Country Snapshot

Population (2019, millions)¹ 52.57
Population Projections (2030, millions)¹ 65.45
Economically active population in agriculture (as % of Economically active population)¹², 2019 91.5
Capital Nairobi
Surface Area (km²)² 580,370
Weather¹¹ Hottest month, February, 13-28°C; coldest month, July, 11-23°C; driest month, August, 24 mm average rainfall; wettest month, April, 266 mm average rainfall
Languages³ Official: English and Kiswahili – Others: numerous indigenous languages
Main Religions³ Main: Protestant and Catholic – Others: Muslim, Traditionalists, others and none
Time⁴ Eastern Africa Time (EAT) +0300 UTC
Driving Orientation⁵ Left Side
Internet Country Code⁶ .ke
Country Calling Code +254
Plug, Socket and Voltage⁷ Type G – 240V/50Hz
Currency Kenyan Shilling (KES) – 1/100 = Cent
Exchange Rate (As of 28 January 2018, per USD)⁸ 100.74 (buy rate)
GDP at Market Prices (2018, current, billions of USD)⁹ 87.9
GDP Growth (2018, annual %)⁹ 6.32
Average GDP Growth (2014-2018, annual %)⁹ 5.62
GDP per Capita, PPP (2018, current international $)⁹ 3,461
Inflation, Consumer Prices (2018, annual %)⁹ 4.68
Average Inflation, Consumer Prices (2014-2018, annual %)⁹ 6.49
Total Reserves in Months of Imports (2017)⁹ 4.34

Sources:
¹United Nations Population Division, Department of Economic and Social Affairs.
²COMESA Statistics, COMESTAT Data Hub.
³CIA World Factbook.
⁴Time and Date Portal.
⁵Chartsbin Portal, “Worldwide Driving Orientation by Country”.
⁶Wikipedia, “List of Internet top-level domains”; and, Internet Assigned Numbers Authority, Root Zone Database.
⁷International Electrotechnical Commission, World Plugs.
⁸Central Bank of Kenya.
⁹World Bank, World Development Indicators 2019.
¹¹Economist Intelligence Unit.
¹²AFDB Socio Economic Database.

Reasons to Invest in Kenya

  • Kenya has a strong economy accounting for more than 40% of East African Community’s GDP; clear policy framework in the Big 4 Agenda and Vision 2030; and numerous investment opportunities across all sectors and project sizes.
  • Kenya is a signatory to a large and growing number of tax treaties and investment promotion and protection Agreements such as the TradeCom II Programme (2016- 2020) under framework of the Cotonou Agreement aimed to strengthen capacities of ACP countries on Trade and the Africa Growth and Opportunities Act.
  • Since independence, Kenya has maintained remarkable stability despite changes in its political system.
  • Access to a large pool of highly educated and skilled workforce; highly productive and easily trainable.
  • Kenya’s strategic location and its well-developed business infrastructure make it a natural choice for investors and many international firms have made it their regional hub.
  • Access to the larger East African Community and regional markets with access to over 385 million consumers. Nairobi is also a major transport Hub in East Africa with Connections from Jomo Kenyatta International Airport to Major Destinations around the world. All these are coupled with a convenient Time zone of (GMT +3).
  • Kenya affords a pleasant and quality standard of living with its diverse natural resources ranging from wildlife to sceneries.
  • Kenya is signatory to a number of multilateral and bilateral trade agreements as part of its trade policy such as WTO, AfCFTA, AGOA, ACP-EU, and COMESA.

Source: Kenya Investment Authority – KenInvest.

Population

Population Projections (millions)

Population (2019) 52.57
Population Projections (2030) 66.45

Source: United Nations Population Division, Department of Economic and Social Affairs.

Population Residing in Urban Areas (%)

Population Projections (2019) 27.5
Percentage of Population Residing in Urban Areas (2030) 33.4

Source: United Nations Population Division, Department of Economic and Social Affairs.

Youth Literacy Rates (2017, %)

Youth Literacy Rate, Population 15-24 Years, Both Sexes 87.83
Youth Literacy Rate, Population 15-24 Years, Female 88.08
Youth Literacy Rate, Population 15-24 Years, Male 87.59

Source: United Nations Educational, Scientific and Cultural Organization, UNESCO Institute of Statistics.

