Please wait...

Trade and Investment

Trade and Investment

The Lamu Port South Sudan and Ethiopia Transport Corridor (LAPSSET) is one of the most significant infrastructure projects in Africa aimed at fostering trade and investment – the African land bridge. This is a massive project which when finalized will link the Atlantic and Indian oceans through the port habours of Lamu in Kenya and Douala in Cameroon. The project envisages a rail,road and pipeline link which will cut trade time round the Cape (of Good hope) approximately by six weeks . Already , phase one is underway linking Kenya, Ethiopia and South Sudan. The project will not only increase intra-Africa trade , but will equally offer exciting technology transfer and commercial opportunities to foreign investors. More detailed informationon the LAPSSET project can be found on the link below

Lapsset Project

 

TRADE AND INVESTMENT

Investment Promotion

This is a function of the Kenya Investment Authority (KIA).

The Kenya Investment Authority was established by the Governement of Kenya through the Investment Act 2004 with the mandate of promoting and facilitating private investments in Kenya for both local and  foreign investors.

Guarantees to Investors

Kenya provides the following guarantees to local and foreign investors:

1. 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.

2. 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.

3. 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 duringthe 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

1. Agriculture

Upstream:
  • Fertilizers, chemicals
  • Better high yielding seeds and plant materials cross breed
  • Irrigation system; water pumps, steel pipes, hosepipes
  • Pesticides
  • Refrigerated transport
  • Agricultural tools and equipments
  • Air (transport) freight
  • Assembly of tractors, generators, motors
  • Extension services
  • Organic farming
  • Spare parts and accessories

2. IServices:

  • 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.

3. 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

4. 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.

5. Housing

 

  • Need for low cost technologies and materials
  • Funding for building of affordable houses

Doing Business In Kenya

Kenya has a free enterprise economy and the strongest industrial base in the eastern and central African region. In 2009 Kenya’s estimated population was 42 Million. Kenya therefore, has about 40% of the total East African Community population of about 120 million people. It is thus, a sizeable market apart from being a strategic investment, tourist and trading location. It has easy access to various export markets such as the Common Market for Eastern and Southern Africa (COMESA), the rest of Africa, Asia, the Middle East and Europe. As a transport and communications hub for the sub-region, Kenya is also competitive when trading with distant markets such as the USA, Canada, and Australia. Increased trade with the USA has been enhanced by the African Growth and Opportunity Act (AGOA).
Kenya is a member of several commercial and economic organisations which make the country a safe and secure place to do business. These include the World Trade Organisation (WTO); the United Nations Conference on Trade and Development (UNCTAD); the African, Caribbean and Pacific/European Unions (ACP/EU) Cotonou Agreement, the International Monetary Fund; the World Bank, the Multilateral Investment Guarantee Agency; and the African Trade Insurance Agency among others. Kenya-German investment activities are further supported by bilateral protocols, especially the double taxation agreement signed between the two countries in 1977, and the Treaty On The Encouragement And Reciprocal Protection Of Investments which came into force on 7th December, 2000.

Major Economic And Regulatory Institutions In Kenya

Doing business with Kenya is simplified by the establishment of sectoral technical and service support institutions. These organs are well developed with updates and restructuring as necessary to meet the ever emerging challenges. They help in alleviating unnecessary bottlenecks and bureaucracies that may stifle the process of doing business, touring or investing in Kenya. The Government established these key, professionally run institutions to assist stakeholders in relevant sectors. The organizations aim at making it easy for a buyer of Kenyan products to identify his/her suppliers; tourist to know the products on offer including sites and attractions, and the investor to identify opportunities and set up projects. The organizations include the following:
 

1. The Kenya Bureau of Standards

The Bureau develops, supervises and harmonizes standards of goods and services produced in Kenya for both local and international consumption and compliance. The Bureau also regulates, controls and insures quality compliance of foreign goods entering Kenya while recognising the international standardization procedures and practices.
For more information visit https://www.kebs.org/

2. The Kenya Plant Health Inspectorate Service KEPHIS

KEPHIS undertakes regulatory procedures and practices on all phyto-sanitary requirements for the export and import services in Kenya. It is a dependable, effective, efficient and competitive regulatory service which ensures the quality of agricultural inputs and produce.
For more information visit https://www.kephis.go.ke/

3. The Communications Commission of Kenya

Licenses and regulates telecommunications, radio communications and postal services in Kenya Potential investors in the sector of communications and postal service.
For more information visit https://www.ca.go.ke/

4. The Centre for Business Information in Kenya

A division within the Export Promotion Council, the Centre has the objective of providing a potential importer and exporter with a timely, reliable and updated business information at all enterprise levels. It operates as a hub of a national network embracing various sources of business information.
For more information visit https://www.makeitkenya.go.ke/

5. The Horticultural Crops Development Authority

This is a parastatal body established to advise growers, exporters and processors in order to facilitate and increase production of top quality horticultural produce for export and local market. The organisation is also charged with the responsibility of licensing horticultural exporters.
For more information visit https://www.afa.go.ke/background-mandate-horticulture-directorate/

6. The Kenya Tourist Board

The Board is a parastatal organisation charged with the overall responsibility of marketing Kenya as a tourist destination of choice.
Kenya is a perfect destination for adventure, relaxation, culture and sports. It is touristically endowed with savannah grasslands rich with big and small game, timeless cultures unchanged with the modern world, fascinating beaches and coral reef. The captivating equatorial forests and a mystery of snow-capped mountains along the Equator. Desert trekkers have a chance together with those who love to enjoy the cool highland retreats. These are the issues Kenya Tourist Board will prove right to our visitors among other secrets of a holiday and safari of a life time.

