The Partnerships Regulations, 2025, introduce Limited Liability Partnerships into Uganda’s legal framework, aligning fund structuring options with global private equity standards.
Uganda recently enacted the Partnerships Regulations, 2025, bringing noteworthy development for businesses, particularly for those considering the establishment of Limited Liability Partnerships (LLPs). This new regulatory framework expands the available partnership structures and provides a clearer, more flexible avenue for businesses, including Private Equity (PE) firms, to operate within Uganda’s legal and financial ecosystem under a more internationally desirable structure.
Why the LLP structure for PE Funds
Private equity funds favour vehicles that combine three attributes: contractual flexibility, a liability shield equivalent to a company, and single-layer (partner-level) taxation. The LLP now delivers all three inside Uganda’s borders. Partners may draft an agreement that hardwires capital call mechanics, carried interest waterfalls, and advisory committee powers, yet the entity itself remains tax transparent. Uganda’s Income Tax Act treats partnership income as flowing straight through to the partners rather than taxing the partnership as a separate person. As a result, sponsors can host the general partner (GP) and the management team onshore without exposing their assets or sacrificing after-tax returns.
Key statutory touchpoints fund managers should note
The Regulations stipulate that an LLP comes into existence only after the Registrar issues a certificate of registration and assigns it a unique number.
Any change in partner identity, capital commitment, or the registered office must be filed within ten days, failure attracts a daily default fine. Foreign LLPs may register a branch; conversely, an existing Ugandan general partnership can be converted to an LLP by lodging a section 51 statement, with pre-conversion liabilities staying with the outgoing partnership.
Complementary regulations from 2023 already require every partnership (including LLPs) to file beneficial ownership information, mirroring the company regime and answering most institutional investor KYC concerns.
Regulatory benefits for PE capital formation
Because partners are liable only up to the amount they have agreed to contribute, institutional investors such as pension funds and DFIs receive the same downside protection they would expect in other offshore financial centres.
The absence of entity-level income tax prevents the “double dip” of corporate tax followed by withholding tax on dividends, thereby increasing distributable cash and simplifying waterfall modelling.
An LLP also fits neatly alongside offshore feeder funds or co-investment SPVs: the Ugandan entity may sign a common LPA and allocate carried interest exactly as its counterparties do, avoiding conflict between onshore company law dividend rules and partnership cash flow provisions.
First close checklist
- Vehicle selection – Compare an LLP structure with any company or trust structure. The calculation will turn on carried interest treatment, VAT leakage on management fees, and withholding tax relief under relevant treaties.
- Drafting – Ensure the partnership agreement embeds the statutory particulars, including registered office, proposed contribution schedule, dispute resolution clause, and partner admission/exit mechanics.
- Regulatory filings – Obtain a tax identification number for the LLP to enrol for e-filing with URA.
- Governance artefacts – Prepare an investment committee charter and ESG policy; both now form part of the compliance pack that many LPs insist on during due diligence.
Looking ahead
By operationalising a globally recognized fund wrapper into domestic law, Uganda eliminates one of the chief friction points for private equity inflows. Early adopters stand to benefit from smoother fundraising, lower structural costs, and greater alignment between Ugandan sponsors and offshore LPs.
Fund managers considering a conversion or a maiden Fund launch should begin modelling tax flows and red-lining their LPAs now; the first movers are likely to set the market standard for Ugandan LLP documentation.
For advice on forming or converting to a Ugandan LLP, or on the interaction between the new Regulations and your existing fund structure, please contact our Private Equity Team.
This publication is for general information only and does not constitute legal or tax advice. Professional advice should be sought for specific transactions.
