{"id":147964,"date":"2026-09-08T08:53:13","date_gmt":"2026-09-08T08:53:13","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=147964"},"modified":"2026-09-08T08:53:13","modified_gmt":"2026-09-08T08:53:13","slug":"rwanda-alternative-investment-funds","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/rwanda-alternative-investment-funds\/","title":{"rendered":"Rwanda: Alternative Investment Funds"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-147964","comparative_guide","type-comparative_guide","status-publish","hentry","guides-alternative-investment-funds","jurisdictions-rwanda"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Liedekerke<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/08\/Liedekerke-logo-B-solid-w-background.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Liedekerke<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/08\/Liedekerke-logo-B-solid-w-background.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Alternative Investment Funds laws and regulations applicable in Rwanda<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the principal legal structures used for Alternative Investment Funds?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Rwandan law does not define or separately regulate \u201calternative investment funds\u201d; the term does not appear in the legislation. Such funds are regulated as collective investment schemes (CIS) under Law n\u00b0 062\/2021 of 14 October 2021 governing Collective Investment Schemes (the \u201cCIS Law\u201d), with \u201calternative\u201d strategies accommodated through the restricted scheme (sophisticated investors only), the private scheme, the expert fund, and funds specialised in real estate, private equity, derivatives or commodities (Articles 3 and 20). Articles 2 and 4 recognise four structures: (a) the unit trust scheme, by trust deed under the Trusts Law, without legal personality (Articles 4-5); (b) the investment company scheme, a limited liability company under the Law governing companies, with fixed or variable capital, which may be a protected cell company (Articles 4, 6-8); (c) the partnership scheme, a limited partnership (Article 9); and (d) the contractual scheme, formed by operator\/depositary agreement, without legal personality, assets held for participants as tenants in common (Article 10).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does a structure provide limited liability to the investors? If so, how is this achieved?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, by statute. Under Article 70 of the CIS Law, participants\u2019 liability is limited to the amount due on their units or shares, and they are not liable for the operator\u2019s, trustee\u2019s, depositary\u2019s or custodian\u2019s acts. An investment company scheme must be a limited liability company, limiting shareholders&#8217; liability to the unpaid amount on their shares (Article 6); a limited partner\u2019s liability in a partnership scheme (Article 9) is confined to its committed contribution, provided it does not participate in management. However, a collective investment scheme established as a partnership must be a limited partnership in which at least one partner is a general partner with unlimited liability. Scheme assets are ring-fenced from the operator, investment manager, trustee and depositary and their creditors (Articles 41, 46 and 47).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a market preference and\/or most preferred structure? Does it depend on asset class or investment strategy?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Unit trusts are currently the predominant structure. According to the Capital Market Authority (CMA) Annual Report 2024\u20132025, the only two licensed and operational CIS in Rwanda within that period were the RNIT Iterambere Fund and the Aguka Unit Trust Fund, both of which were established as unit trusts. The same report records continued growth in the sector, with unit holders increasing by 39% to 40,253 and assets under management rising by 12% to RWF 71.4 billion. The CIS Law accommodates the full range of structures, driven by asset class, investor base and tax. In practice, the limited partnership (Article 9) and the fixed-capital investment company (a closed-ended scheme under Article 7, which may require listing on the Rwanda Stock Exchange where its life exceeds five years) are used for closed-ended private equity, venture capital and real estate strategies, while the variable-capital investment company and the unit trust (open-ended or interval schemes under Articles 5 and 8) serve retail money market and equity funds. The Law also recognises specialised vehicles, including restricted schemes for sophisticated investors, expert funds, and funds specialised in real estate, private equity, derivatives or commodities (Articles 3 and 20).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the regulatory regime distinguish between open-ended and closed-ended Alternative Investment Funds (or otherwise differentiate between different types of funds or strategies (e.g. private equity vs. hedge)) and, if so, how?