Economic Co-operation and Development (OECD) convertibilityrequirements. The Rwandan Franc exchange rate is closely tiedto the United States dollar.TaxationTaxes paid by companies include:Corporate/Income Tax at 30%;Pay As You Earn (Employment income tax) is 30% for allsalaries above 100 000 RWF (approx US$160);Value Added Tax (VAT) is charged at a rate of 18% onimports, services and locally manufactured goods;A Withholding Tax of 15% is levied on the followingpayments made by resident individuals or resident entitiesincluding tax-exempt entities: dividends, interests,royalties, service fees including management andtechnical service fees, performance payments made to anartist, lottery and other gambling proceeds;A Withholding Tax of 5% of the value of goods imported forcommercial use is paid at customs on the Cost, Insuranceand Freight (CIF) value before the goods are released bycustoms;A Withholding Tax of 3% on the sum of invoice, excludingthe Value Added Tax, is retained on payments by publicinstitutions to those who supply goods and services basedon public tenders.Rwanda has concluded double taxation treaties with Mauritiusand South <strong>Africa</strong> and discussions are under way to conclude onewith Belgium.Imports/ExportsImports include foodstuffs, machinery and equipment, steel,petroleum products, cement and construction material.Exports include coffee, tea, hides, pyrethrum, minerals andservices, especially tourism.Monetary PolicyThe effect of the global financial crisis on Rwandan banks wasmild. All banks are now compliant with the minimum capitalrequired of 5 billion RWF.A law regulating private credit referencing bureaux has beenenacted.Legal SystemRwanda’s legal system is a hybrid of civil and common law.Current law reforms are aimed at aligning Rwanda’s legal systemwith the rest of her East <strong>Africa</strong>n Community (EAC) partner states(Uganda, Kenya, Tanzania, and Burundi).Arbitration as an alternative dispute resolution mechanism isnot fully developed but it is a priority of the Government incollaboration with the Rwanda Private Sector Federation (PSF)to develop Alternative Dispute Resolution Mechanisms and theArbitration Centre. Rwanda is a member of the InternationalCentre for Settlement of Investment Disputes (ICSID).In 2008, Rwanda opened specialized commercial courts toaddress commercial disputes and facilitate enforcement ofproperty and contract rights.Judgments of foreign courts and contract clauses choosingforeign governing law are enforced by local courts.Intellectual PropertyPatents, trademarks, commercial marks, designs and patternsare protected by statute.The new Intellectual Property (IP) law brings togethersubstantive legislation on patents, copyright, trademarks,Geographical indications (GI), industrial designs, utility modelsand unfair competition. National legislation on traditionalknowledge and genetic resources is currently underconsideration with the technical support of the WorldIntellectual Property Organisation (WIPO) and the <strong>Africa</strong>nRegional Intellectual Property Organization (ARIPO), which alsoprovided legislative advice in drafting the new IP law.Rwanda has been a WIPO Member State since February 1984and joined ARIPO in 2010. Rwanda is keen to tap into thesubstantive expertise of these two <strong>org</strong>anisations to fast-track itsuse of IP and to boost its economic performance.Financial ServicesThe banking sector comprises 12 banks which include 8commercial banks, 1 primary microfinance bank, 1 discounthouse, 1 development bank and 1 mortgage bank.The microfinance sub sector consists of more than 100 relativelysmall institutions.Ecobank, Access Bank and Kenya Commercial Bank (KCB) areamong the international banks with a presence in Rwanda.The Rwandan Capital market is still nascent. The securitiestrading on the Rwanda Capital Market include KenyaCommercial Bank shares, Commercial Bank of Rwanda bondsand Government of Rwanda Treasury bonds.Treaties and Bilateral AgreementsRwanda has signed Bilateral Investment Treaties with Belgium,Luxembourg, Switzerland, Germany, Mauritius and the UnitedStates.Rwanda has signed and ratified the Multilateral InvestmentGuarantee Agency (MIGA) convention. MIGA issues guaranteesagainst non-commercial risks to enterprises that invest inmember countries.Rwanda is also a member of the <strong>Africa</strong>n Trade Insurance Agency(ATI). Both MIGA and ATI cover risks against restrictions onimport and export activities, inconvertibility, expropriation, war,and civil disturbances.Membership of International and Regional OrganisationsRwanda is a member of several sub-regional economic<strong>org</strong>anizations, such as the East <strong>Africa</strong>n Community (EAC) whoseother members are Burundi, Uganda, Kenya and Tanzania.The main objective of the Common Market is to facilitate thefree movement of goods, capital, services and persons withinthe East <strong>Africa</strong>n region.Rwanda is also a member of the EconomicCommunity of the Great Lakes (CEPGL)together with the DRC and Burundi, and ofthe Common Market for Eastern andSouthern <strong>Africa</strong> (COMESA), a bloc of 2165
countries with a Free Trade Area.Economic DevelopmentsIn 2008 Rwanda embarked on a major overhaul of its legal,regulatory and institutional framework to create a morefavourable operating environment for business. A number ofnew, business friendly laws have been enacted. These includethe new Companies Act, the Insolvency Law, the Arbitration Law,the Secured Transaction Law, the Electronic Transactions Law,the Mortgages Law, the Credit Reference Bureau Law, the newLabour Law and the new Intellectual Property Law.Key Industry SectorsRwanda’s economy is predominantly agricultural. Agriculture isresponsible for 41.7% of GDP, industry for 14.1% and services44.2%.Rwanda’s industrial sector is small but growing at a rate of 8% peryear. It is mainly involved in the processing or manufacture ofcement, beverages, soap, furniture, shoes, plastic goods, textilesand cigarettes.The Services sector is still under developed but is growing fast. Itis expected that it will grow faster with Rwanda’s entry into theEast <strong>Africa</strong>n Community (EAC).Labour RelationsLabour is readily available. However, highly skilled professionalsare limited owing to the country’s tragic past. With the hugeinvestment in education which the Government has made, therewill be a corresponding improvement in the quality of the labourforce. Trade Unions are not strong although collective bargainingagreements are in force for a few companies.Yearly work permits for foreign employees can be obtained at afee of US$85 (East <strong>Africa</strong>n citizens are not required to pay thisfee). They are obtainable within 3-5 days from the date ofapplication.66
Change language