HOW TO SET UP AN ICT COMPANY IN RWANDA

Rwanda is one of the fastest developing African countries with a thriving Information Communication and Technology (ICT) sector. According to the Rwanda Development Board (RDB), as of 2020, the ICT sector grew by 29%, contributed 2% of the country’s GDP and employed around 8,962 workers (0.26% of employment) with a projection of constituting 7% of Rwanda’s exports in less than five (5) years.

Company incorporation in Rwanda is free though the licence for ICT business is not. The Rwanda Utilities and Regulatory Authority is empowered by Regulation No. 013/R/EC-ICT/RURA/2021OF25/02/2021 GOVERNING LICENSING IN ELECTRONIC COMMUNICATION to licence and regulate the activities of ICT business operators in Rwanda. 

This article highlights, in a question-and-answer format, the requirements, cost, and procedures for incorporation of an ICT company and post-incorporation registrations that a potential investor must appreciate before commencing business operation in Rwanda.

How do I set up an ICT company in Rwanda?

In order to set up as an ICT company in Rwanda, the proposed company must be registered as a public limited liability company through the Rwanda Development Board (RDB), under the office of the Registrar General which is the body saddled with the responsibility of business/company registration in Rwanda. 

Thereafter, the company must be licensed by the Rwanda Utilities Regulatory Authority (RURA) for the specific activities that are related to the category of the company’s proposed ICT business in Rwanda.

Is there any minimum share capital requirement for setting up an ICT company in Rwanda?

Generally, there is no minimum share capital requirement for registering a company in Rwanda. 

What are the particulars required to incorporate an ICT company in Rwanda?

Below are the requirements for incorporating an ICT company in Rwanda:

1. Proposed name of company;
2. Nature of business and objectives of the company;
3. Names of the directors of the company;
4. Names of the shareholders if different from the directors;
5. Memorandum and Articles of Association;
6. Particulars of shareholders;
7. Contact information of the directors and shareholders – email address;
8. Telephone number, postal address and residential addresses;
9. Details of division of shares between the shareholders of the company;
10. Proposed physical address of the company;
11. A notarized shareholder/board resolution in their country of incorporation to set up business in Rwanda (for corporate shareholder/director).

What is the cost of incorporating an ICT company in Rwanda?

Registration of companies with the Rwanda Development Board (RDB) is free. However, charges will apply where the company decides to engage in post incorporation activities e.g., increase in share capital of the company, change of directorship, etc.

Kindly note that the licensing of an ICT company by the Rwanda Utilities Regulatory Authority (RURA) is not free; please see below the costs of licence.

Can an ICT company in Rwanda be fully foreign-owned?

Yes, a foreigner can register and fully own an ICT company in Rwanda. The government of Rwanda allows foreign investment and ownership in ICT with no limitation on equity or ownership.

Are there special requirements for foreigners setting up an ICT company in Rwanda?

Yes, it is mandatory for foreigners setting up a company in Rwanda to appoint a resident director in Rwanda who may either be a Rwandan citizen or a foreigner with a valid resident or work permit.

Also, foreigners who will be signatories to the company’s bank account must have their international passport and bank form authenticated/notarized in the nearest Rwandan Embassy/High Commission/Consulate in their country of residence.

Kindly note that appointment of a resident director helps to increase the probability of timely corporate bank account approval.

Does  a company require any regulatory licence to engage in ICT business in Rwanda?

Yes, any company seeking to engage in any kinds of Information Communication Technology operation in Rwanda must obtain a licence from the Rwanda Utilities Regulatory Authority (RURA) before commencing business activities. 

What are the permissible business activities for ICT companies in Rwanda?

Each category of ICT licence specifies the scope of ICT business that its holders can undertake in Rwanda. The permissible activities of an ICT company are based on four broad authorizations, namely:

1. Equipment installation and maintenance;
2. Importing and supplying electronic communications equipment;
3. Managed services; or 
4. Any other services as may be determined by the Regulatory Authority.

Please note that the managed service providers are operators operating under a business model whereby the licensee outsources some of the functions such as operations, resources management and maintenance. Prior to outsourcing any service, all licensed operators must seek authorization from the Regulatory Authority.

