Dentons Hamilton Harrison & Mathews > Nairobi, Kenya > Firm Profile
Dentons Hamilton Harrison & Mathews Offices
1ST FLOOR, DELTA OFFICE SUITES, BLOCK A, OFF WAIYAKI WAY, MUTHANGARI
PO BOX 30333-00100
NAIROBI
Kenya
Dentons Hamilton Harrison & Mathews > The Legal 500 Rankings
Kenya > Banking, finance and capital markets Tier 1
Prominent in the space of government financing, especially in relation to the oil and energy sector, Dentons Hamilton Harrison & Mathews runs the gamut of corporate finance transactions advice to large local and international corporations in real estate, manufacturing, and agriculture. Structured finance, sovereign bonds, securitisations, and syndicated lending also count among the practice’s strengths. Practice head Richard Omwela excels in loan, equity and project financing, and leads a team including Sigee Koech, who specialises in secured and unsecured financing for lenders and local and cross-border transactions for borrowers, Daniel Wanjau Muriu, who focuses on capital markets, and Andrew Mugambi, who works on project and PPP financing.Practice head(s):
Richard Omwela
Other key lawyers:
Testimonials
‘Integration of technology and information to ensure all their services are easily accessible to all their clients.’
‘Personalisation of services to suit the specific client’s needs. Sharing the vision with clients enables understanding needs and how they can be met.’
‘The team is highly professional, knowledgeable and up-to-date with the market dynamics.’
‘They are full of energy, proactive, highly engaged, honest, and never make excuses for anything. They deliver as and when they promise to deliver.’
Key clients
Standard Chartered Bank Plc
African Export Import Bank
The Standard Bank of South Africa Limited
Coöperatieve Rabobank U.A.
NCBA Bank Kenya PLC
Stanbic Bank Kenya Limited
Equity Bank (Kenya) Limited
Platcorp Holdings Limited
Balaji EPZ Limited
Kinetic Holdings Limited
Work highlights
- Acted as local counsel for the Standard Bank of South Africa, Citibank N.A. Kenya Branch, Stanbic Kenya Limited, and DFI’s British Investment International and Norfund, on Greenlight Planet Kenya Ltd’s market leading, first-of-its-kind, bank-led and entirely Kenyan-Shilling-denominated $130m securitisation deal.
- Acted for Platcorp Holdings Limited and four of its subsidiaries in Kenya and Uganda in a $45m facility from the International Finance Corporation (IFC).
Kenya > Dispute resolution Tier 1
The dispute resolution practice at Dentons Hamilton Harrison & Mathews is routinely retained in complex litigation and arbitration by an array of corporate clients from the banking, insurance, energy, construction, retail, and public sectors. Distinct specialisations in competition, constitutional and administrative, tax, and regulated industry law form core pillars of work for the team. Banking, insurance, and IP expert Michi Kirimi now heads the team, supported by the tax and real estate-focused Kiragu Kimani and commercial and employment specialist Ezra Makori.Practice head(s):
Michi Kirimi
Other key lawyers:
Kiragu Kimani; Ezra Makori; Wilson Mwihuri; Queenton Ochieng’; Lawson Ondieki
Testimonials
‘Best service quality.’
‘The team is hard-working and delivers an excellent service.’
‘Excellent service delivery to clients. They give great client care through the provision of swift updates on the progress of matters handled and meet strict client and court deadlines.’
‘They have excellent judgement, analytical skills and are able to spot points of weaknesses in the client’s as well as opponents’ case and address the same. In addition, they are creative and able to provide solutions that are practical and out of the box; good research and writing skills.’
‘Great interpersonal skills and very patient with clients.’
Key clients
Equity Bank (Kenya) Limited
Vivo Energy Kenya Limited
The Heritage Insurance Company Limited
Powerchina International Group Limited
Stecol Corporation
Majid Al Futtaim Hypermarkets Limited
Rural Electrification and Renewable Energy Corporation
British Army Training Unit Kenya
Parklane Construction Limited
Work highlights
- Acted for a construction engineering company in a suit alleging damages of KSh450m alleged to have been suffered as a result of their quarrying activities.
