Starting a new venture is an exciting and daring journey, yet it can get overwhelming when you don’t understand the basic procedures. I finally checked various online resources and consulted business experts to understand this process.
This straightforward step by step guide will help you to navigate the process of setting up your business in Rwanda.
Step 1: Prepare necessary documents
Gather all essential documents for business registration. Ensure you have a valid national ID or passport for all shareholders, and prepare the Articles of Association, which outline your company's structure, ownership, and operating procedures. Although only sometimes mandatory, a business plan can be crucial, especially for specific business types. You’ll also need proof of address for your business location. Business plan and articles of association are not always mandatory requirements.
Step 2: Choose a business structure
Decide on the type of business entity that best suits your needs. Common types include sole proprietorship, partnership, and limited liability company (LLC). Each structure has its legal and tax implications, so choose accordingly and ensure you are well informed of their respective requirements.
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Step 3: Register the business
Visit the RDB's e-registration portal to start the registration process. Fill in the necessary details, including your business name, business activities, shareholders' details, and directors' details. This process is entirely free of charge when done by yourself. If outsourced, please note that you will be paying the service fee only.
Step 4: Name reservation
Your business name is a critical part of your brand identity. First, conduct a name search to ensure that your desired business name is unique and not already in use. You can do this through the Rwanda Development Board (RDB) Name Search Portal. Once you’ve confirmed the name's availability, you can reserve it using the RDB’s online name reservation service.
Step 5: Submit documents
Upload scanned or soft copies of your prepared documents through the RDB portal. The platform will guide you through the required steps, making the process straightforward and user-friendly.
Step 6: Obtain Certificate of Incorporation
Once your documents are verified and your application is approved, the RDB will issue a Certificate of Incorporation. This certificate, available through the RDB portal, serves as your official proof of business registration.
Step 7: Register for taxes
To comply with Rwandan tax laws, you need to register with the Rwanda Revenue Authority (RRA). Obtain a Tax Identification Number (TIN) by visiting the RRA website. If applicable, you should also register for Value Added Tax (VAT) through the same portal.
Voluntary businesses with a taxable turnover of more than RWF 20 million in any tax year or equivalently RWF 5 million quarterly must register for value added tax (VAT) in accordance with Article 6 of the Law on Tax Procedure, 2023.
The new VAT Law introduces incentives for hybrid and electric vehicles by applying a zero-rating (0% VAT) to locally assembled electric vehicles, hybrid vehicles, their relevant batteries, and electric charging station equipment. Additionally, imported electric and hybrid vehicles and their equipment are exempt from VAT. These measures aim to encourage the adoption of cleaner transportation options and support Rwanda’s sustainability goals, including reducing carbon emissions.
Step 8: Register for social security
Sign up with the Rwanda Social Security Board (RSSB) to handle employee social security contributions. The contributions cover for medical insurance, paid sick and maternity leave, pension benefits, and occupational hazards insurance. You can find more information and register on the RSSB website.
Step 9: Obtain sector-specific licenses
Depending on your business type, you may need additional licenses or permits. Check with the relevant regulatory bodies to ensure compliance. Specific sector requirements can often be found on respective ministry websites or through the RDB.
Step 10: Open business phone number & mobile money code
A dedicated business phone number and momo code are key in managing business communications and payments respectively. To obtain them, visit the nearby MTN service center, mention that you need a business sim card and momo code. Ensure that you have your tin number, a valid national ID/passport, company registration certificate and a stamped request letter. Include your business in the letter and state "CC.RURA” under the tin number. Your business phone number and momo code are created and provided instantly.
Alternatively, when you send a representative, include the names and identification number of the representative authorized in the letter. The representative should present their identification document at the MTN service center.
Step 10: Open a bank account
A dedicated business bank account is essential for managing your finances. Visit a local bank to open an account in your company’s name. Most banks in Rwanda offer specialized services for business accounts and offer a variety of digital services that can enable you to operate from anywhere in the world. Ensure good consulting on which bank to choose and understanding of available services that may benefit your business.
Additional considerations
To protect your brand, consider registering your trademarks with the RDB. You can find more information on the RDB Intellectual Property page. Additionally, evaluate the need for business insurance to safeguard your business against potential risks. Insurance policies tailored to various business needs are available from numerous providers in Rwanda.
By following these steps, you can smoothly navigate the process of setting up your business in Rwanda. Staying compliant with legal requirements is crucial. Maintain accurate and up-to-date accounting records, and file annual returns and tax returns as mandated by law. The RRA website provides detailed guidelines on filing requirements and deadlines.
Good luck with your new venture!
The author is a Usability Specialist & Technical Writer at KudiBooks, a cloud based accounting software and payment solution.