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. The CIS Law distinguishes scheme types by redemption and liquidity. Article 3 defines an \u201copen-ended scheme\u201d (units redeemed on demand at net asset value), a \u201cclosed-ended scheme\u201d (units not redeemable at periodic intervals, may be listed on a stock exchange), and an \u201cinterval scheme\u201d (redemption at prescribed intervals). Fixed-capital investment companies must be closed-ended (Article 7); variable-capital investment companies, unit trusts and contractual schemes may be open-ended or interval schemes (Articles 5, 8 and 10). The law also differentiates by investor type: a \u201crestricted scheme\u201d is offered solely to sophisticated investors (Article 3), and Article 20 lets the CMA exempt private schemes, expert funds and specialised funds from some licensing requirements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any limits on the manager\u2019s ability to restrict redemptions? What factors determine the degree of liquidity that a manager offers investors of an Alternative Investment Fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Redemption is regulated principally by the CIS Law and CMA regulations made under it although the regulations are still draft and have not yet been published. By definition, an open-ended scheme must redeem holdings on demand at net asset value, per the law, regulations and the scheme\u2019s formation documents (Article 3). Under Article 68 the CMA issues regulations governing offer, redemption and suspension of transactions, and the operator must ensure issue and redemption is properly carried out (Article 28). Closed-ended schemes need not offer periodic redemption (Article 3). The degree of liquidity a manager offers is determined by the scheme type, its dealing frequency, the liquidity of underlying assets, and the redemption and suspension procedures prescribed by CMA regulation, rather than by the fund manager.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are potential tools that a manager may use to manage illiquidity risks regarding the portfolio of its Alternative Investment Fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The principal statutory tool is suspension of dealing: under Article 68 of the CIS Law the CMA issues regulations (such regulations are not yet published) governing suspension of transactions, and a scheme\u2019s formation documents must address suspension, termination and winding up (e.g. Article 10). Valuation must always be fair and accurate, per the CMA\u2019s methodology (Article 80).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions on transfers of investors\u2019 interests?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Under Article 73 of the CIS Law, the CMA issues regulations governing the modalities for transferring units, shares or other participation in a CIS, and transfers must be recorded in the register of participants. Transfers are also governed by the scheme\u2019s formation documents, which specify eligible investors and classes of units (Articles 10 and 66), by customer due diligence under the Anti-Money Laundering Law, and, for restricted, private or exempt schemes, by the requirement that the transferee satisfies the sophisticated-investor or institutional-investor eligibility criteria (Articles 3 and 20).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any other limitations on a manager\u2019s ability to manage its funds (e.g., diversification requirements)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Chapter VII of the CIS Law governs investment, valuation and pricing. Scheme assets must be invested per the law and CMA regulations (Article 75), which set out the eligible assets, the proportion investable in particular assets, and the maximum exposure to a single issuer or group. Article 77 imposes a general obligation to diversify so as to spread risk, and Article 78 governs the power to lend and borrow.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the local tax treatment of (a) resident, (b) non-resident, (c) pension fund and (d) sovereign wealth fund investors (or any other common investor type) in Alternative Investment Funds? Does the tax status or preference of investors or the tax treatment of the target investments primarily dictate the structure of the Alternative Investment Fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The tax treatment is governed by Law n\u00b0 027\/2022 of 20\/10\/2022 establishing taxes on income, as amended (the \u201cIncome Tax Law\u201d), and is notably favourable to fund investors. As a general matter: (a) income from savings in a collective investment scheme is exempt from income tax (Article 20); (b) capital gains on sale or transfer of CIS shares or units are exempt from the 10% capital gains tax (Article 1 of Law n\u00b0 014\/2025 of 27\/05\/2025 amending the Income Tax Law, and Article 38 of the Income Tax Law); and (c) income distributed to holders of such shares or units is excluded from the 15% withholding tax otherwise applicable to dividends (Article 60). The standard rates against which these exemptions operate are 28% corporate income tax (Article 48, as amended by Law n\u00b0 051\/2023 of 05\/09\/2023) and 15% withholding tax on dividends and interest (Article 60).