INVESTING IN KENYA

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• INVESTING IN KENYA
• KENYA INVESTMENT AUTHORITY
• KenInvest
• Mr. Mwalimu Musee
• Senior Manager, Investment Promotion

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Kenya. Your INVESTMENT destination
Your Ultimate Investment Partner
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KENYA
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Promoting Kenya as a Product

• (Envoys , High Commissioners are Marketers for
  Kenya , hence they should understand Kenya as a
  product )
• What does it offer?
• Strategic location
• Human Resource
• Tourism
• Stability
• Market Access
• Natural Resources

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The economy (sector wise)

• Agriculture -24
• Manufacturing -15
• Tourism including Services -61

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Key Kenyan Imports?

• Machinery and equipments
• Technology
• Petroleum products
• Chemicals and Pharmaceuticals
• Consumer goods

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Key Kenyan Exports?

• Tourism
• Horticulture
• Tea
• Coffee
• Services
• Building Materials
• Petroleum Products
• Consumer goods

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Kenyas Key trading Partners?

• Comesa (Consumer goods, petroleum products,
  building materials, services)
• European Union(technology, Proffessional
  services, Machinery and equipments, chemicals and
  pharmaceuticals, tourism, horticulture, Coffee,
  tea)
• Middle East (petroleum, Horticulture, consumer
  goods, meet products, Raw materials, building
  products)
• Asia(textiles, consumer goods, building
  materials, chemicals and pharmaceuticals, raw
  materials)

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Why Investors Choose Kenya as an Investment
Destination?

• There are 3 major reasons why investors choose to
  locate in Kenya as opposed to investing in the
  neighbouring countries (pull factors)
• These are

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Strategic Location

• Convenient Location for Hub operations
• (easy access to the region by road, railway, sea
  and air)
• Access to international Markets (in Europe, Asia,
  USA)
• Availability of other support services for
  facilitation of business operations (finance,
  insuarance, transport, and proffessional services)

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Human Resource

• Adequate and trainable human resource available
  in all types of skills required for operations
  (reduces the need for expatriate employees)
• Adequate universities and medium level colleges
  for imparting various skills when needed
• Extensive understanding and use of English
  language

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High economic growth rates

• Impressive performance in economic growth 4.7,
  5.8 and over 6 in the last 3 years has expanded
  the domestic market and has also been a pull
  factor in attracting investments in Kenya. This
  is supported by a fairly stable macro economic
  framework (in form of money supply, inflation,
  interest rates and exchange rates)

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Examples

• The telecommunications sector in the mobile
  phones sub-sector, the internet services,
  building materials, and air transport
• The entrance of a number of Multinational
  Corporations in the Kenyan Market in the last 2
  years.
• The Nairobi Stock Exchange also recorded good
  results as observed through the NSE 20 index.

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Stable Political And Economic Environment

• Kenya has experienced a stable political and
  economic climate since independence in 1963.
• A multiparty democracy and elections held every 5
  years since independence
• A significantly large industrial base in the
  region
• A large business support infrastructure (
  transportation, financial services, insurance,
  logistics and proffessional services)

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Market Access

• East African Customs Union (composed of 5
  countries with a population of over 110 million,
  represents one of the fasted growing regions in
  Africa)
• Common Market for East and Southern Africa,
  population over 400 million, 13 countries have so
  far reached FTA, Customs Union 2008.
• Preferential Access to EU Market for Kenyan
  Products.
• Preferential Access to the USA Market under the
  AGOA
• Preferential Access to the Japanese Market under
  TICAD (Tokyo International Conference On African
  Development)

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Investment Guarantees

• Kenya Constitution guarantees security of life
  and property
• Member of MIGA, covers foreign investors against
  non-commercial risks
• Member of ICSID, arbitration of disputes outside
  Kenya.
• Member of ATIA, covers both commercial and non
  commercial risks

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Investment Incentives

• 100 investment allowance for manufacturing and
  hotel projects
• Duty and VAT exemption on capital goods including
  machinery
• Duty and VAT exemption on building materials and
  hotel equipments and fixtures
• Export processing Zones (10 year tax holiday,
  exemption of duty and VAT on machinery,
  equipments and raw materials, exemption from
  stamp duty and withholding tax on dividends)

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Taxation

• Corporate tax stands at
• Standard rate of 30
• 20 for the first 5 years, for new listings
  with at least 40 of issued share capital
  quoted at the stock exchange
• Withholding tax is 5
• Rate of VAT
• Standard 16
• Restaurants 16
• Input for health care, education and exports of
  goods and services 0

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Taxation (contd)

• Excise duties levied on beer, tobacco, wines
  spirits
• Personal tax is charged on the income earned in
  Kenya. Rates are graduated to a maximum of 30
• Import duties range
• from 0 to 25 for finished products
• 0 for capital goods,and basic raw materials

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Opportunities for investment in Kenya

• Agriculture
• Coffee value addition and branding
• Tea-value addition and branding
• Pyrethrum-extraction of pyrethrine and value
  addition
• Sisal-
• Horticulture
• Livestock products

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Investment opportunities (contd.)