- Acted for the British Army Training Unit in Kenya in defending a constitutional petition instituted before the Environment & Land Court by over 1,500 claimants alleging that a fire that started as a result of a military training exercise had affected the claimants and violated their constitutional right to a clean and healthy environment.
- Acted for a prominent hypermarket chain in the country in an appeal to the High Court from the judgment of the Competition Tribunal upholding the decision of the Competition Authority which had imposed certain sanctions on the client.
Kenya > Employment Tier 1
Key players in the finance, energy, defence and tech industries routinely seek the expertise of Dentons Hamilton Harrison & Mathews for the team's ease of success in employment disputes, as well as its tailored advice on disciplinary and termination processes, restructuring, employee transfers, and employment contracts. Michi Kirimi specialises in redundancy and restructuring advice, as well as labour disputes with former employees, while Lorna Mainnah is highly regarded for her expertise in immigration matters for expatriate employees. Litigator Ezra Makori is an excellent resource when negotiating with labour unions.Practice head(s):
Michi Kirimi; Lorna Mainnah
Other key lawyers:
Testimonials
‘We have worked on very complex cases with the team. They are organised, professional, resourceful and very sound on matters of law. They are current and will guide clients on legal matters. Their advice is always the right one to follow.’
‘Ezra Makori is exceptional! Professional, available, knowledgeable, respectful, resourceful and always there for his clients. He is one counsel I can call any time of the day to request legal assistance and he will provide the support required from wherever he is.’
‘The team is well structured with a great understanding of the matters in their purview. Diverse and well-skilled team.’
‘Excellent legal advisory services delivered in a timely manner. The team is dedicated in keeping the client updated on the status of the matters.’
‘Effective collaboration and attention to the client’s unique organisational set up has been critical in their delivery.’
‘Absolute pleasure working with the employment team, especially Ezra Makori, who has a great understanding of the law and specific needs of the company.’
‘Availability of the team to respond to quick consultations.’
Key clients
G4S Kenya Limited
Water Org
Kenya Kazi Services Limited
Gulf Energy Ltd
One Earth Future Foundation
Federation of Kenya Employers
Wells Fargo Ltd
Airtel Networks Kenya Limited
Lufthansa Cargo AG
National Bank of Kenya Limited
Work highlights
- Defended a client against a claim lodged by 63 claimants seeking approximately KSh1.6bn where a substantial part of the claim was dismissed and the claim amount was reduced by over 90%.
- Defended a private security services company sued by 245 former employees who were seeking approximately $900,000 for unfair and wrongful dismissal from employment.
Kenya > Privatisation and projects Tier 1
Leveraging a broad network of key sector contacts, Dentons Hamilton Harrison & Mathews routinely assists government departments, non-governmental organisations, and private sector sponsors and developers. The practice complements its hefty reputation in large-scale, high-profile PPPs with a strategic focus on energy and infrastructure projects. Practice head Andrew Mugambi works closely with the Kenyan PPP Directorate on nationally significant projects and concessions, and is supported by Peter Okaalet Jr., who has an excellent reputation in both traditional and renewable energy projects.Practice head(s):
Andrew Mugambi
Other key lawyers:
Peter Okaalet Jr.; Ralia Mohamud
Key clients
Directorate of Public Private Partnerships
Kenya Defence Forces
China Road and Bridge Corporation
Work highlights
- Advised the Government of Kenya, through the Ministry of Defence and the Directorate of Public Private Partnership, on a project for the design, development, building and financing of residential accommodation and other associated support facilities for the Kenya Defence Forces across multiple locations in Kenya.
- Advised China Road and Bridge Corporation on a public-private partnership project in Kenya aimed at resolving the long-standing water scarcity issue, involving the construction of a water dam on the Ndarugu River in Kiambu county, near Nairobi.
Kenya > Commercial, corporate and M&A Tier 2
Particularly active in the banking, logistics, and tech sectors, Dentons Hamilton Harrison & Mathews is well-versed in M&A, private equity, competition, and antitrust law, capital markets, and regulatory advice and compliance. Practice head Richard Omwela has a strong track record advising on corporate mergers, while the trio of Andrew Mugambi, Daniel Wanjau Muriu, and Peter Okaalet Jr cover the breadth of M&A transactions, competition, and merger control, as well as private equity matters.Practice head(s):
Richard Omwela
Other key lawyers:
Key clients
Commercial International Bank (Egypt) S.A.E.
