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The Working Committee on Regulatory Reforms for Business Activity has submitted recommendations to the attorney general. Implementation of these recommendations has commenced with the publication of the Licensing Laws (Repeals and Amendment) Bill 2007, presented together with the Budget, which proposes further reform to the licensing regime.
Although Kenyan law does not generally restrict foreign investors from investing in the country, certain legal provisions restrict the extent of foreign investment in particular sectors of the economy. For example, restrictions are imposed on non-Kenyan residents or citizens owning shares in listed companies.
The Investment Promotion Act 2004 aims to encourage inward investment into Kenya. Its primary objective is to reduce the bureaucracy faced by investors in relation to licensing, immigration and negotiating tax incentives and exemptions from the relevant authorities. The act established a corporate body known as the Kenya Investments Authority, which is responsible for implementing its goals.
The Kenyan High Court recently considered whether shares held in a bank by a wholly owned subsidiary company of a judgment debtor could be attached in order to settle a judgment debt payable by the judgment debtor. Its controversial decision may lead to the erosion of the basic principle that a company is a separate legal entity.
Two innovations that have been established in recent years to encourage foreign investment in Kenya are the Investment Promotion Centre, which liaises between enterprises and relevant ministries and helps to resolve bureaucratic problems, and export processing zones, in which certain business imports are free of tax.