SLAUGHTER AND MAY PLEA5e 2016 FLASH TALK FOCUS ON UGANDA BY: APOLLO N. MAKUBUYA 18 TH NOVEMBER 2016 MASEMBE, MAKUBUYA, ADRIKO, KARUGABA & SSEKATAWA ADVOCATES (MMAKS ADVOCATES)
WHO WE ARE 2 Specialized corporate & commercial law practice banking and finance, real estate, mergers and acquisitions, capital markets, employment, and intellectual property. Consistently ranked leading commercial law practice by Chambers Global Guide Alliance of independent top tier African law firms Ranked Tier One law firm by IFLR 1000, The Guide to the World s Leading Financial Law firms 8 Partners and 19 Associates. One of the largest firms in Uganda.
FLASH TALK Focus on Uganda Summary Political outlook Business outlook Legal outlook Constitution Democracy Security Regional arrangements GDP Investment climate Sector analysis Rule of law Court system Legal regime Alternative dispute resolution
POLITICAL OUTLOOK 4 1995 CONSTITUTION DEMOCRACY General elections every 5 years February 2016 election election petition Stable political environment SECURITY Uganda Police Uganda People s Defence Force Generally peaceful
POLITICAL OUTLOOK 5 REGIONAL ARRANGEMENTS East African Community Common Market for Eastern and Southern Africa Africa, Caribbean and Pacific Group of States World Trade Organization African Union
BUSINESS OUTLOOK 6 ECONOMY We are struggling but we are not desperate. The situation is under control. As Government, we are ready to listen and learn Minister of Finance Matia Kasaija NUMBERS $28.5M - Revenue collection short fall Exports - $2.6B Imports - $5.0B CBR - from 14% to 13% Economic growth SOURCE: WORLD BANK
BUSINESS OUTLOOK 7 GDP GROWTH Financial year 2014/2015 recorded 5% real GDP growth Financial year 2015/2016 real 4.8% GDP growth 5.5% projected growth in the industrial sector 5.7% projected growth in the services sector Regional comparison Country CBR GDP Growth GDP USD Exchange rate UGANDA 13% 4.8% $26B $1 = UGX 3,583 KENYA 7% 5.8% $52B $1 = KES 102 TANZANIA None 7.2% $40B $1 = TZS 2,180
BUSINESS OUTLOOK 8 INVESTMENT Uganda Investment Authority one stop service Foreign investor license proof of USD 100,000> Investment incentives Concessional rates of import duty, Exemption from import duty personal effects Drop in FDI inflow YEAR 2014 2015 2016 FDI VALUE $1.2B $1B Depressed global economy, expected drop
SECTOR ANALYSIS 9 OIL & GAS Memorandum of Understanding commercialize Albertine Graben Current discovered recoverable reserves 1.2 to 1.7 billion barrels 8 Production licenses & 3.55 Billion Pipe line - Tanga New national content law ENERGY Estimated electrical potential 5,300 MW Hydro 2,000MW Mini-hydro 200MW Solar 200MW Biomass 1,650 MW Geothermal 450MW
SECTOR ANALYSIS 10 INFRASTRUCTURE Public Private Partnership projects Transport roads & railway Energy - dams Tourism - hotels Business markets REAL PROPERTY Non citizens cannot own freehold or mailo land Can acquire lease not exceeding 99 years Landlord Tenant Bill Control rent, currency & relationship
SECTOR ANALYSIS 11 BANKING & FINANCE Regulator Bank of Uganda 25 licensed commercial banks Islamic Banking, Agency Banking, Bancassurance Interest rates Capping rates Exchange rate Mobile money Bail out
SECTOR ANALYSIS 12 INSURANCE 21 non life insurance firms paid up capital UGX 4 Billion 8 life insurance companies paid up capital UGX 3 Billion Regulator Insurance Regulatory Authority CAPITAL MARKETS Uganda Securities exchange relatively small 16 listed companies most are cross listings Regulator Capital Markets Authority
SECTOR ANALYSIS 13 ICT 8 telecommunication companies UCC & NITA USD 106million optic fibre cable facilitate e-governance and internet access Migration from analogue to digital television broadcast TOURISM top foreign exchange earner for Uganda AGRICULTURE Uganda is Africa s second-leading coffee producer Agriculture, forestry & fishing approx. 65.6% employment
SECTOR ANALYSIS 14 TAX TAX TYPE RATE COMMENT Income tax 30% corporate tax 25%-45% mining residents taxed on worldwide income, non residents on Uganda-source income VAT 18% on taxable supplies of goods and services Withholding tax 15% residents and non residents Capital Gains tax 30% disposal of assets including shares Double Tax Treaties Mauritius, India Denmark, Norway Netherlands, United Kingdom India, Zambia & South Africa
LEGAL OUTLOOK 15 RULE OF LAW 1995 Constitution Executive Parliament Judiciary COURT SYSTEM Supreme Court Court of Appeal High Court Magistrate Court Subordinate courts & tribunals
LEGAL REGIME 16 BUSINESS Business law Business types company, branch, sole proprietorship, partnership, trust, et al Businesses may be 100% foreign owned Foreign investment allowed in all sectors not national security related Anti corruption & Anti bribery laws EMPLOYMENT Employers must contribute 15% to National Social Security Fund Liberal pension sector licensed retirements benefits schemes Non citizen employees Obtain a work entry permit, certificate of residence or special pass Online immigration applications
LEGAL REGIME 17 INTELLECTUAL PROPERTY Intellectual property can be 100% foreign owned Common types of IP rights in Uganda Trademarks & Industrial Designs Copyright & Neighbouring rights Patents & Utility models ENVIRONMENT National law Environmental Impact Assessment Regulator- National Environment Management Authority
LEGAL REGIME 18 COMPETITION No national competition law statutory exceptions COMESA Competition Regulations uncertain application in Uganda East African Community Competition Authority not operational CONSUMER PROTECTION No consolidated national law Sectoral policies and regulatory framework Regulator Uganda National Bureau of Standards
ALTERNATIVE DISPUTE RESOLUTION 19 Arbitration and Conciliation Act Domestic arbitration International commercial arbitration Enforcement of foreign arbitral awards Conciliation of disputes Number of arbitrators Appointment of arbitrators Appointing authority Centre for Arbitration and Dispute Resolution Compulsory mediation all commercial disputes
20 SHOULD YOU INVEST?
21
BOTSWANA BURUNDI ETHIOPIA KENYA MALAWI MAURITIUS NIGERIA RWANDA SUDAN TANZANIA UGANDA ZAMBIA MASEMBE, MAKUBUYA, ADRIKO, KARUGABA & SSEKATAWA ADVOCATES (MMAKS Advocates) A 3 rd Floor, DTB Centre, Plot 17/19 Kampala Road P PO Box 7166 Kampala T +256 414 254 374, +256 312 260 016 W www.mmaks.co.ug Legal Notice: these materials are for training purposes only and do not constitute legal or other professional advice.