By David Rupiny
On May 7, 2024, the Annual Investment Meeting (AIM) Congress, sitting in Abu Dhabi, United Arab Emirates, named Uganda as the best investment destination in Africa. The accolade is for Uganda attracting some of the most significant investment projects and providing a conducive environment for investments.
The State Minister of Finance (Investment and Planning), Hon. Evelyn Anite, received the award, on behalf of Uganda, at the Congress, which ran under the theme “Adapting to a shifting investment landscape: Harnessing new potential for global economic development”.
In 2023, at the same Congress in Abu Dhabi, which brings together A-listers in the investment world, Uganda was also named as the best investment destination in East Africa and the Uganda Investment Authority (UIA) was awarded as the best investment promotion agency in East Africa.
These awards, out of many others, signify not only the vast investment opportunities Uganda offers, including in tourism, but also the pivotal role UIA is playing in attracting quality investment projects (in tourism too).
Tourism refers to the short-term movement of people to destinations outside the places where they normally live and work. It also involves the activities of people, referred to as tourists or visitors, during their visit to these destinations and the facilities and services utilized during their stay.
Uganda is top in tourism in the world
Globally, Uganda’s tourism is in good stead, and its potential is brighter!
An international tourism agency, Bradt Guides, has ranked Uganda as the fourth place on Earth to visit in 2024, behind Switzerland, Antarctica and the Falkland Islands, and ahead of Madagascar (fifth position) and Zanzibar (seventh), the only African destinations featured in the top 13 destinations of 2024.
In 2023, cable television network, CNN, listed Uganda as one of the best tourist destinations in the world. National Geographic picked Uganda as one of the best travel destinations in the world. The New York Times listed Uganda as one of the 33 locations in the world to consider when planning travel. In 2012, Lonely Planet named Uganda as one of the best countries to visit in the world. UNESCO, in 2012, declared Uganda’s Bwindi Impenetrable Forest as one of the best birding destinations in the world.
These many and growing accolades are justified by the steady streaming of, amongst others, tourism investment projects in Uganda and by Ugandans.
Uganda has vast, profitable investment opportunities in tourism
On May 21, 2024, UIA received a high-powered delegation from Dubai-based investment firm, Haliburg, scheduled to build three high-end tourist hotels in Bwindi Impenetrable Forest, Queen Elisabeth National Park, and Murchison Falls National Park.
In addition, Haliburg plans to set up an airline to boost domestic tourism by easing air travel between Entebbe International Airport and various tourism sites across Uganda.
Haliburg’s interest in Uganda’s tourism sector is not just the latest but represents just a tip of investments and prospects in the sector, which is steadily growing with tourist numbers estimated to be over 1. 6 million per year, contributing 7.7% to the country’s GDP.
Uganda has vast investment opportunities in tourism
Uganda is teeming with investment opportunities in areas like MICE (meetings, incentives, conferences and exhibitions), leisure, adventure, agro-tourism, religious tourism, community tourism, lifestyle, historical sites, cultural sites, accommodation, national parks, nature, people, and marine, amongst others.
These investment opportunities are not only largely untapped but are spread in all nooks of Uganda, all of which enjoy political stability and peace.
Role of UIA in promoting investments in tourism
The Uganda Investment Authority is laser-focused on the tourism sector because it presents vast and rewarding opportunities. Tourism is one of the priority sectors UIA works on and is in sync with perspective plans like National Development Plan III, Government thematic programmes and UIA Strategic Plan 2020-2025.
It is worth noting that UIA has offered investment licenses to 500+ quality tourism investment projects, spanning various areas like accommodation, food services, travel agency, tour operation, reservation service, transportation, storage, and other related activities.
These tourism investment projects are spread across Uganda. The latest investment projects have had planned 27,246 direct jobs.
Most licensed investment projects in tourism are by Ugandans, signifying the important role the citizens are playing in promoting investments in the sector.
Key source countries for investments in tourism in Uganda
Key source countries for investments in tourism in Uganda are Kenya, Denmark, Netherlands, Rwanda, United Kingdom, Germany, India, Australia, Israel, Austria, United States of America, South Africa, Ethiopia, Canada, New Zealand, Belgium, and Pakistan.