What are the categories of licences?

The following are the categories of licences:

1. Network Infrastructure Providers Licence: this licence allows its holders to own, operate or provide any form of active infrastructure or passive physical infrastructure used for carrying or providing services, applications and content. The licensee must construct, install, maintain, protect and operate the network infrastructure associated with transmission, reception and switching of electronic communications or electronic signals as approved by the Regulatory Authority and as described in the license. The licensee must not operate or provide any new network infrastructure not described in the license except with prior approval by the Regulatory Authority.

2. Network Services Providers Licence: This licence is granted to applicants who intend to provide electronic communication services (to be carried in the networks and covers voice, data, Internet, text messaging and other services) to the public. It allows its holders to provide services to those using electronic communications networks, to provide basic connectivity and bandwidth to support a variety of applications services (including but not limited to cellular mobile services, customer access services and mobile satellite services) and Customer Premises Equipment (CPE) for providing ICT network services on commercial basis.

3. Application Service Providers Licence: Application service provider licensees are non-network-infrastructure-based service providers who provide all forms of applications to end users using the infrastructure of network service provider licensees. The applications may be based on speech, sound, data, text, images as well as other ICT services that deliver a particular function to the end user. The access to these services can be through establishment and operation of private facility and network or procurement and reselling of services from licensed facility and/or network service providers. Please note that the Application Service Provider Licence is not issued to a service provider who is regulated by another statutory regulatory body (such as digital financial service providers, online gaming companies, electronic health service providers, etc.). Any applicant falling under this category must request a non-objection certificate from the Regulatory Authority to ensure compliance with the provisions of ICT law and other relevant laws and regulations.

What are the requirements for processing an ICT licence from RURA?

There are general requirements that are common to all the three categories of ICT licence and there are specific requirements that are peculiar to each of the three categories of ICT licence. 

 General Requirements for ICT Licence in Rwanda

A company seeking to engage in information communication technology operation in Rwanda must first submit an application letter addressed to the Director General of the Rwanda Utilities Regulatory Authority in a prescribed form, and accompanied by the following namely:

(a) A copy of certificate of company registration;

(b) Information on technical description of the services to be provided;

(c) Company profile;

(d) The geographical area of activity;

(e) ID or passport of the legal representative of the company;

(f) Information on the shareholding structure;

(g) A detailed business plan; and

(h) Any other information that the Regulatory Authority may consider necessary.

Specific requirements of Network Infrastructure Services Licence

In addition to the general requirements for the three categories of ICT licence, an applicant for Network Infrastructure Services Licence must submit the following:

a) Technical specifications for interoperability and compatibility of the system with other systems;

b) Network roll-out plan and its implementation schedule;

c) Physical presence in Rwanda;

d) Description of the network with 5 years roll out targets;

e) Technical specifications of the equipment to be used within the network;

f) Availability of emergency services;

g) Network plan and construction;

h) Network diagrams and explanations;

i) Targeted customers;

j) Value Proposition;

k) Details of Management Team showing technical and business Management capability;

l) Financial capability supported by proof of funding from a financial institution;

m) Indication of resources that may be required from the Regulatory Authority;

n) Innovation and new technology rollout plan

o) Proof of payment of application fees;

Please note that further detailed requirements may be requested depending on the nature of the applicant’s network infrastructure service.

Specific requirements for Network Service Provider Licence

In addition to the general requirements for the three categories of ICT licence, an applicant for Network Service Provider Licence must submit the following:

a) Network roll-out plan and its implementation schedule;

b) Physical presence in Rwanda;

c) description of the network services with five (5) years roll out targets;

d) technical specifications of the equipment to be used within the network;

e) Availability of emergency services;

f) Network plan and construction;

g) Network diagrams and explanations;

h) Target customers;

i) Value Proposition;

j) Details of Management Team showing technical and business Management capability;

k) Financial capability supported by proof of funding from a financial institution;

l) Indication of resources that may be required from the Regulatory Authority;

m) Innovation and new technology rollout plan

n) Proof of payment of application fees;

Where applicable and upon approval of the licence, the applicant will pay within thirty (30) days, the performance bond equals to USD 200,000 (Two Hundred Thousand United States Dollar), prior to the collection of that licence. However, Network Service Providers ISPs Tier 2 may be required to pay a performance bond equivalent of USD 40,000 (Forty Thousand United States Dollar).

