UGANDA Law and Practice Contributed by: Arnold Lule Sekiwano, Ritah Nakalema, Evelyn Maria Nakigudde and Collette Melvina Awano, Engoru, Mutebi Advocates
The Tax Procedures Code (Amendment) Act 2025 also makes it mandatory for casino, gaming and betting operators to process all wagers and payouts through a centralised payments gateway licensed by the Bank of Uganda and linked to the Uganda Revenue Authority electronic notice system, thereby increasing regulatory oversight and compliance obligations. Non- integration attracts a penal tax of double the gaming or withholding tax due or UGX110 million, whichever is higher, significantly heightening operational and transactional risk, particularly in the context of due diligence and acquisitions in the sector. The Income Tax (Amendment) Act 2024, Cap 338, introduced new tax amendments that are likely to have an impact on M&A activity in Uganda. One key development is the tax exemption for income derived by private equity and venture capital funds regulated by the CMA. The income of individuals and entities meeting spe - cific investment criteria is exempt from income tax. Investors that, within a period of ten years from the commencement of business or from making addition - al capital investment, invest at least USD10 million (for foreign investors) or USD300,000 (for Ugandan citizens operating in urban areas) or USD150,000 (for Ugandan citizens operating in upcountry areas) qual - ify for tax exemptions. However, such investors must meet the following conditions: • at least 70% of their raw materials must be locally sourced, subject to availability; • at least 70% of their employees must be Ugandan citizens, earning an aggregate wage of at least 70% of the total wage bill; and • they must be engaged in the manufacture of elec - tric vehicles, electric batteries or electric vehicle charging equipment; the fabrication of electric vehicle frames and bodies; or the operation of spe - cialised hospital facilities. Furthermore, income derived by private equity and venture capital funds regulated by the CMA is now exempt from income tax. The prior provision that granted non-recognition of capital gains tax on the sale of investment interests in a registered venture capital fund, as long as at least 50% of the sale pro -
ceeds were reinvested within the year of income, has been repealed. This means that venture capital funds are no longer required to reinvest at least 50% of the proceeds of the sale of their interest in Uganda for them not to be charged with capital gains tax. There is also a noteworthy amendment concerning stamp duty under the Stamp Duty Act, Cap 339: investors acquiring shares in a private equity or ven - ture capital fund, or private equity or venture capital funds regulated by the CMA, are not required to pay stamp duty on nominal share capital or any increase of share capital, or a transfer of shares or other securi - ties, to or by them. 3.2 Significant Changes to Takeover Law There have not been any significant changes to the takeover law in the past 12 months, nor is it under review. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies Under Ugandan law, there are no prohibitions and/or restrictions imposed on stakebuilding prior to making a takeover bid. Bidders are entitled to, and often do, build stakes in the target prior to launching an offer; however, it is not a requirement. A bidder may elect to build a stake in the target prior to launching an offer as a demonstration of commitment to the target and a means of increasing the acquirer’s leverage during pricing negotiations. Until a potential bidder breaches the 25% shareholder level of the target, other than for certain disclosure obligations, stakebuilding is unregulated. 4.2 Material Shareholding Disclosure Threshold Under both the Companies Act and USE Listing Rules of 2025, there are material disclosure requirements and filing obligations. A company is obligated to file an annual return at the end of each calendar year. Under the Listing Rules, major shareholders of any class of voting securities must disclose any significant changes in their ownership over the past three years. Similarly, issuers for the Fixed Income Securities Mar -
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