New rules to allow more foreign direct investment in Kenya

MK254 · 2016-08-16T06:20:41+00:00

The government has ratified new rules allowing foreign direct investment (FDI) in establishment of special economic zones (SEZ) where products will be manufactured for the export market. In a Kenya gazette notice, Industry Trade and Co-operatives Cabinet Secretary Adan Mohamed said county governments were also at liberty to allocate land to any local or foreign investor planning to put up an SEZ. The identified facilities will also enjoy a one-stop regulatory regime manned by officers from the Special Economic Zones Authority (SEZA) who will help foreign investors acquire all documentation that will allow them to launch their operations within the shortest time possible. The Special Economic Zones Regulations 2016 state that SEZA must maintain an open investment environment to facilitate and encourage business via establishment of “simple, flexible and transparent procedures for registration of the investor”. The new regulations also seek to enable foreign investors put up plants within the shortest time possible as SEZA will be required to establish a resident office that will help investors have all their architectural designs and environment impact assessment audits approved within the shortest time possible. ONLINE SERVICES The one-stop shop facility will be connected online to all regulatory agencies enabling investors to have their expatriate workers’ acquire work permits and visas within the SEZ facilities with assistance from officers seconded from relevant government agencies. To facilitate development of manufacturing plants with the SEZ, the CS said that all development environmental permits will be processed on site thereby discarding age-old tradition where regulatory agencies delayed applications for commencement of construction for up to two years. The gazette notice comes hardly a month after Israeli Prime Minister Benjamin Netanyahu, Turkey’s President Recep Tayyip Erdoğan and India’s Prime Minister Narendra Modi led business delegations to Kenya and expressed interest in setting up shop in Kenya. WORLD LEADERS VISIT The world leaders said this would help improve the trade imbalance where they exported more to Kenya and imported less. The visits saw a raft of agreements signed with President Uhuru Kenyatta which were aimed at enhancing trade linkages. The new rules also empower county governments to set aside public land for establishment of SEZ and to collect levies on behalf of the government from operators, developers and factory owners. The move will also help increase access of SEZ processed products on the Kenyan market via a 20 per cent window while the rest must be exported to foreign markets. The move promotes the government’s intention to lure FDI in manufacturing and especially companies seeking access to affordable labour with an eye set on established markets in Europe and America. Under the African Growth and Opportunities Act (Agoa), the American government gave special treatment to African-based companies to process and export the goods to their markets on preferential terms. The new regulations is a departure from past practice where the government, which owns the land, funds construction of necessary infrastructure before allowing investors to put up factories. New rules allow more foreign investors in Kenya

Thread starter MK254
Start date Aug 16, 2016

MK254

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New rules to allow more foreign direct investment in Kenya

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