Directors, governance and the company secretary: the resident director rule, eligibility, duties and conflicts, appointment and removal, how the company signs, the resident company secretary, public company boards and the 2026 CMA governance regulations

The board: numbers and composition

Under Law N° 007/2021 of 05/02/2021 governing companies, as amended by Law N° 019/2023 of 30/03/2023, the business and affairs of a company are managed by or under the direction of its Board of Directors, which has all the powers needed except those the Law or the incorporation documents reserve to the shareholders or others; in a private company with one director, that director exercises the board's powers (Article 144). Notwithstanding anything in its incorporation documents, a private company must have at least one director and a public company at least two (Article 153). Directors act collegially, and the incorporation documents should fix a number sufficient to make up a quorum. The Law imposes no maximum, no nationality condition and no requirement for employee or local shareholder representation on the board of an ordinary company.

The first directors are those named in the incorporation documents, each of whom must consent in writing; later directors are appointed by ordinary resolution of the shareholders unless the incorporation documents provide otherwise (Article 154). Directors are voted on individually: a single resolution appointing two or more people may be put only if the meeting first agrees, without any vote against, that it may be put that way (Article 155). Joint venture articles commonly give each shareholder the right to appoint and remove a set number of directors by notice, which the Law allows because Article 154 is subject to the incorporation documents.

The resident director rule

Every company must have at least one director ordinarily resident in Rwanda. The rule appears three times: among the essential requirements for every company (Article 6, 4°), among those for a private company (Article 7, 4°), and on its own in Article 157: "A company must have at least one (1) director who resides in Rwanda." It applies to companies owned by foreigners and by Rwandans alike, and to a single-director company, whose only director must then be resident. An earlier version of the Be Rwanda Wise FAQs stated that Rwandan companies generally need no resident director; that is not correct, and RDB's registration system, banks and practitioners all treat the rule as mandatory.

The test is residence, not nationality. A foreign national who lives in Rwanda under a valid residence or work permit can be the resident director, as can a Rwandan citizen. Many foreign-owned subsidiaries meet the rule by appointing the local general manager, who needs a permit from the Directorate General of Immigration and Emigration (DGIE) in any case (Work permits and residence permits); others appoint a Rwandan professional as a non-executive director. Anyone accepting the role should understand that a resident director carries the same duties and liabilities as every other director, and often receives the Registrar General's and the tax administration's correspondence first. Some tax regimes add stricter substance tests on top of Article 157: the preferential regimes for holding companies and entities promoted through the Kigali International Financial Centre require, for example, a proportion of resident directors and board meetings held in Rwanda (Investment incentives).

Who may be a director

A company appoints a natural person as a director only if he or she: (1) is at least 16 years of age; (2) if he or she has been bankrupt, has been discharged; (3) is not disqualified by a court order; (4) has not, in the immediately preceding five years, been sentenced to a penalty under the Companies Law, the law regulating the capital market or for economic crimes; (5) meets any qualification in the company's incorporation documents; and (6) does not have a mental disability certified by a recognised medical doctor (Article 156). A company therefore cannot itself be a director; a corporate shareholder acts through the individuals it nominates.

A person who is disqualified but acts as a director is treated as a director for the purposes of every provision of the Law that imposes duties and obligations on directors (Article 156), and the acts of a director are valid notwithstanding a defect in his or her appointment or qualification (Article 159). The practical message for groups is that someone who behaves as a director, for example a regional executive who in fact runs the Rwandan subsidiary without being on the register, may carry a director's exposure without the protections of formal appointment.

What directors owe the company

The fundamental duty of a director is to act in good faith in a manner that he or she believes on reasonable grounds is in the best interests of the company, and to use reasonable diligence in the discharge of the duties of the office (Article 147). The duty is owed to the company, not to the shareholder who appointed the director, but the Law makes three group exceptions where the incorporation documents expressly permit them: a director of a wholly owned subsidiary may act in what he or she believes is the best interests of the holding company; a director of a subsidiary that is not wholly owned may do so with the prior agreement of the other shareholders; and a director of a company carrying out a joint venture between its shareholders may act in the best interests of a shareholder in connection with that joint venture. Without the enabling clause in the articles, nominee directors of a foreign group remain bound to put the Rwandan company first.

