So why are global Investors investing in Kenya? You should probably read this if you plan to invest your money in Kenya. It is not a surprise why Kenya has emerged as the destination for foreign direct investment (FDI).
The economy is booming in Kenya, the government is doing everything to open its arms for foreigners to invest in Kenya, and numerous opportunities exist in sectors such as tech, renewable energy, agribusiness, etc.
Kenya, for instance, received USD 759 million worth of FDI in 2022, up from 64% when the same period was compared with last year, as per a report developed by the United Nations Conference on Trade and Development (UNCTAD) World Investment Report.
Whether you are an experienced investor or you want to invest in Kenya for the first time, here is everything you need to know. Read on to see why you need to be in Kenya and how you can start.
Kenya is Known for Growth, a Gateway, and Security
Kenya is special in East Africa, and not just for the stunning beauty or vibrant culture. It has the strongest economy in the region, with a GDP of $108 billion by 2023.
The economy of Kenya is expected to grow by 6% in the coming years. So why does this matter if you are interested in investing in Kenya? A booming economy provides more chances for your money to work for you.
Kenya is also the gateway to East Africa. With a port in Mombasa, it has the potential to connect with close to 500 million consumers of the East African Community (EAC) and more, thanks to trade deals such as the African Continental Free Trade Area( AfCFTA).
Investing in Kenya is bigger than the country itself; it connects you to an extensive regional market. Additionally, compared to some of its neighbors, Kenya’s political stability should provide investors another level of confidence.
Inclusive growth, to which the government is alluding with its “Bottom-Up Economic Transformation Agenda,” sets a culture that appeals to foreign investors who can invest in Kenya.
The other central plus point is the infrastructure in a country. Kenya has four international airports, and a central new modern railway, the Standard Gauge Railway (SGR) line linking Mombasa to Nairobi, making moving goods and people fast.
A robust telecom network complements this, and a tech-savvy audience makes the potential of businesses skyrocket now if you ask yourself why invest in Kenya, because the country has the stability, access, and infrastructure for your investments to sprout.
Incentives That Attract Foreigners to Invest in Kenya
A primary reason why international investors are driving their capital into Kenya is the significant incentives available from the government. To make investing in Kenya easy, the Kenya Investment Authority (KenInvest) and the Kenya Revenue Authority (KRA) have lined up an array of fiscal and non-fiscal incentives.
Here’s what you need to know:
Tax Holidays in Special Economic Zones (SEZs)
Set up an SEZ, and you will have to pay a 10% corporate tax for the first 10 years, followed by a 15% rate for the next 10, plus exemptions on VAT, import duties, and stamp duty.
Export Processing Zones (EPZs)
In EPZs, businesses can avail of a 10-year corporate tax holiday and VAT and customs duty exemption on raw materials and equipment.
Allowance on Investment Deduction
100% ceiling for manufacturing, hotel, etc (Subject to conditions)
Double Taxation Agreements (DTAs)
Kenya has signed agreements with countries such as Germany, France, and India, among others, to prevent individuals from being taxed on the same income twice, making it more straightforward for individuals and, in turn, companies to invest in Kenya without losing a chunk of their profits due to tax.
No Exchange Controls
Thanks to the free forex regime in SEZs, there are no limitations on the repatriation of funds to their country of origin.
Therefore, keeping costs as low as possible and giving returns a high potential helps encourage you to engage in the business with Kenya investment incentives for foreign investors.
Sector-heavy Stories for International Investors
One should remember that Kenya is a diverse economy; hence, there are many opportunities in various areas to invest in Kenya. This article will now highlight the best sectors to invest in Kenya and why they continue to capture the attention of investors.
Technology & Fintech: The Silicon Savanna
Home to a burgeoning tech industry, especially in Nairobi, which is often referred to as the” Silicon Savannah”, Kenya has lagged behind European countries and other frontier states by 15 years on phone banking.
This city of innovation is home to startups like Safaricom, which transformed the mobile banking industry through M-Pesa.
Fast forward to 2023, and Microsoft embarks on a massive deal with G42, and both giants announce the biggest data center co-location ever in Kenya, which will help improve the overall tech infrastructure for the country.
Investing in Kenya’s tech sector means investing in a young, large, and tech-savvy population with an increasing digital demand. Whether for fintech startups or to develop applications, the opportunities to invest in Kenya are limitless.
Renewable Energy & GreenTech: Leading Africa
Kenya is a world leader in renewable energy, where more than 90% of its electricity comes from geothermal, wind, and solar.
Kenya possesses one of Africa’s largest geothermal capacities, attracting multinational climate and energy funds looking to invest in Kenya.
Investments in green tech can be drivers of both sustainability and profits, as seen with projects such as KenGen’s geothermal plants. If you are passionate about it, you will be wise to invest in Kenya, especially in clean energy.
