Public companies, the Rwanda Stock Exchange and takeovers: the 2012 Takeovers Regulations and the 25% mandatory offer, the Companies Law 50% control-block rule, offer timetable, target board duties, 5% disclosure, insider dealing and the 2026 CMA corporate governance Regulations

The legal framework for listed and public companies

Rwanda's public markets are regulated by Law N°01/2011 of 10/02/2011 regulating capital market in Rwanda (Official Gazette n° 13bis of 28/03/2011), as modified by Law N°45/2018 of 13/08/2018, which rewrote the insider and offence provisions. The regulator is the Capital Market Authority (CMA), re-established by Law Nº 057/2021 Bis of 18/09/2021, which replaced Law N° 11/2011 of 18/05/2011; the 2012 Takeovers Regulations still refer to the CMA under its former founding law, but the powers carry over. The CMA licenses market intermediaries, approves offer documents and prospectuses, supervises disclosure and investigates market abuse. The Rwanda Stock Exchange (RSE) operates the market. On 9 October 2026 it listed ten equities with a total market capitalisation of RWF 6,728,252,759,081, across Main, SME, Fixed Income, Green and multi-currency segments; foreign-currency securities are governed by CMA Directive N° 01/2025 of 30/10/2025 on multicurrency denominated securities. Settlement runs through the central securities depository under Law n° 016/2025 of 02/06/2025 governing the central securities depository, qualified financial contracts and netting agreements.

Three sets of rules apply to a change of control of a listed company. The Capital Markets (Takeovers) Regulations N°10, 2012 (Official Gazette n° 27bis of 02/07/2012) apply to the conduct of all takeover offers, whether voluntary or mandatory, made for listed companies (Article 1), and remain on the CMA's list of regulations in force at 10 October 2026. Law N° 007/2021 of 05/02/2021 governing companies contains its own mandatory-offer rule for public companies in Article 244, which reaches unlisted public companies as well. And from 2 October 2026 Regulations No 002/CMA/2026 of 02/10/2026 relating to the capital market corporate governance set the board, committee and disclosure rules for listed companies and issuers. Competition clearance under Law n° 011/2026 of 26/02/2026 relating to competition and consumer protection, and COMESA or EAC filings where their thresholds are met, apply on top (Merger control and competition law); a listed bank also needs the National Bank of Rwanda (BNR)'s prior authorisation for any acquisition of 5% of its capital or votes under Law nº 044/2024 of 30/05/2024 governing banks (Article 21).

When an offer becomes mandatory

Under Article 41 of the Takeovers Regulations, an offer is required when any person acquires shares carrying 25% or more of the voting rights of a listed company, whether in one purchase or through a series of transactions over time, and when persons acting in concert who together hold less than 25% buy more shares and so take their collective holding to 25% or more. The offer must be extended to the holders of each class of equity share capital, whether or not the class carries votes, and offers for different classes must be comparable. Article 3 presumes concert between a company and its parent, subsidiaries and associated companies; a company and its directors and their close relatives; a company and its pension funds and employee share schemes; a fund manager and the discretionary funds it manages; an adviser and its client; the directors of a target where an offer is imminent; and partners. The presumption can be rebutted, but the burden is on the parties, so a consortium should be assessed before any member buys.

The offer is tightly constrained. It must be in cash, or carry a cash alternative, at not less than the highest price paid by the offeror or any concert party for voting rights in the target during the preceding six months (Article 43). It may be conditional only on the offeror ending up with more than 50% of the votes (Article 42(a)), and no acquisition that triggers a mandatory offer may be made if the offer would depend on a shareholder vote of the offeror or on any other condition, consent or arrangement (Article 42(b)). Between the offeror's board resolution to make an offer and the posting of the offer document, the offeror and its concert parties may not place nominees on the target board or exercise the target's votes without CMA consent (Article 44). The CMA may grant exemptions under Article 48, including for a strategic investment tied to management or technical support, a management buy-out by a majority of the employees, a restructuring the CMA approves, an acquisition of a company in financial distress, an enforcement of pledged securities and the maintenance of domestic shareholding for strategic reasons; exemptions are published in two national daily newspapers.

Article 244 of the Companies Law adds a second test for public companies. A person who intends, alone or with affiliated persons (companies it controls, an individual's family and persons acting in concert), to acquire a control block of 50% or more of any class of a public company's shares must give the company written notice at least 30 days before acquiring it. Within 60 days of the acquisition, the acquirer must offer to all holders of that class at not less than the weighted average price it paid during the six months before acquiring the block, with an acceptance period of at least 30 days, and the whole process must be completed within 120 days of the notice. An acquirer who ignores the rule may not vote any shares of the class. For a listed company crossing 50%, both regimes apply, and in practice the offeror applies whichever rule is stricter on each point: the earlier notice under Article 244, the higher price under Article 43 of the Regulations, and the Regulations' timetable and documents.