Labour

Unemployment (2018, % of Total Labour Force, Modeled ILO Estimate)

Unemployment, Total 9.31
Unemployment, Female 9.22
Unemployment, Male 9.39

Source: World Bank, World Development Indicators 2019.

Labour Force (2017, % of Ages 15+, Modeled ILO Estimate)

Labour Force Participation Rate, Total 66.30
Labour Force Participation Rate, Female 63.58
Labour Force Participation Rate, Male 69.1
Labour Force, Total (number) 20,518,673

Source:World Bank, World Development Indicators 2019.

Economy Overview

GDP

2014 2015 2016 2017 2018
GDP at Market Prices (current, billions of USD) 61.44 64.01 69.18 78.75 87.9
GDP Growth (annual %) 5.35 5.71 5.87 4.86 6.32

Source: World Bank, World Development Indicators 2019.

Value Added by Sector (% of GDP)

Indicator 2018 2019
Agriculture 39.45 40.34
Manufacturing 12.31 11.94
Industry 22.71 22.48
Services 56.84 56.18
Construction 6.48 6.59
Electricity, gas and water 2.85 2.89
Mining and quarrying 1.07 1.06
Education 6.18 6.00
Finance, real estate and business services 21.43 21.28
Public administration and Defense 5.59 5.54
Health and Social Work 2.15 2.16
Other services 1.61 1.58
Transport, storage and communication 12.22 12.17
Wholesale and retail trade, hotels and restaurants 11.19 10.98

Source: AFDB Socio Economic Database.

Trade Profile

Import Partners (Imported Value, thousands, USD)

  2014 2015 2016 2017 2018
World 18,237,053 14,555,436 14,107,376 16,680,503 17,374,783
China 2,780,189 2,988,849 3,325,065 3,776,808 3,661,733
India 2,962,554 2,371,959 2,024,747 1,648,243 1,828,448
Saudi Arabia 631,551 504,064 682,385 1,108,244 1,705,151
United Arab Emirates 1,160,071 783,867 901,889 1,337,658 1,456,152
Japan 973,144 798,663 811,829 789,909 984,823

Source: International Trade Center COMTRADE Statistics.

Export Partners (Exported Value, thousands, USD)

  2014 2015 2016 2017 2018
World 6,023,982 5,396,276 5,695,081 5,745,668 6,050,407
Pakistan 244,301 333,334 395,360 618,040 582,521
Uganda 541,976 561,135 498,730 483,332 503,419
United States of America 127,094 117,727 424,698 453,908 465,203
Netherlands 412,506 320,926 392,336 399,220 447,264
United Kingdom 374,835 347,583 368,178 370,061 394,336

Source: International Trade Center COMTRADE Statistics.

Kenya’s Top Import Products (USD ’000)

Chapter Description 2014 2015 2016 2017 2018
  All products  18,237,053 14,555,436 14,107,376 16,680,503 17,374,783
27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes 4,000,306 2,238,934 2,111,727 2,740,761 3,391,797
84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof 1,678,328 1,425,214 1,428,812 1,827,535 1,664,366
87 Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof 1,498,466 1,514,396 1,138,203 1,114,074 1,227,903
85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles 1,553,756 1,239,386 1,629,903 1,121,436 1,206,182
72 Iron and steel 727,248 643,291 604,359  734,553 860,555

Source: COMSTAT database

Kenya’s Top Export Products (USD ’000)

Chapter Description 2014 2015 2016 2017 2018
  All products 6,023,982 5,396,276 5,695,081 5,745,668 6,050,407
09 Coffee, tea, mate and spices 1,298,958 1,353,432 1,452,842 1,667,074 1,617,160
06 Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage 612,315 483,387 555,572 595,482 625,599
27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes 609,415 563,028 424,914 353,658 386,777
07 Edible vegetables and certain roots and tubers 242,432 222,982 264,573 209,108 250,134
08 Edible fruit and nuts; peel of citrus fruits or melons 100,829 114,193 149,837 180,698 232,965

Source: COMSTAT database

Investment Profile

FDI Inflows (millions of USD)

Year 2016 2017 2018 2019 2020
FDI Inflows 1,138.6 1,403.6 1,139.4 1,098.4 716.8

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Outflows (millions of USD)

Year 2016 2017 2018 2019 2020
FDI Outflows 11.2 13.6 11.2 10.8 7.1

Source: United Nations Conference on Trade and Development, World Investment Report 2021.