Please note that further detailed requirements may be requested depending on the nature of the applicant’s proposed network service.

Specific requirements for Application Services Licence

In addition to the general requirements for the three categories of ICT licence, an applicant for Application Service Licence must submit the following:

a) Value Proposition;

b) Indication of resources that may be required from RURA;

c) Payment of Application Fees;

d) Technical Specifications, System architecture including details of its features;

e) Performance bond equals to USD10,000 (Ten Thousand United States Dollars) where applicable, submitted not later than one-month prior the collection of the licence;

f) A detailed document describing operational and maintenance modalities of all IT systems. In addition to provide:

• Location of infrastructure or facilities;
• Outsourced operations or systems and details of those involved; and
• Information on specific levels of access and maintenance;

g) A detailed document describing the availability of backup facilities, contingency plans like disaster recovery plans for facilities and incident management plan;

h) documentation that demonstrates that the applicant has the technical experience and capability to manage the system;

i) Quality of Service metrics of the application, such as availability, Mean Time To Repair (MTTR), system uptime, including its terms and conditions and customer contract template with the clients;

j) A description of internal control mechanisms, including, IT infrastructure, policies and procedures, which the applicant has established to comply with the existing Laws and Regulations;

k) Availability of emergency services;

l) Agreement between Telecoms, Banks, Digital Financial Services, and ATM services providers if any.

Please note that further detailed requirements may be requested depending on the nature of the applicant’s proposed application service.

Specific Requirements for Managed Services

An applicant must submit an application letter addressed to the Regulatory Authority accompanied by the following documents:

1. A copy of certificate of company registration provided by the competent authority in Rwanda;

2. Detailed information on with technical description of the services to be provided;

3. Company profile;

4. ID or passport of the legal representative of the company;

5. Information on the shareholding structure;

6. Payment of Application Fees;

7. Any other information that the Regulatory Authority may consider necessary.

In addition to conditions set out above, approval of all partnerships between a licensee and any third party service provider are subject to the following conditions:

a. Specify the service to be provided;

b. Fulfil all technical, operational, safety and other conditions in accordance with applicable laws, regulations and standards;

c. Demonstrate the financial capacity and readiness to perform all related activities applied for and to provide safe and reliable services;

d. Have sufficient employees with appropriate technical qualifications to perform its activities;

e. Present Contracts and any related Service Level agreement with licensees.

Are there categories of applicants that must request for a non-objection certificate from the Regulatory Authority?

Yes, the Regulatory Authority will not issue an Application Service Provider Licence to a service provider who is also regulated by another statutory regulatory body (such as digital financial service providers, online gaming companies, electronic health service providers, etc.). Any applicant falling under this category must request a non-objection certificate from the Regulatory Authority to ensure compliance with the provisions of ICT law and other relevant laws and regulations.  the following must request for a non-objection certificate:

• Digital financial service providers;
• Gaming companies;
• Electronic health service providers;
• Any other area that may be determined by the Regulatory Authority from time to time in the general interest of consumers.

The applicant intending to operate in the services regulated by the Regulatory Authority must apply for the non-objection certificate if the applicant:

1. Has an annual turnover below twenty million Rwandan Francs (20,000,000 RWF) over an initial operating period of five (5) years;

2. Targets to serve a population coverage below hundred thousand (100,000) people;

3. Whose services may not affect national security;

4. Whose services do not have an impact on confidentiality and privacy of his/her customers; and

5. Any other criteria that may be determined by the Regulatory Authority from time to time in the general interest of consumers.

Please note that if an applicant does not fall under one of the conditions above, the applicant must apply for an Application Service Provider Licence.

Are there key considerations adopted by Rwanda Utilities Regulatory Authority in assessing the application for ICT licence?

