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Guarantee Against Expropriation
The Constitution of Kenya provides guarantees against expropriation of private property, which may occur for reasons of security or public interest. In such a case, a fair and prompt compensation is guaranteed.
Repatriation of Capital and Profits
Capital repatriation, remittance of dividends and interest are guaranteed to foreign investors under the Foreign Investment Protection Act (FIPA) (Cap 518).
Investors can repatriate:
• After tax profits, including retained profits which have not been capitalised;
• The proceeds of the investment after payment of the relevant taxes;
• Principal and interest associated with any loan.
Other Guarantees
Kenya is a member of the World Bank-affiliated Multilateral Investment Guarantee Agency (MIGA), which issues guarantees against non-commercial risk to enterprises that invest in member countries.
Kenya is also a member of the International Centre for Settlement of Investment Disputes (ICSID), and of the Africa Trade Insurance Agency (ATIA).
The Government policy is aimed at extending facilitation measures in favour of private sector investment.
The following is a summary of current incentives that have been put in place:
Tax Incentives
Investment Allowance
Investment allowance is provided as an incentive for investment in the manufacturing and hotel sectors at the rate of 100% countrywide. For Manufacturers Under Bond, the applicable rate is 100%. In addition, eligible capital expenditures have been expanded to include certain infrastructure and environmental protection equipment related to the manufacturing activity.
Export Promotion Programmes
Duty Remission Facility
Materials imported for use in manufacturing for export; the production of raw materials for export; or the production of duty free items for sale domestically, are eligible for duty remission. Applications for this facility should be made to the Tax remission for export office (TREO) at the Ministry of Finance.
Manufacture Under Bond
To encourage manufacturing in Kenya for export to the world market, the Government has established the Manufacture Under Bond programme that is open to both local and foreign investors. Enterprises operating under the programme are offered the following incentives:
Exemption from duty and VAT on imported raw materials and other imported inputs; and,
100 per cent investment allowance on plant, machinery, equipment and buildings.
Bonded manufacturing enterprises can be licensed to operate within a 30 km radius of a Customs Office. This programme is facilitated by the Investment Promotion Centre and administered by the Kenya Investment Authority.
Export Processing Zones Programme
The Export Processing Zones Authority (EPZA) coordinates operations of Export Processing Zones (EPZs). The Government encourages the development of private EPZs, and a number of them have already been established. Enterprises operating in these zones in Kenya enjoy the following benefits:
• 10 year tax holiday and thereafter a flat 25 per cent tax for 10 years;
• Exemption from all withholding taxes on dividends and other payments to non-residents during the first 10 years;
• Exemption from import duties on, raw materials and intermediate inputs;
• No restrictions on management or technical arrangements;
• Exemption from Stamp Duty;
• Exemption from VAT;
• and Operate on one licence only.
Investment Opportunities in Key Sectors
Agriculture
Upstream:
• Fertilizers, chemicals
• Better high yielding seeds and plant materials cross breed
• Irrigation system; water pumps, steel pipes, hosepipes
• Pesticides
• Storage including, cold storage
• Refrigerated transport
• Agricultural tools and equipments
• Air (transport) freight
• Assembly of tractors, generators, motors
• Extension services
• Organic farming
• Spare parts and accessories
Services:
• Agricultural extension
• Veterinary services
• Dipping services
• Farmers Training - Better production methods, quality control and improvement
• Transport services (from farm to markets)
• Farm preparation - ploughing, harrowing, planting
• Storage and drying of harvested Agricultural produce.
Tourism
Kenya is a vast country with a wide range of potential tourist attractions, which have not been fully exploited. Currently, the tourism industry is mainly concentrated at the country's coastal area and in the National Parks and Game Reserves. As a policy matter, the Government of Kenya is strongly committed to the regional diversification of this very important industry to other areas for some good reasons.
Similarly, the potential for the domestic market has not been fully exploited. There is also need to identify other tourist attractions besides the existing National Parks, Game Reserves and the Beach. In order to extend the length of stay of "safari" tourists in Kenya, emphasis will be put into the development of inland "resorts" situated close to the national parks and game reserves.
The main constraint to the development of such resorts has been lack of sufficient investment capital. Participation in such investment ventures will, therefore, be very much encouraged by the Government of Kenya in order to exploit the tourism potential in those areas. Some of the viable projects are;
• Cruise-Ship Project on Lake Victoria:
• Bomas of Kenya Tourist Hotel Project
• Bomas of Kenya Amusement Park Project
• Mombasa Island Hotel Project
• Nairobi Jomo Kenyatta International Airport Hotel Project
• Health Spa Projects
Mining
Mineral exploration and exploitation are currently carried under the auspices of the Mining Act, CAP.306 of the Laws of Kenya, and is administered by the Department of Mines and Geology, Ministry of Environment and Natural Resources.
Generally, in Kenya, there exist high mineral potential areas i.e. the gold bearing greenstone belt of Western Kenya and Mozambique Belt in Central and Southern Kenya. Several exploration companies have been granted exploration licences to explore for gold and base metals in these areas. Some of the above high mineral areas have been staked by both local and foreign companies.
Investors may wish to enter into joint ventures with companies already holding exploration concessions.
Housing
• Need for low cost technologies and materials
• Funding for building of affordable houses
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The Mission
