Foreign companies opening offices in Kenya will be required to cede at least a third of their shareholding to locals after Attorney General Githu Muigai fully operationalized the newly enacted Companies Act 2015.
The new law requires that foreign companies registering in Kenya cede at least 30 per cent of their shareholding to persons who are Kenyan citizens by birth.
Prof Muigai, via a gazette notice issued a fortnight ago appointed June 15, 2016 as the date to enforce in full the Companies Act. The new law was being implemented in phases previously.
Investors who fail to comply with the fresh ownership rules will be slapped with a fine of Sh5 million.
The law comes into force despite Industrialisation Secretary Adan Mohamed’s admission in November last year that the ownership rule was an “error” that would be corrected.
The statute also provides that there shall be a foreign company register and empowers the Treasury Cabinet Secretary to issue regulations on how foreign companies will operate in Kenya.
Under the repealed law, foreigners were only required to have Kenyan directors with no limits on ownership.
– BUSINESS DAILY