Investment Licences In Uganda

WHAT YOU SHOULD KNOW ABOUT INVESTING AND INVESTMENT LICENCES IN UGANDA

According to the Investment Code Act 1991, Section 15 (1 and 2), Uganda Investment Authority (UIA) shall issue to the applicant an investment license which shall; Authorize the holder of a license to make all arrangements necessary for establishing the business enterprise described in the license. The Executive Director shall liaise with Government Ministries and departments, local authorities and other bodies as may be necessary in order to assist an investment license holder to comply with any formalities or requirements for obtaining any permission, authorizations, licenses, land and other requirements for implementing the business enterprise.

After a company has been incorporated/ registered (foreign company) in Uganda, it is eligible for an investment license provided its capital investment exceeds US$ 100,000 (Foreign firms) and US $ 50,000 (Local firms).

Application for an investment license is made to Uganda Investment Authority. After all required documentation is submitted along with the filled application form, the investment license is issued within one week.

Documentation required includes:

  1. Copy of the Certificate of Incorporation
  2. Copy of the Memorandum and Articles of Association
  3. A business plan
  4. Proof of financial ability to implement proposed project i.e. bank statement or letter project support form a bank.
  5. Proof of proposed physical location of project Secondary Licenses.

There are some sectors that require regulatory approvals from the relevant entities and these include: energy generation, mining, banking, air transport, pharmaceuticals production, education and health. In most cases, the regulatory approvals/permits/or licenses must be acquired before applying for the Investment License.

BENEFITS OF AN INVESTMENT LICENSE
Benefits of an Investment License to the Holder
The benefits that accrue to the holder of an investment license include:

  1. Assistance in acquiring secondary licenses or approvals except in the following sectors, where a secondary license is mandatory i.e. mining, banking, drugs/ pharmaceutical, as well as the health and education services.
  2. Assistance in recommendations for various services e.g. loans from commercial banks, project development assistance from Development Partners, and introductions to Equity Funders etc.
  3. Assistance in recommendations and the follow up on the acquisition of work permits
  4. Assistance in access to land for investment. Industrial land can be allocated land in the operational and planned Industrial Parks and linkages to private land owners for purchase can be made.
  5. Possibility of Joint Venture Partnerships through the Match making of the licensed domestic investors with foreign inward missions, as well as the establishment of markets for licensed investors to supply raw material or finished products
  6. Participation in outward missions and organized international fora, at which licensed investors (domestic and foreign) get exposure, markets and machinery
  7. Timely access to the one stop centre for all necessary first hand information on any matters regarding their investment
  8. Provision of aftercare services in relation to specific challenges such as tax disagreements, closures due to non compliance, and support in negotiations with other parties e.g. Government Departments, equity funders, Community Based Organisations etc.
  9. Participation in free specialized training and workshops for especially domestic investors who need to build their capacity to measure up to best international practices in carrying out business with Transnational Corporations.

Benefits of an investment license to the Government

The licensing of investments in Uganda provides vital information for the Government in the following areas:

  1. The Monitoring of private sector inflows for purposes of formulating policies that will sustain and increase the current levels of economic growth and development
  2. The assessment of confidence levels of the private sector in the economy deduced from the trends of inflows
  3. The provision of timely and reliable data on foreign assets and liabilities to formulate policies that will guard Uganda’s economy from negative external effects experienced by down turns in the international economies. The data enables government to plan for mitigations against any such destabilizing effects.
  4. Management of the financial sector and planning for aversion of potential economic crises to foster stable growth. It is important in Uganda’s investment promotion, facilitation and retention efforts
  5. Better decision making and to meet international standards and codes in reporting
  6. Compilation of Uganda`s Balance of payments and International Investment Position statistics
  7. Assessment of how foreign investment complements local investment in form of feedback from the private sector, which is critical for policy fine tuning that benefits all stakeholders in the economy
  8. Assessment of the perceptions of the private sector investors on the investment climate in Uganda in order to evaluate the impact of the existing policies. This can be done from the results of the periodic private sector surveys carried out among licensed companies.

INVESTMENT (TAX) INCENTIVES IN UGANDA

The absolute exemption on plant and machinery only applies to plant and machinery used in the agricultural sector. The plant and machinery items are specified under paragraph 1(s) of the second schedule to the VAT Act.

Other importers of plant and machinery benefit from VAT deferment provided under the statutory instruments provided in the VAT Act.

Other incentives under the Income Tax Act include; Income tax exemption on exporters of finished consumer and capital goods produced in Uganda as provided under Section 21(1)(y) of the Income tax Act; and Income tax exemption on income derived by the person carrying on agro-processing.

