RDB’s Richard Kayibanda outlines company law reform plans

Rwanda is on the brink of a significant overhaul of its company laws, aimed at enhancing the business environment and attracting new investments to the country. Richard Kayibanda, Registrar General at the Rwanda Development Board, recently spoke to CNBC Africa, outlining the key changes and their implications. The proposed reforms focus on adapting the legal framework to meet international standards and practices, specifically in terms of corporate governance and compliance. One of the notable changes includes allowing independent directors to own shares in the companies they oversee, with a capped limit of two percent of the total share capital. This alteration seeks to strike a balance between attracting skilled individuals to company boards while ensuring their objectivity and independence are maintained. Furthermore, the introduction of provisions requiring companies to disclose beneficial ownership information aims to align Rwanda with global anti-money laundering and counter-terrorism financing standards. Kayibanda highlighted that the reforms aim to position Rwanda as an international financial hub, fostering a conducive environment for multinationals and investors. The company law reforms are anticipated to be gazetted in the near future, with stakeholders working collaboratively to expedite the process. These changes represent a step towards Rwanda's ambition of becoming a middle-income country and a thriving financial center. The reforms also introduce new company structures like protected cell companies and limited life companies, offering investors diverse options suitable for their needs. Additionally, the ability for companies to transfer registration seamlessly across jurisdictions without dissolution is expected to attract businesses seeking flexibility and ease of operation. In light of previous regulatory challenges faced by multinationals, especially in sensitive sectors like finance, the timing of these reforms is seen as opportune. Rwanda's journey towards reform started in 2008, with continuous improvements culminating in the current comprehensive changes aimed at enhancing the country's economic landscape. The emphasis on transparency and compliance with international standards underscores Rwanda's commitment to creating a robust and attractive business environment. The collection of beneficial ownership information serves as a tool to combat illicit financial activities while safeguarding privacy. Measures have been put in place to ensure access to this data is regulated to prevent misuse or compromise of individuals' confidential information. The new laws are designed to support Rwanda's broader economic objectives and solidify its position as a competitive investment destination in the region. As the country embarks on this pivotal legislative journey, stakeholders remain optimistic about the transformational impact these reforms will have on Rwanda's business ecosystem.