Rongai Workshop and Transport Limited
Viasat Inc.
Work highlights
- Advised Commercial International Bank (Egypt) S.A.E. (CIB) on its acquisition of the remaining 49% shareholding in Mayfair CIB Bank Limited.
- Advised Shareholders of Rongai Workshop & Transport Limited, the second-largest road transport company in Kenya (based on regional destinations served), on the sale of 100% of of its issued shares to an affiliate of Velogic Logistics Limited.
- Advised Viasat Inc. on the subscription for a 70% stake in a Kenyan company, Simba Broadcasting Limited.
Kenya > Real estate and construction Tier 2
Processing a high volume of real estate sale and purchase transactions, the dedicated team at Dentons Hamilton Harrison & Mathews advises on all relevant aspects of conveyancing, projects, planning, construction, regulatory, and compliance mandates. Lorna Mainnah leads the practice, and fields extensive expertise in large-scale conveyancing matters and complex commercial transactions, while managing partner Adil Khawaja has in-depth knowledge of real estate and planning law. Nancy Gitau assists with large-scale conveyancing transactions, including transfer and financing.Practice head(s):
Lorna Mainnah
Other key lawyers:
Adil Khawaja; Nancy Gitau; Deborah Ontiri
Testimonials
‘They provide practical solutions.’
‘Lorna Mainnah is hands on and very knowledgeable. She is also very easily accessible.’
‘Personalised service.’
Key clients
Africa Logistics Properties
Nanyuki Ranching Limited
Hewton Limited
Riverglades Properties LLP
MTK Group
Plumbing Systems Limited and Flammatech Limited
Immo80 Kenya Limited
Eezy Track Limited
Work highlights
- Advised Hewton Limited on the structuring and management of a development comprising a commercial area and a residential area with 200 houses in one of Nairobi’s prestigious suburbs, worth approximately KSh2bn.
- Advised Nanyuki Ranching Limited in the subdivision of a property in Nanyuki, Laikipia County measuring 4,738 acres and its subsequent sale to various purchasers, a deal worth approximately KSh2,2bn.
Dentons Hamilton Harrison & Mathews > Firm Profile
The firm: Dentons Hamilton Harrison & Mathews is one of Kenya’s highly acclaimed law firms, with a tradition of excellence dating back to 1902. We have built up a reputation as an innovative, experienced, responsive and highly-skilled firm with the capacity and technical expertise to offer practical legal solutions to both corporate and individual clients. We are one of Kenya’s largest law firms with a dedicated team comprised of 16 Partners and over 40 Associates who are supported by a team of over 80 legal assistants, administrative and paralegal staff. We offer legal services to clients all over Kenya and have our primary office in Nairobi and a second office in Mombasa.
Dentons Hamilton Harrison & Mathews provides a full range of legal services to an extensive client base which includes local and foreign companies, individuals, state corporations and Non-Governmental Organizations.
Recent experience:
Banking and finance: Advised Africa Logistics Properties on its $26m financing from Stanbic Bank Kenya and Standard Chartered Bank South Africa.
Dispute resolution: Represented the Ethics & Anti-Corruption Commission in challenges against its investigation into allegations of corruption made against several prominent personalities.
Employment: Advised an acquaculture business on a restructuring process, which required redundancies and acted in a subsequent case brought by one of the employees seeking damages and reinstatement.
IP: The firm handles a large portfolio of IP work for international and local clients such as Merck, Anheuser Busch, Abu Ghazaleh Intellectual Property, Adams & Adams, Rotam Agrochem International Limited, eBay Inc, Commercial Bank of Africa Limited, Reed Smith and Kilpatrick Townsend & Stockton
Privatization and Projects: Advised PricewaterhouseCoopers (Japan) and the World Bank Group on a study on the resilience of PPP infrastructure in Kenya.
Real estate: Advised ALP North Two on the negotiation and preparation of the sub-leases connected to Kenya’s first grade A logistic and distribution warehouse park.
