The government has unveiled a new set of investment incentives in Uganda aimed at attracting capital from the United Arab Emirates and boosting trade across East Africa. The package includes tax holidays, import duty exemptions, and access to fully serviced industrial parks, signaling the country’s commitment to strengthening its position as a regional investment hub.
What the Incentives Include
According to the Uganda Investment Authority (UIA), the new incentives provide:
- A ten-year corporate income tax holiday for agro-processing investors operating in designated industrial parks or free zones, plus zero import duty on plant, machinery, fertilizers, seeds, and pesticides.
- Similar tax relief and duty exemptions for manufacturers who export at least 80% of their production.
- Exemptions from VAT and import duties for investors in the tourism sector importing equipment, hotel furnishings, and vehicles.
- Full profit repatriation and dividend transfer rights under the 2019 Investment Code.
These measures form part of Uganda’s broader industrialization strategy focused on manufacturing growth, export expansion, and job creation.
Strategic Context and Why It Matters
The move comes as bilateral trade between Uganda and the UAE continues to rise, from about $300 million in 2018 to over $2.8 billion in 2024. Officials say the latest Uganda investment incentives could further strengthen this momentum by attracting Gulf investors to priority sectors such as agro-processing, renewable energy, and tourism.
At the recent Uganda–UAE Business Forum in Kampala, both nations reaffirmed their commitment to deepen economic cooperation, with several UAE firms expressing interest in Uganda’s free zones and industrial parks.
Sector-Specific Opportunities
Agro-processing: Uganda’s fertile land and access to regional markets make food processing a high-return sector.
Manufacturing for export: The incentives encourage integration into global supply chains through export-driven production.
Tourism infrastructure: VAT and import exemptions on hospitality equipment support recovery in Uganda’s tourism sector.
Renewable energy: Uganda is also expanding incentives for solar and hydropower projects to meet regional demand.
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Eligibility and Key Considerations
To qualify for the investment incentives in Uganda, foreign investors must meet capital requirements and, in some cases, operate from designated free zones or industrial parks. Experts advise evaluating infrastructure readiness, power reliability, and logistics before committing to major projects.
Uganda’s Investment Code guarantees profit repatriation and legal protection against expropriation, but compliance with land and environmental regulations remains critical.
What This Means for Investors Based in the UAE
For UAE-based investors, the introduction of the investment incentives in Uganda presents a strategic opportunity to expand into one of Africa’s fastest-growing markets. The combination of tax reliefs, export-friendly policies, and access to over 600 million consumers through the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA) makes Uganda a strong base for regional operations.
If effectively implemented, the new framework could accelerate industrial partnerships, technology transfers, and capital inflows between Uganda and the UAE.
