Cooperatives in Rwanda

At a glance

The main points to understand before preparing a cooperative application.^1,2,3

Source: Rwanda Cooperative Agency: Legal Affairs and Registration; Official Gazette of the Republic of Rwanda: Law N° 057/2024 Governing Cooperatives in Rwanda (July 2024); Rwanda Revenue Authority: Register your business^1,2,3

Registration gives a cooperative legal personality when RCA approves its application. The application is therefore more than a record of the founders: it must explain what the cooperative will do, how it will benefit its members and how it will finance its activities.¹

The legal framework

Law N° 057/2024 governs the establishment, organisation and functioning of cooperatives in Rwanda. It was dated 20 June 2024 and published in Official Gazette n° 28 Bis on 8 July 2024. The law covers the establishment and organisation of primary cooperatives, unions, federations and confederations, as well as cooperative governance and the powers of their organs.^2,4

The 2024 law repealed Law N° 024/2021, which had been published in May 2021. Founders preparing a new application should use the 2024 law as the current legislative framework. The law includes a provision on the cooperative’s Constituent Assembly, while RCA’s registration guidance sets out the operational application and review process.^1,2,5

A cooperative is an autonomous association of people who voluntarily join to meet common economic, social or cultural needs through a jointly owned and democratically controlled enterprise. Member control and a shared purpose distinguish this structure from a business controlled solely by investors. RCA also describes principles including open membership, democratic control, member economic participation, autonomy, education, cooperation among cooperatives and concern for the community.⁶

Choose an activity and structure

Start with the common purpose the cooperative will serve. RCA’s registration requirements ask founders to define its domain of activity and objectives. Those details should match the proposed business model and the benefits described in the business plan. A clear, consistent description helps reviewers understand both the cooperative’s work and the reason members are joining together.¹

RCA groups cooperatives according to the activities they undertake.⁶

Source: Rwanda Cooperative Agency: About cooperatives⁶

Primary cooperatives can also join together in larger organisations. Three or more primary cooperatives may form a union; only primary cooperatives may belong to a union, and a primary cooperative cannot belong to two unions at once. Three or more unions may form a federation, and three or more federations may form a national confederation. RCA describes these structures as a way for cooperatives to manage property better and defend common interests.⁶

How registration works

RCA’s published process moves an application through local review before the Agency makes its decision.¹

• Prepare the application and apply for legal personality through CMIS. RCA says the applicant submits the online application.
• The Sector Cooperative Officer assesses the file and may visit the cooperative. The sector has five days to approve the application.
• After sector approval, the application moves to the district. The District Cooperative Officer reviews it and may approve or reject it.
• After district approval, the application moves to RCA. For a savings and credit cooperative application, RCA requests approval from the National Bank of Rwanda.
• If RCA approves the application, it grants legal personality within two working days. If an application is rejected, it is returned with comments for correction.

Source: Rwanda Cooperative Agency: Legal Affairs and Registration¹

RRA lists CMIS and the RCA sector office where the cooperative’s activities take place as registration routes. Keep cooperative registration distinct from ordinary company registration through the Registrar General at RDB: RCA is the authority responsible for cooperative registration.^1,3

Prepare the application file

RCA lists bylaws and internal regulations, the cooperative’s domain of activity and objectives, the required number of founder members, and a certificate issued by the sector where it will operate. The sector certificate should indicate that the cooperative meets the requirements. The minimum number of founders is set by law; check that the planned membership meets the applicable requirement before submitting the file.^1,2

RCA specifies four elements for the business plan:¹

• The intended business model.
• A clear outline of the economic and social benefits the cooperative provides, or will provide, to members through their collective effort.
• An action plan covering at least the first three years.
• The working capital available to finance the cooperative’s activities.

Source: Rwanda Cooperative Agency: Legal Affairs and Registration¹

Treat these materials as one joined-up proposal. The objectives and activity in the bylaws should correspond with the business model, while the benefits should explain why members’ collective effort matters. The working-capital information should show how the cooperative plans to finance its intended activities. Preparing consistent documents makes the application easier to review and gives founders a shared reference for starting operations.¹

Governance and records

Cooperatives are member-based organisations, so founders should make their governance arrangements clear in the governing documents. The 2024 law’s structure covers governance organs, the General Assembly, board responsibilities and meetings. RCA’s description of cooperative principles emphasises democratic member control and member economic participation. These principles make it important for members to understand how they take part in decisions and how the cooperative manages shared resources.^2,6

RCA lists accounting records including a cash book, debtor and creditor books, a register of members’ shares, purchase and sales books, stock documents, invoices, delivery notes, a balance sheet and an income statement or statement of revenue and expenditure. These records help track transactions, member interests and the cooperative’s financial position. The law’s framework also addresses internal controls, transparency and financial reporting.^4,6

Agree who will maintain the accounts and retain supporting documents as part of the cooperative’s operating arrangements. The records listed by RCA cover both day-to-day transactions, such as purchases and sales, and financial summaries, such as the balance sheet and income statement. Accurate records support informed member oversight and the preparation of financial information.⁶

Tax after RCA registration

RCA registration and tax compliance are related but separate. RRA identifies RCA as the registration route for cooperatives and notes that it continues to register cooperatives that received certificates before integration with the RCA system. A cooperative carrying out taxable activity should consider its tax-registration and filing obligations separately from obtaining legal personality through RCA.³

RRA’s published guidance sets VAT-registration thresholds for taxable business activity: turnover exceeding RWF 20 million in the previous fiscal year or RWF 5 million in the preceding quarter requires VAT registration within seven days after the relevant year or quarter ends. RRA also states that a VAT-registered business must acquire an Electronic Billing Machine. Assess these rules against the cooperative’s activities and applicable tax obligations.³

Practical preparation

Before filing, founders can reduce avoidable delays by working through a short preparation checklist:¹

• Agree on the cooperative’s purpose and define its intended activities and objectives.
• Check that the bylaws, internal regulations and business plan describe the same proposal.
• Identify the required founder-member number and prepare the sector certificate.
• Set out member benefits, the three-year action plan and working capital in the business plan.
• Keep the CMIS application details and any review comments so founders can respond consistently if the file is returned for correction.

Source: Rwanda Cooperative Agency: Legal Affairs and Registration¹

For a proposal involving savings and credit, allow for RCA’s stated request for National Bank of Rwanda approval. If the cooperative will undertake several activities, describe each clearly in its objectives and business model. For advice on establishing and managing a cooperative, RCA recommends seeking professional advice from the Agency or a cooperative development body.^1,6