Attracting foreign investments is the aim of every country with various incentives all over the place for anyone wishing to relocate or expand their business. In Kenya for example in a bid to increase bed capacity for tourist as the country targets 3 million tourist in the next 2 years the government has allowed any investor willing to invest in a hotel to import capital goods tax free. But tax exemptions and deductions are not the ultimate magnet. The regulatory framework in any country as well as how efficiently it is exercised is of major concern to any investor. To put this in perspective business involves credit. for example: wholesalers acquire goods on credit from manufacturers, while suppliers offer credit to retail chains. With credit comes defaults, hence any country that lacks the capability to dispense any such cases quickly and with just is not a favorable business location. In Kenya setting up a business involves certain legal requirements. Certain acts regulate and stipulate how this should be done. It all starts with the type of business one has in mind with the business name governed by the business name act while each sector has its own laws with banks for example having the banking act. In total there are up to 200 licenses that investors are expected to acquire from various government agencies. To issue the licenses is the national government and local governments. And with the enacting of the new constitution Lawyer George Kithi says the structure of local governments is likely to be taken up by county governments almost in the same structure. "The number licences are likely to remain the same with the counties taking the responsibility of local government with some cases it involving the use of the same offices." With that brief overview of just some of the licence requirements, of main concern to any investor is about other laws of the land such as those protecting individual property and nature of doing business
"Investors must understand that the constitution protects everyone in kenya and their property including foregn nationals. They should know that in no way will the government seize their property unless it is necessary and is such scenario due compensation will be given with the current market rates been utilized." George Kithi He explains that should all systems be functional and bodies like the toothless monopolies commission exercise its powers this would drive up competition and encourage investment based on quality products and not profit margin as witnessed especially in the oil sector. As seen in the monopolies commission Kithi says various government agencies actually act as an deterrent to foreign investment. Bureaucracy in various ministries and the decentralization of services also acts as a major let down. To this end the need for automation of services as seen in the attorney general’s office can lead to increased efficiencies. Due to the inefficiencies created by the bureaucracy as well as some motivated by the vice of corruption it is estimated that for one wishing to start a company in Kenya will take about 14 days to have all documents in place. Now compare this with other east African community member states especially Rwanda where the process can take as little as a single day. The role of the judiciary in expedition of cases cannot be over emphasized as in the past has cost the country investors whereas also leading to huge losses to locals and investors as well. One casing point is the Titanium case that is still in court years since the mining of the mineral was to kick of with the miner Tiomin of Canada incurring heavy losses after carrying out various feasibility studies just to name a few but also the residents of Kwale are yet to benefit from the project. In the long run Kithi believes that efficiency of the judiciary will determine how Kenya performs in attracting businesses as well as retaining them. He is however happy with reforms the institution is currently undergoing and hopes that the kenya chamber of commerce can get back to its feet to help in arbitration of cases without necessarily having to end up to court.
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