<\/p>\n<p>Applying this to investor categories: (a) resident investors are taxable on worldwide income but benefit from the CIS exemptions above; (b) non-resident investors are taxable only on Rwandan-source income (Article 12) and on dividends and interest by withholding, subject to treaty relief; (c) qualified pension funds are exempt from corporate income tax (Article 45); and (d) sovereign wealth funds typically rely on treaty relief or specific exemptions. Structuring is tax-driven; the Investment Code operates in harmony with the Income Tax Law, which permits tax reductions for investment promotion under the Investment Code (Article 69). On that basis, the Code grants a preferential 3% rate to a registered CIS (minimum fund size USD 1,000,000 within three years, minimum local expenditure USD 50,000 per year, with local management and substance), equivalent 3% rates to a special purpose vehicle and a pure holding company, and 0% withholding tax on dividends, interest and royalties paid to investors enjoying the preferential 3% or 15% rates (Annex, Sections II and X). With treaty access, these incentives make Rwanda an attractive fund and holding-company domicile.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What rights do investors typically have and what restrictions are investors typically subject to with respect to the management or operations of the Alternative Investment Fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Investors\u2019 core rights are statutory. Under the CIS Law participants are entitled to adequate information to make informed decisions, information on their rights and duties, a copy of the scheme\u2019s formation documents and prospectus when investing, and an annual statement of accounts within three months of year-end (Article 88). The formation documents (Articles 11-15) and prospectus (Articles 54-64) are the law\u2019s defined offering documents; the law does not use the term \u201cprivate placement memorandum\u201d, though a contractual scheme\u2019s \u201cscheme agreement\u201d (Article 10) performs a similar function. Open-ended scheme investors have redemption rights at net asset value (Article 3), and investors hold units or shares carrying the rights of their class (Articles 65 and 66). Governance is exercised by the trustee (unit trust), depositary (contractual or partnership scheme), or board of directors (investment company) (Article 25); no annual general meeting is mandatory except for an investment company scheme, subject to contrary CMA regulation (Article 74). By way of restriction, participants\u2019 liability is limited and they are not liable for the operator\u2019s or service providers\u2019 acts (Article 70); limited partners must avoid management participation to preserve limited liability; and all investors are subject to the eligibility and transfer rules in the formation documents.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Where customization of Alternative Investment Funds is required by investors, what types of legal structures are most commonly used?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The CIS Law provides several statutory tools for customisation. A scheme may be an umbrella scheme with separately managed and accounted sub-schemes (Articles 3 and 4), and an investment company scheme may be a protected cell company, in which a single legal entity comprises a core linked to several cells, each with separate assets and liabilities (Article 4; definition in Article 3). A CIS may also issue different classes of units, shares or other participation with differing rights, provided no class prejudices another (Article 66).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are managers or advisers to Alternative Investment Funds required to be licensed, authorised or regulated by a regulatory body?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Under the CIS Law, the operator of a scheme must be licensed by the CMA as an investment manager, or exempted (Article 35), and must hold that licence at all times (Article 44). Licensing is governed by Regulation n\u00b0 01 on Capital Markets (Licensing Requirements), 2012 (the \u201cLicensing Regulation\u201d), covering the investment manager and the investment adviser. A manager must be a firm; an adviser may be an individual. The capital requirements for investment managers and investment advisers are set by CMA regulations and the East African Community directives on capital markets (the \u201cEAC Directives\u201d).\u00a0 A licence is granted only to a \u201cfit and proper\u201d applicant, assessed on integrity, competence and financial soundness (Licensing Regulation, Articles 19 and 27), and the power to issue, suspend and withdraw licences rests with the CMA under Article 9 of Law n\u00b0 057\/2021 bis of 18 September 2021 establishing the Capital Market Authority of Rwanda (the \u201cCapital Market Authority Law\u201d).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are Alternative Investment Funds themselves required to be licensed, authorised or regulated by a regulatory body?