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Kenya’s New Law Requires Foreign ICT Firms to Have 30% Local Shareholding

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Kenya’s New Law Requires Foreign ICT Firms to Have 30% Local Shareholding

Kenya has introduced a new law that requires foreign ICT firms setting up base in Kenya to have a 30 per cent local shareholding to be considered Kenyan.

These new regulations have been introduced in the recently published gazette notice on National Information Communication and Technology Public Policy Guidelines of 2020

New foreign ICT firms will have to fulfil the new guidelines for them to obtain licenses while existing firms will have three years to meet the local equity ownership threshold.

“It is the policy that only companies with at least 30% substantive Kenyan ownership, either corporate or individual will be licensed to provide ICT services. For purposes of this rule, companies without majority Kenyan ownership will not be considered Kenyan, and may thus not be calculated as part of the 30% Kenyan ownership calculus.” states the policy in the Gazette Notice.

Read: Uber, Bolt to Face Prohibitive Ride-hailing Regulations in Lagos

For listed companies, the equity participation rules will conform to the then extant rules of the Capital Markets Authority.

The new regulation is part of the government efforts to boost Kenyans participation in the ICT and Science & Technology sector through equity participation.

The Gazette Notice also highlights that government ICT procurement, including security and defence, will give preference to new and innovative local businesses to permit greater participation by emerging enterprises and preferentially adopt homegrown solutions.

“Kenyan built solutions will be preferred over any other solution; where there are no local businesses that meet the tender requirements, skills transfer to local firms and personnel will be a mandatory requirement.”

Image Credits: iHub

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