Business Times will for the next few weeks publish a series on the new investment law launched by the government last year. The series by Dr. Elvis Mbembe, a law don at University of Rwanda’s School of Law and an advocate for economic and social rights, will examine the policy in view of helping Rwandans and investors understand it better to benefit from it, as well as present its shortcomings

Last week, I looked at the areas of the economy a foreign investor can participate in. Today, I will discuss the requirements that one should fulfill to register an investment project in Rwanda.

Article 11 of the new investment law lists documents that investors must have when applying for an investment certificate. They includes the certificate of legal personality of business company, a detailed business plan, a table indicating five-year income projections for the investment project, an environmental impact assessment certificate issued in accordance with relevant laws, projected number of employees and categories of employments, license granted by the business sector in which he/she intends to operate, and the proof of payment of registration fee.

It is important to note that in order to gather elements listed above, the investor is entitled to receive adequate support from Rwanda Development Board (RDB), which has the duty to give to investors any "appropriate investment-related support that may be required”.

In comparison with the old law, where according to its article 14 this kind of support could be provided to investors only "if considered necessary”, the new law makes it a right for investors to receive support from RDB staff. As soon as the investor has fulfilled these requirements, an investment certificate has to be delivered to them within two days. It is worth noting that the new law has drastically reduced the timeframe for the issuance of investment certificate down from 10 days to only two days only from the date of receipt of the application.

An investment certificate can be cancelled if, after its issuance, it is found that the declaration on the basis of which it was issued was false or fraudulent; if in investment operations there occurred material changes detrimental to investments; or if the investor fails to fulfill his/her obligations which include, according to article 13, the implementation of their proposals in accordance with the submitted business plan in application for an investment certificate, a proper keeping of financial and accounting records of the investment enterprise and submission of a copy of a certified financial report to RDB within three months following the preceding financial year. New ventures must data on their operations to facilitate RDB in its monitoring duties. They are also expected to respond to any query from the RDB in connection with operations in a given times; register with the tax administration body and file tax returns timely even they are entitled to tax exemption.

In relation to cancellation of an investment certificate, two improvements were introduced by the new law: the validity of the certificate does not depend on the investor’s personal criminal record, unlike in the old law where an investment certificate could be revoked following a jail sentence of at least six months. The new law discarded this provision. However, in case the investment certificate is cancelled due to false or fraudulent declarations made by any investor, Article 9 of the new law provides for the latter to refund an amount of money equivalent to the incentives they received in their capacity as registered investors.

Nevertheless, the cancellation of an investment certificate is not at the discretion of the investment authority.

Whatever the reason for cancellation of an investment certificate, the investment authority has to issue a written notice to the investor, detailing the reasons that prompted the revocation.

The investor has up to 10 days to file their defence (in writing). It is only when the investment authority is not satisfied with the provided explanations or when the investor does not respond within that given timeframe that RDB can then cancel the investment certificate.

The second improvement concerns the introduction of an appeals process, in case one is not satisfied with reasons for cancellation of their certificate. In case an investor is not satisfied with the decision, they can now appeal to the head of the RDB against it within 10 working days from the day they are notified about that decision.

RDB also has 10 days to make a final decision.

This is change from the old law; in fact the new investment regime makes two changes regarding the appeal against the cancellation of an investment certificate.

First of all, unlike in previous where the appeal was lodged to the minister in charge of investment, now it is the head of RDB who hears the appeal. This is a positive change as it makes the procedure easy and fast.

Investors do not need to deal with a different institution, but the issuing agency.

Secondly, the timeframe given for the appeal’s authority to make a final decision is just 10 days. The old law did not specify any deadlines, which could lead to a lengthy appeal.

After an investment has been registered, what are incentives that an investor can enjoy? This is what we will discuss in the next issue.