Kenya’s Class G Investor Permit is a specialized immigration instrument under Sections 37–39 of the Kenya Citizenship and Immigration Act, 2011, designed to attract high-impact foreign investment. This guide provides a technical deep dive into eligibility criteria, legal compliance, application workflows, and post-issuance obligations, aligned with the Directorate of Immigration Services (DIS) and Kenya Investment Authority (KenInvest) regulations.
Legal Framework & Regulatory Authorities
Governing Statutes
- Kenya Citizenship and Immigration Act, 2011 (No. 12 of 2011): Defines permit classes, investment thresholds, and renewal protocols.
- Kenya Investment Promotion Act (Cap. 485): Mandates minimum capital requirements (USD 100,000) and sectoral restrictions.
- Tax Procedures Act, 2015: Outlines fiscal obligations for permit holders.
Oversight Bodies
- Directorate of Immigration Services (DIS): Processes permits and enforces compliance.
- KenInvest: Issues Investment Certificates and facilitates sector-specific incentives.
- Kenya Revenue Authority (KRA): Manages tax compliance (e.g., Tax Compliance Certificate [TCC]).
Eligibility Criteria: Technical Specifications
Investment Requirements
- Minimum Capital: USD 100,000 deposited in a Kenyan commercial bank (Central Bank of Kenya [CBK]-regulated).
- Permissible Structures:
- Wholly Foreign-Owned Entity: 100% foreign equity under Companies Act, 2015.
- Joint Venture: Partnership with Kenyan nationals under Limited Liability Partnerships Act, 2011.
Sectoral Restrictions
Prohibited sectors for foreign investors (per Schedule 4 of the Investment Promotion Act):
- Small-scale mining (under KSh 100M).
- Retail trade (exceptions for investments > USD 1M).
Employment Quotas
- Local Staffing: ≥ 60% Kenyan employees (Citizen and Immigration Regulations, 2012).
- Expatriate Roles: Limited to technical/senior management (Form 25 justification required).
Application Workflow: Step-by-Step Technical Process
Phase 1: Pre-Application Compliance
- Entity Formation:
- Register under Companies Act, 2015 (CR12 for shareholders, Memorandum & Articles of Association).
- Obtain KRA PIN and Business Permit (County Government).
- Capital Injection:
- Transfer USD 100,000 to a Kenyan bank; secure Bank Confirmation Letter (SWIFT/MT103 traceability).
Phase 2: eFNS Portal Submission
- Documentation:
- Form 27 (Work Permit Application): Notarized by advocate.
- Form 25 (Expatriate Justification): Detailed role necessity.
- Audited Financials: IFRS-compliant statements for operational entities.
- Digital Requirements:
- Scanned documents (PDF/A-1b, 300 DPI).
- Biometric data (via DIS-appointed centers).
Phase 3: DIS Review & Approval
- Technical Committee Evaluation:
- Due Diligence: CBK anti-money laundering (AML) checks.
- SLA: 60–180 days processing (varies by sector).
- Fees:
- Processing: KSh 20,000 (non-refundable).
- Issuance: KSh 250,000/year (exempt for EAC nationals).
Phase 4: Post-Issuance Compliance
- Alien Registration Certificate (ARC): Apply within 30 days (Biometrics at Nyayo House).
- Annual Reporting: Submit to DIS by March 31:
- Employment Audit: Local vs. expatriate ratios.
- Tax Returns: Certified by KRA.
Tax Implications & Incentives
Fiscal Obligations
- Corporate Tax: 30% (reducible to 15% in Special Economic Zones).
- Withholding Tax: 20% on dividends (15% under Double Taxation Agreements [DTAs]).
Incentive Programs
| Program | Benefit | Legal Basis |
|---|---|---|
| SEZ/EPZ | 10-year tax holiday | SEZ Act, 2015 |
| Manufacturing | 100% Investment Deduction (Cap. 470) | Income Tax Act |
| Agribusiness | VAT exemption on machinery | VAT Act, 2013 |
Compliance & Penalty Framework
Key Obligations
- Renewal: Submit 60 days pre-expiry (Form 27R + KSh 250,000).
- Amendment Reporting: Notify DIS of directorship/equity changes (14 days).
Non-Compliance Penalties
| Violation | Penalty |
|---|---|
| Late renewal | KSh 500,000 + permit revocation |
| Understaffing locals | KSh 1M fine + 3-year ban |
| Tax evasion | 200% back taxes + criminal charges |
Technical FAQs
Q: Can a Class G Permit holder engage in multiple businesses?
A: Yes, via a holding company structure (Section 4A, Companies Act), provided each entity meets DIS criteria.
Q: How does the permit interact with DTAs?
A: DTAs (e.g., Kenya-UK DTA) may reduce withholding taxes; consult KRA’s Treaty Avoidance Guidelines.
Q: What is the appeal process for denied applications?
A: File a Judicial Review Petition at Nairobi High Court within 30 days (Civil Procedure Rules, 2010).
Conclusion
The Class G Investor Permit is a strategic entry point for foreign capital, governed by rigorous legal and fiscal protocols. For investors, meticulous adherence to DIS and KRA mandates is critical to maintaining compliance and leveraging Kenya’s growth sectors.
Engage Muthii Associates for:
- Legal Due Diligence: Entity structuring, DTA optimization.
- Compliance Audits: ARC, tax, and employment reporting.
- DIS Liaison: Expedited permit processing and renewal.
Contact Us: [0722432638]