FDI Inward Stock (millions of USD)

Year 2016 2017 2018 2019 2020
FDI Inward Stock 6,151.6 6,738.7 8,545.8 9,292.8 10,009.6

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Outward Stock (millions of USD)

Year 2016 2017 2018 2019 2020
FDI Outward Stock 60.0 66.4 83.9 91.8 84.7

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Inflows Main Source Countries (in terms of number of projects)

United States, UK, India, South Africa, China, Japan, Germany, UAE, France, and South Korea.

Source: Financial Times, fDi Markets, 2018

FDI Inflows Main Sectors (in terms of number of projects)

Financial Services, Communications, Business Services, Software & IT services, Food & Tobacco, Transportation, Automotive OEM, Industrial Machinery, Equipment & Tools, Consumer Electronics, and Renewable energy.

Source: Financial Times, fDi Markets, 2018

FDI Inflows Main Companies (in terms of number of projects)

Airtel Kenya, Faulu Microfinance Bank, Ecobank Kenya, Cummins Cogeneration Kenya, Samsung Electronics East Africa (SEEA), Taaleritehdas, Orange Kenya, LG Electronics, and Standard Chartered Bank

Source: Financial Times, fDi Markets, 2018

Doing Business

Overall Doing Business Ranking

2020 56/190
2019 61/190

Source: World Bank, Doing Business, 2020

Starting a Business

2020 Rank 129/190
Procedures (number) 7
Time (days) 23
Cost (% of income per capita*) 22.4
Paid-in Minimum Capital (% of income per capita*) 0.0

*GNI per capita used: USD 1,620
Source: World Bank, Doing Business, 2020

Paying Taxes

Paying Taxes

2020 Rank 94/190
Payments (number per year) 24
Time (hours per year) 180
Total Tax Rate (% of profit) 37.2
Profit Tax (% of profit) 30.1
Labor Tax and Contributions (% of profit) 1.9
Other Taxes (% of profit) 5.2

Source: World Bank, Doing Business, 2020

Trading Across Borders

2020 Rank 117/190
Time to Export: Border Compliance (hours) 16
Cost to Export: Border Compliance (USD) 143
Time to Export: Documentary Compliance (hours) 19
Cost to Export: Documentary Compliance (USD) 191
Time to Import: Border Compliance (hours) 194
Cost to Import: Border Compliance (USD) 833
Time to Import: Documentary Compliance (hours) 60
Cost to Import: Documentary Compliance (USD) 115

Assumptions

  • It is assumed that shipment travels from a warehouse in the largest business city of the exporting economy to a warehouse in the largest business city of the importing economy.
  • It is assumed that each economy imports a standardized shipment of 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed that each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product.
  • A shipment is a unit of trade. Export shipments do not necessarily need to be containerized, while import shipments of auto parts are assumed to be containerized.
  • Shipping cost based on weight is assumed to be greater than shipping cost based on volume.
  • If government fees are determined by the value of the shipment, the value is assumed to be $50,000.
  • The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, airport or land border crossing.
  • Time is measured in hours, and 1 day is 24 hours.
  • Costs do not include tariffs.

Source: World Bank, Doing Business, 2020

Investment Regime

Legal Framework

Investment Code – Law N. 6 of the 31st of December 2004- The major regulations governing FDI are found in the Investment Promotion Act (2004). The Act aims to promote and facilitate investment by assisting investors, for instance, in obtaining the relevant licenses and incentives.

Kenya’s Foreign Investment Protection Act (FIPA) (CAP. 518) guarantees capital repatriation and the remittance of dividends and interest to foreign investors, who are free to convert and repatriate profits including un-capitalized retained profits (proceeds of an investment after payment of the relevant taxes and the principal and interest associated with any loan). Kenya has no restrictions on converting or transferring funds associated with investment. 

Key guarantees in terms of investment protection include: 

  • Protection against expropriation
  • Free transfer of foreign capital and income after taxes as well as the return on capital as dividends of companies with foreign or mixed capital
  • There are no general restrictions on the percentage of equity that foreign nationals may hold in a locally incorporated company.
  • Investors can choose between different mechanisms to resolve their disputes.