Others are China, South Korea, Mauritius, Italy, Malaysia, Denmark, Mali, France, Lebanon, Sweden, Botswana, Poland, Somalia, Taiwan, Thailand, Russia, Seychelles, Sudan, Egypt, Nigeria, Turkey, Japan, Zimbabwe, Sudan, Norway, Finland, Spain, and Congo Brazzaville.
UIA collaborations in the tourism sector
In promoting tourism investments, UIA works hand-in-glove with key sister agencies like the Uganda Tourism Board, the Uganda Wildlife Authority (UWA) and the National Forestry Authority, amongst others. With UWA, UIA is promoting and attracting high-end tourism investment projects in Uganda’s national parks, and the process is in overdrive. The sites include national parks like Murchison Falls, Queen Elisabeth, Kidepo Valley, Bwindi Impenetrable Forest, Semuliki, Mount Elgon, and Pian Upe.
UIA also works with private sector players like The Giants Club Conservation and Tourism Investment Initiative, a key player in the UIA One-Stop Centre. The Giants Club promotes responsible conservation and tourism development. It identifies exclusive concession sites to invest in responsible commercial tourism facilities within the boundaries of Uganda’s most outstanding, well-established protected areas.
The Giants Club also promotes investment opportunities for the co-management of protected areas through public-private partnerships (PPP) in long-term rehabilitation, management and tourism development of underutilized protected areas.
UIA One-Stop Centre promotes tourism investments
The Uganda Investment Authority is a One-Stop Centre for Investors in Uganda, aggregating key investment and business support services, including in tourism. UIA is, therefore, a key point of call for those interested in investing in Uganda’s tourism sector. UIA has in place a special desk with dedicated officials whose stock-in-trade is tourism investment promotion.
According to UIA’s tourism focal person, Simon Ngabo, Uganda offers an investor-friendly atmosphere for those interested in the tourism industry, with the UIA One Stop Centre (at the Uganda Business Facilitation Centre on Plot 1, Baskerville Avenue, Kololo, Kampala) addressing all investment and business startup requirements, including services from both public and private agencies.
Incentives in the tourism sector
To ensure that players in the hotel-accommodation and tourism sector get a fair return on investments, the Government of Uganda continues to prioritize the sector. Over the years, many incentives have been introduced to boost the development of the sector. (Source: Uganda Revenue Authority’s A Guide to Taxation of the Hotel and Accommodation Sector, 2023/24).
These incentives include:
- Private employers of persons, 5% of whom are people with disabilities (PWDs), get a deduction of 2% income tax indefinitely.
- Compliant taxpayers are offered a 6% withholding tax exemption on payment for goods and services and professional fees, 12 months renewable.
- All taxpayers are offered a 100% deduction of training expenditure, indefinitely, for training permanent residents or providing tertiary education not exceeding in the aggregate 5 years.
- All taxpayers are allowed to carry forward losses; assessed loss is carried forward as a deduction in the following year of income. Allowable is full carry forward of losses for seven years of income and only 50% carry forward of losses is allowed in the following year of income and the subsequent years of income.
- A developer of a hotel or tourism facility with a room capacity of 30 who invests at least $8m is exempted from VAT on the supply of feasibility study, design, and construction services; or on the supply of locally produced materials for the duration of the development. This also applies to a developer of a facility for meetings, conferences, and exhibitions whose investment capital is not less than one million United States Dollars
- VAT Registered taxpayers with a turnover of UGX150m with the ability to keep proper books of accounts, and make taxable supplies, are eligible for incentives indefinitely.
- A hotel or tourism developer who invests at least $8m for a facility with 100-room capacity receives Nil Stamp Duty on debenture, further charge, lease of land, increase of share capital, transfer of land, and agreement to provide services on conducting a feasibility study or developing a design for construction. This is for the duration of the development.
International tax incentives
According to the Uganda Revenue Authority, any of the following goods engraved or printed or marked with the hotel logo imported by a licensed hotel for its use, are free of import duty: washing machines, kitchenware instruments and utensils, cookers, fridges and freezers, boxes, cabinet, air conditioning systems, cutlery, television sets, carpets, furniture, linen and curtains, gymnasium equipment, bathrobes, clothes-dryers, motorcar for transportation of tourists imported by tour operators, sightseeing buses, overland truck, and tourism boats.
*** David Rupiny is UIA’s acting Deputy Director for Communications and Public Relations
