| [ Legal
System | Investment
Climate | Taxation |
Capital Markets ]
:: INVESTMENT CLIMATE
Over View
Although official Government policy has been to encourage
investment in Kenya, including from abroad, its record
in attracting significant foreign investment has been
poor. With a liberalized economy (price controls and
foreign exchange controls were lifted more than a decade
ago), and a vibrant market-driven private sector, Kenya
could be further along the development path than it
is. Government privatization has moved along slowly
with a patchy record of success (Kenya Airways was a
highly successful privatization (1996), while divestiture
from the state owned incumbent telecommunications, electric
power, railways, ports and other utilities has been
dragged out).
The Investment Promotion Act 2004
aims to encourage foreign investment and facilitate
the issue of licences and permits for foreign investors
by the issue of Investment Certificates by the Kenya
Investment Authority. The licences include both general
and industry-specific licences.
Foreign investment in the private
sector has generally had a good record. Kenya ’s
membership of the EAC and COMESA presents opportunities
for manufacturing operations to exploit the benefits
of those markets.
There are limited foreign investment
incentives available in Kenya. The main area of growth
has been in light assembly manufacturing in export processing
zones where 10 year tax holidays are available to approved
enterprises.
There are no restrictions on investment
by foreigners in private companies and foreigners can
be directors of companies. Minimum Kenyan co-ownership
in insurance companies, banks and telecommunications
companies is mandatory, while at least 25% of the shares
of companies listed on the Nairobi Stock Exchange must
be held by Kenyans. Certain dealings in agricultural
land and beach-front property involving non-citizens
are prohibited unless special approval is obtained;
otherwise foreigners are free to own land.
[ Legal System
| Investment Climate
| Taxation | Capital
Markets ]
|
