3% of turnover.

There are special CIT rates for certain industries or sectors of the economy. Newly listed companies on capital markets are taxed as follows for a period of five years:

• If a company sells at least 30% of their shares to the public, the CIT rate is 25%.
• If a company sells at least 40% of their shares to the public, the CIT rate is 20%.

Residents are subject to tax at rates ranging between 0% and 30% on the following annual graduated scale of income:

• 0% - up to 60,000 RWF;
• 10% - 60,001 - 100,000 RWF;
• 20% - 100,001 - 20,00 RWF;
• 30% - 200,001 RWF and above

The standard VAT rate is 18% and applies to goods and services that are neither exempt from VAT nor zero-rated.

Services supplied are taxable if:

• The service recipient and the service provider are residents of Rwanda.
• The service recipient is a resident of Rwanda and the service is useful to the recipient in Rwanda.
• The service provider is a resident of Rwanda and the service is useful to the recipient in Rwanda.

Exports of goods and services are subject to VAT at 0%.

Some supplies are exempt from VAT, the main categories being supply of clean water service; goods and services for health purposes; educational materials and services; transport services; books, newspapers, and journals; financial and insurance services; lending or leasing interests in land or building for residential purposes; funeral services; energy supplies; lease of exempted goods; all unprocessed agricultural and livestock products; agricultural insurance services; gaming activities; goods and services for a special economic zone; mobile handsets; equipment for information, communication, and technology; goods sold in customs; aircraft and its spare parts/maintenance tools; and imported electric vehicles and accessories.

Double taxation avoidance agreements in Rwanda: ‍United Kingdom, France, Germany, South Africa, Italy, Netherlands, Belgium, Denmark, Switzerland.