Financial Crime World

Rwanda Positions Itself as a Financial Hub in Africa

In an effort to rebrand itself as a financial hub in Africa, Rwanda has introduced a range of initiatives aimed at attracting foreign investors and promoting economic growth.

Key Requirements

To operate in Rwanda, foreign companies must meet certain requirements. These include:

  • Conducting board meetings in Rwanda
  • Having at least two professional or qualified Rwandan residents on their boards
  • Maintaining a physical office in the country
  • Ensuring that at least 30% of the company’s staff are Rwandan nationals
  • Meeting a minimum annual expenditure threshold for investments in Rwanda

Fund Formation

Rwanda offers various legal structures for forming funds, including:

  • Companies
  • Partnerships
  • Limited liability partnerships

Foreign companies can establish these entities in Rwanda and conduct their business activities from there.

Regulatory Framework

The Capital Markets Authority (CMA) is the primary regulator of the financial sector in Rwanda. The CMA regulates the establishment and operation of fund managers, custodians, and other service providers. Fund agreements must be submitted to the CMA, and amendments thereto require regulatory approval.

Substance Requirements

To meet the substance requirements, fund managers and custodians must:

  • Be domiciled in Rwanda
  • Be licensed by the CMA
  • Have a minimum of USD 1 million managed in Rwanda
  • Hold an Investment Manager license issued by the CMA

Capital Retention Requirements

There are no capital retention requirements for legal entities in Rwanda.

Currency Restrictions

Rwanda has no currency restrictions in place, either in terms of functional currency or exchange control for distributions to investors.

International Dispute Resolution

Fund agreements can choose international dispute resolution mechanisms, including arbitration. Foreign arbitral awards are enforceable in Rwanda, and the country is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Private Marketing Rules

Private funds and collective investment schemes (CIS) not licensed or exempted by the CMA are prohibited from publicly marketing their products. This means that only licensed or exempted CIS can be marketed to Rwandan persons or internationally.

By implementing these initiatives, Rwanda aims to position itself as a financial hub in Africa, attracting foreign investors and fostering economic growth in the region.