• Agriculture
• Horticulture commercial farming
• Ranching
• Irrigation systems.
• Floriculture
• Agribusiness
• Fertilizer
• Pesticides.
• Commercial dairy farming

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Investment opportunities (contd.)

• Manufacturing
• Sheet glass
• Fertilizers and pesticides
• Textiles
• Wood products
• Cement
• Pharmaceutical
• Salt works
• Tyres
• Iron and steel.

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Investment opportunities (contd.)

• Energy sector
• Oil exploration
• Power generation (electricity)
• Privatisation

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Investment opportunities (contd.)

• g) Tourism
• Kenya is naturally endowed in-
• Wildlife
• Pleasant climate
• Beautiful scenery
• Sandy beaches
• Sportsmen women
• There are enormous opportunities in -
• Accommodation provision
• Recreation and
• Entertainment

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Building Construction

• Key economic indicators improved in 2006
  following completion of several constituency
  Development Fund (CDF) projects and increased
  budgetary allocation for the road construction,
  maintenance and rehabilitation activities.
• Loan to the sector increased by 41.1 from kshs.
  21,421 Million in 2005 to 30,227 million in 2006.
• Cement consummation increased by 12.3 from
  1,572.5 thousand tones in 2005 to 1,765.8
  thousand tones in 2006.
• Private building works completed in selected main
  towns increased by 4.9 in 2006 while the index
  of Government expenditure on roads, improved fro
  62.6 in 2005 to 209 in 2006.
• Disbursement of funds by Kenya Roads Board to
  roads agencies increased by 7.3 from KShs. 9
  billion in 2005 to KSH 10.3 billion in 2006.

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Investment opportunities (contd.)

• Building and construction
• Low cost housing in the urban areas for a growing
  population
• Provision of financial resources to the private
  sector to enable them undertake building and
  construction activities
• Roads
• By-passes
• Housing Hotels Offices

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12. Financial Sector

• Kenya has a well developed financial sectors.
• These are-
• 49 Commercial banks
• 4 NBFIS
• 2 Mortgage finance companies
• 4 Building societies
• 11 Insurance companies
• 3 Reinsurance companies
• 6 Development Finance Institute (DFIs)

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ICT Sector

• I.T enabled service
• Call centers for both in-bound and outbound calls
• Wide range of business outsourcing services
• Disaster Recovery
• Software Development
• Education and Training
• ICT Habitats
• Development of Broadband infrastructure

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Knowledge Industry

• To complement the above sectors Kenya aspires to
  attract internationally reputable education
  institutions, universities and training centers
  areas for investment include
• Science and Technology Centers
• IT centers of excellence
• Training centers for hospitality industry
• School fashion and design
• RD institutes
• School for business and International marketing

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Kenya Investment Authority

• Role
• Provides services local and international
  investors and potential investors by
• Issuing Investment Certificate
• Assisting in obtaining any necessary licenses and
  permits
• Assisting in obtaining incentives or exemptions
  under the Income Tax Act, the Customs and Excise
  Act, the Value Added Tax Act, or other
  legislation
• Providing information including on investment
  opportunities throughout Kenya sources of
  business capital

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Kenya Investment AuthorityRole and Function.Cont

• Review the Investment Environment and make
  recommendations to the Government and others,
  with respect to changes that would promote and
  facilitate investment, including changes to
  licensing requirements
• Facilitate and manage investment sites, estates
  or lands together with associated facilities
• Market Kenya domestically and internationally

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Investment Procedure

• Registration of businesses by Registrar of
  Companies
• Registration at Kenya Investment Authority on a
  prescribed registration form (investment
  application form)
• Application for Investment Certificate
• Requirements for Investment Certificate
• Local Investments gt Ksh.1,000,000
• Foreign Investments- gtUS 100,000

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Investment Procedure...Cont

• Approval is given within 21 days from the date of
  application
• Upon approval, Investment Certificate is issued.
• Approval exclude areas that affect security,
  health and environment.
• Investments in Banking and Insurance are approved
  by Central Bank of Kenya and Commission of
  Insurance respectively.

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THANK YOU
Tel [phone] Fax [phone]
6663 info_at_investmentkenya.com