Directors must also not act, or agree to the company acting, in a manner that unfairly prejudices or discriminates against any existing shareholder (Article 148) or contravenes the incorporation documents or the Law (Article 149). Under the solvency duty, a director must not agree to the company entering into a contract or arrangement unless he or she believes on reasonable grounds that it does not involve an unreasonable risk of the company failing the solvency test, and must not agree to the company incurring an obligation unless he or she believes on reasonable grounds that the company will be able to perform it when required (Article 150). Directors must exercise the care, diligence and skill reasonably expected of a director in like circumstances, and must use their powers for a proper purpose (Article 151); they may rely on information and professional advice under Article 152. The duties continue to matter after the company ends: a director's liability survives the company's removal from the register (Article 280), and the insolvency law, Law N° 075/2021 of 06/12/2021, adds offences for carrying on business once an insolvency practitioner has been appointed.

Conflicts of interest and the interests register

A director or controlling shareholder who is interested in a transaction or proposed transaction with the company must, immediately after becoming aware of it, cause the nature and extent of the interest, and its monetary value where it can be quantified, to be entered in the register of interests and the annual report and, if the company has more than one director, disclose it to the board (Article 167). A general notice that the person is a shareholder, director, officer or trustee of a named company is sufficient disclosure for future transactions with that company. Failure to disclose does not invalidate the transaction, but transactions in which a director is interested may be avoided by the company under Article 168, and Article 230 treats a breach of Articles 167 and 168 as unfairly prejudicial conduct. The disclosure duty in Article 167 does not apply in a private company whose shareholders have opted out of it.

The Law also requires disclosure of directors' remuneration and other offices held (Articles 164 and 165), regulates a director's use of company information (Article 170) and dealings in the company's shares (Article 171), and restricts voting by interested directors (Article 169). Particulars of every indemnity or insurance for a director must be entered in the interests register (Article 174). For a foreign-owned subsidiary the most common conflicts are intra-group: management fees, loans and licences between the company and its parent, where the nominee directors are interested through their roles in the group. Recording a standing general notice and minuting the board's consideration of each related-party contract is the safest course, and also supports the arm's length pricing that the tax administration expects (Transfer pricing and international tax).

Appointment, removal and leaving office

Shareholders may, by ordinary resolution passed at a general meeting, remove one or all of the directors before the end of their term, with or without a stated reason, notwithstanding anything in the incorporation documents or in any agreement between the company and the director (Article 160). The notice of the meeting must state that the removal is on the agenda and must be sent to the director concerned. A removed director keeps any right to compensation or damages for termination of office under his or her contract. Because the power overrides the articles, a minority shareholder's protection against the removal of its nominee must be contractual, for example an undertaking by the majority in the shareholders' agreement to vote against removal, rather than a clause in the articles purporting to entrench the director. A director's office is also vacated in the circumstances listed in Article 161, and the appointment, resignation and replacement of the company's directors and secretary are reflected in the annual return, which lists the full names and addresses of the directors and of any secretary (Article 143, as amended).

Changing a director

1. Check eligibility and residenceConfirm that the new director meets Article 156, has consented in writing (Article 154), and that at least one director will still be resident in Rwanda after the change (Article 157).
2. Pass the resolutionAppoint by ordinary resolution of shareholders unless the articles give the power to the board or to a shareholder by notice; to remove, give notice of a general meeting stating the item and sending it to the director (Article 160), or use a written resolution where the articles allow.
3. Update the company's recordsRecord the change in the minutes and the company's records kept under Article 111; obtain the new director's interest disclosures for the register of interests (Article 167).
4. Notify the Registrar GeneralUpdate the company's details on RDB's online system and ensure the next annual return reflects the board; late or incomplete information carries a fine of FRW 200,000 to FRW 500,000 (Article 327, as amended).
5. Update banks, regulators and beneficial ownershipChange bank mandates and any regulator's approved-persons records; if the change alters who controls the board, file updated beneficial ownership information within 14 days (Article 116, as amended).

How the board works and how the company signs

Subject to the incorporation documents, board proceedings are governed by the Registrar General's instructions (Article 145), and the board may delegate its powers to committees of directors or to managing or executive directors it appoints, but not its fiduciary duties; each director remains responsible for the delegate's exercise of the power unless he or she reasonably believed the delegate would act properly and monitored the delegate (Article 146). Articles drafted for a foreign subsidiary should therefore deal expressly with notice, quorum, meetings by video conference, written resolutions of directors and the casting vote, rather than leaving them to the default instructions.

