- Kenya’s capital now joins Casablanca, Cape Town, Port Louis (Mauritius), and Johannesburg
- Firms looking to join the NIFC will pay Sh1 million for certification and an annual fee of Sh500,000, regulations published by the Treasury indicate.
Image: ENOS TECHE
Kenya targets $2 billion (Sh235 billion) worth of investment through the Nairobi International Financial Centre (NIFC) launched on Monday.
The centre, first mooted in 2014, is meant to help direct international investment to Kenya, enabling companies and investors to take advantage of trade and investment opportunities.
Kenya’s capital now joins Casablanca, Cape Town, Port Louis (Mauritius), and Johannesburg as IFCs in the continent.
An international financial centre (IFC) is a location with venues and facilitating Foreign Direct Investment (FDI) in areas such as banking, asset management, insurance and financial markets.
Speaking at the launch, National Treasury Cabinet Secretary Ukur Yatani said the centre offers tailored incentives to ease trade and brew a vibrant social economic environment for the country.
Thew centre, he said will ride on information technology to widen investors financing scope and spread risk away from the banking sector that currently provides more than 70 per cent of financing needs in the market.
“Beyond pulling in capital from around the world, the NIFC also wants to deepen the pools of capital available for domestic investors," Yatani said.
He said apart from also serving as a gateway to Africa for investors, the centre also aims to deepen the local financial and capital markets.
The Cs said the Nairobi centre has access to the African Continental Free Trade Area (AfCTA), making it easy to trade across 54 African countries with 1.3 billion people and a combined GDP of $3.4 trillion (close to Sh400 trillion).
Some of the perks that come with joining the NIFC include fast-tracked licensing and regulatory procedures, a predictable tax regime and an improved dispute resolution framework.
In addition, NIFC firms will have the freedom to repatriate profits, employ certain categories of staff, not be subject to nationalisation and can be owned 100 per cent by non-Kenyans.
Firms looking to join the NIFC will pay Sh1 million for certification and an annual fee of Sh500,000, regulations published by the Treasury indicate.
Start-ups will pay Sh100,000 for certification and an annual fee of a similar amount. These are firms in the initial stages of setup, which provide an innovative or novel product or service.
Companies operating a carbon market exchange or emission trading system under the NIFC will benefit from 15% corporate tax for the first 10 years of operation.
Investor companies certified by the NIFC Authority and have invested a minimum of Sh5 billion will benefit from the certainty that the Capital Gains Tax applicable at the time they make their investments will remain unchanged during the lifetime of the investments.
However tax justice crusaders have expressed concern about the centre's establishment saying it will disadvantage Kenyan firms at the expense of foreign players and and open up avenues for tax evasion.
Last year,UK-based insurance firm, Prudential Plc with operations in Africa and Asia placed request to join the Nairobi hub.
The insurer submitted a Letter of Intent at a roundtable meeting in London, attended by President Uhuru Kenyatta and UK Foreign Secretary Dominic Raab.