7. The Kenya Tourist Development Corporation (KTDC)

The Kenya Tourist Development Corporation was established in 1966 with main objective of developing the infrastructural facilities in the tourist industry in Kenya. The organisation has since developed investment strategy going into partnership with foreign and domestic private investors in tourism development.
KTDC provides both financial and business advisory services to the investing community in the tourist industry. Hence as a bridge between other development financial institutions and private investors, KTDC mobilizes financial resources form foreign sources to assist the tourism industry.
Investors can therefore, use KTDC facilities to develop their tourist industry projects in Kenya.
 
  • For more information and contact:
  • Kenya Tourist Development Corporation,
  • Utalii House
  • P.O. Box 42013
  • Nairobi
  • Tel. 00254-20-330820, 229751
  • Fax. 00254-20-227815
  • https://ktdc.co.ke/

8. The Kenya Wildlife Service (KWS)

The Service is a statutory body responsible for the conversation of biodiversity and sustainable development of natural resources in the national parks and reserves. As a custodian of biodiversity resources, KWS has the role of managing, protecting and conserving the country’s natural heritage on which the tourism industry is economically dependent.

The Service therefore, seeks to ensure optimum economic benefit to the Kenyan people through development and promotion of nature tourism. KWS can be a trusted and committed partner in world nature conservation. Investments in this sector is therefore welcome.

9. The Investment Promotion Agency (IPA)

The Agency is a statutory body originally established in 1986 as the Investment Promotion Centre to promote private investment in Kenya. Under its new mandate which it acquired in 2005, the IPA is a one-stop shop for investors intending to invest in Kenya. IPA helps facilitate the approvals, licensing of new investment projects, and organizing investment promotion activities both locally and internationally.
In approving investment projects, IPA works in consultation with respective government authorities to facilitate the acquisition of relevant approvals, licences and permits. Upon project approval, IPA issues a General Authority Certificate which enables investors to commence immediate implementation of their project while obtaining the required licenses within a period of six months.
The Agency is the one point to visit when intending to invest in Kenya in any sector of the economy. It has a list of project proposals which can readily be taken up by any interested foreign or local investor. The IPA has also listed all the investment opportunities available in Kenya in its databank and website.

Business Institutions and Associations

There are a number of non-governmental membership organizations or associations that work closely with the government and international institutions to facilitate business contacts and ease transactions in Kenya. These include:

1. The Kenya National Chamber of Commerce and Industry

This is an umbrella lobbying body for the business community in Kenya. It advises both the government and business community on the trend of local and international trade. The chamber of commerce and industrys membership in Kenya is voluntary. The one umbrella body with headquarters in Nairobi has countrywide branches in major cities.

2. The Federation of Kenya Employers 

Established in 1959 looks after the collective interests of the employers mainly investors in all sectors of the economy in Kenya.
For more information visit https://www.fke-kenya.org/

3. The Fresh Produce Exporters Association of Kenya 

Is a non-governmental membership organisation. Its main objective is to promote the horticultural sector by undertaking market intelligence, export promotion, technical support and training of the members. It works closely with Kenya Plant Health Inspectorate Service, Kenya Flower Council, and Horticultural Crops Development Authority for maintenance of high quality fresh produce in Kenya for the local and export market.
For more information visit http://fpeak.org/

4. The Kenya Flower Council 

Is an organisation established by major stake holders in the flower industry to foster responsible and environmentally safe production of cut flowers and related products in order to make Kenya flowers competitive and safe in both the local and export markets. The Council has established stringent code of practice and standards that members must adhere to, including six month continuous farm audits.
For more information visit http://kenyaflowercouncil.org/

5. The Kenya International Freight and Warehousing Association 

Ensures fairness, professionalism and efficient management of in and out going freight. Importers and exporters depend on the association members to move their goods to the markets.

  • Contacts and information visit
  • Kenya International Freight & Warehousing Association
  • Bishop Garden Towers,
  • Bishops Road
  • P.O. Box 57969
  • Nairobi
  • Tel. 00254-20-2717071
  • ” -20-2727806
  • Fax.00254-20-2722536
  • ” -20-213952
  • E-mail: kifwa@nbnet.co.ke

6. The Kenya Private Sector Alliance (KEPSA) 

Brings together all associations in the private sector in Kenya. It is a one-stop umbrella association to turn to in case of need to contact any product or service association or individual companies in Kenya. Any association not introduced in this website can therefore be traced by any investor, trader and service professional or consumer of any sector through KEPSA.

  • For more information contact
  • Kenya Private Sector Alliance, Bishops Garden Towers – 1st Floor Bishops Road,
  • P.O. Box 3556,
  • 00100 Nairobi, Kenya:
  • Tel. 00254-20-2730371/2,
  • Fax. 00254-20-2730374
  • and e-mail: kepsa@kenyaweb.com

7. The Kenya Association of Manufacturers 

Is an organization established in 1959 to be the sole representative of the manufacturers in Kenya. Its objective is to drive industrialization process in Kenya through promotion of competitive local manufacturing in a liberalized market environment.
For more information visit http://www.kenyamanufacturers.org

8. Starting a Tourism Business in Kenya

The tourism Industry in Kenya is regulated by two Acts of Parliament. Namely: the Hotels and Restaurants Act (Cap 494) and the Tourist Industry Licensing Act (Cap 381).
More information on licensing can be found at http://www.tourism.go.ke/ministry.nsf/pages/licencing
Kenya’s tourism sector presents many excellent opportunities for investment. Tourist businesses include:
  • 1. Hotels (service “flats”, service apartment, beach cottages, holiday cottages, game lodges, and bandas)
  • 2. Restaurants
  • 3. Tour Operators and other Businesses

The Ministry of Tourism issues Regulated Tourist Licenses for various categories of tourist activities by the Licensing Section.

For more information visit Tourism Licence Requirements