• Uninterrupted political and economic stability
  
• Abundant, well trained, mobile labour
  
• Strategic location - easy access to regional and world markets
  
• Well developed social and physical infrastructure, and IPC's one-stop facilitation services
  
• Kenya has had uninterupted political stability illustrated by Kenya's:

Multiparty democracy

• Democratic elections every five years since independence
  
• Smooth transition between governments
  

The government has revitalised the investment climate by;

• Liberalising the exchange controls
  
• Removing price controls
  
• Freeing the shilling exchange rate to be market driven
  
• Abolishing import licensing
  
• Opening up of the capital markets to foreign participation
  
• Attractive incentives are availed to all investors through;

Generous Investment and capital allowance

• Remmission for customs and VAT
  
• Manufacturing under bond status
  
• Export processing zones status
  
• Double taxation agreements
  
• Protection and promotion of investment agreements
  
• Bilateral investment treaties
  
• Trade agreements
  

Opportunities abound for investments in Kenya's agricultural, industrial, and commercial sectors e.g. Horticulture, Agro-processing, Textiles and Apparels, Plastics and Pharmaceuticals, Tourism and Financial services. The investment Promotion Centre (IPC) will guide you on how to benefit from these opportunities and incentives, and facilitate the implementation of your project.

Guarantees to Investors

Kenya provides the following guarantees to local and foreign investors:

1. Guarantee Against Expropriation

The Constitution of Kenya provides guarantees against expropriation of private property, which may occur for reasons of security or public interest. In such a case, a fair and prompt compensation is guaranteed.

2. Repatriation of Capital and Profits

Capital repatriation, remittance of dividends and interest are guaranteed to foreign investors under the Foreign Investment Protection Act (FIPA) (Cap 518). Investors can repartriate:
After tax profits, including retained profits which have not been capitalised;
The proceeds of the investment after payment of the relevant taxes;
Principal and interest associated with any loan.

Other Guarantees

Kenya is a member of the World Bank-affiliated Multilateral Investment Guarantee Agency (MIGA), which issues guarantees against non-commercial risk to enterprises that invest in member countries. Kenya is also a member of the International Centre for Settlement of Investment Disputes (ICSID), and of the Africa Trade Insurance Agency (ATIA).

The Government policy is aimed at extending facilitatoin measures in favour of private sector investment. The following is a summary of current incentives that have been put in place:

Tax Incentives

Investment Allowance

Investment allowance is provided as an incentive for investment in the manufacturing and hotel sectors at the rate of 100% countrywide. For Manufacturers Under Bond, the applicable rate is 100%. In addition, eligible capital expenditures have been expanded to include certain infrastructure and environmental protection equipment related to the manufacturing activity.

Depreciation

Liberal rates are allowed for the depreciation of assets based on book value as follows:

• Buildings
  
• Industrial buildings 2.5% (Straight Line)
  
• Hotels 4.0 % (Straight Line)

Machinery

Tractors, combine harvesters, earth- moving equipment, and similar vehicles 37.5% (Declining Balance)

Other self-propelled vehicles, including aircraft 25% (Declining Balance)
All other machinery, including ships 12.5% (Declining Balance)
Computers and other office equipment 33.3% (Declining Balance)

Export Promotion Programmes

Duty Remission Facility

Materials imported for use in manufacturing for export; the production of raw materials for export; or the production of duty free items for sale domestically, are eligible for duty remission. Applications for this facility should be made to the Tax remmission for export office(TREO)at the Ministry of Finance.

Manufacture Under Bond

To encourage manufacturing in Kenya for export to the world market, the Government has established the Manufacture Under Bond programme that is open to both local and foreign investors. Enterprises operating under the programme are offered the following incentives:

• Exemption from duty and VAT on imported raw materials and other imported inputs; and,
  
• 100 per cent investment allowance on plant, machinery, equipment and buildings.

Bonded manufacturing enterprises can be licensed to operate within a 30 km radius of a Customs Office. This programme is facilitated by the Investment Promotion Centre and administered by the Kenya Revenue Authority.

Export Processing Zones Programme

The Export Processing Zones Authority (EPZA) cordinates operations of Export Processing Zones (EPZs).

The Government encourages the development of private EPZs, and a number of them have already been established. Enterprises operating in these zones in Kenya enjoy the following benefits:

• 10 year tax holiday and thereafter a flat 25 per cent tax for 10 years;
  
• Exemption from all withholding taxes on dividends and other payments to non-residents during the first 10 years;
  
• Exemption from import duties on, raw materials and intermediate inputs;
  
• No restrictions on management or technical arrangements;
  
• Exemption from Stamp Duty;
  
• Exemption from VAT; and,
  
• Operate on one licence only.