Main Contacts
Department | Name | Telephone | |
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Corporate, Commercial & Real Estate | Richard Omwela | ||
Litigation | Ken Fraser | ||
Litigation | Kiragu Kimani | ||
Corporate, Commercial & Real Estate | Adil Khawaja | ||
Corporate, Commercial & Real Estate | Andrew Mugambi | ||
Litigation | Michi Kirimi | ||
Corporate, Commercial & Real Estate | Daniel Wanjau Muriu | ||
Corporate, Commercial & Real Estate | Lorna Mainnah | ||
Corporate, Commercial & Real Estate | Sigee Koech | ||
Litigation | Ezra Makori | ||
Corporate, Commercial & Real Estate | Peter Okaalet Jr | ||
Corporate, Commercial & Real Estate | Nancy Gitau |
Lawyer Profiles
Photo | Name | Position | Profile |
---|---|---|---|
Mr Kenneth Fraser | Kenneth Fraser SC is the Head of the Litigation Department. He specialises… | View Profile | |
Ms Nancy Gitau | Nancy is a Partner at Dentons Hamilton Harrison & Mathews. She is… | View Profile | |
Mr Adil Khawaja | Adil Khawaja has 28 years’ experience and in-depth knowledge in real estate,… | View Profile | |
Mr Kiragu Kimani | Kiragu has over 35 years’ experience in constitutional matters, tax litigation, procurement… | View Profile | |
Ms Michi Kirimi | Michi has over 25 years’ experience in successfully guiding her clients through… | View Profile | |
Ms Sigee Koech | Sigee is a partner in Dentons Hamilton Harrison & Mathews specializing in… | View Profile | |
Lorna Mainnah | Lorna has over 15 years’ experience in real estate, environmental and planning,… | View Profile | |
Mr Ezra Makori | Ezra is a partner at Dentons Hamilton Harrison & Mathews. He is… | View Profile | |
Mr Andrew Mugambi | Andrew Mugambi specialises in corporate and commercial law work including mergers and… | View Profile | |
Dr Daniel Muriu Wanjau | Daniel is an advocate of the High Court of Kenya having been… | View Profile | |
Mr Peter Okaalet Jr | Peter is a partner at Dentons Hamilton Harrison & Mathews. He is part… | View Profile | |
Mr Richard Omwela | Richard Omwela has been in legal practice for the past 43 years… | View Profile |
Staff Figures
Number of lawyers : 60Languages
English SwahiliMemberships
Law Society of KenyaOther
Contacts : Senior partner: Richard Omwela (richard.omwela@dentons.com) Contacts : Managing partner: Adil Khawaja (adil.khawaja@dentons.com) Other offices : MombasaDoing Business In
Kenya
Introduction
Kenya has shown a resilient recovery from the COVID-19 pandemic with efforts being undertaken to support trade, attract further foreign investment and improve value chain development across various economic sectors.
Kenya is considered the economic, commercial, financial and logistics hub of East and Central Africa. With the strongest industrial base in the region, Kenya has been successful in attracting investors who seek to reap the benefits of its regional position.
Kenya has the largest economy in East Africa offering advantages as an investment destination including:
- a stable investment environment,
- its strategic location as a regional financial, communication and transport hub,
- a highly skilled human resource, and
- a well-established private sector with vibrant capital markets.
Similarly, advancements in sectors such as Information Communications and Technology (ICT) have led the technology sector to become one of the major business sectors in Kenya. Kenya also enjoys one of the highest internet access rates in sub-Saharan Africa. Kenya recently landed its sixth submarine fibre cable in March 2022. The cable will improve efficiency and cut internet costs in Kenya as well as the region.
The business entities through which one may opt to make investments in the country include:
- Limited liability companies
- Limited liability partnerships
- Foreign registered companies i. e., branches of Companies incorporated outside Kenya
- Commercial trusts
Depending on the choice of one’s investment various structures are available in Kenya including business set-up, joint ventures, mergers & acquisitions, and public private partnerships among others. The different investment structures have various legal, regulatory and tax considerations attached to them and are guided by comprehensive laws and business practices. Furthermore, depending on the applicable sectors, the investment structures would need to seek approval of different regulators, most of whom are established under the applicable laws.
Kenya’s Legal System
Kenya operates the British common law system underpinned by the historic ties between Britain and Kenya. The supreme law in Kenya is the Constitution of Kenya, 2010, to which all other laws are subservient. The general rules of international law as well as any treaties and conventions ratified by Kenya also form part of the law of Kenya.