A takeover offer for a listed company, step by step

1. Clear the regulatory path before crossing 25%Because a mandatory offer can carry no condition other than acceptances (Article 42), obtain any merger clearance under Law n° 011/2026 (suspensory review of 45 days, extendable once by 15), COMESA or EAC approval and, for a bank, BNR authorisation before the triggering purchase.
2. Approach the target board in writingArticle 5 requires the intention to make an offer to be made first in writing to the target board, stating the securities, the total consideration, how and when the offer may be accepted and how any consideration securities rank.
3. Announce within 24 hoursThe target announces a firm intention notified to it, or rumour and unusual price or volume movement after an approach; the offeror announces where its own actions caused the movement or immediately after a triggering acquisition (Article 8). Announcements appear in at least two national daily newspapers (Article 23).
4. Appoint advisers and confirm fundsThe target retains an independent financial adviser and a licensed Transaction Adviser (Article 9); the offeror's financial adviser or another third party confirms that resources are available to satisfy full acceptance (Article 6).
5. Obtain CMA approval of every documentAll documents are filed with the CMA and may not be released until approved; the final copy goes to the CMA and the RSE (Article 22).
6. Post the offer documentWithin 15 days of the offer, or 20 days for a securities exchange offer, dated no more than two days before dispatch (Article 14), with the Schedule 1 information (Article 15).
7. Target board replyWithin 14 days of posting, the target sends its board's recommendation, the written advice on whether the offer is fair and reasonable, and the Schedule 2 information (Article 16); an agreed deal may use a composite document.
8. Keep the offer open and announce resultsAt least 30 days from posting (Article 17); at least 15 days after it becomes unconditional (Article 19); results to the CMA and the RSE within 24 hours of each closing date and published the next day (Article 29).

The target board: advice, neutrality and responsibility for documents

Once a bona fide offer has been communicated to the target board, or the board has reason to believe one is imminent, Article 11 forbids the board, without the approval of shareholders in general meeting, to take any action that could frustrate the offer or deny shareholders the chance to decide on its merits. The Article lists the usual defensive steps: issuing shares or options, issuing convertible securities, buying or selling assets of a material amount or outside the ordinary course of business, entering into contracts, including service contracts, outside the ordinary course, and buying back or redeeming shares or giving financial assistance for their purchase. Where the company is already contractually bound to take such a step, the CMA must be consulted. Directors of both companies, when advising shareholders, must act only as directors, disregarding their own or their family's shareholdings, and have regard only to the interests of shareholders, employees and creditors (Article 10).

The quality of information is regulated as strictly as a prospectus. Every document must satisfy the highest standards of accuracy and be adequately and fairly presented (Article 24), and must state that all directors jointly and severally accept full responsibility for it (Article 25). Profit forecasts are the directors' responsibility, with a report from the financial advisers and specific assumptions disclosed (Article 26), and any asset valuation must be carried out or confirmed by an independent, professionally qualified valuer whose consent is included (Articles 27 and 28). All shareholders of a class must receive equal treatment as to consideration and information, and no special deal may be struck with some holders without the CMA's prior written consent (Article 4). An adviser with a connection to either party that creates or is likely to create a conflict of interest may not advise the target (Article 9).

Conditions, revisions and how long an offer can last

A voluntary offer must, unless the CMA consents otherwise, be conditional on the offeror and its concert parties holding more than 50% of the votes, and may set a higher acceptance level (Article 38). It may not be subject to subjective conditions whose satisfaction depends on the offeror's judgment or lies within its control (Article 37), and once made it cannot be withdrawn without the CMA's consent unless an express condition has failed (Article 12). The offeror may improve the consideration or extend the offer period; every shareholder, including those who have already accepted, receives the improved terms, and a revised offer stays open for at least 30 days from its dispatch (Article 13). If the offeror or a concert party buys target shares during the offer above the offer price, it must raise the offer to the highest price paid and announce the purchase through the exchange (Article 35). Acceptors may withdraw at any time before the offer closes, following the procedure in the offer document (Article 21).

Article 20, headed 'Final day', provides in all three language versions that, except with the CMA's consent, an offer 'may remain open after' 60 days from posting. The heading and the reference to consent indicate that 60 days is meant as an outer limit, and offerors usually plan on that basis and seek the CMA's consent for anything longer. After an offer that has lapsed or been withdrawn without becoming unconditional, the offeror and its concert parties may not make a new offer for 12 months without the CMA's consent (Article 39); after an offer that succeeded, a person holding effective control may not make a second offer within six months of the close (Article 40). The Regulations contain no squeeze-out procedure for compulsorily acquiring the shares of a residual minority, and none was found in the Companies Law, so an offeror that reaches 90% or more should not assume it can take the company to 100%; a delisting or a scheme approved under the amalgamation rules (Articles 198 to 206 of the Companies Law, which require listed companies to comply with capital market rules under Article 199) is the usual way to deal with remaining holders.