In addition, investors also benefit from industrial building deduction as per Section 29, and for those in agricultural sector Section 35 provides for more allowable expenditure.

Other reasons why you should consider investing in Uganda

  1. Uganda attained and has had political and social stability since 1986.
  2. Effective macro-economic policies that maintained economic growth at an average of 6.5% and enabled the country to withstand external economic shocks during the global economic downturn from 2008 to 2011 during which the economy still grew by 3%
  3. Natural resource rich country (Human and Minerals).
  4. Totally liberalised foreign exchange regime.
  5. Consistently improving infrastructures.
  6. Trainable and fast adaptable workforce from over 30 universities.
  7. Welcoming population.
  8. No labour tensions.
  9. Dedicated Commercial and Industrial courts for quick resolution of business disputes
  10. A unique multi climate varies from winter on the snow capped Mountain Rwenzori in the west, to the temperate highlands of Western Uganda and tropical forests of the Central region as well as the semi arid North Eastern Uganda.

Angualia Daniel
Managing Partner
M/s Angualia Busiku & Co. Advocates
Plot 3 Parliament Avenue, Raja Chambers
www.lawyers-uganda.com
Email: angualia@lawyers-uganda.com
Mobile Telephone: +256774477656
(Trademarks, company and investment law)

Determine the Value of Your Trademark

HOW DO YOU DETERMINE THE VALUE OF YOUR TRADEMARK?

db410-trademark_protectionIn general, the value of a trademark is based directly on the trademark’s earning power. Where little or no income history is available, however, imagination, common sense and experience may be the best guides to apply in ascertaining a trademark’s value. In addition, studies of the industry in which the trademark will be used or the products marketed, market surveys of probable sale prices and expected profits, and opinions of industry experts may also be applied.

The value of a trademark lies in the goodwill associated with that trademark. Goodwill is an intangible asset that provides added value to the trademark owner’s worth (such as a recognizable brand). However, in many cases it can be quite difficult to ascertain the goodwill and then place a true value on it at a point in time, because of the many variables that must be considered. For example, reasonable people can differ on future expectations, such as opportunities for increasing the value of the trademark and competitive threats and marketplace risks to the trademark. Read more

HOW DO I HAVE A TRADEMARK RECOGNISED AND PROTECTED IN ONE OR SEVERAL AFRICAN STATES

By Ninsiima Irene: Email: ninsiima@lawyers-uganda.com
Regional protection of trademarks in African states that are member states to the Banjul Protocol on Marks is achieved through registration of a trademark(s) in a member state (s) through ARIPO secretariat offices or directly through the Intellectual Property Office of the member state. The African Regional Intellectual Property Organisation (ARIPO) which is an Intergovernmental Organisation for Cooperation among African States on Matters of Intellectual Property is entrusted with the registration of marks and the administration of such registered marks on behalf of the Contracting States.
The Banjul protocol in line with the ARIPO’s objectives was adopted to promote the harmonisation and development of intellectual property laws and to establish common services necessary for the co-ordination, harmonisation and development of intellectual property activities affecting its members. The protocol was adopted on November 9 1993 at Banjul and entered into force on March 6 1997. As of today, it has been ratified by a number of African States that include; Uganda, Kenya, The United Republic of Tanzania, Botswana, Lesotho, Liberia, Malawi, Namibia, Sao Tome and Principe, Swaziland, Zimbabwe, Gambia, Ghana, Kenya, Mozambique, Sierra Leone, Sudan and Zambia. The protocol provides a centralised trademark registration procedure.
Direct registration in a member state is done by an application to the Intellectual Property Office of such member state and the application is considered basing on the domestic legislation of such member state and its requirements. This is in line with the Paris Convention for Protection of Industrial Property, 1883, which incorporates the principal of territoriality and allows a sovereign state to be able to decide on whether a given trademark should be registered basing on its national laws.
All applications through ARIPO Secretariat for the registration of a mark are filed either directly with the Office or with the Industrial Property Office of a Contracting State by the applicant or his duly authorized representative who then transmits the application to the secretariat. Where the applicant seeks to have his mark(s) protected in several countries, such countries have to be designated on the application. The application is considered by the secretariat and once it meets all the formal requirements, it is forwarded by the secretariat to each designated state. Upon receipt of the application, the designated state then considers the application basing on its national laws.
An application for registration of a Mark which has been accepted by any designated State is then published in the ARIPO Marks Journal as having been accepted by the designated State or designated States concerned. At any time after the publication in the Marks Journal of an application as accepted by the designated State or designated States but before the registration of the mark by the secretariat, any person may give a notice of opposition to the application for registration in a designated State or designated States. Once notice of opposition is lodged, the application is treated according to the opposition procedures laid down under the national laws of the designated State or designated States concerned.
Where no opposition has been made or where it has been successfully defended, the mark(s) is registered by the Secretariat office three months after the publication in the Marks Journal. The registration is then recorded in the Marks Register and the Secretariat Office issues to the applicant a certificate of registration. The fact of registration of a mark is then published in the Marks Journal.
The registration of a mark remains valid for a period of 10 years from the filing date and may be renewed for further periods of 10 years.  The renewal of the registration must be effected on or before the date of expiration of the original registration or of the last renewal of the registration though a grace period of 6 months is allowed, in either case, on payment of a surcharge.
The registration of a mark by the ARIPO Secretariat has the same effect in each designated State, with respect to rights conferred by the mark, as if it was filed and registered under the national laws of each such state. The national laws of each Contracting State apply to the cancellation of a registration, whether based on non-use or any other grounds.