Investment Incentives

  • Investors in Export Processing Zones (EPZs) benefit from a range of fiscal incentives.
    • A 10-years tax holiday followed by a 25% flat tax for the next 10 years;
    • Exemption from all withholding taxes during the first 10 years;
    • Exemption from import duties on machinery, raw materials, and inputs;
    • No restrictions on management or technical arrangements;
    • Exemption from stamp duty and from the VAT on raw materials, machinery and other inputs.
  • Industrial building allowance – This is an annual allowance computed on the straight-line method at 10% per annum on cost from 1 January 2010, The rate for hotels is 10% and 25% for commercial buildings, irrespective of the transfer price. A 50% industrial building allowance can be claimed on a hostel or educational building, as well as for buildings used for training.
  • Formworks allowance – The allowance in respect of expenditure on farm works is 100% of the expenditure incurred. Farm works are structures necessary for the proper operation of a farm and include fences, dips, drains, water and electricity works (other than machinery), windbreaks etc., as well as farm buildings.
  • Wear-and-tear allowances on plant and machinery – Plant and machinery includes furniture and fittings, office equipment, vehicles, aircraft and ships.
  • Investment deduction allowance – This is intended as an incentive to investment in the manufacturing sector and consists of a “once-and-for-all” claim based on the cost of buildings and machinery installed therein.
  • Shipping investment deduction – A shipping investment deduction equal to 100% is claimable in the year of first use on capital expenditure incurred on the purchase or on purchase and refitting of a power-driven ship of more than 125 tons.
  • Special Economic Zone (SEZ); With effect from 1 January 2018, the Income Tax Act provides that Special Economic Zone enterprises are subject to:
    • 100% investment deduction on buildings, plant and machinery used in manufacturing or the 150% investment deduction where the investment is located outside the municipalities of Kisumu, Mombasa or Nairobi.
    • 10% corporate tax for first 10 years;
    • 15% corporate tax for subsequent years;
    • Duty & VAT exemption;
    • 100 percent of the investment allowance on cost of building and
    • Exemption from stamp duty; and
    • Exemption from withholding tax
    • Exemption from Import duty and Import Declaration Fees

Source: Kenya Investment Authority (KenInvest).

Country Snapshot

Population (2019, millions)¹ 52.57
Population Projections (2030, millions)¹ 65.45
Economically active population in agriculture (as % of Economically active population)¹², 2019 91.5
Capital Nairobi
Surface Area (km²)² 580,370
Weather¹¹ Hottest month, February, 13-28°C; coldest month, July, 11-23°C; driest month, August, 24 mm average rainfall; wettest month, April, 266 mm average rainfall
Languages³ Official: English and Kiswahili – Others: numerous indigenous languages
Main Religions³ Main: Protestant and Catholic – Others: Muslim, Traditionalists, others and none
Time⁴ Eastern Africa Time (EAT) +0300 UTC
Driving Orientation⁵ Left Side
Internet Country Code⁶ .ke
Country Calling Code +254
Plug, Socket and Voltage⁷ Type G – 240V/50Hz
Currency Kenyan Shilling (KES) – 1/100 = Cent
Exchange Rate (As of 28 January 2018, per USD)⁸ 100.74 (buy rate)
GDP at Market Prices (2018, current, billions of USD)⁹ 87.9
GDP Growth (2018, annual %)⁹ 6.32
Average GDP Growth (2014-2018, annual %)⁹ 5.62
GDP per Capita, PPP (2018, current international $)⁹ 3,461
Inflation, Consumer Prices (2018, annual %)⁹ 4.68
Average Inflation, Consumer Prices (2014-2018, annual %)⁹ 6.49
Total Reserves in Months of Imports (2017)⁹ 4.34

Sources:
¹United Nations Population Division, Department of Economic and Social Affairs.
²COMESA Statistics, COMESTAT Data Hub.
³CIA World Factbook.
⁴Time and Date Portal.
⁵Chartsbin Portal, “Worldwide Driving Orientation by Country”.
⁶Wikipedia, “List of Internet top-level domains”; and, Internet Assigned Numbers Authority, Root Zone Database.
⁷International Electrotechnical Commission, World Plugs.
⁸Central Bank of Kenya.
⁹World Bank, World Development Indicators 2019.
¹¹Economist Intelligence Unit.
¹²AFDB Socio Economic Database.

