Rwanda is rapidly emerging as a strategic hub for global businesses seeking to re-domicile or migrate their operations. This growing interest is fueled by the enactment of Law No. 007/2021 of 05/02/2021 Governing Companies, as amended by Law No. 019/2023 of 30/03/2023 Amending Law N° 007/2021 of 05/02/2021 Governing Companies (the “Companies Act”), which introduced a vigorous legal framework to simplify the process of transferring a company’s registration to Rwanda. Coupled with the country’s pro-business reforms, this legal framework has positioned Rwanda as an attractive destination for foreign investment and corporate relocation.
Re-domiciliation refers to the process by which a company moves its registration from one jurisdiction to another while maintaining its legal identity, while migration often involves the transfer of a company’s domicile and incorporation status to another jurisdiction. In Rwanda, companies seeking re-domiciliation or migration benefit from a clear legal framework designed to facilitate this process. The primary legal instrument governing these activities is the Companies Act, which outlines provisions for the registration, recognition, and operation of foreign companies within Rwanda. Under Article 312 of the Companies Act, a company incorporated in another country may continue its existence in Rwanda if permitted by the laws of its home jurisdiction. To facilitate re-domiciliation, the foreign company must demonstrate compliance with the regulations in its country of origin and meet specific requirements set by the Rwandan Companies Act.
A foreign company seeking re-domiciliation must apply to the Registrar General to be registered as a Rwandan company, effectively continuing its operations as if it had been incorporated under the Rwandan law. The application process requires the submission of key documents, including a notarised copy of the company’s certificate of incorporation, a resolution authorising its continuation in Rwanda, a notarised copy of its memorandum or articles of association, a statement of charges on its assets, and documentary evidence proving compliance with foreign company registration requirements. Additionally, the applicant must demonstrate that the company is in good standing in its country of incorporation and in any other jurisdiction where it conducts significant business. The Registrar General may waive the requirement to resubmit documents already registered in relation to the foreign company. Upon fulfilling these requirements, the company is entered into Rwanda’s register of companies and issued a certificate of registration, which serves as conclusive evidence of compliance with the registration requirements under the Companies Act and confirms the company’s status as registered in Rwanda from the date specified on the certificate of registration.
It is important to note that registration does not create a new legal entity. Instead, it ensures the continuity of the foreign company as a legal entity, preserving its rights, obligations, property, and any ongoing legal proceedings as it transitions to operate as a company registered in Rwanda. Upon re-domiciliation, the company becomes subject to all Rwandan laws governing companies, including adherence to local taxation laws, compliance with employment laws, and fulfilling other statutory obligations. For instance, under Law Nº 027/2022 of 20/10/2022 establishing taxes on income, re-domiciled companies are considered Rwandan tax residents and must register with the Rwanda Revenue Authority (RRA) to comply with corporate income tax, value-added tax (VAT), and withholding tax requirements.
Additionally, companies handling personal data must comply with Law Nº 058/2021 of 13/10/2021 relating to the protection of personal data and privacy (DPA), which imposes obligations related to data storage, processing, and cross-border data transfers. Companies in regulated sectors such as banking, insurance, and telecommunications must also obtain additional approvals from regulatory authorities like the National Bank of Rwanda (BNR) or the Rwanda Utilities Regulatory Authority (RURA). These sector-specific regulations require companies to meet licensing requirements to operate legally within their respective industries.
Re-domiciling a company to Rwanda offers several strategic advantages that can enhance its operations and access to key markets. One of the primary benefits is Rwanda’s strategic location within the East African Community (EAC) and its membership in the African Continental Free Trade Area (AfCFTA), which provide easy access to regional and continental markets. Additionally, Rwanda is known for its favourable business environment, with streamlined processes for company registration, tax compliance, and other business operations. The government further incentivises investors through various tax incentives and investment promotion programs under the Rwandan Investment Code, which are designed to attract foreign capital, technology, and expertise to advance growth in key priority sectors of the economy. Beyond these economic benefits, Rwanda offers a secure and stable environment for businesses, with a focus on political and economic stability that provides a conducive atmosphere for companies to thrive without the risks commonly associated with unstable markets.
While the process of re-domiciliation to Rwanda is streamlined, companies may encounter challenges that require careful attention. One key challenge is adapting to new regulatory and compliance requirements, as companies must familiarise themselves with Rwanda’s legal and regulatory frameworks, which may differ significantly from those of their previous jurisdictions. This includes understanding tax laws, data protection regulations, and business licensing requirements to ensure full compliance with local rules. Another consideration is managing cultural and operational changes, as shifting operations to a new jurisdiction often necessitates adjustments in business practices, management styles, and workforce integration. Companies may need to invest in training, change management, and integration strategies to align their operations with Rwanda’s business culture and regulatory environment. Additionally, companies operating in certain industries may face the challenge of understanding sector-specific laws, as some sectors require additional approvals and compliance steps that can introduce complexity to the re-domiciliation process.
Rwanda not only allows foreign companies to re-domicile and migrate into Rwanda but also permits Rwandan companies to migrate to other jurisdictions, provided they comply with the provisions of the Companies Act. Rwandan companies seeking to migrate must apply for removal from Rwanda’s company register, obtain shareholder approval, issue public notices, and secure clearance from the Rwanda Revenue Authority (RRA). They must also demonstrate compliance with the legal requirements of the destination country. Migration is prohibited for companies undergoing liquidation, under administration, or failing the solvency test. Upon approval by the Registrar General, the company is removed from Rwanda’s register of companies but retains its legal identity, obligations, and ongoing legal proceedings.
Rwanda presents a compelling opportunity for companies looking to re-domicile or migrate their operations. The Companies Act provides a clear and streamlined process for foreign companies to transfer their business while maintaining legal continuity, facilitating a smooth entry into Rwanda’s vibrant market. With its strategic location, stable political environment, and business-friendly atmosphere, Rwanda offers a compelling destination for global CEOs. However, transitioning to Rwanda requires careful consideration of the legal and operational adjustments necessary to ensure compliance and maximise the advantages of operating in Rwanda.