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How to Register a Sole Proprietorship in Uganda

For contractors
May 14, 2021
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Uganda, officially the Republic of Uganda, is a landlocked country located in East-Central Africa. Uganda gained its independence from Great Britain in 1962 and has been an independent republic since.

The country has, due to its wet climate and dominantly warm weather, huge agricultural potential, and therefore that part of industry plays a major part in Uganda's economy.

Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.

Sole proprietor in Uganda

A sole proprietor in Uganda is defined as an individual who is engaged in business on their own account and has unlimited liability for the business debts.

Registering as a sole proprietor in Uganda

To become a legal sole-proprietor in Uganda, you need to register with the Uganda Revenue Authority (URA) to obtain a formal trade name and Tax Identification Number, which are used for recognizing a legal entity.

To register as a sole proprietor with the URA, you will need the following documents:

  • Copy of two identification documents e.g., driver's permit, voter's card, passport, employer ID, national ID, etc.
  • A completed individual application form

Registering a business name in Uganda

Registering your company name is being done at the Registrar's office, and it takes two days to complete and costs UGX 25,000 (EUR 5,6).

The following registration procedures include 

  • Paying registration fees at the given bank (around RHX 100,000 + RHX 2,500 bank charges)
  • Registering at the Uganda Revenue Authority's local office where you gain a Tax Identification Number(TIN), or registering online via URA E-Service

Taxation system for sole proprietors in Uganda

If monthly chargeable income does not exceed RHX 235,000 (EUR 56), no income tax is charged.

If monthly chargeable income exceeds RHX 235,000, the income tax is charged on the following schedule:

  • For monthly income RHX 235,000 - RHX 335,000: 10% on the amount that exceeds the lower boundary
  • For monthly income RHX 335,000 - RHX 410,000 : RHX 10,000 (EUR 2,25) monthly plus 20% on the amount that exceeds 335,000.
  • For monthly income over RHX 410,000: RHX 25,000 and 30% of the amount that exceeds RHX 410,000 a month.

VAT in Uganda

Anyone whose annual revenue exceeds RHX 150 million is legally obliged to register with the authorities for VAT (Value Added Tax) payments with the Uganda Revenue Authority. The VAT rate stands at 18%.

Also, entities whose revenue is less than RHX 150 million can voluntarily register with the Uganda Revenue Authority.

You can find more detailed information about the tax obligations on the URA (Uganda Revenue Authority) website.

Uganda Revenue Authority has come up with the E-Service, a new and digitalized way of registering for tax, calculating the taxes, and paying them all online and all immediately and in that way reducing a significant amount of time a taxpayer would waste waiting in the queues.

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For contractors
May 14, 2021

Uganda, officially the Republic of Uganda, is a landlocked country located in East-Central Africa. Uganda gained its independence from Great Britain in 1962 and has been an independent republic since.

The country has, due to its wet climate and dominantly warm weather, huge agricultural potential, and therefore that part of industry plays a major part in Uganda's economy.

Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.

Sole proprietor in Uganda

A sole proprietor in Uganda is defined as an individual who is engaged in business on their own account and has unlimited liability for the business debts.

Registering as a sole proprietor in Uganda

To become a legal sole-proprietor in Uganda, you need to register with the Uganda Revenue Authority (URA) to obtain a formal trade name and Tax Identification Number, which are used for recognizing a legal entity.

To register as a sole proprietor with the URA, you will need the following documents:

  • Copy of two identification documents e.g., driver's permit, voter's card, passport, employer ID, national ID, etc.
  • A completed individual application form

Registering a business name in Uganda

Registering your company name is being done at the Registrar's office, and it takes two days to complete and costs UGX 25,000 (EUR 5,6).

The following registration procedures include 

  • Paying registration fees at the given bank (around RHX 100,000 + RHX 2,500 bank charges)
  • Registering at the Uganda Revenue Authority's local office where you gain a Tax Identification Number(TIN), or registering online via URA E-Service
Contracts

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Generate contracts in seconds. We’ll ensure that you're complaint with local labor laws, no matter where you live.

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Taxation system for sole proprietors in Uganda

If monthly chargeable income does not exceed RHX 235,000 (EUR 56), no income tax is charged.

If monthly chargeable income exceeds RHX 235,000, the income tax is charged on the following schedule:

  • For monthly income RHX 235,000 - RHX 335,000: 10% on the amount that exceeds the lower boundary
  • For monthly income RHX 335,000 - RHX 410,000 : RHX 10,000 (EUR 2,25) monthly plus 20% on the amount that exceeds 335,000.
  • For monthly income over RHX 410,000: RHX 25,000 and 30% of the amount that exceeds RHX 410,000 a month.

VAT in Uganda

Anyone whose annual revenue exceeds RHX 150 million is legally obliged to register with the authorities for VAT (Value Added Tax) payments with the Uganda Revenue Authority. The VAT rate stands at 18%.

Also, entities whose revenue is less than RHX 150 million can voluntarily register with the Uganda Revenue Authority.

You can find more detailed information about the tax obligations on the URA (Uganda Revenue Authority) website.

Uganda Revenue Authority has come up with the E-Service, a new and digitalized way of registering for tax, calculating the taxes, and paying them all online and all immediately and in that way reducing a significant amount of time a taxpayer would waste waiting in the queues.