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UIA lays out, procedure, Terms and Conditions for accessing land for investment

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UIA lays out, procedure, Terms and Conditions for accessing land for investment

UIA Boss Eng. Frank Sebbowa

Uganda Investment Authority (UIA) is charged by the government of Uganda with, the responsibility of facilitating investors to access agricultural pieces of land for large scale agriculture and also setting up business and industrial parks such as  the Kampala Industrial & Business Park, Luzira Industrial Park, Bweyogerere Industrial Estate in addition to twenty two new Industrial Parks across the country in the following Districts (Arua, Gulu, Lira, Moroto, Soroti, Hoima, Nakasongola, Nakaseke, Luwero, Mubende, Kabarole, Kasese, Bushenyi, Mbarara, Kabale, Rakai, Masaka, Kampala, Jinja, Iganga, Tororo and Mbale). Industrial parks are pieces of land serviced by provision of water, electricity, roads on well demarcated land so that investors can expedite the installation of factories and businesses.

Specific Responsibilities Include:

* Development of a network of Industrial and Business Parks across Uganda both owned and run by UIA and in partnership with district authorities and private developers and investors.

*  Development of a lands database of privately owned land but available for lease or purchase by investors for commercial and industrial purposes that meet the investors’ needs where UIA land is not available or suitable.

The development of Industrial Parks leads to the following benefits:-

Attraction of Foreign Direct Investment.

Employment creation in the country

Promotion of high and sustained national economic growth.

Creation of business opportunities.

Introduction of new and improved manufacturing skill & standards.

The provision of cost effective industrial infrastructure which improves the competitiveness of Uganda as an investment destination.

For all this to happen seamlessly, UIA needs the collaboration of the local government in all the districts earmarked to host the industrial parks. This is one of the reasons for UIA, to establish District Investment Committees (DICs) in conjunction with the local government countrywide. The DICs will assist in the enhancement of SME development as a major driver for economic growth and development.

The allocation of industrial land for both domestic and foreign investors is informed by Uganda’s land policy and guided by the new allocation criteria below:

Application

An application for Investment land shall be on Form UIA 2 shall give:

*A detailed project proposal showing the project business activity and the main products or services to be produced on the land applied for.

*The proposed total amount of investment in US dollars.

*Documented evidence of the Investor’s ability to raise funds to implement the project

*Expected Project Impact on the Economy in terms of job creation, capital investment, turnover and export revenue where applicable as well as other benefits to the community.

*The amount and nature of land (amount of acreage) that shall be required for the project including the necessary infrastructure facilities.

*Evidence of the Investor’s Track Record in terms of experience in implementing similar or related investment projects in the past.

*The anticipated implementation period for the project (in months).

*The anticipated impact of the project on the environment and whether an EIA shall be necessary.

The application for Investment land shall be accompanied with:

*The Memorandum and Articles of Association of the investment entity.

*A copy of the Certificate of Registration issued by Uganda Registration Services Bureau to the applicant.

*The Company’s Investment License issued by UIA.

*A Business Plan articulating in detail items in sub-section 1(a) above

*Preliminary architectural layout of the proposed facilities (giving details of proposed land utilization).

Land Allocation

Procedure:

Application for land by an investor company.

*Evaluation of the application by an Evaluation Committee comprising of the Executive Director and at least three Heads of Divisions of UIA.

*Consideration of the application by the relevant Sub-Committee of the UIA Board.

*Consideration and final allocation of land by the UIA Board.

*Lease offers shall be valid for strictly 14 days within which written acceptance of the offer must be given to UIA.

*Legal documentation (Signing of Lease Agreement with UIA subject to approved terms and conditions and processing of Leasehold certificate of title)

Terms and Conditions for land allocation

Land shall be allocated to Investors on the following conditions:

Only entities recognized under the Companies Act of Uganda for purposes of doing business or similar activities shall be eligible for UIA land allocation.

An initial lease offer of 3 years, within which the Investor would have undertaken substantial development on the land. This term to be extended to a full term of 30 years (or as may be determined by the UIA Board) upon satisfactory development of allocated land.

Those allocated investment land shall pay a premium and ground rent as shall be determined by the UIA Board, unless the land is subsidized in line with the government policy on prioritized investment sectors. (See notes in 4 below).

Investors allocated fully subsidized land (for government prioritized investment sectors) to provide a performance security in form of a bank or insurance bond equivalent to 10% of the value of the leased land valid for 18 months within which period the conditions in subsection (iv) below should have been achieved.

Within 18 months from the date of allocation, the investor should have started development of the land in terms of approved building plans, approved EIA and commenced physical construction; failure of which the lease shall automatically lapse and land shall revert back to UIA and the performance bond will be cashed and the proceeds forfeited to the state.

The investor company allocated UIA Investment land shall not change the Shareholders for the first three years.

Priority will be given to the priority sectors as guided by Government’s priority listing of investments.

4 .Important Notes

Payments for Leased Land:

Payments for Leased Investment Land shall be as follows and/or as amended by UIA Board from time to time:

*Ground Rent to enable UIA manage the land shall be USD 10 per acre per annum.

The Total Payable Lease Premium as shall be indicated in the Lease Agreement shall be payable in the following installments:

*1st Installment of 10% of the total payable lease premium prior to signing of the Lease Agreement.

*2nd Installment of 30% of the total payable lease premium within 6 months from the date of signing the Lease Agreement.

*3rd Installment of 30% of the total payable lease premium within 18 months from the date of signing the Lease Agreement.

*4th and last Installment of 30% of the total payable lease premium within 36 months from the date of signing the Lease Agreement.

Failure to pay on time shall attract an interest equivalent to the Bank of Uganda inter bank lending rate payable to UIA and shall render the Lease Agreement subject to revocation at the exclusive option of UIA Board.

                   www.ugandainvest.go.ug

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