A plenary sitting of the Chamber of Deputies has approved the relevance of the draft law governing partnerships, which seeks to fill the gap caused by lack of regulatory framework.
The absence of the framework has been cited to discourage investors wishing to use partnership structures.
The bill will be examined by the standing committee prior to being voted into law.
While presenting the relevance of the bill on Monday, November 30, 2020, Clare Akamanzi, the CEO of Rwanda Development Board (RDB) said that many stakeholders consulted recommended that the partnerships law would be another important addition towards the improvement of the business environment.
She said that partnerships avails an alternative for companies to engage in strategic alliances involving commercial partners. Hence, she said, there is need for an established framework to regulate how the parties are brought together to develop a working partnership.
"The adoption of the law on partnerships (general, limited and limited liability partnerships), will therefore facilitate investments out of Rwanda through structures domiciled in Rwanda as these structures are familiar to international investors," she observed.
Partnership law, she added, is also particularly relevant to the financial facility that Rwanda has started developing under the Kigali International Financial Centre (KIFC) because partnerships are very often treated as tax transparent bodies and are particularly relevant to fund structures.
Partnerships, Akamanzi explained, are often used on knowledge-based businesses such as fund managers, law firms, or medical experts, adding that in such professional services are under the current legal regime registered as corporate entities which may not work for some of them.
"This partnership law is one of key instruments that we will develop to be able to attract investors who want to invest their money through Rwanda," she said, indicating that that is much needed because normally, when investors want to establish funds, they register as partnerships, not as ordinary companies.
Boosting the Kigali International Financial Center
She said that for Rwanda to achieve its vision 2020-2050, it requires it to establish a system through which it becomes an international financial centre which meets all the required standards so that international finances are channeled through its the economy.
"That will help us especially to be able to create (and attract) high profile jobs to Rwandans including accountants, lawyers, or tax experts, and fund managers, which require skills," she said.
For the country to be international financial centre, Akamanzi said that they carried out different studies to identify the requirements to be able to receive money like other countries [which already have such centres.]
"What we have realised is that when investors want to invest in Africa - Rwanda inclusive -, they often channel their money through Dubai, Casablanca in Morocco, and Mauritius, because they have financial centres that have the abilities to help them invest elsewhere," she said.
"As Rwanda we want to be among those countries that can provide the needed environment so that the investors do not transfer their funds to Dubai, Morocco or Mauritius alone, but understand the reason they should transfer their money to Rwanda," she said.
Also, she said, it required means and skills, adding that they have a plan to work with the Rwanda bar association or law firms, accountants and fund managers so that the country gets ready for Rwandans to get jobs thanks to the establishment of the financial centre.