Uganda Free Zones Authority (UFZA) has issued two Developer’s Licenses to M/s BlockChain Technologies (U) Limited and M/s Shree Modern Textiles Ltd to develop Free Zones in Kampala and Jinja Districts respectively.
Free economic zone or free port is a designated area in which companies are taxed very lightly or not at all in order to encourage economic activity.
Free-trade zones are areas in which goods may be landed, handled, manufactured or reconfigured, and re-exported without the intervention of customs authorities.
A free zone may also exist as the result of a mutual agreement between several countries to create a customs-free zone in a designated area. The fact that no duties or taxes are levied in the free zone helps to promote trade, especially the import and export of all kinds of goods.
If multiple countries conclude an agreement to create a joint-free zone, all barriers to trade are abolished. No duties or taxes are levied within the free zone.
This freedom from barriers attracts companies from all sectors and encourages them to relocate to the free zone and to register new companies.
While handing over the licenses at the UFZA offices in Kampala, the Ag. Executive Director of UFZA, Samuel Kasule, applauded the two Companies for having picked Interest to come and invest in Uganda where there are many business opportunities.
“Now is the time for the Private Sector to harness the opportunities that are in Free Zones especially the tax incentives that ease the cost of production.
“We are committed to ensuring that the private sector exploits all the opportunities available in the country,” he said.
To ensure that Uganda remains a suitable country for the Private sector, the Government is providing incentives to both fiscal and non-fiscal developers and operators hoping that this will lower the cost of doing business.
Some of the incentives include exemption from taxes and duties on all Export Processing Zone, imported inputs that are for the exclusive use in the development and production output of the business enterprise (raw materials, plant and machinery, spare parts and intermediate goods).
Government has also exempted the developers and operators from all taxes, levies and rates on exports from the Free Zones alongside 10 year tax holiday for a developer in a Free Zone with a capital of at least USD 50 million for a foreigner and $10 million for a citizen among other incentives.
M/s BlockChain Technologies (U) Limited intends to undertake the business of digital innovation/ software production for BlockChain, Big data, Artificial intelligence, Internet of Things, Machine Learning, Robotics and 5G (5th generation wireless networking architecture.
When running at full capacity, the company’s planned direct employment is 800 employees. They will mainly be exporting their services to Dubai (UAE), London, India and South Africa, among others.
“Blockchain technology is the way to go in line with global trends. We are honoured to establish the first of its kind in Africa, focused on BlockChain and emerging technologies” said Kwame Rugunda, the Company Chief Executive Officer.
He further added that they project an additional 1000 indirect jobs to be created over the next 5 years.
At the same occasion, another License was issued to M/s Shree Modern Textiles Ltd which will be in ginning, weaving and making textiles.
The major products expected from the facility include crew-neck t-shirts, polo t-shirts, Terry towels, trousers and full sleeve shirts. The Free Zone that sits on 81 acres is projected to employ 1,500 people directly and create about 4,500 indirect jobs.
“We are currently employing 50 people but the numbers will drastically increase in the next 5 years and will adhere to the Health and Safety Policy in all our facilities,” said Jay Patel, the Managing Director of Shree Modern Textiles Ltd.
The Shree Modern Textile Ltd is a flagship company of the Uganda-based Nile Agro Group of Companies involved in the manufacturing of products like laundry soap, wheat flour, plastic jerry cans, and water tanks.
BY SAMUEL NABWIISO