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Govt issues new land guidelines for investors

By Edward Anyoli

Added 25th September 2020 09:15 AM

Govt issues new land guidelines for investors

Kamya arriving at the media centre on Wednesday

INVESTMENT |

Lands minister Beti Kamya Wednesday said the Government has approved new guidelines and conditions for mortgaging government land by investors.

She said some of the investors have abused the Government's goodwill, by mortgaging state land without investing the borrowed money into agreed business projects.

"The abuse of the privileges by investors defeats the Government purpose of facilitating investments, thereby affecting job creation, increase in tax base and transfer of technology, among others," Kamya said during a press briefing at the media centre.

She said, in some instances, investors have changed land title use without notifying the Government and, in other instances, land remains unutilised, but encumbered, putting it at risk.

She noted that investors will be required to submit applications for investment to the relevant government entity and a Memorandum of Association, certification of registration and investment licence will be issued by the Uganda Investment Authority (UIA).

Kamya said, in addition, investors are supposed to present a business plan, detailing the project idea and the preliminary architectural layout of the proposed facilities.

The minister said the investors will be required to present documentary evidence of financial capacity to use the land and the activity plan, highlighting key milestones for the first 18 months.

She added that investors will have to present a written commitment that the milestones would be delivered and, if an investor fails, the land will be withdrawn.

Also, a proposed total amount of investment in US dollars and ability to raise funds to implement the proposed project will be required. She added that the proposal should meet the National Development Plan expectations.

Kamya explained that the application for the allocation of land shall be processed by the Government, in line with government policy.

The minster noted that the process of leasehold certificate of title should not take more than two weeks and that no investors shall be allowed to take possession of the land without a signed lease agreement and leasehold certificate of title. She said for any allocation of land, for which a lease agreement is not signed by the investor within the given time frame, it shall be returned to the Government and will be available for allocation to other investors. She said the investor shall forfeit the land if possession is not effected within six months.

"Possession means starting to prepare the land for the planned development, in line with the approved business plans," Kamya added.

She noted that land use rights certificates shall be issued by the lands minister to the investor, in consultation with the leasing authority.

In addition, there will be restrictions to change land use and an investor shall not transfer, sublease or sub-divide the allocated land, except with government's consent, in consultation with the leasing authority. Kamya added that foreign investors will only be allocated leasehold and not any other tenure of land holding.

"Foreign investors shall only be allowed a leasehold tenure of 49 years, but renewable upon expiry. For foreign investors to be allowed to mortgage developments on land, they should have invested at least 60% of the investment capital value," she said.

Regarding local investors, Kamya said they will be required to invest at least 30% of the investment capital value. They shall also be allocated leases with no provision of conversion to freehold tenure.

"Once a mortgage is processed and granted to an investor, the mortgage land or properties shall be published in the Uganda Gazette," Kamya said.

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