Has the thought of relocating or investing in Uganda crossed your mind? Let’s dive into all you need to know before you consider this decision.
Uganda, recently awarded the AIM Investment Award 2024 for attracting the most significant Foreign Direct Investment (FDI), is proving itself as a prime destination for foreign investors. Here’s a comprehensive guide on why and how to invest in the Pearl of Africa.
Before we get into why you should definitely invest in the Pearl of Africa, here are some things to keep in mind when considering investing in Uganda.
- PLAN PLAN PLAN!
Before investing anywhere in the world, research and planning is key. Factors such as location can determine whether your investment was truly worthwhile. Based on research done by the African Investor, places like Naguru, Muyenga and Kololo are common areas foreigners live and invest in. Investing in these areas would be a good assurance of having high return on investment as these areas tend to be liked by every background.
2. Hire a Property Manager
After buying or building your property, it is crucial to have a property manager if you choose to rent it out. As a foreigner, it may be harder to get clients or understand the market completely in Uganda. Hiring a property manager will not only put you under a lot less pressure, but you are now more assured of getting a tenant.
3. Have a Clear Goal for your Property
Are you renting? Have plans to sell the property? Want to make your property your home? There are many choices you can make when it comes to what will happen after buying a property. The one thing you can’t be is undecided. Even before pulling all your money together, you must have a clear goal for what you want to do with your property.
4. Always have Money put Aside for Additional Costs
Let’s say all the money you need for your investment is $80,000. It would be advisable to have an extra $8,000 – $16,000 for potential unseen or maintenance costs that may not have been provided at the beginning. It is good practice to budget around 10-20% of the total construction costs. It doesn’t matter how much assurance is given that this exact figure will be all you need, always be prepared.
5. Have a Team that you Trust
As an investor, you will never know as much as the people on the ground, your lawyer, your real estate agent and so on, especially as a foreigner. It is extremely important that you have a trustworthy team to guide you through the process. Yes, it would still be advisable to keep tabs every step of the way but knowing that you have people you can trust will ensure the path you’re taking will be smooth sailing.
Why Uganda?
Alright, now that you know the basics. What is it about Uganda that makes investing worthwhile as a foreigner? Here’s what you need to know
Weather
No winter season! Uganda is located on the Equator providing a very tropical climate. If you did a survey on the most common reason to relocate it would be the weather. If you are investing only to let the property but still live elsewhere, this will also be key to note in the case that the people you are letting to will not be from Uganda.
Tourism
Most people that decide to relocate or invest in Uganda want to do so in the CBD. Whilst there is no wildlife even within a three-hour drive, however you can still contact travel tour companies that will give you a road trip you will not regret, if you are willing to sit for minimum 7hrs of course. The most renowned national park is Queen Elizabeth. This park hosts the big five and many more exotic animals. Bird watching is also highly recommended at the park. There is also Bwindi Impenetrable Forest where you get to see the gorillas. If you are letting out your property to foreigners it would be good to advertise with this in mind while if Uganda will be your new home, then this is an activity you cannot miss.
Okay, okay, this sounds like what you would get on a brochure at the airport. Let’s finalize with the financial benefits that investing in Uganda can bring.
High FDI
Uganda has one of the highest FDI percentages in East Africa. Research recorded from the World Investment Report 2023 found a 39% increase in 2022. It is clear that foreign investment is something Uganda is interested in. While most of the FDI is in transportation, mining, finance, etc., real estate now is coming up as a worthwhile investment for foreigners.
Tax free
If you are a foreigner investing in real estate, whether it is to rent out or lease, there is a 10-year tax exemption. The requirements are that the property be located in an industrial park or free zone with a minimum investment of $250,000. This allows you to focus solely on the project itself and most importantly, save a pretty penny.
Alright, now you know the basics, the beauty of Uganda and the perks of coming in as a foreigner. While there will be challenges coming to set shop in a place you don’t know well, Uganda is the perfect place to start this venture.
High Return on Investment
With international developers like VAAL Real Estate, the return on investment in Uganda can reach up to 23% annual return. While this number can fluctuate, this ROI is higher than most real estate returns across the world. Investing with real estate companies provides a much more secure and stress-free investment process, and thus people lean towards real estate investment instead of constructing their projects solo.
If you need any assistance, advice or real estate consultancy, do not hesitate to contact a VAAL Real Estate property advisor at +256 765 500 000, and they will make sure you have all the necessary information to make the best investment decision for you.