The Nairobi International Financial Centre: Kenya’s proposed new gateway to foreign investment – JD Supra
Monday 4 July 2022 marked the launch of the Nairobi International Financial Centre, which President Uhuru Kenyatta stated will create an environment for fintech to thrive; for innovation and new technologies such as artificial intelligence to be mainstreamed; and for investors to inject new capital into Kenyan and regional businesses.
The Nairobi International Financial Centre (the NIFC or the Centre) is established under the Nairobi International Financial Centre Act 2017 (the Act). The Act seeks to provide the legal framework for the development of an efficient and globally competitive financial services sector in Kenya that generates high levels of national savings and investments. The overall objective of the Centre is to create a framework that will improve Nairobi’s status as an economic hub for foreign investment in Africa in line with one of the key pillars of Vision 2030, to move Kenya’s economy up the value chain. The financial services sector is a priority sector under Vision 2030 as it is vital in raising Kenya’s GDP growth.
The Nairobi International Financial Centre (General) Regulations 2021 were published on 20 December in anticipation of the operationalisation of the NIFC.
Key among the benefits to be enjoyed by NIFC firms is the guarantee that they will not be subject to any nationalisation or expropriation measures or any restrictions on private ownership in Kenya, and they may repatriate profits and realise investment.
There are certain other aspects of the NIFC where clarity will be needed, for example the expectation that NIFC firms will not be subject to local ownership restrictions, i.e., non-Kenyan or non-residents can own 100% of such firms. This seems to conflict with a requirement in the Act that all firms must comply with all the licensing regulations in the specific sector.
We expect the NIFC Authority to streamline some of these issues in the coming days, otherwise the lack of clarity may deter businesses from seeking such certification and therefore slow down the uptake of this Government of Kenya venture.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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