Stakebuilding, disclosure and insider dealing

The English text of Article 46 of the Takeovers Regulations requires a person whose holding of shares carrying voting rights in a listed company, or rights over such shares, reaches 5% or more but less than 25%, or falls from 5% or more to below 5%, to announce the acquisition or disposal and the total holding not later than 9.00 a.m. on the trading day after the transaction, stating the number of shares, the prices, the identity of the persons dealing and the resulting total; holdings of persons acting by agreement are aggregated. The Kinyarwanda and French texts of the same Article refer instead to a band of 10% to 35%. Until the CMA resolves the discrepancy, the prudent course is to disclose at 5%, which satisfies all three versions.

Stakebuilding before an announcement is limited by Article 31: no one who holds confidential price-sensitive information about an actual or contemplated offer may deal in the target's securities between the time an approach is contemplated and its announcement. Purchases by the offeror itself for the purposes of the offer are excepted, unless the offeror or a concert party is a director or employee of the target. During the offer period the offeror and its concert parties may not sell target shares without the CMA's consent and 24 hours' public notice (Article 32), and if talks end, persons privy to them may not deal before the termination is announced (Article 34). Confidentiality must be preserved and a false market prevented (Article 7).

Outside the offer rules, insider dealing is a criminal offence. Law N°45/2018 replaced the definition of insider in Article 41 of Law N°01/2011 and the penalty in Article 69: dealing on inside information is punishable by three to five years' imprisonment and a fine of RWF 80,000,000 to RWF 100,000,000, and refusing to cooperate with the CMA's investigators by one to two years and a fine of RWF 3,000,000 to RWF 5,000,000 (new Article 72 bis). Under Article 39(3) of Regulations No 002/CMA/2026, material information relevant to the value of shares or to investors must be published immediately, so leaks during negotiations can force an early announcement.

Governance of listed and public companies from 2 October 2026

Regulations No 002/CMA/2026 came into force on publication in the Official Gazette n° Special of 02/10/2026 (Article 52) and repeal the Capital Market Corporate Governance Code n° 09, 2012 (Article 50). They apply to listed companies and issuers of securities to the public, and their scope clause also lists companies intending to issue securities to the public, public companies, State-owned companies, private companies and small and medium enterprises (Article 3); how far the CMA will apply them to companies with no securities in the market is not yet clear. The board has at least 7 and at most 11 directors (3 to 5 for an SME), at least half non-executive and at least one third independent, and independent directors are paid only sitting allowances (Article 6). Independence is reassessed by the audit committee after nine years (Article 12). The chief executive cannot be chair, the chair must meet the independence criteria, and the division of their responsibilities is written into the board charter (Article 17). Nominating, remuneration and audit committees are provided for (Articles 21 to 25).

Shareholder rights are strengthened. General meeting documents, including proposed resolutions and voting rules, are posted on the company's website; resolutions on separate issues may not be bundled; remote participation and voting in absentia should be provided for in the articles; and minutes are published within ten days of the meeting (Article 34). Voting follows the principle of one share, one vote within each class (Article 35). The annual report identifies major shareholders, including beneficial owners, and the financial statements follow international standards and are audited under International Standards on Auditing (Article 39). For a foreign acquirer of a listed company, these rules shape the post-closing board: an investor with 60% cannot fill the board with executives, and must plan for independent directors, an independent chair and committee structures. The private-company governance rules that apply below the market are in Directors, governance and the company secretary.

Listing as an entry or exit route: the tax position

Listing on the RSE has tax consequences that make it attractive both for a founder's exit and for a portfolio investor. Gains on the sale of shares and other securities listed on the Rwandan securities exchange, and on shares or units of collective investment schemes, are exempt from capital gains tax under Article 38 of Law nº 027/2022 of 20/10/2022 establishing taxes on income, whereas a sale of unlisted shares is taxed at 10% of the gain since 29 May 2025 under Law nº 014/2025 of 27/05/2025, collected through the resident company whose shareholding changed (Capital gains, property and other taxes). Dividends and interest paid to an investor in a company listed on the RSE bear a preferential withholding tax of 5% rather than the general 15% under Article 60 of Law N° 027/2022 of 20/10/2022 where the recipient is a resident of Rwanda or of the East African Community; point XI of the incentives annexed to Law N° 006/2021 of 05/02/2021 on investment promotion and facilitation also grants a 5% rate on dividends and interest paid to an investor in an RSE-listed company without stating a residence condition, so an investor resident outside the EAC should confirm with RRA whether it can rely on point XI (FAQ 23). A company newly listed on a Rwandan capital market pays corporate income tax at 20% for five years if it sells at least 40% of its shares to the public, or 25% if it sells at least 30% (Article 48(2) of the Income Tax Law, as amended by Law N° 051/2023 of 05/09/2023), instead of the standard 28%.

The exemption in Article 38 refers to listed securities on the Rwandan exchange; whether a privately negotiated block trade in listed shares settled outside the exchange is covered should be confirmed with the Rwanda Revenue Authority (RRA) before signing. Proceeds of a sale of listed shares by a foreign investor may be repatriated under Article 12 of Law N° 006/2021 of 05/02/2021 on investment promotion and facilitation once taxes are settled (FAQ 61), and the bank will ask for documents showing the source of funds (Repatriating profits and capital).