ANNOUNCEMENT 16 Jun 2016

On 16 June 2016, the government of Kenya announced that as of 15 June 2016, it will fully enforce the 'Companies Act 2015'. This full enforcement of the 'Companies Act 2015', for the first time, introduced a domestic ownership requirement for newly registered foreign companies in the country.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

UNCTAD (2015) Kenya implemented 30% domestic ownership requirement for newly registering foreign companies. http://investmentpolicyhub.unctad.org/IPM/MeasureDetails?id=2973&hubc=null&rgn=&grp=&c=&t=&s=&df=&dt=&pg=7&map=false&isSearch=false

Kenyalaw.org 'Legal Notice No. 109 on the Companies Act, 2015' (English)
http://kenyalaw.org/kl/index.php?id=6177

Inception date: 15 Jun 2016 | Removal date: 20 Sep 2016
Still in force

FDI: Entry and ownership rule

On 15 June 2016, the government of Kenya enforced in full the ‘Companies Act 2015’. This law for the first time introduces the necessity for all the newly registered foreign firms in Kenya (i.e. firms registered after the effective date of the ‘Companies Act 2015’), to cede minimum 30% of their ownership to citizens born in Kenya. Furthermore, this new law states that investors that do not comply with this newly established domestic ownership requirement will receive a fine amounting to Sh 5 million (USD 49356.39).

The denoted domestic ownership requirement was repealed on 20 September 2016 (see related measure).

AFFECTED SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A