Investment incentives: the Annex to the Investment Code, the 0%, 3%, 15% and export corporate income tax rates, seven- and five-year tax holidays, withholding tax relief, accelerated depreciation, VAT refunds, start-up, film and mining incentives, strategic projects and how incentives are claimed and lost

How the incentive system works

Rwanda's investment incentives are almost entirely in one place: the Annex to Law N° 006/2021 of 05/02/2021 on Investment Promotion and Facilitation (the Investment Code), published in Official Gazette n° 04 bis of 08/02/2021. The Annex has twenty-two numbered parts, from preferential corporate income tax (CIT) rates and tax holidays to withholding tax reductions, accelerated depreciation, VAT refunds, capital gains tax relief and talent and immigration incentives. Article 6 of the Investment Code grants them to a registered investor that fulfils the requirements of each incentive, and allows a registered investor to benefit from incentives in other laws as well. The tax laws defer to the Code: Article 69 of Law N° 027/2022 of 20/10/2022 establishing taxes on income provides that any reduction or exemption of income tax for the purpose of promoting and facilitating investment is carried out under the investment law.

Three consequences follow. First, an investor that has not obtained an investment certificate from the Rwanda Development Board (RDB) receives none of the Annex incentives, however large its project; registration is optional in law but in practice the gateway to every incentive (RDB registration and the investment certificate). Second, each incentive has its own conditions, and the certificate records what the investor is entitled to; holding a certificate does not by itself confer the 15% rate or a tax holiday. Third, the conditions continue: the Rwanda Revenue Authority (RRA) applies the incentive in the investor's tax returns and can deny it in any year in which the conditions are not met, and RDB monitors registered investors to ensure that 'incentives are directed to the projects which adhere to the requirements and the investor's submitted business plan' (Article 16(3)).

Foreign investors receive equal treatment with Rwandan investors 'with regard to investment incentives and investment facilitation' (Article 9), so every incentive described here is available to a foreign-owned company on the same terms. Retail and wholesale trade are excluded from the Code's definition of 'investment' (Article 2(25)) and so fall outside the incentive regime, although they remain open as ordinary business (Sectors open to foreign investors and licensing).

Preferential corporate income tax rates

The standard CIT rate is 28% (Corporate income tax). The Annex replaces it with four preferential rates. 0% (point I) is available to an international company with its headquarters or regional office in Rwanda that invests at least USD 10,000,000 in tangible or intangible assets in Rwanda, provides employment and training to Rwandans, conducts international financial transactions of at least USD 5,000,000 a year through a licensed commercial bank in Rwanda, is well experienced in its sector, spends at least USD 2,000,000 a year in Rwanda, and sets up actual and effective administration and coordination in Rwanda performing at least three of eight listed functions (procurement, strategic planning, marketing, data management, treasury, research and development, training and personnel management, and other shared services). An entity registered by a philanthropic investor with the approval of the Private Investment Committee also qualifies.

3% (point II) is the rate for five vehicles used in cross-border structures: a pure holding company, a special purpose vehicle registered for projects lasting more than two years, a collective investment scheme, a global or paper trading company (on foreign-sourced trading income) and an intellectual property company (on foreign-sourced royalties). Each must meet size and spending thresholds and a common set of substance conditions; these vehicles are the core of the Kigali International Financial Centre and are described in Kigali International Financial Centre.

15% (point IV) applies to registered investors in listed activities: energy generation, transmission and distribution from peat, solar, geothermal, hydro, biomass, methane and wind (excluding an investor executing an engineering procurement contract for the Government); goods transport with a fleet of at least five trucks of 20 tonnes or more; mass transport with at least ten buses of 25 seats or more; manufacturing of textiles and apparel, electronics, ICT equipment, large-scale agricultural operations, processing in wood, glass and ceramics, and value addition in mining and agricultural equipment; ICT and knowledge-based services, manufacturing or assembly (excluding ICT retail, wholesale, repair and telecommunications); innovation, research and ICT training facilities and incubators; licensed financial services firms such as fund managers, collective investment schemes, wealth managers, family offices, fund administrators, fintechs, captive insurers, private banks, mortgage finance institutions, finance lessors, asset-backed securities, reinsurers and trust and company service providers; affordable housing; electric mobility; and adventure and agro-tourism (FAQ 34).

Exporters (point V) pay 25% where exports of goods and services are at least 30% but less than 50% of turnover, and 15% where they are 50% or more. The rate applies for at most five years from the first year in which exports reach 30% of turnover, and eligibility is tested on each year's exports; it does not apply to exporters of unprocessed minerals, or of tea and coffee without value addition (FAQ 35). Outside the Code, Law N° 051/2023 of 05/09/2023 amending the income tax law gives newly listed companies 20% or 25% for five years depending on the share of their capital sold to the public, and Article 46 of the income tax law gives deposit-taking microfinance institutions 0% for five years from approval, renewable on conditions now set by Ministerial Order N° 008/26/10/TC of 24/09/2026.