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Every CIS must be approved or registered by the CMA before operating or offering interests, in accordance with the licensing provisions (Articles 5, 6, 9 and 10), which determine the licensing conditions (Article 19). The CMA may refuse a scheme that does not meet those conditions, is inappropriately designed, or whose assets would not be safeguarded (Article 19). For non-retail funds, Article 20 empowers the CMA to exempt a restricted scheme, a private scheme, an expert fund, or a fund specialised in real estate, private equity, derivatives or commodities from some licensing requirements; even so, an exempted scheme remains subject to core obligations: an independent custodian, annual audit, formation documents and prospectus, and the sanctions regime (Article 21).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the Alternative Investment Fund require a manager or advisor to be domiciled in the same jurisdiction as the Alternative Investment Fund itself?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no requirement that the manager and fund share the same domicile, but a CIS operating in Rwanda must have a CMA-licensed operator or investment manager (CIS Law, Articles 35 and 44). A \u201crecognised scheme\u201d is a CIS licensed elsewhere and approved by the CMA to operate in Rwanda (Article 3), and custody of scheme assets may, with safeguards, be held outside Rwanda (Article 49). A foreign manager or adviser may serve the Rwandan market by obtaining a CMA licence or, as an \u201capproved foreign\u201d manager or adviser, by maintaining facilities in Rwanda (Article 33 of the Regulation N<sup>o<\/sup> 2 on Capital Market Conduct of Business, 2012 , Article 33). For funds seeking the Investment Code\u2019s preferential 3% rate as a licensed CIS, the manager, custodian and operator must be Rwanda-resident (Annex, Section II).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there local residence or other local qualification or substance requirements for the Alternative Investment Fund and\/or the manager and\/or the advisor to the fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Licensed firms must demonstrate operational substance in Rwanda: the licensing application requires details of office facilities, management structure, key personnel and a chief executive with relevant expertise, and the licensee must remain fit, proper and financially sound (Licensing Regulation, Articles 16-17 and 27). More demanding substance applies where Investment Code incentives are sought. To obtain the preferential 3% rate as a licensed CIS, the fund must have a minimum size of USD 1,000,000 within three years, minimum annual local expenditure of USD 50,000,\u00a0 the CIS manager, custodian and operator established in Rwanda, at least 30% Rwandan professional staff, at least 25% Rwanda-resident directors, at least 50% of the board physically present for meetings held in Rwanda, board strategic meetings and records kept in Rwanda, and at least two professional Rwanda-resident directors (Annex, Section II); comparable conditions apply to a pure holding company and a special purpose vehicle.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What service providers are required by applicable law and regulation?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The CIS Law requires a CIS to have certain service providers and assigns governance and service-provider roles by vehicle type. Article 24 identifies the CIS service providers as the operator, custodian, trustee, depositary and investment manager, and allows the depositary or trustee also to act as custodian. Specific obligations attach by vehicle: every scheme needs a licensed operator or investment manager (Articles 35 and 44); a unit trust needs a CMA-licensed trustee (Article 3); a contractual or partnership scheme needs a depositary; and the custodian must be licensed (Article 48). The operator must hold scheme assets separately from its own assets and those of other schemes it operates (Article 36), protected from the operator\u2019s creditors (Article 41). Even an exempted scheme must engage an independent custodian and auditor and file an annual audit report (Article 21). The EAC Directives confirm the same constellation of parties for a CIS (fund manager, custodian, trustee, fund administrator, investment adviser and auditor).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are local resident directors \/ trustees required?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, in part; the position differs by vehicle. A unit trust\u2019s trustee must be a body corporate licensed by the CMA (CIS Law, Article 3); licensing, not nationality, is the qualifying requirement. An investment company scheme is governed by its board of directors (Article 25) and, as a company under the Law governing companies, must have at least one director ordinarily resident in Rwanda; a private company needs at least one director and a public company at least two directors (Companies Law, Articles 6, 153 and 157). A partnership scheme must be a limited partnership with at least two partners, of which at least one general partner must be resident in Rwanda or have an appointed local agent (Law governing Partnerships, Article 67; CIS Law, Article 9). Where a fund seeks the Investment Code\u2019s preferential tax treatment, more demanding residence requirements apply: at least 25% of directors must reside in Rwanda, at least 50% of the board must attend meetings held in Rwanda, and at least two professional or qualified Rwanda-resident board members are required (Investment Code, Annex, Section II).