The Judicature Act of 1967 sets out the sources of law in Kenya as follows:
- written laws (statutes)
- common law
- doctrines of equity
- statutes of general application in force in England on or before 12 August 1897
- African customary law
Kenya operates a devolved system of government comprising the national government and 47 county governments. At the national level, laws are enacted in Parliament (comprising of the National Assembly and the Senate) while at the county level, the laws are enacted at the relevant county assemblies.
The court system consists of superior courts comprising the Supreme Court, Court of Appeal and the High Court and subordinate courts comprising Magistrates Courts, Kadhis’ Courts, Court Martials, Small Claims Court and other courts or local tribunals.
Investors may also consider alternative dispute resolution methods with modes such as arbitration and mediation being preferred due to time and, in most instances, cost efficiencies with respect to resolving disputes.
The Economy
The Kenyan shilling remains one of the most stable currencies in East Africa. The Central Bank of Kenya (CBK) manages the nation’s currency and allows its exchange rate to float freely with others in the global forex market. The CBK’s mandate is to sustain price stability, maintain liquidity in the country’s financial system, and support growth and investment. The government has also freed the Kenyan shilling exchange rate to be market driven with no restrictions on remittance or repatriation of profits and dividends.
Kenya’s inflation rate stood at 5.4% in January 2022. Inflation is projected to remain within the CBK’s target range of 2.5% to 7.5%, whereas fiscal and current account deficits are expected to reduce due to increased revenue collection and exports for the year 2021.
Kenya operates a liberal economy which promotes trade and investment with the main sectors being agriculture, financial services, tourism, ICT, and manufacturing.
The agricultural sector contributes 24% to the country’s Gross Domestic Product (GDP) with 70% of export earnings. It is also the largest employer with more than 40% of the total population and more than 80% of Kenya’s rural population earning from the sector. The sector remained resilient at the height of the COVID-19 Pandemic helping to limit the contraction in GDP to only 0.3%.
The tourism sector remains a major player in Kenya’s historically contributing to 10.4% of the GDP and directly employing 990,000 jobs. However, the COVID-19 Pandemic caused a decline of 78.4 % of tourist arrivals in 2020 compared to 2019, resulting in a 99.7% decline in earnings from $1.5 billion in 2019 to $4.6 million in 2020. It is projected that the Kenyan economy will increase its annual growth rate, from 5.0% in 2021 to 5.9% in 2022 reflecting an increase of 18%. The economy may grow following the resumption of normal economic activities and the implementation of the Government of Kenya’s Economic Recovery Strategy. Therefore, analysts anticipate that the tourism sector is it likely to bounce back compared to the last two years.
Kenya’s financial sector is the third largest in sub-Saharan Africa and is driven by increased adoption of technology, emergence of alternative channels of distribution, increased financial inclusion levels and a stable regulatory environment.
Overall, Kenya’s financial sector was resilient during the height of the COVID–19 Pandemic because of strong capital and liquidity buffers that were built over time following several government reforms and business innovativeness. However, rapid adoption of financial technology, re-engineering business models and innovations have resulted in complex and new emerging risks including increased fraudulent activity, cyber–attacks and cybersecurity threats as well as data privacy concerns (personal information theft).
Kenya is also a regional leader in ICT as a top innovation hub, attracting strategic businesses in ICT with several blue-chip technology companies operating from Nairobi.
With the upcoming presidential elections in August 2022, it is anticipated that political activity may slow down some sectors as key players ordinarily adopt a ‘wait and see’ approach. That said, most of the country remains confident of a peaceful election cycle.
Business Environment and Recent Developments
There have been developments in various sectors over the past year summarised in the table below:
Sectors | Changes |
Infrastructure and Public Private Partnerships (PPPs) | The Public Private Partnerships Act, 2021 (the PPP Act) came into force on 23rd December 2021 and repealed the Public Private Partnerships Act, 2013 (the Repealed PPP Act). The PPP Act seeks to improve and enhance the PPP framework in Kenya by introducing various changes in the sector at the national and county government level.