Different types of marks which can be registered in Uganda

Different types of marks which can be registered in Uganda
  1. A Service mark. This is a trademark that is used for advertisement of services. For example a hotel can register its mark for its services. Businesses use service marks to identify their services and distinguish them from the services of their competitors.
  1. A Collective mark. This is a trademark that distinguishes the goods and services of members of an association from those of any other undertaking. Collective marks usually belong to a group or association of enterprise. Their use is reserved to the members of such group or association.
  1. Certification mark. This is a mark indicating that the goods or services in connection with which it is used are certified by the proprietor of the mark in respect of the origin, mode or manufacture of goods, quality and other characteristics. The certification mark may only be used in accordance with the defined standards.
  1. Defensive mark. This is a trademark applied for by a trademark owner of a well known trademark for goods and or services that are not intended to be used by that owner. The purpose of filing a defensive mark is to reduce the possibility of other traders using the trademark for unrelated goods or services because the use of the trademark by a third party may cause confusion in the market place. For example the owners of Sumsung trademark which is widely known for electronics may register the same mark for other goods or services which may be plastics, beverages among others in order to prevent others from using the mark.
  1. An Associated mark. This is a trademark that is identical to another trademark which is registered or is the subject of an application for registration in the name of the same person in respect of similar goods.

Exclusive Rights to Use Trademark as a Whole

EXCLUSIVE RIGHTS TO USE TRADEMARK AS A WHOLE AND NOT IN PARTS

It is a well established principle in trademarks law that the exclusive right to use a trademark applies to its use as a whole and not in parts. Many a times a trademark can be a composite trademark having various elements in it, and when the trademark is registered, the protection is provided to the mark as a whole and not in parts.

The principle was recently reinstated by the commercial court division of the high court of Uganda in the case of Tuskys (U) Limited Versus Tusker Mattresses Uganda Limited. Tuskys (U) Ltd, registered a trademark “TUSKYS” in respect of goods in Class 18. On the other hand, Tusker Mattresses Ltd a Kenyan registered holding company of Tusker mattresses (U) Limited registered a trademark in Class 16 in the name and style of: “Time To Go TUSKYS Your Friendly Supermarket”. Tusker Mattresses Uganda Limited which was assigned the trademark runs retail chain supermarkets in Kampala under the said trademark. Tuskys (U) Limited brought the suit alleging that its trademark was being infringed by the defendant who was operating its supermarkets under the name “TUSKYS”. It sought for a permanent injunction restraining the defendant from any further use of its registered trademark among other reliefs.
While agreeing with Tuskys (U) Limited, court stated that there was no doubt that the word “TUSKYS” which is the plaintiff’s mark also stands out in the mark used by the defendant. If the two marks are put side by side as demonstrated below the words “Your Friendly Supermarket” in the mark used by the defendant would distinguish the marks because one would know that that of the defendant is a supermarket as the mark suggests. That if Tusker Mattresses (U) Limited used the trademark assigned to it without leaving out the words “Time To Go Your Friendly Supermarket” it would not cause any likelihood of confusion. The defendant’s abandonment of the mark assigned to it and adoption and use of the mark “TUSKYS” singularly made it identical to the plaintiff’s mark. Tusker Mattresses (U) Limited was ordered to revert back to the use of its assigned trademark “Time To Go TUSKYS Your Friendly Supermarket”.
Court reiterated the concept of considering trademarks as a whole. The proprietor gets exclusive right to the use the trademark as a whole. In the same way, the proprietor cannot preclude others from using any part of the trademark independently or in a combination of difference words altogether. To claim rights over any part of such trademark, the proprietor must apply for registration of such part as separate trademark.