Reasons to Invest in Kenya

  • Kenya has a strong economy accounting for more than 40% of East African Community’s GDP; clear policy framework in the Big 4 Agenda and Vision 2030; and numerous investment opportunities across all sectors and project sizes.
  • Kenya is a signatory to a large and growing number of tax treaties and investment promotion and protection Agreements such as the TradeCom II Programme (2016- 2020) under framework of the Cotonou Agreement aimed to strengthen capacities of ACP countries on Trade and the Africa Growth and Opportunities Act.
  • Since independence, Kenya has maintained remarkable stability despite changes in its political system.
  • Access to a large pool of highly educated and skilled workforce; highly productive and easily trainable.
  • Kenya’s strategic location and its well-developed business infrastructure make it a natural choice for investors and many international firms have made it their regional hub.
  • Access to the larger East African Community and regional markets with access to over 385 million consumers. Nairobi is also a major transport Hub in East Africa with Connections from Jomo Kenyatta International Airport to Major Destinations around the world. All these are coupled with a convenient Time zone of (GMT +3).
  • Kenya affords a pleasant and quality standard of living with its diverse natural resources ranging from wildlife to sceneries.
  • Kenya is signatory to a number of multilateral and bilateral trade agreements as part of its trade policy such as WTO, AfCFTA, AGOA, ACP-EU, and COMESA.

Source: Kenya Investment Authority – KenInvest.

Population

Population Projections (millions)

Population (2019) 52.57
Population Projections (2030) 66.45

Source: United Nations Population Division, Department of Economic and Social Affairs.

Population Residing in Urban Areas (%)

Population Projections (2019) 27.5
Percentage of Population Residing in Urban Areas (2030) 33.4

Source: United Nations Population Division, Department of Economic and Social Affairs.

Youth Literacy Rates (2017, %)

Youth Literacy Rate, Population 15-24 Years, Both Sexes 87.83
Youth Literacy Rate, Population 15-24 Years, Female 88.08
Youth Literacy Rate, Population 15-24 Years, Male 87.59

Source: United Nations Educational, Scientific and Cultural Organization, UNESCO Institute of Statistics.

Labour

Unemployment (2018, % of Total Labour Force, Modeled ILO Estimate)

Unemployment, Total 9.31
Unemployment, Female 9.22
Unemployment, Male 9.39

Source: World Bank, World Development Indicators 2019.

Labour Force (2017, % of Ages 15+, Modeled ILO Estimate)

Labour Force Participation Rate, Total 66.30
Labour Force Participation Rate, Female 63.58
Labour Force Participation Rate, Male 69.1
Labour Force, Total (number) 20,518,673

Source:World Bank, World Development Indicators 2019.

Economy Overview

GDP

2014 2015 2016 2017 2018
GDP at Market Prices (current, billions of USD) 61.44 64.01 69.18 78.75 87.9
GDP Growth (annual %) 5.35 5.71 5.87 4.86 6.32

Source: World Bank, World Development Indicators 2019.

Value Added by Sector (% of GDP)

Indicator 2018 2019
Agriculture 39.45 40.34
Manufacturing 12.31 11.94
Industry 22.71 22.48
Services 56.84 56.18
Construction 6.48 6.59
Electricity, gas and water 2.85 2.89
Mining and quarrying 1.07 1.06
Education 6.18 6.00
Finance, real estate and business services 21.43 21.28
Public administration and Defense 5.59 5.54
Health and Social Work 2.15 2.16
Other services 1.61 1.58
Transport, storage and communication 12.22 12.17
Wholesale and retail trade, hotels and restaurants 11.19 10.98

Source: AFDB Socio Economic Database.

Trade Profile

Import Partners (Imported Value, thousands, USD)

  2014 2015 2016 2017 2018
World 18,237,053 14,555,436 14,107,376 16,680,503 17,374,783
China 2,780,189 2,988,849 3,325,065 3,776,808 3,661,733
India 2,962,554 2,371,959 2,024,747 1,648,243 1,828,448
Saudi Arabia 631,551 504,064 682,385 1,108,244 1,705,151
United Arab Emirates 1,160,071 783,867 901,889 1,337,658 1,456,152
Japan 973,144 798,663 811,829 789,909 984,823

Source: International Trade Center COMTRADE Statistics.