The Act establishes a Directorate of PPPs (the Directorate) which will serve as the lead institution in the implementation of PPPs in charge of originating, guiding, and coordinating the selection, ranking and prioritization of PPP projects and overseeing project appraisal and development activities of contracting authorities (CAs). The Directorate carries out most of the functions of the PPP Unit that was established under the Repealed Act.
Under the Repealed PPP Act, a CA seeking to enter a PPP arrangement with a private party was to establish a PPP node. A PPP node’s mandate was to among other things, prepare project agreements, ensure parties complied with the Repealed PPP Act and monitor the implementation of a project agreement. Under the PPP Act, majority of the functions of the PPP node are now to be performed directly by a contracting authority in liaison with the Directorate.
The PPP Act provides for new procurement methods including direct procurement and restricted bidding adding to those prescribed under the Repealed PPP Act such as competitive bidding and privately-initiated proposals.
The PPP Act introduces new arrangements to PPP structures which allow parties to consider more options and evaluate risks including Brownfield Concessions, Build Transfer models, Annuity-based Design, Build, Finance and Operate models and Joint Venture partnerships.
The PPP Act also imposes a success fee of up to 1% of the total project cost, payable by a private party that achieves financial close (the date when all conditions precedent required to be met to achieve first drawdown on senior debt under a project agreement are met).
The PPP Act expands the pre-qualification procedures that a CA must comply with including satisfaction of the legal, social, and environmental due diligence parameters prescribed by the Directorate.
Approval of the Cabinet Secretary is required under the PPP Act to restructure a project company’s shareholding to secure the equity component of a transaction if such restructuring does not (i) alter the overall split between debt and equity approved under the project agreement or (ii) dilute the majority position of the lead member of a consortium within the project company’s shareholding structure. Previously, only CA approval was required change in shareholding.
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Business | The Business Laws (Amendment) Act, 2021 (the BLAA) expanded the definition of a general meeting under the Companies Act to provide that a general meeting may take place as either a physical, virtual or hybrid meeting. A notice of a general meeting must, in addition to all previous requirements, specify the means of joining and participating in the meeting.
The BLAA also amended the Law of Contract Act to align it with the Companies Act, 2015 which abolished the use of common seals to execute documents.
The Companies (Beneficial Ownership Information) (Amendment) Regulations, 2022 (the Beneficial Ownership Amendment Regulations) introduced additional provisions regulating the disclosure of beneficial ownership information.
The Beneficial Ownership Amendment Regulations provide for additional disclosure obligations for companies which participate in Public Procurement and Assets Disposal under the PPAD Act, 2015 and Public Private Partnerships (PPP) under the PPP Act, 2013.
Private parties which participate in (or intend to participate in) public procurement arrangements and PPPs are now required to disclose their beneficial ownership information. Beneficial ownership information maintained by the Public Procurement Regulatory Authority in the Government Portal, in relation to entities that have been awarded a tender by the procuring entity as part of contract award shall be published and made publicly available. The PPP Directorate may also publish such information.
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Banking
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The Central Bank of Kenya (Amendment) Act, 2021 was assented into law in December 2021 with the principal objective of bringing the provision of credit or loan facilities through digital channels under the purview of the CBK.
Further, the CBK Digital Credit Providers Regulations, 2022 become operational in March 2022 and provide for the licensing, governance, and credit operations of digital credit providers. Under such Regulations, all previously unregulated digital credit providers must apply to the CBK for a license within six months of the publication of the Regulations, that is by 17 September 2022, or cease operations. |
Telecommunications
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The National Information Communications and Technology Policy Guidelines, 2020 (the 2020 ICT Policy) replaced the Kenya National ICT Policy Guidelines, 2006. The 2020 ICT Policy provides that a company licensed to provide information communications and technology services in Kenya, unless exempted by the relevant Cabinet Secretary, must have a minimum of 30% substantive Kenyan ownership (the Local Ownership Requirement). The 2020 ICT Policy was amended in April 2021 under Kenya Gazette Notice No. 3192 dated 25 March 2021, which provided further clarifications on the Local Ownership Requirement. We summarise these below:
· Existing licensees with less than the 20% local equity requirement and have not exhausted their three-year grace period will be required to meet the 30% local equity rule at the end of such a grace period.
· Existing licensees that met the 20% local equity requirement before the 2020 ICT Policy was published have two years from 7 August 2020 to meet the 30% local equity requirement.