Agribusiness and Value-Added Food Processing
Kenya’s agriculture, one of the most significant contributors to this newfound economic status, has all it needs to enable any investor to succeed sooner when they invest in agribusiness in Kenya.
The crop is intended for export, and in general, crops such as tea, coffee, and horticultural products are grown here. You can also pay with the ceded assets by investing them in processing or logistics to raise the price of raw materials and log into global markets.
The government gives 100% capital allowances on farm work; hence, investing in Kenya’s agribusiness industry is excellent.
Real Estate & Tourism Infrastructure
Kenya Real Estate Sector Booming Kenya has a prosperous economy that attracts the attention of multiple investors worldwide by heeding investment categories, including its real estate sector.
The demand for residential and commercial properties is still high, especially in Nairobi and Mombasa. Kenya’s wildlife and beaches attract millions of tourists.
However, these do not hold a candle to the ROI from putting money in hotels or infrastructure projects like the LAPSSET corridor. However, if you plan to invest in Kenya, especially if you get into real estate or invest in tourism, the chances of being right would be significantly higher.
Practical Steps for Foreign Investors to Invest in Kenya
Ready to invest in Kenya? It is entirely possible to begin as an alien. It is easy, but you must take a few steps to ensure you will not fall out of compliance while keeping your money safe.
Clarity on Permits and Licenses
Business permits are necessary for every entrepreneur and can be easily obtained at KenInvest’s one-stop shop. Additional approvals may be required depending on the activity carried out in sectors such as mining or agriculture from bodies like the National Environmental Management Authority (NEMA).
Select a Legal Form for Your Business
Based on this, you must decide if you are better off incorporating a limited company, partnership, or branch of your non-UK domiciled carrier. Always take legal advice from local counsel before structuring.
Do Your Due Diligence
Verify land titles, do background checks with partners, and adhere to local laws before investing in Kenya. This is important to avoid any fights or issues in the future.
Use KenInvest
The Kenya Investment Authority assists international staff with licensing, tax registration, and work permits. Its eRegulations platform helps to take the sting out of the process.
Want to make this easier? Schedule a 30-Minute Advisory Call with Our Legal Team to Help You Invest as a Foreigner in Kenya. We can also offer a customized investor checklist for Kenya to keep you on course. [Link to calendar]
Risks and How to Mitigate Them
Investing in Kenya 2025, as with any investment, comes with risks; however, these are manageable. The following are the prominent ones, along with how to manage them:
Currency Risk
129 KES to 1 USD in 2025. You can always hedge your investments using foreign currency accounts or by working with financial advisors who can stabilize the returns you will receive.
Land Title Issues
Owning land is difficult; even foreigners can only have leasehold land for 99 years. Conduct complete land title checks in a well-known legal firm to prevent disputes. So, our team can assist you with a land/title due diligence report to clear the clouds and bring peace of mind. [Link to service
Corruption and Bureaucracy
Kenya placed 126 out of 180 in the 2023 Corruption Perceptions Index. Instead, join established local companies and let KenInvest do the legwork for you via its one-stop shop.
Local Partner
If you choose the wrong local partner, your entire project could be in jeopardy. Make sure that your partners pass background checks, and work with legal advisors to ensure that not once will one of them give you problems.
These are part of any investment deals. With proper planning and working with experts, you can limit exposure to these risks and have a winning investment in Kenya.
FAQs
How do foreigners invest in Kenya?
With KenInvest, foreigners can start a business in Kenya and are responsible for getting all the necessary permits and choosing a corporate structure. Success Must Come from Local Partnerships and Proper Due Diligence
Who is offering what incentives to foreign investors who are inclined towards business in Kenya?
In SEZs and EPZs: Tax holidays, VAT exemptions & investment deduction (Kenya). Tax treaties can also help ensure that overseas investors do not face a disproportionately large tax bill.
Is Kenya the best place to invest in by 2025?
Yes! Kenya 2025 under Bilateral Investment Promotion and Protection Agreements (BIPPAs). With Kenya’s growing economy and strategic location, investor-friendly policies offer Kenya a competitive investment platform. Tech and renewable energy stand out as significant sectors.
Which is the best sector to invest in Kenya
Technology, renewable energy, agribusiness, and real estate are top industries in which to invest in Kenya. These industries have high potential for growth and government backing.
Do foreign investors own land in Kenya?
Foreigners are forbidden from owning freehold land but can own leaseholds of up to 99 years. We will run title checks to ensure no legal issues are at play.
Conclusion
Kenya is a land of opportunity for those foreign investors who want to start. With its expanding economy, geographical strategic positioning, and a long list of Kenya investment incentives for foreign investors, the country gives you every reason to invest your money there.
Kenya’s investment opportunities are wide and varied, and you can choose from tech, renewable energy, agribusiness, or real estate. Yes, risks are involved, but with the proper planning (due diligence, local partners, expert advice), it is easy to get around these.
Talk to us if you want to invest in Kenya by starting a business or company, buying property, or land.
