Possible outcome of the revised Investment Code of 2017!
Yesterday at the Plenary in the Parliament, discussed the revised Investment code of 2017. Which in its self isn’t the most exiting thing. Nevertheless, the reality is that this is now in Parliament shows a push from the Members of Parliament and the Committee of Ministry of Finance, Planning and Economic Development (MoFPED). That they are up to something. They are trying to forge something ahead. However, as the President has claimed the bureaucrats for being lazy, this shows another attempt. However, if this parts of the laws are enacted. Will ensure that it takes longer and the quality of the Foreign Investor to hold onto the new demands of the state. This will also give more power to the Uganda Investment Authority (UIA).
As the September report on the bill states. They will register all investments and all incentives inventory, as off who is doing what and licensed to do. As the Foreign Investor has to comply too a more rigid laws to be able to in the first place now.
Because the change of laws is that an exports of a minimum of 70% of the production in the given incentive, hire at least up to 60% Ugandan citizens and accept to monitored by the authorities and the statutes within the law. This being the UIA, which has the oversight.
The Incentive before launching has to verified and certified by the UIA. The same authority that has oversight and register the incentives. The Foreign Investor has to notify the UIA if they are complying with their inventory to the UIA as per law.
As to make it more hectic for anyone to invest is not allowed to directly to be investing in farming, as production of agricultural output. They cannot do that, but they can be able and allowed to own factories and businesses that helps the farmers to get better crops or bigger livestock.
The law states further the priorities for a Foreign Investor, as per law: “1. agro processlng; 2. food processing; 3. medical appliances; 4. building materials; 5. light industry; 6. automobile manufacturing and assembly; 7. household appliances; 8. furniture; 9. logistics and ware-housing; 10. information technology; or ll. commercial farming”.
This really put the parameter for what they can and cannot do. They are specific as to who allows, what sort of investment, who certifies and who monitors. Therefore, a foreign investor, by law has to comply a lot more and has to have more paperwork to prove his business-plan, prove his investment, his hires and his initial plan for getting exports of the giving products. This will clearly hamper investments and create a longer time-table for them. As the Foreign Investor cannot focus on local market, but on international market, because that is how it is by law. In addition, when you invest in something, you don’t want to loose your certification or your rights to produce or export given products.
Also, the same investor needs to incorporate the business with the Registrar General, a certified of remittance by the Bank of Uganda, the second, the certified of remittance to lodge an application to the Department of Immigration and this department have to give the Foreign Investor a permit to do stay and do business in Uganda. Therefore, before engaging with the new criteria of the UIA and MoFPED, the investor has to get the BoU in check and get the Department of Immigration. If all of these factors doesn’t slow down a process, nothing does. This is clearly a way of securing jobs for bureaucrats and lesser the burden of the foreign exchange and remittance in general.
- Get UIA Approval and Certification of Business
- Get BoU Certification of Remittance
- Get Department of Immigration – Permit and Application of Remittance
- Getting monitored by the UIA to see you comply with the codes.
If that sounds like an easier way in, it doesn’t, more offices and paperwork, before even spending money. This code will clearly hamper more foreign investors from coming, unless they are giving Presidential Handshakes to the President. I am sure he then lets them in. Peace.