· Existing licensees that had been granted a waiver under the ICT Sector Policy Guidelines of 2006 will have 3 years to meet the 30% local equity requirement from 25 March 2021.
· New applicants for licences have 3 years to meet the 30% local equity requirement from the date of issue of their licences.
· Companies registered to exclusively offer Business Process Outsourcing Services are exempted from complying with the 30% local equity requirement.
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Data protection
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Since the setting up of the Office of the Data Protection Commissioner in November 2020, the following steps have been taken with respect to data protection:
· The Data Protection (Registration of Data Controllers and Data Processors) Regulations, 2021 (the Registration Regulations); the Data Protection (General) Regulations, 2021 (the General Regulations); and the Data Protection (Complaints Handling Procedure and Enforcement) Regulations, 2021 (the Complaints Regulations) were approved by Parliament in February 2022.
· The General Regulations and Complaints Regulations are in force. However, the Registration Regulations will come into effect six months from the date of their publication (14 July 2022).
· Further, the ODPC has issued for public comment its Alternative Disputes Resolution framework which seeks to govern how parties resolve their data protection disputes arising under the Data Protection Act, 2019.
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Competition and Anti-Trust | The Competition Authority of Kenya (the CAK) published Buyer Power Guidelines (the Guidelines) in March 2022 which clarifies the CAK interpretation of buyer power and the principles that the CAK will follow when assessing conduct that may constitute abuse of buyer power.
Under the Guidelines, the CAK will implement a two-step approach in the assessment of abuse of buyer power. First, the CAK will determine whether buyer power exists and consider all relevant circumstances including, the nature and determination of contract terms between the concerned undertakings, the payment requested for access to infrastructure and the price paid to suppliers.
The CAK also published the Retail Code of Practice (the Retail Code) which borrows heavily from the UK’s Grocery Supply Code of Practice. The Retail Code applies to retailers and suppliers and requires them to deal fairly and ethically with each other by conducting their trading relationships with each other in good faith, without distinction between formal and informal arrangements and without duress.
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Employment law | The Employment (Amendment) Act, 2022 introduced amendments to the Employment Act that now require an employer to request for relevant compliance and clearance certificates only upon granting a prospective employer an offer of employment.
In most instances, compliance and clearance certificates are usually required from government agencies such as the Kenya Revenue Authority (KRA), the Higher Educations Loans Board (HELB), the Directorate of Criminal Investigation (DCI) etc.
An employer is allowed to rescind an offer of employment where the prospective employee cannot provide the necessary clearance or compliance certificates or if after providing the necessary certificates, the employee is not able to satisfy the mandatory clearance requirements.
The above changes will necessitate employers to change their recruitment processes specifically on how they conduct background checks.
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Tax | With effect from 1 January 2022, a company is deemed to be thinly capitalized where the gross interest paid or payable by the company to related persons and third parties exceeds 30% of the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) in any financial year. This requirement applies to interest on all loans, payments that are economically equivalent to interest and expenses incurred in connection with raising financing for a company.
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Anti-Counterfeit | Kenya’s Anti-Counterfeit Authority (the ACA) is commencing implementation of recordation of intellectual property rights effective from 1 July 2022. This process is on the back of amendments made to the Anti-Counterfeit Act that now requires that trademarks and other IP rights relating to goods to be imported into Kenya to be recorded with the ACA.
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Foreign Shareholding Restrictions
There are various regulators in the Kenyan economy covering the main economic sectors. The regulatory bodies exercise their mandate as provided under their establishing statutes. Efforts are being made to remove administrative barriers and improve regulatory delivery across various sectors.
There are various restrictions that apply to foreign shareholdings in entities operating in certain sectors and specialised fields. The restrictions are summarised in the table below:
Sector | Restriction |
Telecommunication | The National Information Communications and Technology (ICT) Policy Guidelines, 2020 caps foreign ownership in a company that provides telecommunication services to 70% of the issued share capital.
A subscription management services provider cannot from entering contractual arrangements with a foreign multi-channel satellite provider unless the foreign provider has landing rights in Kenya. Foreign ownership in a subscription management services licensee is capped at 80% of the shareholding |
Mining | Under the Mining Act, 2016 foreign ownership of companies that are eligible for holding or acquiring an artisanal mining permit, a prospecting permit, a mining permit, and a mining dealers permit is capped at 40% of the shareholding.