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What rules apply to foreign managers or advisers wishing to manage, advise, or otherwise operate funds domiciled in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A foreign manager or adviser can access the Rwandan market in three ways. First, it can obtain its own CMA licence as an investment manager or adviser under the Licensing Regulation. Second, it can operate as an \u201capproved foreign\u201d manager or adviser, maintaining facilities in Rwanda where prescribed information is available and the CMA\u2019s notices may be served (Conduct of Business Regulation, Article 33). Third, it can act as sub-adviser to a locally licensed operator, which may delegate portfolio management to it provided the delegation does not impair effective performance of the delegated function, the CMA\u2019s supervision, or management in investors\u2019 best interests; functions requiring a licence may not be delegated to an unlicensed person (CIS Law, Article 29). Separately, a fund already licensed abroad may be admitted as a \u201crecognised scheme\u201d if approved by the CMA (Article 3), and the EAC Directives allow a CIS and its manager authorised in one Partner State to be recognised in another.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the common enforcement risks that managers face with respect to the management of their Alternative Investment Funds?\u00a0<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The CMA has broad supervisory and enforcement powers. Under Article 9 of the Capital Market Authority Law it may investigate, inspect, require information, impose administrative sanctions, and issue, suspend and withdraw licences. A licence may be withdrawn where the holder ceases to be fit and proper, contravenes the law, or provides false information (Licensing Regulation, Article 21). Under the CIS Law the CMA may issue binding directives and, on contravention, seek court orders for compensation or restitution, publicise the breach and take other measures (Article 95); it may also address unlawful investments (Article 50), disqualified persons (Article 96) and false prospectuses, for which the operator and, as applicable, the board and trustee are liable (Article 62). As anti-money laundering supervisor, it may impose disciplinary and financial sanctions and restrict, suspend or withdraw a licence (Anti-Money Laundering Law, Articles 43 and 44). The EAC Directives also prohibit front-running, churning and insider dealing and require best execution. Typical risks include unlicensed activity, breaches of investment, valuation and redemption rules, disclosure failures, conflicts of interest, market misconduct and anti-money laundering failings. Express enforcement risks include carrying on CIS business without the required licence, recognition or exemption, unlawful promotion of a scheme and making an unlawful public offer, as addressed respectively in Articles 129, 131 and 132 of the CIS Law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the typical level of management fee paid? Does it vary by asset type?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Rwandan law does not prescribe or cap the management fee a manager may charge investors. The only fees fixed by regulation are those payable to the CMA for regulatory services under Regulation n\u00b0 08 on Capital Markets (Fees), 2012. A CIS pays an application and annual licensing fee, a prospectus evaluation fee of 0.05% of the total offer, and a liquidation fee of 0.05% of total assets (Annexes I and II). The management fee charged to investors is a commercial matter, governed by the scheme\u2019s prospectus, which must set out all charges payable by the scheme and participants (CIS Law, Article 69), and by the duty of a licensed firm to disclose all fees and commissions to clients in advance and comprehensibly (Conduct of Business Regulation, Article 9).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is a performance fee or carried interest typical? If so, does it commonly include a \u201chigh water mark\u201d, \u201churdle\u201d, \u201cwater-fall\u201d, \u201cpreferred return\u201d or other condition? If so, please explain.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Rwandan law does not specifically prescribe or limit performance fees or carried interest, subject to the general duty to act in clients\u2019 best interests and disclose all fees in advance (Conduct of Business Regulation, Articles 5 and 9).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are fee discounts \/ fee rebates or other economic benefits for initial investors typical in raising assets for new fund launches?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Rwandan law does not have any elaborate provisions related to fee discounts\/fee rebates or other economic benefits for initial investors. Any preferential class must not prejudice other classes (CIS Law, Article 66) and all fees must be disclosed in advance (Conduct of Business Regulation, Articles 5 and 9). Reduced fees, rebates or founder-class terms for anchor investors at first close are common within those limits.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are management fee \u201cbreak-points\u201d offered based on investment size?