Tax holidays: seven years and five years

The seven-year holiday (point VIII) is the Code's main tool for very large projects. A registered investor, except an investor in private equity or venture capital, that invests at least USD 50,000,000, contributes at least 30% of that amount as equity, and fully invests it within at most seven years, receives a CIT holiday of up to seven years. The holiday starts in the first year after the year in which the USD 50,000,000 has been fully invested, so the years of construction and ramp-up are not consumed by it. The eligible sectors are energy projects producing at least 25 MW (excluding a Government engineering procurement contract and fuel-produced energy), manufacturing, tourism, health, ICT manufacturing, assembly and services (excluding retail, wholesale, repair and telecommunications), export-related projects, and any other priority sector added by Ministerial Order (FAQ 36).

The five-year holiday (point IX) has two beneficiaries. A specialised innovation park developer or specialised industrial park developer is exempt for up to five years from the first year in which the project makes a positive net income. A licensed microfinance institution is exempt for five years from the date of its licence, renewable on the conditions in an Order of the Minister. No Order has been made under the Code itself, but Article 46 of the income tax law gives deposit-taking microfinance institutions the same five-year 0% rate, and Ministerial Order N° 008/26/10/TC of 24/09/2026, made under that Article and published on 25 September 2026, allows one renewal where the institution has at least five branches outside the City of Kigali in different districts, lends digitally to clients in more than five districts and takes savings, has distributed no dividends since the holiday began, keeps non-performing loans at or below 10%, reports to the National Bank of Rwanda and holds a tax clearance certificate; RRA decides after consulting the National Bank. A holiday removes CIT only: withholding tax on payments the company makes, VAT, PAYE and the other taxes continue, and the company must still register with RRA and file returns (Article 26(6) of the Investment Code).

Withholding tax, depreciation, VAT and capital gains

Rwanda's standard withholding tax on dividends, interest, royalties and service fees paid by residents is 15% (Article 60 of the income tax law; Withholding taxes and tax treaties). The Annex reduces it to 0% on dividends, interest and royalties paid by investors on the 3% regimes and on the 15% financial-services regime in point IV(7) (point X), to 5% on dividends and interest paid to an investor in a company listed on the Rwanda Stock Exchange (point XI), and to 10% on interest on foreign loans, dividends, royalties and service fees, including management and technical fees, paid by specialised park developers (point XII). The 0% rate does not extend to other 15% investors, such as a manufacturer or an ICT company, which still withhold at 15% or the treaty rate.

Accelerated depreciation (point XX) allows a flat 50% in the first year on new or used business assets worth at least USD 50,000 each, for investors in export projects, manufacturing, telecommunications, agro-processing, education, health, transport (excluding passenger vehicles of fewer than nine seats), tourism and construction projects worth at least USD 1,800,000, and other sectors where the investment is at least USD 100,000. The assets must be kept for at least three years; an investor that disposes of them earlier must inform the Commissioner General of RRA and pay back the CIT saved, with penalties and interest, unless the disposal was caused by natural calamity or another involuntary reason.

VAT refunds are made to registered investors within 15 days of RRA receiving the relevant documents (point XIX), against the 30 days that apply to other taxpayers under Article 26 of Law N° 049/2023 of 05/09/2023 establishing value added tax; the faster refund does not apply to investors in VAT-exempt sectors (FAQ 37). The capital gains tax exemption (point XVIII) states that a registered investor does not pay capital gains tax, except that income from selling commercial immovable property is taxable. Law N° 014/2025 of 27/05/2025 raised capital gains tax from 5% to 10% from 29 May 2025 and extended it to licences, debt instruments, options and guarantees; the amending law did not touch the Code, and how RRA applies point XVIII to the wider post-2025 charge has not been confirmed in a published ruling, so the exemption should be confirmed with RRA before a sale is priced on it (Capital gains, property and other taxes).

Exporters, start-ups, film, mining and talent

A small and medium or emerging investor with an export project receives a 150% deduction for qualifying internationalisation costs, on up to USD 100,000 of spending a year: overseas marketing and promotion, trade fairs not supported by another initiative, overseas business development and market entry and research costs, including setting up a foreign entity and the salaries of staff stationed abroad (point VII). The costs must be pre-approved through a joint review by RRA, RDB and the ministry in charge of trade, with the Commissioner General of RRA approving in consultation with the Head of RDB. Products used in export processing zones are exempt from customs taxes and duties under the East African Community Customs Management Act (point VI; Customs and EAC trade).

Start-ups (point XIV): an angel investor, excluding private equity and venture capital funds, investing up to USD 500,000 in a start-up is exempt from capital gains tax on the sale of shares originally bought as a primary issuance and from withholding tax on dividends for five dividend issuances, provided the investment stays in the start-up for at least two years (FAQ 38). Strategic projects and small and medium or emerging investors may obtain financing from the Seed Innovation Fund for manpower, training, equipment, software, professional services and intellectual property costs (point XV). Film investors receive VAT zero-rating on local purchases and 0% withholding tax on approved foreign specialised services, with post-production and co-production spending thresholds of USD 150,000 and USD 500,000 (point XVII). A mining exploration licence holder may carry losses forward for ten years where exploration spending was at least 50% of its spending in the loss years (point XVI; Mineral tax, royalties and fiscal terms).