Article 47 sets out how a company enters into contracts. An obligation that the law requires to be made in writing is entered into in writing signed under the company's name by: two or more directors in the case of a public company; one director, or the secretary, or both; the director, in a private company with only one director; any other director or person if the incorporation documents so provide; or one or more attorneys appointed by the company under the Law. Any other obligation may be entered into by any person acting under the company's express or implied authority. These rules apply whether the contract is made in Rwanda or elsewhere and whether or not it is governed by Rwandan law. Counterparties, and banks in particular, therefore ask to see the board resolution or power of attorney behind a signature; the formal requirements for contracts themselves are covered in Commercial contracts in Rwanda.

The company secretary

Article 172, as replaced by Law N° 019/2023, provides that a public company has a company secretary and a private company may have one. Subject to the incorporation documents, the secretary is appointed by the Board of Directors for such term, remuneration and conditions as it thinks fit, and may be removed by the appointing authority. Since 30 March 2023, "the company secretary must be a Rwandan resident". The secretary's duties under Article 173 are to advise the directors on their responsibilities and powers; to inform them of the rules affecting shareholders' and board meetings and the filing of company documents, and of the consequences of non-compliance; to ensure that minutes are properly prepared and registers accurately kept; to ensure that the annual balance sheet and other required documents are submitted to the Registrar General; to ensure that copies of the balance sheet and activity reports reach their destinations; and to perform other duties assigned by the board.

The secretary is also the default keeper of the internal register of beneficial owners: under Article 116, as amended, the register is kept by the company secretary or, where there is none, by the board, and the secretary or other competent person who fails to disclose beneficial ownership information when required is liable to a fine of FRW 500,000 to FRW 1,000,000 (Article 333). The Law sets no professional qualification for the role. For a private subsidiary without in-house staff in Kigali, appointing a resident professional secretary, often a law or accounting firm, is the usual way to make sure that registers are kept in Rwanda, filings are made on time and the beneficial ownership register has a responsible keeper.

Public, listed and regulated companies

A public company must separate the roles of chair and chief executive, establish an audit committee of at least three independent non-executive directors to review accounting and financial practices, financial controls, legal compliance and the external auditor (Article 156), and have a majority of non-executive directors, at least one-third of whom are independent (Article 158). A non-executive director is one who is not part of management, not an employee and not otherwise affiliated with the company, though he or she may own shares; an independent director has no material or pecuniary relationship with the company or related persons, is paid only sitting fees or allowances, and holds no more than 2% of the shares.

Listed companies and companies making a public offer are also governed by Regulations No 002/CMA/2026 of 02/10/2026 relating to the capital market corporate governance, gazetted on 2 October 2026, which repeal the 2012 corporate governance code (Article 50). They provide for a board of seven to eleven members (three to five for SMEs), at least half non-executive and at least one-third independent, with independent directors paid sitting allowances only (Article 6); a reassessment of independence after nine years and rotation of one-third of directors (Article 12); and rules on board committees, risk management, internal audit and sustainability disclosure (Articles 21 to 49), with auditors required to be members of the Institute of Certified Public Accountants of Rwanda (ICPAR). Article 3(b) lists further entities within their scope, including categories of private companies and SMEs; how far that extends to ordinary private companies is not yet clear, and companies near the boundary should seek confirmation from the Capital Market Authority (CMA). Banks, insurers and microfinance institutions are subject to the corporate governance regulations of the National Bank of Rwanda (BNR), including fit-and-proper approval of directors, which apply in addition to the Companies Law.

Indemnity, insurance and personal exposure

A company must not indemnify a director, secretary, auditor or employee for liability arising from acts or omissions in that capacity, or for costs of proceedings, and any indemnity given in breach is void (Article 174). Subject to the incorporation documents, it may indemnify them for costs in proceedings brought by the company in which judgment is given in their favour or they are acquitted or granted relief, and for liability or costs in proceedings brought by third parties that do not result from a failure to act in good faith in the company's best interests. It may also buy directors' and officers' insurance, and particulars of every indemnity and insurance must be entered in the interests register.

Directors are personally exposed to administrative fines for the company's filing failures: where the signed annual accounts, auditor's report and directors' report are not delivered to the Registrar General on time, each director is liable to a fine of FRW 1,000,000 to FRW 10,000,000 (Article 332). A foreign company that misses the registration deadline exposes both the company and its director to fines of FRW 1,000,000 to FRW 3,000,000 each under Article 335, as the OECD Global Forum's 2024 review reads that article (its text refers to a foreign company establishing a share transfer or share registration office in Rwanda). The calendar that avoids these fines is in Compliance calendar after registration.