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no statutory rule under Rwandan law regarding management fee breakpoints. Tiered reductions for larger commitments, mainly for institutional investors, are subject to the equal-treatment principle for classes (CIS Law, Article 66) and advance fee disclosure (Conduct of Business Regulation, Article 9).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are first loss programs used as a source of capital (i.e., a managed account into which the manager contributes approximately 10-20% of the account balance and the remainder is furnished by the investor)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>First-loss programmes are not addressed by Rwandan law and are not an established local market feature. Manager seed capital or a general-partner alignment commitment may develop as the market matures, subject to the general best-interests duty (Conduct of Business Regulation, Article 5).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the typical terms of a seeding \/ acceleration program?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Seeding and acceleration programmes are not specifically regulated under Rwandan law, and no established domestic market practice has yet developed.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What industry trends have recently developed regarding management fees and incentive\/performance fees or carried interest? In particular, are there industry norms between primary funds and secondary funds?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no published evidence of domestic trends in management fees, carried interest, or distinctions between primary and secondary funds. The existing legal framework leaves these commercial terms to negotiation between fund managers and investors, reflecting international practice.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What restrictions are there on marketing Alternative Investment Funds?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The offer of CIS interests is regulated by the CIS Law and the Capital Market Authority Law. A public offer requires an approved prospectus: the CMA Board approves prospectuses and offering documents under which securities are offered to the public (Capital Market Authority Law, Articles 8, 12 and 24), and will not approve one that contravenes the CIS Law or its regulations (Article 61). Promotional materials for a CIS must be approved by the trustee or depositary and submitted to the CMA, and no promotion may be made unless the prospectus is approved (Articles 57-58); a \u201cscheme advertisement\u201d is widely defined (Article 3). Article 55 sets out when an offer is not treated as public, and the private-placement provisions confine non-public offers to specified persons (banks, licensed investment managers, licensed, recognised or exempted CIS, pension funds, insurers, and professional or institutional investors). Advertisements and client communications must be fair, clear, not misleading, and approved by a director (Conduct of Business Regulation, Articles 5, 9 and 10).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the concept of \u201cpre-marketing\u201d (or equivalent) recognised in your jurisdiction? If so, how has it been defined (by law and\/or practice)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no statutory concept of \u201cpre-marketing\u201d under Rwandan law. The CIS Law instead regulates by reference to whether an activity amounts to an offer to the public or a \u201cscheme advertisement\u201d (Articles 3 and 55). Informal soundings of professional investors occur in practice, but pre-launch outreach risks characterisation as an unauthorised offer or advertisement if a prospectus has not been approved (Articles 57-58).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can Alternative Investment Funds be marketed to retail investors?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Only a fully authorised CIS may be marketed to the general public. A \u201crestricted scheme\u201d is by definition offered solely to sophisticated investors (CIS Law, Article 3), and the schemes the CMA may exempt under Article 20 (restricted, private and expert funds and funds specialised in real estate, private equity, derivatives or commodities) are precisely those not offered to the public. These schemes cannot be marketed to retail investors and must confine their investor base to the eligible categories (and persons declared sophisticated investors under Article 20).