How CS Moses Kuria intends to boost foreign investments in Kenya by revisiting the Companies Act 2015

 

The Secretary of the Cabinet for Trade, Moses Kuria, said that he intends to shortly propose a change in the cabinet to overturn the regulatory section under the Companies Act 2015 that requires all foreign direct investment in Kenya to be held locally by a minimum of 30 per cent.

In its present form under the Companies Act 2015, the legislation stipulates that international businesses that want to incorporate in Kenya must transfer at least 30 per cent of their ownership to individuals who were born in Kenya and are thus citizens of that country.

Any companies that do not comply with this guideline are subject to a fine of 5 million Kenyan shillings. On the other hand, the legislation does not apply to businesses that are already established and registered in Kenya.

Moreover, the legislation grants the secretary of the Treasury Cabinet the authority to make laws governing the activities of foreign businesses in Kenya.

This is the approach that Kuria is currently against, which he thinks has to be modified to make it possible for the nation to receive a greater amount of foreign direct investment (FDI).

During his speech on Monday at the inauguration of Showfa, a new taxi ride-hailing service in Nairobi, Kuria said that he has a large number of investors who would want to bring investments into the nation but are blocked from doing so by the legislation, which he characterized as being penalizing and superfluous.

"We have this problem with Space X, which Elon Musk has long intended to establish in Kenya but hasn't been able to do so. But Mr Simiyu wants to declare Mimi Ndio partner wa Elon Musk hapa Kenya?

 

"No, we shouldn't deceive ourselves that way; that won't take place."

Kuria said, "In this respect, I am going to take this change to the cabinet to abolish this law so that businesses may utilize this nation to base their activities in Africa and beyond."

The legislation overturned on June 15, 2016, permitted Kenyans to serve on the boards of directors of foreign companies that wanted to establish businesses in Kenya. This law took effect on June 15, 2016.

According to Kuria, these are some of the laws that must be altered if it is determined that they do not fulfil the needs of Kenyans.

He said that he wants to increase the current foreign direct investment portfolio to $10 billion and examine the rules to make room for new investments.