Export Partners (Exported Value, thousands, USD)

  2014 2015 2016 2017 2018
World 6,023,982 5,396,276 5,695,081 5,745,668 6,050,407
Pakistan 244,301 333,334 395,360 618,040 582,521
Uganda 541,976 561,135 498,730 483,332 503,419
United States of America 127,094 117,727 424,698 453,908 465,203
Netherlands 412,506 320,926 392,336 399,220 447,264
United Kingdom 374,835 347,583 368,178 370,061 394,336

Source: International Trade Center COMTRADE Statistics.

Kenya’s Top Import Products (USD ’000)

Chapter Description 2014 2015 2016 2017 2018
  All products  18,237,053 14,555,436 14,107,376 16,680,503 17,374,783
27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes 4,000,306 2,238,934 2,111,727 2,740,761 3,391,797
84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof 1,678,328 1,425,214 1,428,812 1,827,535 1,664,366
87 Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof 1,498,466 1,514,396 1,138,203 1,114,074 1,227,903
85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles 1,553,756 1,239,386 1,629,903 1,121,436 1,206,182
72 Iron and steel 727,248 643,291 604,359  734,553 860,555

Source: COMSTAT database

Kenya’s Top Export Products (USD ’000)

Chapter Description 2014 2015 2016 2017 2018
  All products 6,023,982 5,396,276 5,695,081 5,745,668 6,050,407
09 Coffee, tea, mate and spices 1,298,958 1,353,432 1,452,842 1,667,074 1,617,160
06 Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage 612,315 483,387 555,572 595,482 625,599
27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes 609,415 563,028 424,914 353,658 386,777
07 Edible vegetables and certain roots and tubers 242,432 222,982 264,573 209,108 250,134
08 Edible fruit and nuts; peel of citrus fruits or melons 100,829 114,193 149,837 180,698 232,965

Source: COMSTAT database

Investment Profile

FDI Inflows (millions of USD)

Year 2016 2017 2018 2019 2020
FDI Inflows 1,138.6 1,403.6 1,139.4 1,098.4 716.8

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Outflows (millions of USD)

Year 2016 2017 2018 2019 2020
FDI Outflows 11.2 13.6 11.2 10.8 7.1

Source: United Nations Conference on Trade and Development, World Investment Report 2021.

FDI Inward Stock (millions of USD)

Year 2016 2017 2018 2019 2020
FDI Inward Stock 6,151.6 6,738.7 8,545.8 9,292.8 10,009.6

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Outward Stock (millions of USD)

Year 2016 2017 2018 2019 2020
FDI Outward Stock 60.0 66.4 83.9 91.8 84.7

Source: United Nations Conference on Trade and Development, World Investment Report 2021

FDI Inflows Main Source Countries (in terms of number of projects)

United States, UK, India, South Africa, China, Japan, Germany, UAE, France, and South Korea.

Source: Financial Times, fDi Markets, 2018

FDI Inflows Main Sectors (in terms of number of projects)

Financial Services, Communications, Business Services, Software & IT services, Food & Tobacco, Transportation, Automotive OEM, Industrial Machinery, Equipment & Tools, Consumer Electronics, and Renewable energy.

Source: Financial Times, fDi Markets, 2018

FDI Inflows Main Companies (in terms of number of projects)

Airtel Kenya, Faulu Microfinance Bank, Ecobank Kenya, Cummins Cogeneration Kenya, Samsung Electronics East Africa (SEEA), Taaleritehdas, Orange Kenya, LG Electronics, and Standard Chartered Bank

Source: Financial Times, fDi Markets, 2018

Doing Business

Overall Doing Business Ranking

2020 56/190
2019 61/190

Source: World Bank, Doing Business, 2020

Starting a Business

2020 Rank 129/190
Procedures (number) 7
Time (days) 23
Cost (% of income per capita*) 22.4
Paid-in Minimum Capital (% of income per capita*) 0.0

*GNI per capita used: USD 1,620
Source: World Bank, Doing Business, 2020

Paying Taxes

Paying Taxes

2020 Rank 94/190
Payments (number per year) 24
Time (hours per year) 180
Total Tax Rate (% of profit) 37.2
Profit Tax (% of profit) 30.1
Labor Tax and Contributions (% of profit) 1.9
Other Taxes (% of profit) 5.2

