Kenya Market Entry

Kenya Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

According to cheeroutdoor.com, Kenya has relatively liberalized import and export conditions. There is no system of import and export licenses. The exception is some items related to safety, health or the environment, which are listed in the relevant law (Import, Export and Essential Supplies Act). Since September 29, 2005, the Pre-shipment Verification of Conformity (PvoC) system has been in force in Kenya, replacing the previous Pre-shipment inspection for imported goods. The purpose of the new system is to strengthen the control of conformity of imported goods to Kenyan standards administered by the Kenya Bureau of Standards (KEBS). The inspection is carried out in the country of origin of the goods by the inspection companies Societé Générale de Surveillance and Intertek Testing.

The protection of the domestic market is ensured by tariff rates that range from 0-40%. Firms considering extending short-term financing to Kenyan businesses should exercise caution when assessing repayment risk. The existence of an audited financial statement and an attractive credit rating does not necessarily mean that the debt will be repaid. The Competition Act prohibits horizontal and vertical agreements between businesses or concerted practices between businesses, the object or effect of which is to prevent, distort or restrict commercial competition in any goods or services in Kenya. Cartels such as price fixing, market sharing and collusion in the framework of tenders or prescribing a minimum selling price are prohibited. The Competition Act prohibits the abuse of dominance and purchasing power. CAK (Competition Authority of Kenya) operates a corporate leniency program for companies that voluntarily disclose the existence of a concerted agreement or practice that is prohibited by the Competition Act and cooperate with the Authority in its investigation. A firm that enters into a restrictive horizontal or vertical agreement or abuses its dominant position commits an offense and may be sentenced to imprisonment for up to five years or a fine not exceeding KES 10 million or both.

The Kenya Competition Act 2010 also regulates the area of ​​corporate mergers. The Competition Act defines a merger as the acquisition of shares, business or other assets, whether in Kenya or outside Kenya, which results in a change of control of an enterprise, part of an enterprise or an asset and doing business in Kenya. The Competition Act sets out examples of what constitutes control for the purposes of merger regulation. In calculating merger thresholds, the Competition Authority of Kenya “CAK” has issued guidelines that use financial thresholds based on turnover in Kenya. Mandatory notification applies to an enterprise that must have a minimum turnover threshold of KES 1 billion and the turnover of the target enterprise exceeds KES 100 million. When approving a merger, the CAK takes into account the public interest. Kenya has a pre-implementation regime,

Forms and conditions of operation on the market

Main types of companies in Kenya: Registered Company Branch Offices of Companies registered outside Kenya Partnership Sole proprietorship Cooperatives The most common form of operation in Kenya is through limited liability companies, as this form is easy to set up with no minimum or maximum share capital requirements. The procedure for registering a private company in Kenya is as follows:

Company name reservation: An application is made to the Commercial Register (Registrar) to search and reserve the proposed company name. Name reservations are usually valid, when approved, for 30 days from the date of reservation. A company may choose to adopt the model articles prescribed by the Companies Act or may adopt its own set of articles if it so wishes.

Registration: After stamping, the documents are filed with the registrar together with the following documents: declaration of capital and initial share, declaration of the founders of the company declaration of the registered office and residential address of the director(s); and a statement of nominal capital. Registration of a new company usually takes three to four weeks from the submission of the relevant documents. Although there is no legal requirement for a maximum or minimum share capital, it is recommended that a company be registered with a minimum share capital of KES 100,000, which provides an exemption from paying stamp duty when registering a company.

Foreign companies can establish a branch of foreign companies. Branches are subject to corporate income tax of 37.5% if they carry out business activities in Kenya. This is higher taxation compared to Kenyan companies that pay 30% income tax. The Companies Act contains disclosure and compliance requirements for companies registered outside of Kenya that wish to register and branch or represent business in Kenya. In addition to the financial statements of the branch, it is also necessary to register the financial statements of the parent company with the commercial register. Imports are mostly carried out through a representative who acts as an importer on his own account or as an intermediary. For Czech companies, it is essential that the contract with the local representative is concluded in such a way that

Marketing and communication

Marketing requirements are usually negotiated with the relevant local representative, who often asks for financial support to introduce a certain product to the market. The aspect of promotion as such, as well as its form, which does not differ from the form common in developed countries, are often underestimated by Czech exporters. On-site promotion cannot be carried out without English brochures and technical descriptions. For consumer goods, but also for some equipment, promotion in the media, especially in the press, is usual.

Foreign exhibitors prefer specialized exhibitions held mostly at the Kenyatta International Conference Center (KICC, a high-rise building in downtown Nairobi). Smaller specialized exhibitions are also held in Sarit malls, Village Market and large hotels. Furthermore, national exhibitions (Turkey, Iran) are held here.

Trade fairs and sales exhibitions are a good way to meet potential partners. Despite the name, some “fairs” are small-scale sales exhibitions, so it’s a good idea to check their marketing value before participating.

