FREE ZONES IN UGANDA
Presentation at theUganda - Japan Business
ForumTokyo, JapanMr Hez Kimoomi Alinda
EXECUTIVE DIRECTOR
1st December 2022

1About Uganda Free Zones Authority⚫

Uganda Free Zones Authority (UFZA) is a Government Agency
established by the Free Zones Act, 2014, for the purpose of creating
opportunities for export-oriented investment and job creation.

UFZA is responsible for:1) Establishment;2) Development;
3) Management;
4) Maintenace;
5) Marketing;6) Supervision, and7)Control
2 Free Zones in Uganda…of⚫

…Uganda Free Zones Authority⚫ The Authority has membership in:

Africa Economic Zones Organization;
2) World Free Zones Organization
3) Global Alliance on Special Economic Zones⚫ UFZA offers developers and operators ofFree Zones in Uganda the advantages ofextra-territoriality and transnationalism – Noborder frictions
1)

3

International legal and policylinkages⚫ East African Community (EAC) Customs

Union Protocol – Articles 25, 29,31 and 32⚫ EAC Customs Management Act, Part XIV⚫ EAC SEZ Policy, 2022
⚫ Article 23 of the AfCFTA CPTG
❑ Global best practice❑ Full integration into the Global SEZs4ecosystem

What is a Free Zone?
❑ A “Free Zone”

5is a gazetted geographical area
exempted from customs duties, and taxes
applicable on exportation of outputs to aid theproduction of export competitive goods andservices.
Examples❑ Export Processing Zones❑ Free Port Zones❑ Special Economic Zones❑ Free Trade Zones, etc.

Types of Free Zones Licenses
Developer’sLicense• Issued

Operator’s License

to an Entity• Issuedwhich would invest inwhich

undertakeor an entity

thecommercial

operationcarries out the day

infrastructure in a Free

activities in the Freeto day running of aZone for either theirZoneFree Zone.

development

ofown use or to let out tootherOperators

Business Enterprises

6Manager’sLicenseortoanEntity• Issued to a personwhich

Business Opportunities in Free Zones
1.

2.
3.

4.
5.
6.
7.
8.

9.
10.

7

Manufacturing – Electronics, Machinery &Equipment, Textiles
and Apparels, Leather and foot wear
Agri-business & Processing – Coffee, Cocoa, etc
BPO/ITES
Furniture and Wood Products
Refined petroleum Products
Pharmaceticals, Botanical Products Pathogen economy
Basic metals and precious mineral beneficiationWarehousing & Dry/Cold Storage
Simple Assembly
Development of Comprehensive Model SEZs

Who is Eligible?
1.

2.

3.

4.

8

Exporters of at least 80 per cent of goods
produced by the enterprise (Export ProcessingZone)
Developers of transhipment hubs (Free Port)
Private Developer who owns land or industrial
buildings
Greenfield investors – No minimum capitalthresholdBenefits of Free Zones to thePrivate Sector
1.
2.

3.

4.
5.

9

Agglomeration, clustering and co-location
Simplified Administrative Procedures for obtaining
licensees and permits from other Government
institutions - Relationship Manager assigned to every
Free Zone
Green Channel Customs Management Platform for Free
Zones goods
Green field & serviced industrial land for leasing
Pre-built Plug and play industrial sheds, warehouses &office spaceTax Incentives
1.

2.

3.

4.

5.

10

Import Duty is exempt on Plant and machinery, Spare parts, tools, rawmaterials, intermediate goods, construction materials, equipment, officeequipment and supplies, and transport equipment;
10-Year Income Tax Exemption for a Free Zone Developer andOperator;
VAT is exempt on any payment for feasibility studies, design,construction services, construction materials, earth moving equipment
and machinery;Excise Duty is exempt for construction materials for development or
construction of a factory or warehouse; andNo stamp duty payable on legal instruments executed by Developers
and Operators of Free zones e.g. debenture, lease of land, increasing ofshare capital and transfer of land.

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Opportunities for Developers
Kaweweta (4,465.363 Hectares)
The land is located in Central Uganda.
Investment Opportunity:
1.
Development and operation of a Private Free Zone as a single tenant or multitenant model2.
Construction of industrial facilities, warehouses, & office building for lease/rent by
more than 1000 private operators
Potential Sectors
1.
2.

3.