Source: World Bank, Doing Business, 2020

Trading Across Borders

2020 Rank 117/190
Time to Export: Border Compliance (hours) 16
Cost to Export: Border Compliance (USD) 143
Time to Export: Documentary Compliance (hours) 19
Cost to Export: Documentary Compliance (USD) 191
Time to Import: Border Compliance (hours) 194
Cost to Import: Border Compliance (USD) 833
Time to Import: Documentary Compliance (hours) 60
Cost to Import: Documentary Compliance (USD) 115

Assumptions

  • It is assumed that shipment travels from a warehouse in the largest business city of the exporting economy to a warehouse in the largest business city of the importing economy.
  • It is assumed that each economy imports a standardized shipment of 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed that each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product.
  • A shipment is a unit of trade. Export shipments do not necessarily need to be containerized, while import shipments of auto parts are assumed to be containerized.
  • Shipping cost based on weight is assumed to be greater than shipping cost based on volume.
  • If government fees are determined by the value of the shipment, the value is assumed to be $50,000.
  • The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, airport or land border crossing.
  • Time is measured in hours, and 1 day is 24 hours.
  • Costs do not include tariffs.

Source: World Bank, Doing Business, 2020

Investment Regime

Legal Framework

Investment Code – Law N. 6 of the 31st of December 2004- The major regulations governing FDI are found in the Investment Promotion Act (2004). The Act aims to promote and facilitate investment by assisting investors, for instance, in obtaining the relevant licenses and incentives.

Kenya’s Foreign Investment Protection Act (FIPA) (CAP. 518) guarantees capital repatriation and the remittance of dividends and interest to foreign investors, who are free to convert and repatriate profits including un-capitalized retained profits (proceeds of an investment after payment of the relevant taxes and the principal and interest associated with any loan). Kenya has no restrictions on converting or transferring funds associated with investment. 

Key guarantees in terms of investment protection include: 

  • Protection against expropriation
  • Free transfer of foreign capital and income after taxes as well as the return on capital as dividends of companies with foreign or mixed capital
  • There are no general restrictions on the percentage of equity that foreign nationals may hold in a locally incorporated company.
  • Investors can choose between different mechanisms to resolve their disputes.

Investment Incentives

  • Investors in Export Processing Zones (EPZs) benefit from a range of fiscal incentives.
    • A 10-years tax holiday followed by a 25% flat tax for the next 10 years;
    • Exemption from all withholding taxes during the first 10 years;
    • Exemption from import duties on machinery, raw materials, and inputs;
    • No restrictions on management or technical arrangements;
    • Exemption from stamp duty and from the VAT on raw materials, machinery and other inputs.
  • Industrial building allowance – This is an annual allowance computed on the straight-line method at 10% per annum on cost from 1 January 2010, The rate for hotels is 10% and 25% for commercial buildings, irrespective of the transfer price. A 50% industrial building allowance can be claimed on a hostel or educational building, as well as for buildings used for training.
  • Formworks allowance – The allowance in respect of expenditure on farm works is 100% of the expenditure incurred. Farm works are structures necessary for the proper operation of a farm and include fences, dips, drains, water and electricity works (other than machinery), windbreaks etc., as well as farm buildings.
  • Wear-and-tear allowances on plant and machinery – Plant and machinery includes furniture and fittings, office equipment, vehicles, aircraft and ships.
  • Investment deduction allowance – This is intended as an incentive to investment in the manufacturing sector and consists of a “once-and-for-all” claim based on the cost of buildings and machinery installed therein.
  • Shipping investment deduction – A shipping investment deduction equal to 100% is claimable in the year of first use on capital expenditure incurred on the purchase or on purchase and refitting of a power-driven ship of more than 125 tons.
  • Special Economic Zone (SEZ); With effect from 1 January 2018, the Income Tax Act provides that Special Economic Zone enterprises are subject to:
    • 100% investment deduction on buildings, plant and machinery used in manufacturing or the 150% investment deduction where the investment is located outside the municipalities of Kisumu, Mombasa or Nairobi.
    • 10% corporate tax for first 10 years;
    • 15% corporate tax for subsequent years;
    • Duty & VAT exemption;
    • 100 percent of the investment allowance on cost of building and
    • Exemption from stamp duty; and
    • Exemption from withholding tax
    • Exemption from Import duty and Import Declaration Fees

Source: Kenya Investment Authority (KenInvest).