Daniel is Founder and CEO and has 20 years of experience in the international finance world focusing on cross-border payments, technology and the property sectors. Daniel is widely quoted as an expert within the money transfer industry including by The Economist, The Wall Street Journal, Reuters, CNBC and Bloomberg. Daniel is passionate about helping consumers and businesses find the best and most efficient ways to transfer money internationally.

Contents

Summary

There are currently no restrictions in place limiting international money transfers to or from Uganda. The Ugandan shilling (UGX) can be freely converted to any foreign currency, and is most commonly converted in the UGX to USD currency corridor. Currency transfers are easily made with minor administrative requirements.

Uganda’s money transfer regulations

Uganda does not currently impose restrictions on money transfers or currency conversions that are associated with investments into or out of the country. This includes sending money from salary, investment capital, dividends, or making foreign exchange payments for a service, a lease or a loan. Foreign investors and expatriate employees are able to obtain currency or make currency transfers at a commercial bank without prior approval from the Bank of Uganda, the country's central bank. The US Department of States most recent report on Uganda concludes that there have been no investor reports of issues with making currency transactions to send money to or from Uganda.

The Bank of Uganda enforces a number of regulations and Acts to help ensure financial transactions to or from Uganda for both individuals and institutions are safe, meet standards for international money transfers and remittances, and are not linked to the financing of terrorism or to money laundering.

The Foreign Exchange Act of 2004, the Foreign Exchange (Forex Bureaus and Money Remittance) Regulations of 2006, and the Mobile Money Guidelines of 2013, provide for licensing and regulation of any institution that engages in foreign exchange transfers. In 2013, Uganda implemented the Anti-Money Laundering Act and, along with the Financial Institutions (Anti-Money Laundering) Regulations, which were enacted in 2010, impose a number of know your customer requirements on banks and other financial institutions that are involved in money transfers abroad. These regulations give the Bank of Uganda and the soon-to-be-created Financial Intelligence Authority the ability to impose restrictions on any money transfers or remittances that are found to be connected to money laundering or the financing of terrorism.

Uganda’s monetary and regulatory authority

The Bank of Uganda is the countrys central bank. Established in 1966, it is owned fully by the Ugandan government, although it is not a department of the government. The bank is responsible for overseeing and regulating all currency exchange transactions for the shilling (UGX), Ugandas official currency, and for setting banking and financial regulations for the country, regulating the money supply through monetary policy, managing the countrys foreign reserves, and managing the countrys debt, among other duties. The Bank of Uganda has set little to no restrictions on capital flows and fx payments, and has imposed a number of regulations to help ensure the safety and legality of fund transfers into and out of the country.

Uganda’s economic background

Uganda is a fast-growing country with significant oil reserves, an openness to foreign direct investment, and a number of laws and regulations to protect foreign investors. Since 2000, Ugandas economy has experienced solid growth, with a particularly strong financial sector, as well as energy, infrastructure, and telecommunications sectors. The country has recently experienced high inflation, however, with a rate at around 7% in 2014, and numerous other issues ranging from underfunded schools, hospitals, and social services to poor infrastructure and land resources. In an effort to attract foreign investors, the government of Uganda has devoted resources to initiatives for infrastructure development, increased international trade, promotion of foreign direct investment, and manufacturing.

Foreign investment in Uganda

The government of Uganda encourages foreign investment and currently offers a number of tax incentives for medium and long-term foreign investors. The Heritage Foundations 2014 Index of Economic Freedom gave Uganda an overall score of 59.9, ranking it number 91 out of 178 countries in terms of ease of doing business, property rights, trade freedom, and fiscal and monetary policy. While Uganda ranks as the 10th freest out of 46 sub-Saharan African countries on the index, it ranked low (28th out of 46 sub-Saharan countries) on measures of corruption.

According to the US State Department, Ugandas foreign direct investment nearly doubled in 2012, up from US$900m in the previous year to US$1.7bn, driven primarily by investments to the oil sector. The top countries investing in Uganda, according to Ugandas Bureau of Statistics, are China, India, Singapore, Great Britain, Kenya, and Sudan. Along with oil, the main sectors attracting foreign investment include manufacturing, financial services, real estate, agriculture, forestry, fishing, power, construction and mining.

Policies and laws in Uganda are generally favorable for foreign investors, though the government continues to work on reforms that are needed to help fully equalize treatment of foreign investors. Ugandas Investment Code permits foreigners to participate in all industrial sectors except those dealing with national security or those that require land ownership, and Ugandan law also allows foreign investors to purchase domestic enterprises, or to establish a greenfield investment. Most foreign investors find it easiest to establish themselves as limited liability companies. For more information on what type of companies foreign firms are permitted to establish in Uganda, visit the UIA website.

Currency

The Uganda shilling (UGX) is the official currency of Uganda, replacing the East African shilling in 1966. The shilling was divided into cents until 2013, but today has no subdivision. Besides the shilling, the US dollar, the British pound, and the EU euro are also used throughout the country for transactions. Today, shilling banknotes in circulation are available in denominations of 1000, 2000, 5000, 10,000, 20,000 and 50,000 shilling notes. Shilling coins are available in denominations of 50, 100, 200, 500, and 1,000 shilling coins.