Rwanda is considered one of the easiest places to do business in Africa. There is less government bureaucracy when it comes to registering a business. On average, for instance, it takes 6 hours to open a business in Rwanda. Business registration is done with Rwanda Development Board (RDB), a government institution mandated to accelerate Rwanda’s economic development by enabling private sector growth. This article covers insights aspiring entrepreneurs’ need in order to embark on their business endeavors in Rwanda with confidence and clarity in terms of registration requirements, procedures, and possible business categories. First and foremost, the business registration process is fully automated. You can register your business online and it is free of charge. This has particularly made business registration in Rwanda very easy and fast. The registration portal is accessed via: https://brs.rdb.rw/busregonline or by visiting rdb.rw, navigating through e-Services, and choosing Business/Company Registration. Also Read: Business Registration in Rwanda | How To Register A Business In Rwanda. In case of challenges, a registration support team is available to assist at the Registrar General's office located in the RDB building for those in Rwanda. The following are requirements you need to tick for registration: 3 Preferred names of the Business A Description of the activities of the business Passport size photographs of all the directors and shareholders Physical and e-mail address, telephone number and occupation of all shareholders/directors of the proposed company Local physical address of the business Share apportionment percentage. More to the easy and quick process, below is a number of interesting facts: After registration, within six working hours the applicant receives a certificate of establishment by e-mail. The number of shares subscribed may increase after registration After registration, changing the description of the company, names, addresses, business activities, directors or board members, distribution and transfer of one share and deregistration are allowed at any time when approved by the notary. RDB looks after investors from the time they are looking for an idea to the time they find an idea about investing in Rwanda and after they invest in Rwanda. RDB has an after care department of about 20 people that provide after registration services your business may require. Watch: https://www.youtube.com/watch?v=zDt1K9UJ8FE Upon registration, Rwanda groups businesses into two: Individual enterprise and a company as elaborated below: Individual Enterprise: An Individual Enterprise is an unincorporated business with a single owner who pays personal income tax on profits earned from that business. It is the simplest form of business to set up. It is common among individual self-contractors, consultants or small business owners. Individual Enterprise owners do business under their own names because creating a separate business or trade name isn’t necessary. However, they are allowed to have one. Read: https://org.rdb.rw/business-registration/ Company: Companies are grouped as private and public as elaborated below: One of the big advantages of running a business as a company is that all debts incurred by the company are the company’s own liabilities – they are not directly the legal liabilities of the shareholders or of the directors., unlike an unincorporated business, the company exists as a separate legal ‘person’ from the shareholders and the directors. Just like a natural or ‘real’ person, the company can own property (such as money, land, intellectual property etc) and can also be responsible for its own debts. In this way, the liability of the people who run the company is said to be ‘limited’; their liability extends only to the ‘stake’ that they have in the company. Incorporated companies belong to the following categories Private Companies Private companies are further sub-categorized as: Limited by shares A private company limited by shares is formed by physical or moral persons, limited to their shares; it does not require any minimum initial share capital. Minimum shareholder is 1 and maximum of 100 shareholders. The shares usually refer to the stake held by the company’s shareholders. In such a company, the shareholders’ obligation is to pay the company for the shares they have taken in it. The individual puts money into the company, and in return the company gives it a percentage of ownership, in the form of shares (how much of a company the individual in question owns depends on how many shares he/she has in comparison with the other people, if any, who own shares in that company). Limited by guarantee A company limited by guarantee is owned by individuals and/or corporate bodies known as ‘guarantors’. Guarantors do not have any shares in the company and, generally, they do not take any of the profits. The owners of a company limited by guarantee will agree to pay a sum of money, known as a ‘guarantee’, if the company has any debts or becomes insolvent. The majority of companies limited by guarantee are set up by non-profit organizations such as sports and social clubs, unions, or cooperatives etc. Unlimited An unlimited company is very much like a regular private company limited by shares, since it does not have to use unlimited in its company name; the main difference arises when insolvency occurs. When formal liquidation happens and the company is unable to pay off its debts, the creditors will be able to use the personal assets of the directors and shareholders in order to pay off the liability. This means that regardless. Public Companies A public limited Company is formed by physical or moral persons. Liabilities are limited to their shares and minimum initial share capital is set by Regulators. A public limited Company has no limitations on the type of business in which it may engage in, on the number of shareholders and on listing its shares on a stock exchange. Minimum shareholders is 1 and there is no set maximum number. NB: A public company is always limited. It cannot be unlimited. A company limited by shares and by guarantee may be public or private. However, a company limited by guarantee or an unlimited company cannot be a public. Private Companies cannot engage in the business of banking, insurance, and finance. Investors wishing to participate in these sectors are required to set up public companies. Understanding the distinctions between Individual Enterprises and Companies, especially private entities categorized by shares, guarantee, or unlimited liability, is crucial for prospective business owners. Lastly, the Registrar General shall not reserve a name with any of the following characteristics: Which, or the use of which, would contravene any law Which goes against good morals Which is identical or almost identical to a name that the Registrar General has already reserved for another company; Which is identical with that of an existing company, or statutory corporation, or so nearly resembles that name as to be likely to mislead, except where the existing company or statutory corporation is in the course of being dissolved and signifies its consent in such manner as the Registrar General requires Which is misleading In conclusion, registering a business in Rwanda presents an exciting opportunity facilitated by the Rwanda Development Board (RDB), offering a fully automated process accessible online at no cost. The process is not only easy and fast, but also supported by a dedicated team at the Registrar General's office for local assistance. Notably, the post-registration services provided by RDB ensure ongoing support for investors. Additionally, compliance with naming conventions enforced by the Registrar General is imperative to avoid legal complications. The author is a Usability specialist & Technical writer at KudiBooks, a cloud-based accounting software and payment solution.