DANGERS OF USING UNREGISTERED TRADEMARKS AND BENEFITS OF REGISTRATION

DANGERS OF USING UNREGISTERED TRADEMARKS AND BENEFITS OF REGISTRATION

What is a trademark?. Different authorities have given the meaning of a trademark. The Trademarks Act 2010 of Uganda defines a trademark to mean: a sign or mark or combination of signs or marks capable of being represented graphically and capable

of distinguishing goods or services of one undertaking from those of another undertaking.

For every successful and time tested corporate brand (trademark), that everyone wants to associate with, behind the scenes, a lot of effort and resources have been sunk into intricate trademark development and aggressive protection. Company brands and trademarks are amongst a company’s valuable assets. A study done by the UK’s IP office reveals that an estimated 6% of most company investments are spent in company brand protection.

Branding starts and centers around your use of distinctive images, symbols, colors and styles, and caricatures, which most appropriately separate and preposition your goods, or services as unique from others on the same market, giving both a protection to your customers and also acquiring brand image and build up brand loyalty amongst your consumers.

Dangers of using unregistered trademarks

Until a name or logo is registered as a trademark, you cannot be certain that it belongs to you. If another person or business registers the mark first, you may find yourself in the highly inconvenient and very costly position of becoming embroiled in litigation and potentially having to withdraw your products, redesign your packaging and marketing literature, and pay damages or an account of profits to the registered trademark owner. Besides the quantifiable costs, you could also risk any goodwill that you may have established in the brand name over the years, over a product that you have painfully taken years to create, just because you didn’t take the extra step of registering it.

Available research from world intellectual property organisation shows that over 80% of SMEs fail to register their trademarks. The majority think that it is not important to their business, with others citing lack of time, lack of understanding of the process of registration and costs associated with registration. By failing to register their trademarks, these businesses are not only damaging their brands and reputation, but also put their businesses at risk and in the end, loose out in the market battle.

Benefits of trademark registration

When you register your trademark, you ensure that you are in a position to prevent others from using or registering a similar one and that is the key to maintaining a strong brand.

Section 34 of the Trademarks Act 2010 is to the effect that a person may not institute proceedings to prevent or to recover damages for an unregistered trademark. Section 35 saves the right of action against a person for passing off goods or services as the goods or services of another or the remedies in respect of the right of action.

Protection under section 35 is only afforded to an unregistered trademark where a mark has acquired a substantial reputation. Even then, the hurdles to be over come in order to succeed in enforcing those unregistered rights against a third party, and the associated costs, are such that many businesses are inhibited from taking the legal action, and those that do, often fail.

By registering its trademark, a business greatly improves its ability to prevent a third party from using or seeking to register conflicting marks, and to seek appropriate remedies, such as an injunction and or damages, in the case of an infringement.

Trademark registrations are also valuable, transferable assets, which can be used as negotiating tools in business transactions and as security for financial transactions. Intellectual capital is recognised as the most important asset of many of the world’s largest and most powerful companies; it is the foundation for market dominance and continuing profitability of leading companies. It is often the key objective in mergers and acquisitions.

 

What to consider while developing a good trademark

Before coming up with the appropriate idea of a trademark, ask yourself, what your particular brand is and what word best expresses your brand. Also imagine what typography conveys the feeling of your brand. For example, what colors are consistent with your brand’s personality?. Your trademark can include a graphic, and if so, choose graphic expression which will best complement your brand. Finally, ask yourself the hard question on whether the trademark helps distinguish your brand from the competition?.

It is important that every business, however small, urgently puts in place an effective and proactive trademark development and registration strategy to ensure that all its brands are properly protected, and that those it enters into contract with to use the those brands are not going to land them in trouble with other trademark owners.

The use of effective trademark watching and monitoring procedures is also fundamental to the maintenance of a strong and enforceable trademark in the market; it helps to identify potential sources of conflict, including potential infringers, and prevents the dilution of one’s trademarks.

Where to find help

You should seek the advice of a trademark attorney for help in developing or implementing your trademark protection strategy. The trademark attorney should be in position to guide you through the trademark selection and registration process and advice on all aspects of the protection and enforcement of your trademarks.

Angualia Daniel

Managing Partner

M/s Angualia Busiku & Co. Advocates

www.lawyers-uganda.com

Email: angualia@lawyers-uganda.com

Mobile Telephone: +256774477656

(Trademarks, company and investment law)