Overview:
According to Henry Musasizi, the State Minister of Finance in charge of General Duties, the Bill proposes a minimum of two or more people as shareholders to start a foreign exchange business for proper governance.
The Cabinet of Uganda has approved the Foreign Exchange (Amendment) Bill, 2022, that seeks to address emerging issues and significant developments in the currency market.
Announcing the Cabinet decisions on Thursday, 19 January 2023, Minister of State for Information, Communication Technology and National Guidance Godfrey Kabbyanga said the new bill also seeks to meet demands from the sector players to promote FinTechs and embrace regional and global market developments.
As part of the proposed amendments, the proposed Bill seeks to increase the minimum capital requirement for forex bureaus from Shs20 million to Shs50 million while for money remittance business from Shs50 million to Shs200 million.
According to Henry Musasizi, the State Minister of Finance in charge of General Duties, the Bill proposes a minimum of two or more people as shareholders to start a foreign exchange business for proper governance.
The Bill seeks to repeal the current provisions of the Companies Act, 2012 that requires a single person to register and start his/her company.
Further, the Bill introduces a Shs50 million security deposit before one operates a money remittance business and Shs25 million for forex bureaus, a move aimed at controlling fraud or disputes in the sector.
As opposed to the current provisions of the Foreign Exchange Act, 2004 that provides renewal of licenses after every 12 months, the Bill proposes a new provision that allows the licenses of money business operators to remain valid after coming into force until it is otherwise revoked or suspended.
If the Bill becomes law, forex bureaus and money remittance entities will have to file regular returns like other businesses in the country. The amendment will enhance the regulators’ powers to enforce compliance, and improve the capacity of the licensed foreign exchange bureaus and money remittance business to survive capital depletion.
The Minister is expected to present the draft bill to Parliament for first reading any time from now before it is referred to the line Committee of Finance for further scrutiny. After passing the Committee scrutiny, the proposed Bill will be bounced back on the floor for the second reading and subsequently transmitted by the Speaker to the President for assent.