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction have a particular form of Alternative Investment Fund be that can be marketed to retail investors (e.g. a Long-Term Investment Fund or Non-UCITS Retail Scheme)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Rwanda&#8217;s retail fund vehicle is the authorised CIS, typically an open-ended unit trust or variable-capital investment company (CIS Law, Articles 4, 5 and 8), approved by the CMA for offering to the public. There is no exact equivalent of the EU Long-Term Investment Fund (ELTIF) or the UK Non-UCITS Retail Scheme; the authorised retail CIS regime, with its prospectus, investment-restriction, valuation and reporting requirements, is the framework for distribution to retail investors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the minimum investor qualification requirements for an Alternative Investment Fund? Does this vary by asset class (e.g. hedge vs. private equity)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For non-retail funds, participation is limited to eligible investors rather than the public. Article 20 of the CIS Law lists the \u201csophisticated investors\u201d to whom a restricted scheme may be offered, including the Government and statutory bodies, banks, insurers, investment managers, investment dealers, licensed, recognised or exempt CIS, pension or provident funds, foreign governments and their agencies, and any person the CMA declares sophisticated. The related private-placement provision treats an offer as non-public where the acquisition cost per subscriber is not less than a prescribed minimum (Article 55).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there additional restrictions on marketing to government entities or similar investors (e.g. sovereign wealth funds) or pension funds or insurance company investors?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no blanket prohibition, but each investor must comply with its own prudential regime. Pension or provident funds and insurers are expressly among the institutional investors to whom restricted schemes may be offered (CIS Law, Article 20), but they are prudentially regulated by the National Bank of Rwanda and subject to investment limits constraining their allocation to alternative funds. For example, under 22 and the annex of the Regulation n\u00b0 68\/2023 of 14\/06\/2023 of the National Bank of Rwanda governing the investment of insurers and reinsurers, insurers\u2019 investments in collective investment schemes are limited to 10% of total assets for general insurers, 15% for life insurers, 10% for public health insurers and 5% for single insurers. Government entities and sovereign wealth funds may also face public-finance or procurement constraints. Marketing to these investors must respect both the CIS Law\u2019s eligibility rules and the investor\u2019s own regulatory framework.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions on the use of intermediaries to assist in the fundraising process?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Intermediaries assisting distribution must be licensed by the CMA. The Licensing Regulation licenses brokers, dealers and securities sponsors (Articles 10 and 11), as well as investment advisers and managers, and only licensed persons may carry on capital markets business, which includes offering and dealing in CIS units (Capital Market Authority Law, Article 3). Unlicensed solicitation is prohibited, and any agreement with an unlicensed scheme is ineffective against third parties (CIS Law, Article 43). Intermediaries are also bound by the Conduct of Business Regulation, the EAC Directives\u2019 harmonised standards (including an investor compensation scheme), and customer due diligence obligations under the Anti-Money Laundering Law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the use of \u201cside letters\u201d restricted?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Rwandan law does not specifically regulate or prohibit side letters. They are permissible subject to general constraints: the operator and service providers must act in participants\u2019 best interests and cannot contract out of their statutory duties (CIS Law, Articles 12 and 28; Conduct of Business Regulation, Article 5); a CIS may issue different classes only where no class prejudices another (Article 66); and the formation documents must not compromise investors\u2019 interests (Article 11). Preferential terms granted by side letter must be consistent with the formation documents, the equal-treatment principle and the manager\u2019s conflicts-of-interest obligations (Conduct of Business Regulation, Article 7).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any disclosure requirements with respect to side letters?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no express statutory requirement to disclose side letters to other investors. Related duties bear on the question: licensed firms must operate a conflicts-of-interest policy and disclose conflicts to clients on a durable medium in sufficient detail to enable an informed decision (Conduct of Business Regulation, Article 7), and the operator and service providers must deal with the CMA openly and cooperatively (CIS Law, Article 14).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the most common side letter terms? What industry trends have recently developed regarding side letter terms?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As Rwanda\u2019s private funds market is at an early stage, there is no confirmed body of Rwandan-specific side letter practice. In cross-border fund transactions, sponsors and investors typically follow international practice, with side letters addressing most-favoured-nation protection, fee terms, co-investment rights, transfer consents and reporting undertakings.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">4734<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/147964","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=147964"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}