Yes, in evaluating the application for ICT licence, the Authority issues a licence to an applicant that:

1. Fulfills all technical, operational, safety and other conditions in accordance with applicable laws, regulations and standards;

2. Has demonstrated the technical and financial capacity and readiness to perform all related activities applied for and to provide safe and reliable services in accordance with all applicable laws, regulations and standards;

3. Has sufficient employees with appropriate qualifications to perform its activities;

4. Has demonstrated the capacity to provide accounting reports and financial information required by the Regulatory Authority in the format and details prescribed;

5. A copy of the criminal record certificate issued by the competent authority for management team;

6. Has paid the required fees set by the Regulatory Authority;

7. Has demonstrated that the company will comply with all applicable laws and regulations;

8. Any other substantive criteria that the Regulatory Authority is needed to ensure a fair and equitable process.

Please note that, where required, the Regulatory Authority may require an applicant for Network services and Applications Service providers to provide a performance bond from a bank or insurance company registered in the Republic of Rwanda and when the Regulatory Authority so requires, the applicant must comply with the performance bond requirements.

Also, kindly note that the performance bond must be provided within thirty (30) days from the date of notification by the Regulatory Authority of the requirement of the performance.

What are the procedures for licensing an ICT licence in Rwanda?

i. Upon receipt of a licence application, the Regulatory Authority will notify within five (5) working days the applicant who has not submitted the required information;

ii. After a notification, the applicant may be required to submit any missing information or document within next ten (10) working days;

iii. Where the applicant fails to submit the missing information or document within that time frame, the Regulatory Authority may reject the application and inform the applicant in writing its reasons for rejection and will avail the documents submitted with the application for collection by the applicant,

iv.  Where the applicant does not collect the documents, the Regulatory Authority may dispose them off at the lapse of twenty-five (25) working days from the date of request of missing information;

v. Where all the required documents are complete, the Regulatory Authority will evaluate the application by examining documents and other information submitted by the applicant;

vi. If the Regulatory Authority determines that the licence application is satisfactory, it issues the relevant licence within three (3) months.

Are there other mandatory fillings an ICT operator is required to undertake after incorporation?

Yes, after incorporation the ICT will undertake the following fillings:

1. Registration with the Rwanda Revenue Authority (RRA)

It is mandatory for any person who sets up any taxable business to register with the Rwanda Revenue Authority (RRA) within a period of seven (7) days from the beginning of the business activity.

Kindly note that it is also mandatory for every taxable business activity in Rwanda within a turnover exceeding RWF 20,000,000 (Twenty Million Rwanda Francs) in the previous fiscal year or RWF 5,000,000 (Five Million Rwandan Franc) in the preceding quarter to register for Value Added Tax (VAT) within seven (7) days from the end of the year or quarter respectively.

2. Registration with the Rwanda Social Security Board (RSSB)

RSSB is a government body in charge of social security services that coordinates Rwanda Medical Insurance Scheme (RAMA) and Social Security Fund (SSF).

Please note that it is mandatory for all foreigners working in Rwanda to register with the RSSB.

What are grounds for withdrawal or suspension of ICT licence by the Rwanda Utilities Regulatory Authorities?

Rwanda Utilities Regulatory Authority may decide to withdraw or suspend the licence granted to an Information Communication Technology company at any time if:

1. If the licensee has falsified any record required to be maintained;

2. The licensee committed a second violation of the same fault and in the same year, or

3. The licensee is financially insolvent.

Please kindly note that the maximum duration of the suspension is three (3) months. If the licensee has not corrected the violations that attracted the suspension at the lapse of the period, the licence is duly revoked by the Regulatory Board; suspension is terminated only upon a finding that the following requirements have been satisfied:

i. The maximum duration of the suspension has elapsed;

ii. The licensee has addressed all violations upon which the suspension was based;

iii. The licensee has submitted a written request to the Regulatory Authority to terminate the suspension after having settled the reason for suspension.

What are the applicable costs for obtaining an ICT licence in Rwanda?

The cost of obtaining an ICT licence is dependent on the type or category of operation the applicant seeks to engage in. The applicable fees for obtaining an ICT licence and the types of licences are as follows:

CATEGORY 1: NETWORK INFRASTRUCTURE LICENCE

CATEGORY 2: NETWORK SERVICE PROVIDERS LICENCE

CATEGORY 3: APPLICATION SERVICE PROVIDER LICENCE