Talent and immigration (points XXI and XXII): foreign start-up founders and innovative entrepreneurs may obtain a two-year entrepreneurship visa, qualifying graduates a two-year talent visa and remote workers in priority fields a two-year visa; a headquarters or regional office in a talent-intensive, high-value sector may recruit foreign managerial, professional and technical staff if at least 30% of its professional staff are Rwandan; visas under these incentives are processed within two weeks; and a registered investor that invests at least USD 250,000 may recruit three foreign employees without demonstrating that the skills are lacking on the Rwandan labour market (Work permits and residence permits).

Strategic investment projects and negotiated incentives

Beyond the Annex, the Cabinet may grant additional incentives to a registered investor for a strategic investment project (Article 7). Article 5 lists the criteria: an anchor investment with a first-mover effect, a significant impact on a value chain, proof of concept, market-creating innovation, significant scale in investment, output and jobs, or other criteria set by the Private Investment Committee (PIC). The PIC proposes the project to the Cabinet with the sector, the estimated investment and jobs, the additional incentives needed, and the commercial and economic impact, with a cost-benefit analysis of the incentives where applicable (Article 8). Once the Cabinet approves, an agreement is negotiated between the investor and the Government, with RDB representing the Government in the negotiation (Article 16(5)) (FAQ 40).

The Order on the PIC's organisation contemplated by Article 15 could not be located on the Government's law portal at 10 October 2026, and no published list of approved strategic projects exists. In practice an investor seeking negotiated terms approaches RDB's investment promotion team with a business case early, before committing to a site or structure, and expects the agreement to make the incentives conditional on investment, employment and timing milestones.

What changed in 2025 and 2026, and what has not

The Annex itself has not been amended since 2021, and no draft replacement of the Investment Code had been published at 10 October 2026. The changes have come through the tax laws around it. The May 2025 tax package (Laws N° 009/2025 to N° 015/2025 of 27/05/2025, published on 29 May 2025) raised capital gains tax to 10%, removed several VAT exemptions and time-limited others; the VAT exemption for industrial machinery and raw materials ended on 30 June 2026 and Ministerial Order N° 004/26/10/TC of 29/04/2026 confirms that it is not renewed, which raises the cash cost of new plant for manufacturers that relied on it. RRA's VAT Deferral Facility, in force since 1 August 2026, softens that cost for eligible manufacturers and miners by letting them defer import VAT on machinery in Chapters 84 and 85 of the EAC Common External Tariff where the VAT on a consignment is at least RWF 10,000,000, on an application made before the goods arrive (Customs and EAC trade). Ministerial Order N° 008/26/10/TC of 24/09/2026, made under Article 46 of the income tax law, set the conditions for extending the microfinance holiday for deposit-taking institutions.

KPMG's summary of the 2026/27 budget, published on 26 June 2026, lists 'rationalizing tax exemptions' among the medium-term revenue measures without detail, and a study published by the International Growth Centre in December 2025 counted 235 firms that received CIT incentives between 2013 and 2023 and more than 3,300 that received customs exemptions. Investors should expect closer scrutiny of whether the conditions are being met rather than a wholesale withdrawal of the Annex. RDB's online FAQ still refers to a benefit of '10% of the CIF value of building and finishing materials', which comes from the regime before 2021 and is not in the current Annex.

Claiming and keeping an incentive

1. Map the incentive before registeringIdentify the Annex point, its thresholds and its conditions, and build them into the business plan filed with RDB, because the plan is the benchmark against which RDB monitors the investor (Articles 16(3) and 26(1)).
2. Obtain the investment certificateIncorporate, then apply online to RDB with the documents in Article 17; RDB decides within two working days of a complete file (Article 18). The certificate describes the facilitations the investor is entitled to.
3. Register with RRA and apply the incentive in returnsPreferential rates, holidays and accelerated depreciation are applied in the annual CIT return due by 31 March; RRA verifies them at audit. A holiday does not remove the duty to file (Article 26(6)).
4. Use the customs and VAT channelsCustoms exemptions are claimed on the import declaration through the Rwanda Electronic Single Window; in practice the exemption request is approved by RDB and confirmed by RRA customs, but the steps are set by administrative practice rather than published rules, so confirm them with RRA before the first consignment. VAT refund claims are filed with full documents to start the 15-day period.
5. Pre-approve where the Annex requiresInternationalisation costs need joint pre-approval by RRA, RDB and the trade ministry; philanthropic entities need PIC approval; strategic projects need Cabinet approval and a signed agreement.
6. Report and keep evidenceFile the financial report with RDB within three months after each financial year, keep operating data for five years, notify RDB within 30 days before changing, suspending or terminating operations, and keep evidence of each condition (export ratios, staff, spending, asset retention).