Setting Up and Operating an Investment in Kenya
The Government of Kenya recognizes the critical role investments play in economic development and realization of Vision 2030 objectives. To this end, Kenya has streamlined business licensing regimes and adopted online investment facilitation portals to ensure faster registration and approval of investment new projects.
The Kenya Investment Authority (KenInvest) is the lead agency on investment matters. Established by an Act of Parliament, Investment Promotion Act, 2004 cap 485 B of the laws of Kenya. The Authorityβs core mandate as spelt out in the act is to promote and facilitate the growth of both local and foreign investments in Kenya. The Act allows foreign investments minimum investment threshold of USD100,000 and USD 10,000 minimum for local investment.
KenInvest set up a One Stop Center (OSC) in 2017 under the Investment Facilitation department to provide for timely and transparent processing of investment applications and approvals required. The OSC brings on board officials from relevant government agencies involved in investment facilitation such as the Registrar of Companies (Business registration Services), Kenya Revenue Authority, Ministry of Lands, NHIF and NSSF, Immigration Services Department and NEMA. The Authority is progressively embracing and integrating digital facilitation services to ensure investors can place their applications for new investments from all over the world and be able to access some of the requisite documentations online. The Kenya Investment Authority has developed an online portal (http://eregulations.invest.go.ke/), to further showcase investment procedures in the country; and increase accuracy and transparency on access to relevant information and data by investors.
The Kenya investment environment is governed by other laws as well, affecting investment. For instance, The Kenya Constitution 2010, the Company Act 2015, Business Registration Act 2015, Foreign Investment Protection Act (FIPA), The Public Private Partnerships (PPP) Act 2013, The Insolvency Act 2015, among other laws. Details of this laws can be accessed from http://www.klrc.go.ke/
Since independence, in 1963; the Government of Kenya has formulated strategic policies, legislations and developmental blue prints that focus on investment growth and support. The Kenya Vision 2030 is the latest blue print to guide the country on developmental issues. These include export compensation schemes to duty draw backs and remission, import substitution and manufacturing under bond. These schemes were succeeded by import substitution, Industrial policies on export processing zones, and other export promotion programmes. Currently, the Vision 2030 drives the countryβs developmental objectives. The advent of devolution in 2010 also created more investment opportunities for investors seeking to locate in the 46 Counties. There is also work in progress towards development of a Kenya National Investment Policy (KIP). The KIP is envisaged to be a comprehensive and harmonized policy to guide attraction, facilitation, and retention of private investments. It will create an institutional framework that allows for coordination for more efficient investment promotion and facilitation as well as creating a favorable investment climate. In addition, Kenya subscribes to African Union agenda 2063 and the United Nations Sustainable Development Goals (SDGs) which are designed to ensure that development activities are conducted with a long-term view towards sustainability and continued social development of her citizens.
Kenyaβs investment environment is fully liberalized. Foreign investors can invest up to 100% ownership; except in securities, Insurance, Power and Lighting and any other identified sectors by government that may be deemed to pose security risk to the country. The attainment of sustained growth and development is feasible through promotion of local and foreign investments.
There are no regulations restricting joint venture arrangements between Kenyans and foreigners or prohibiting the acquisition of Kenyan firms by foreign-owned firms. Nonetheless, there are some restrictions on investment in companies listed on the Nairobi Securities, the insurance sector, and the KPLC. The Kenya Communications Act No 2 of 1998 and Kenya Information and Communications (Amendment) Act 2008 limit foreign investments in the communications sector to 30%.
Protection of private property, is enshrined in the Constitution 2010. Private property may be compulsorily acquired by the government only for reasons of public safety, public interest or security; but with prompt and full compensation. The court of law (Industrial and Commercial Court) provides for arbitration mechanisms. Foreign investors also have the option to seek recourse from the International Centre for Settlement for Investment Disputes (ICSID) for which Kenya is a member Recourse to ICSID for arbitration requires the consent of both parties involved in the dispute. The Investment Disputes Convention Act (1967) stipulates that awards granted by the ICSID Arbitration Tribunal are binding in Kenya and have the same validity as final decrees of the High Court.
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