Doing Business in Kenya - RSM International

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9.3 Foreign Ownership of Shares and Land9.3.1 Shares in Companies Incorporated in KenyaAs a result of the repeal of exchange control laws in 1995, there are presently norestrictions on non-Kenyan residents or citizens owning shares in a private limitedcompany incorporated in Kenya. However, there are restrictions on non-Kenyanresidents or citizens (excluding citizens of East African Community member states)owning shares in listed companies. Non-Kenyan residents or citizens cannot holdmore than 60% of the voting power in a listed company.9.3.2 Restrictions on Land OwnershipAny sale, transfer, lease, mortgage, exchange, partition or other disposal of ordealing with any agricultural land which is situated within a land control area and theissue, sale, transfer, mortgage or any other disposal of or dealing with any share in aprivate company or co-operative society which for the time being owns agriculturalland situated within a land control area requires the mandatory consent of the LandControl Board for the land control area or division in which the land is situated inrespect of that transaction in accordance with The Land Control Act (Chapter 302).Such land has been defined under the Act as that which is outside the jurisdiction ofNairobi City Council, a municipal council or township, or where the user has not beenchanged to a non-agricultural user.Such land control boards are mandated by the Act to refuse consent in any case inwhich the land or share is to be disposed of by way of sale, transfer, lease, exchangeor partition to a person who is not a citizen of Kenya or a private company or cooperativesociety all of whose members are not citizens of Kenya.As regards any other type of land ownership, the Constitution of Kenya provides thatany person who is not a citizen of Kenya may hold land on the basis of leaseholdtenure not exceeding 99 years. A company is regarded as a citizen only if it is whollyowned by one or more citizens.9.3.3 Investment RegulationApart from the restrictions discussed above in relation to “agricultural land”, thereare generally no laws that bar foreign investors from participating in any specificindustry.84DOING BUSINESS IN KENYA
9.4 The Investment Promotions ActThe IPA was enacted by the National Assembly to encourage more inward investmentto Kenya, through creation of an Investment Promotion Authority (IPA). The primaryaim of the IPA is to reduce the bureaucracy faced by an investor in relation tolicensing, immigration and negotiating tax incentives and exemptions from therelevant authorities.The benefits that can be negotiated by or granted to the holder of an investmentcertificate are as follows:• Certain specified licenses appropriate to the business of the investor excludingregulated businesses such as the banking, insurance and petroleum sectors;• Incentives or exemptions under the Income Tax Act, the East African CustomsManagement Act, Excise Act and the Value Added Tax Act; and• A certain number of specific classes of entry permits for management andtechnical staff as well as for owners, shareholders or partners and theirdependants.In deciding whether to issue an investment certificate, the Authority is required toconsider the extent to which the investment will contribute to the Kenyan economyby either increasing the number and quality of jobs in Kenya, training of Kenyansin new skills or technology, contributing to economic development, the transfer oftechnology or increasing tax revenues and foreign exchange.DOING BUSINESS IN KENYA85
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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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Installments Due Date RateNon-Agric
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Page 38 and 39: partnership in which the husband or
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Page 46 and 47: 4.8.4 De-registration and Disposal
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Page 50 and 51: 4.8.7 Records, Invoices, Credit and
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Page 54 and 55: However, where a motor vehicle or o
Page 56 and 57: Where there is no tax payable a ‘
Page 58 and 59: granted or is partly granted, the b
Page 60 and 61: • Airtime on cellular mobile phon
Page 62 and 63: Transit VisasThese are visas requir
Page 64 and 65: Class K is for persons who have an
Page 66 and 67: 5.3.2 WagesAlthough the Employment
Page 68 and 69: NSSF provides the employee with a l
Page 70 and 71: 6.0 ACCOUNTING6.1 Statutory Framewo
Page 72 and 73: 7.0 INTELLECTUAL PROPERTYRIGHTSKeny
Page 74 and 75: Years 1 Shs 1,000Year 2 Shs 1,500Ye
Page 76 and 77: 8.0 Listing Rules8.1 The Capital Ma
Page 78 and 79: • At the date of application, the
Page 80 and 81: 8.3 Payable FeesCompanies pay an in
Page 82 and 83: 9.0 Investing in Kenya9.1 General I
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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