Investment incentives
Tax holidays, exemptions and allowances
Uganda offers incentives under three laws: the Investment Code Act 2019, the Income Tax Act and the free zones provisions. Each incentive has its own qualifying amount, sector and conditions, so read the rule that applies to your project.
Who qualifies
01
Started after the Act took effect
The investment must commence after the Investment Code Act 2019 came into force on 29 March 2019.
02
Meets the minimum capital
The minimum investment capital is set by the Minister through statutory instrument, separately for domestic and foreign investors. Confirm the current amount with UIA.
03
Works in a priority area
The activity must fall within the priority areas listed in Schedule 2 of the Investment Code Act 2019.
Incentives
Income tax holiday for large foreign investments
Foreign investors committing USD 50 million or more.
- Benefit
- Income tax holiday.
- Duration
- 10 years
- Conditions
- The investment must meet the qualification rules of the Investment Code Act 2019.
- Incentives are approved through the Uganda Investment Authority (UIA).
- Law
- Investment Code Act 2019
Agro-processing
Investors whose income comes from agro-processing.
- Benefit
- Full exemption from income tax on agro-processing income.
- Conditions
- Confirm eligibility for the agro-processing category with UIA before investing.
- Law
- Investment Code Act 2019
Export tax holiday
Exporters of finished goods.
- Benefit
- Income tax holiday.
- Duration
- 10 years
- Conditions
- The business must export at least 80% of its finished goods, subject to further conditions.
- Law
- Income Tax Act
Industrial park and free zone operations
Operators in approved industrial parks and free zones. The qualifying amounts depend on whether the investor is a foreign or a Ugandan citizen.
- Benefit
- Exemption from income tax on operations.
- Duration
- Ongoing while conditions are met
- Conditions
- Foreign investors: at least USD 10 million. Ugandan citizens: at least USD 300,000 (USD 150,000 for up-country investment).
- Locally source at least 75% of raw materials.
- Employ at least 75% Ugandan citizens.
- Eligible activities include agricultural processing, pharmaceuticals, building materials, automobiles, furniture, IT, commercial farming, chemicals, textiles, leather and machinery.
- Law
- Income Tax Act (free zones provisions)
Industrial park development
Developers of industrial parks.
- Benefit
- Exemption from income tax on income from letting or leasing facilities.
- Duration
- 10 years
- Conditions
- Foreign investors: at least USD 50 million. Ugandan citizens: at least USD 10 million.
- Law
- Income Tax Act (free zones provisions)
Plant and machinery imports
Investors importing plant and machinery.
- Benefit
- Customs duty exemption, and VAT on the import is deferred and then waived once approved.
- Conditions
- The VAT waiver is granted on approval.
- Law
- Income Tax Act
Research, training and mineral exploration
Businesses spending on scientific research, staff training or mineral exploration.
- Benefit
- 100% deduction (allowance) in the year the expenditure is incurred.
- Conditions
- Applies to scientific research, training and mineral exploration expenditure.
- Law
- Income Tax Act
Employing people with disabilities
Employers where at least 5% of full-time staff are people with disabilities.
- Benefit
- A deduction of 2% of income tax payable.
- Conditions
- The 5% threshold applies to full-time employees.
- Law
- Income Tax Act
Sector-specific exemptions (2024 amendments)
Electric vehicle and battery manufacturers, specialised hospital operators, private equity and venture capital funds, and sales of government securities.
- Benefit
- Income tax exemption for the qualifying activity.
- Conditions
- Each exemption applies only to the activity named in the 2024 Income Tax (Amendment) Act.
- Law
- Income Tax (Amendment) Act 2024
How to apply
Incentives are granted through the Uganda Investment Authority as part of the investment licence. Start with the investment onboarding form or read the licence steps.
Important
This page summarises published information for general guidance. It is not tax or legal advice. Incentives depend on eligibility, approval and the law in force when you invest, and the thresholds above change through statutory instruments and tax amendments. Confirm your position with the Uganda Investment Authority and the Uganda Revenue Authority before you commit capital.
Sources