Heavy and Light Manufacturing
Commercial farming & Agro-processing
Services

12Entebbe International Airport Free Zone
Business Opportunity - Plug and play industrial shed space

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Competitive advantages
1. Free Zone is located within the Entebbe
International Airport
2. One - Stop Trade Facilitation Centre
3. Pre-built factory units/warehousing facilities& office space for rent
4. Fenced & onsite transport infrastructure &utilities - dedicated power, water, ICTbackborne
5. Internal Container shed
6. Rental space for 7 operators @ 800 m2
each unit.
7. Targeted Business Activities:
Horticulture, Meat & Dairy, fish, Mineralprocessing, Logistics/ Cold storage, Packaging

Jinja Free Zone (20 acres)Single-Tenant for Cotton,
ApparelTextile Mill Project
Cost: US$ 47.44 Million

Apparel & Garment Project
Cost: US$ 24.82 Million

Land Use allocation

ParcelTextileandSite Advantages
1. Access to Utilities (water) 6 inches
diameter water pipe
2. Reliable Power - 33KV electricity
transmission line running through thesite3. Planned Industrial Park
Investment Opportunity:o 5 acres of land for an integrated fabric mill;o Provision of a Zero Liquid Discharge (ZLD)
facility which would require a total land areaof 5 acres. (The ZLD is a wastewater
treatment facility which eliminates liquid
discharge from a system; ando 10 acres of land to accommodate 3 garment
and apparel factories for export to North
America under AGOA.

Railway corridor(not in use)

Roads14

Textile Opportunities for establishing anintegrated Textile mill, Garment & Apparel factoryin Jinja Free Zone (20 acres)
Input Volume(60% )

Spinning

3000 tonnes / annum

Local Cotton Supply

Weaving and Knitting

Employment

Permanent –30

Integrated Textile Mill
General Workers– 400

35000 tonnes
Garment
Manufacturing
480 tonnes /annum

Imported FabricGarment / Apparel
Factory

Permanent – 25

General Workers –1,500

2700 tonnes

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Source: Gherzi Report, 2009

Integrated Textile Cost Analysis
Integrated Textile Mill

Apparel and Garmenting Factory

Description

Cost

Description

Cost

Buildings andInfrastructure$23 089188$4 025 000

Plant and Machinery$12 783 905

Pre-operative expenses$1 345 674

Contingency reserve$2 071 095

Working Capital$3 143 093

Total Project Cost

$42 432 957

Construction of Facility•
Parking•
Truck Entry Bay•
Offices•
Gate &Entry/Exit•
Power Points•
Storage areas•
Quality Controlrooms•
Offices

Input Material (lint)$3 600 000

Machinery &Equipment*$780 000

Insurance (1% ofCAPEX)$127 839

Input Materials$18 506 880

Water ($0,6/m3)$6 668Staff$1 365 840

Electricity($0,05/kwh)$291 414

Insurance (1% ofCAPEX)$48 050

Staff$950 000

Marketing$50,000

Administrative$30 000

Administrative$45,000

Total$47 438 878

Total$24 820 770

16Source: Feasibility Report for Jinja Free Zone, 2020

Textile & Apparel opportunity –Cont’d…
1.

Sufficient local cotton supply - Uganda has the second highest
area under cotton cultivation in Africa.

2. Superior organic high quality of cotton fibre (handpicked)❖

GoU subsidised power prices as low as $0.05 per KWh

3. Supply value-added textiles to both regional and global markets❖ Export textiles under AGOA which has been severely
underexploited due to quality

17Opportunities cont’d…
Buwaya - 109 acres
Passenger Plane
above the siteheading to Airport
Site advantages
1.
Proximity to the Airport(4kms)
2.
Dry land with noEnvironment limitationsSectors
1. Manufacturing
2. Agro-processing
3. Services

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Opportunities cont’d…
Kasese Free Zone (20 acres)
Site Advantages
1.
Close to the D.R. Congo- major trading partner ofUganda.
2.
Kasese has an Airstrip.

Potential Sectors/Areas of Investment
1.
Agro processing
a. Food processing - Maize, Millet, Groundnuts,Irish Potatoes, Sweet Potatoes,
b. Fruit Processing (Passion fruits, Tomatoes,Cabbage, Cotton, Oranges, Coffee, Chili peppers,Mangoes, Pineapples, Pears, Apples and Sugarcane.
Manufacturing
Textile and Apparel, Pharmaceuticals,and Leather.
2.

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Dairy, Meat,Opportunities cont’d…
Soroti Free Zone (20 acres)
Site Advantages
1. Site is located in an Industrial Park.
2. Government-owned Fruit Processing
Plant and other factories
3. Tarmac access road within the Park
4. Feasibility Study and Master Planning
is to commence FY2021/22
Potential Sectors⚫ Food processing⚫ Fruit processing,⚫ Timber/Wood processing

20Starting a Business in a Free ZoneIdentify aStrategicSite

Registeryourcompany inaccordancewith S.25(3)of the FreeZones Act

Submit anapplication
for a Licence(AttachBusiness Plan,
ESIA andMaster Plan)

Declarationof the Site
as a Free
Zone

Obtain therequisite
Licence

CommenceOperations
within 12
monthsUFZA works with the Developer/Operator throughout this process21

Thank You
Uganda Free Zones Authority
6th Floor Communications House,
Plot 1 Colville Street,
P. O. Box 37578, Kampala
Tel: +256 417 722 600
Email: info@freezones.go.ug
www.freezones.go.ug
Uganda Free Zones Authority@freezonesug

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