MasiboLaw

By Meshack Masibo and Joy Kawira

This week Kenyan President, William Ruto is in the United States for a historic state visit where he will meet the US President, Joe Biden alongside captains of industry and major CEOs. This is the first visit by an African head of state to the US in over 15 years and is touted as a means to give access to Kenya to American investors, a good number of whom are in the technology sector. It is against this backdrop that Kenya is on the cusps of implementing a new law called the Investment Promotion and Facilitation Bill, 2024

The Bill seeks to make Kenya a more attractive investment destination by centralizing and simplifying the process of acquiring licenses and permits as well as registering foreign companies in Kenya. It will do this through a newly created  Kenya Investment Authority.

Here are some key highlights of the Bill.

1. Requirement for Registration 

The bill proposes that any foreign investor who invests more than 10 million shillings (100,000 USD) in Kenya must register with the Authority before engaging in the investment. Once they register they will receive an investment registration certificate that will grant them certain benefits and make it easier to open businesses in diverse industries by serving as a license and permit or making the license acquisition process faster and more seamless.  

Controversially, the bill proposes that this registration can only be conducted directly or through specified agents who have not been determined yet.  Additionally, local investors, who intend to invest at least 10 million shillings and who also want to benefit from having the certificate ought to register with the authority. 

2. Criteria for Registration

For you to register with the authority, you will need to satisfy certain requirements. The Authority will assess the benefits of having the investor invest in Kenya. You can demonstrate this by showing how your investment will lead to job creation, teaching Kenyans new skills, contributing to tax revenue, technology transfer, foreign exchange earnings,  utilization of domestic materials, value addition, and ICT promotion. It is also crucial to note that the certificate that will be issued will be non-transferable.  

The Bill also proposes that the investment registration certificate can be revoked if it is shown that it was obtained by fraud, misrepresentation, or that you have breached the conditions of the certificate.  However, the Authority must give the holder of the certificate at least thirty days’ written notice of the grounds for the proposed revocation and an opportunity to make representations as to why the investment registration certificate should not be revoked. 

3. Benefits of Registration with the Authority

One of the main benefits of the Bill is that it sets up the Authority which will serve as a one-stop shop for everyone trying to set up in Kenya. This is to tackle the challenge of having a segmented process where investors need licenses and permits from different entities that do not work together which makes the investment journey long and tedious. 

The centralized facility may host government regulatory and service provision agencies including those responsible for business registration, tax and customs, immigration, labour compliance, environmental management, land administration, development control, business permits and licensing, electricity generation, construction oversight, export promotion, and economic zone licensing. 

The proposed provisions in the Investment Promotion and Facilitation Bill, of 2024 are designed to create a more efficient, transparent, and investor-friendly environment in  Kenya by simplifying the investment process. It will also make it easier for investors to acquire the necessary permits and licenses. However, it has some vague provisions that need to be clarified for it to achieve its objectives. 

The writers are lawyers who specialize in offering legal services to people in technology, in case you need further assistance, don’t hesitate to reach them at info@masibolaw.co.ke