Doing Business in Kenya - RSM International

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9.0 Investing in Kenya9.1 General Information About Investing In Kenya9.1.1 Gateway to East AfricaKenya is well placed to be the financial and air transport hub of the region, making thecountry an ideal investment destination for investors targeting regional markets. Thecountry’s strategic location provides easy access to the EAC and COMESA markets.9.1.2 Access to Large Pool of Skilled WorkersKenya prides itself in its large pool of professional workers, trained both within thecountry and in institutions in Europe, North America, Australia and other parts of theworld. For years, Kenya has produced well-educated professionals, fluent in Englishand highly trained in various fields. Kenya holds the distinction of having the highestnumber of universities and colleges educating English speaking professionals in EastAfrica.9.1.3 Kenya: Living the Good LifeKenya offers many advantages that make it a good choice for settlement andinvestment. There is the spectacular and diverse nature with landscapes rangingfrom mountains to beautiful beaches. There are the many wild and spectacularanimals and birds. All of these can easily be enjoyed due to a professional and verywell developed tourism industry, which is very open to investment and partnerships.With nature scenes like the Maasai Mara that was recently branded as the 8thwonder of the world and Tsavo national parks, which draw thousands of visitors everyyear and perfect beaches and hotel infrastructure located on the east coast, nearMombasa, suppliers of tourist services have secured a large and expanding market.Kenya also offers a rich cultural experience and many forms of entertainment whereresidents and visitors alike can gain insight into the many diverse and fascinatingcultures found in the country.Residents living in Kenya lack nothing. Kenya provides residents with well-stockedsupermarkets, wide range of quality restaurants, world standard primary andsecondary schools and high quality health care. Quality housing is also available inall the key towns in Kenya.9.1.4 Fully Liberalised EconomyKenya has now fully liberalised its economy by removing all obstacles that previouslyhampered the free flow of trade and foreign private investment.82DOING BUSINESS IN KENYA
9.1.5 Money Transfers Outside KenyaThere are no exchange controls in Kenya after the Exchange Control Act wasrepealed in 1995.9.1.6 Well Established Local and Foreign Private SectorBy African standards, Kenya has a very substantial private sector, including asignificant number of foreign investors and is touted as one of the most resilienteconomies amongst the emerging economies.9.2 Tax-Related Incentives for Investing in Kenya9.2.1 Tax Treaties and Investment PromotionKenya has a number of tax treaties and investment promotion and protectionagreements. Exports from Kenya enjoy preferential access to world markets undera number of special access and duty reduction programmes. Kenya is signatory tovarious agreements aimed at enhancing trade amongst member states.9.2.2 Bilateral Trade AgreementsKenya has signed bilateral trade agreements with several countries around the world.Some of the countries are already members of existing schemes offering marketaccess/duty reduction preferences.9.2.3 Investment AllowancesThe capital allowance and other incentives, including Export Processing Zones,available to investors are covered in detail in Section 4 of this Booklet.9.2.4 Capital GainThere is no tax on capital gains in Kenya and the provisions in the Income Tax Actin relation to taxation of capital gains were suspended with effect from 14th June1985. There have been attempts in the last 5 years to bring back capital gains taxby the Treasury, but the proposals were rejected by Parliament. There are no rulesor precedents in law which comprehensively distinguish between what is a tradingprofit and what is capital gains and the intention is considered on a case by casebasis.9.2.5 Received DividendsDividends distributed to residents (including citizens of East African Partner States)and non-residents are subjected to a final withholding tax at the rate of 5% and10% respectively. The 5% tax is applicable to all countries under the East AfricanCommunity. Dividends received by a resident holding company with a beneficialshareholding of more than 12.5% are exempt from taxation.DOING BUSINESS IN KENYA83
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2.0 General2.1 IntroductionKenya li
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Kenya Tanzania Uganda Rwanda Burund
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A huge chunk of the Act regulates m
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• Stamping of the Memorandum of A
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the Registrar within a statutory pe
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3.2.3 Thin CapitalisationThin capit
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Where a business is carried on or e
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territory or domestic market. Motor
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• Unrealised foreign exchange los
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4.2.6 Business with Non-Resident Pe
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Page 58 and 59: granted or is partly granted, the b
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Page 72 and 73: 7.0 INTELLECTUAL PROPERTYRIGHTSKeny
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Page 84 and 85: 9.3 Foreign Ownership of Shares and
Page 86 and 87: Contact Details - RSM AshvirRSM Ash
Page 88 and 89: Appendix of Acronyms used in the Bo
Page 90: Notes90DOING BUSINESS IN KENYA
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Doing Business in Kenya - RSM International

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