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Insurance | Under the Insurance Act, foreign ownership is capped at two-thirds of the issued share capital.
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Engineering | Under the Engineering Act, foreign ownership in engineering consulting firms is capped at 49% of the issued share capital.
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Private security services | Under the Private Security Regulation Act, foreign ownership in a private security service company is capped at 75% of the shareholding.
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The Foreign Investment Protection Act guarantees foreign direct investors’ right to capital repatriation, remittance of dividends and the principal and interest associated with any loan. The right is conditional upon the payment of relevant taxes.
The restrictions apply in instances where one is operating in the above discussed sectors to which foreign restrictions apply.
There are no exchange control laws in Kenya. The CBK can impose restrictions on remittances from Kenya to enable the government to meet its obligations under any international treaty however, this blanket power has yet to be exercised. The CBK regulates currency flow through regulations that require any transaction to or from a foreign recipient or within Kenya be effected through a bank licensed by the CBK.
For payments between $10,000 and $499,999 one must attach evidence of the purpose of the payment. An authorised bank must also notify the CBK of any payment above $500,000.
The Proceeds of Crime and Anti-Money Laundering Act 2009 places various reporting obligations on reporting institutions, defined as financial institutions and designated non-financial businesses and professions. Reporting institutions must register with the Financial Reporting Centre and adhere to obligations under Proceeds of Crime and Anti-Money Laundering Act.
Current Opportunities for New Investors
- Special Economic Zones and Export Processing Zones
Investors may take advantage of government initiatives established to boost trade and investment such as the Special Economic Zones (SEZs) and Export Processing Zones (EPZs).
An SEZ is defined as a designated geographical area with business enabling policies which seek to facilitate global and local investments, whereby any goods introduced, and specified services provided are regarded, in so far as import duties and taxes are concerned, as being outside the customs territory. There are 9 gazetted SEZs in Kenya.
An EPZ is defined as a designated part of Kenya where any goods introduced are generally regarded, insofar as import duties and taxes are concerned, as being outside the customs territory but are duly restricted by controlled access and where the benefits provided under the EPZ Act apply. The aim of EPZs is to create and promote export oriented industrial investment within the designated zones. Currently there are over 40 gazetted zones across the country.
SEZs and EPZs provide investment opportunities by offering integrated infrastructure facilities and access to business and economic incentives through the removal of trade barriers and impediments.
- Nairobi International Financial Centre
Investors may also seek to benefit from the recently established Nairobi International Financial Centre (the NIFC) which seeks to serve as Kenya’s new gateway to foreign investment. The NIFC is intended to act as an operating framework that develops an attractive business environment for local and foreign investors interested in investing in, and conducting business related to, financial services (and provision of related activities) in and from Kenya.
The NIFC will be made up of entities certified by the NIFC Authority as NIFC Firms. Such certification authorises the business to conduct qualified activities in Kenya as NIFC Firms. The qualified services include provision of financial services in various sectors including banking and finance (including fintech, green and digital finance), insurance, asset managers, international legal services, accounting and actuarial services among others.
Investors intending to invest $100,000 or more may obtain investment certificates from the Kenya Investment Authority (KenInvest) which is a statutory body established under the Investment Promotion Act, 2004. KenInvest seeks to promote and facilitate investment in Kenya by assisting investors in:
- (i) obtaining any necessary licences and permits,
- (ii) obtaining incentives or exemptions under various laws such as the Income Tax Act, the Customs and Excise Act, the Value Added Tax Act, and
- (iii) providing information, including information on investment opportunities or sources of
A KenInvest investment certificate comprises various licenses required for general compliance. The holder of such certificate is also entitled to various immigration permits and passes. KenInvest also liaises with other government agencies to issue additional licenses and approvals not directly handled by the Authority.
KenInvest seeks to serve as a ‘one-stop-shop’ for investors into Kenya. Investor promotion and facilitation by the Authority seeks to expedite foreign direct investment into Kenya.
- Banking, finance and capital markets
- Dispute resolution
- Employment
- Privatisation and projects
Top Tier Firm Rankings
- Commercial, corporate and M&A
- Real estate and construction