From the field of digital promotion, it is advisable to have your FB page. A number of Kenyan companies use FB exclusively for their promotion and do not even have their own website.

Issues of intellectual property protection

Intellectual property laws in Kenya are contained in the following laws:

  • Constitution in Kenya
  • Industrial Property Act
  • Trademark Law
  • Copyright
  • Anti-Counterfeiting Act

Unregistered intellectual property rights, such as trade secrets, are also protected under Common Law, which is applicable in Kenya under the Jurisprudence Act. The Industrial Property Act, Trade Marks Act and Copyright Act have largely been drafted in line with international best practices contained in international intellectual property treaties to which Kenya is a party. In particular, this is the Agreement on Trade-Related Intellectual Property Rights (TRIPS).

The Anti-Counterfeiting Act provides the means to enforce intellectual property rights related to trademarks and copyrights, if these rights are violated through counterfeiting, it provides the possibility for confiscation and destruction of counterfeit goods, sanctions and fines against offenders.

Key government agencies from an IP perspective are: the Kenya Industrial Property Institute (KIPI), the Copyright Board of Kenya (KECOBO), the Judiciary and the Anti-Counterfeit Agency (ACA). KIPI and KECOBO regulate the area of ​​intellectual property law in accordance with their mandates. KECOBO also carries out copyright registration and also has inspection powers, including the detention of persons suspected of violating the copyright law. KIPI is responsible for the granting of trademarks, certification of trademarks, patents and industrial designs. Courts under the Industrial Property Act decide on patent disputes and utility models. However, trademark disputes are heard before the High Court. The ACA has the power to enter premises and seize suspect goods without warrants. The requirement for court orders is necessary in case of destruction of counterfeit goods.

Nevertheless, the occurrence of counterfeits in Kenya is frequent, and the fight against them is a large part of the ongoing work of the EU delegation and representatives of member states, including the economic department of the Czech Embassy in Nairobi.

Public procurement market

Public contracts are generally awarded in the form of tenders. The first step, especially in the case of tenders for construction work or consultancy activities, is the pre-qualification and registration of interested parties, who, if they are evaluated as suitable for the given purpose, are then approached directly by sending tender conditions. Tenders are published in the daily press or on websites. However, the deadlines for submitting bids tend to be very short, so only those companies that are physically present at the location or that have their representatives have a real hope of success.

There are widespread reports that corruption often affects the outcome of public tenders, and many of the results of these tenders are challenged in the courts. In January 2019, following complaints of public procurement fraud, the Kenyan government decided to move all public procurement, including procurement information, to the Integrated Financial Management Information System (IFMIS), an electronic tool.

Since the central government does not enforce anti-corruption laws, tender-rigging acts go unpunished. Based on government regulations, all ministries are required to publicly publish tender notices on the website on the 15th of every month. However, the Public Procurement Regulatory Authority (PPRA) – the government body responsible for public procurement – points to the fact that 44% of ministries or government agencies that issue tenders and are thus required to publish tender information publicly on websites are ignoring this obligation.

In the case of tenders published in Kenya, which are, however, financed by some banks or agencies where the Czech Republic is not a member (e.g. African Development Bank), it is necessary for the Czech supplier to use for its offer a company based in a country that is a member country of the given bank or agencies.

Payment terms, payment ethics and resolution of commercial disputes

Commercial law is based on English law and customs. The Judiciary consists of the Superior Courts (the Supreme Court, the Court of Appeal, the Employment and Labor Relations Court (ELRC) and the Environment and Land Court (ELC). The subordinate courts consist of the Magistrate Court, Courts Martial and Kadhi Court. The Magistrate Court has jurisdiction to hear and determine civil disputes where the value of the subject matter in dispute does not exceed KES 20 million.The High Court has jurisdiction to hear and determine appeals from the Magistrate Court.

Alternative forms of dispute resolution include arbitration, mediation and conciliation. Arbitration in Kenya is governed by the Arbitration Act. Arbitration, the law is based on the provisions of the United Nations Commission on Trade Law (UNCITRAL), which has been adopted by many countries in the world as the law governing both international and domestic arbitration. Arbitration is generally appreciated as a faster and more efficient way to resolve disputes than through litigation. It is becoming increasingly popular as a method of dispute resolution. Foreign judgments are enforceable in Kenya under the Foreign Judgments Enforcement Act. According to this law, foreign judgments are enforceable on the basis of reciprocity. Therefore, for a foreign judgment to be enforceable in Kenya, the judgment must originate in a country with which Kenya has a mutual recognition agreement. These countries currently include: Australia,

In the case of new business contacts, an irrevocable documentary letter of credit, opened at a reputable bank, is used. It is not uncommon for smaller orders to be paid in advance for new customers.

Visas, fees, specific conditions for traveling to the territory

Travel regime for citizens of the Czech Republic – visa relations for all types of passports

Requirement to enter the country – valid entry or transit visa

According to Kenyan law, a visa application can only be submitted via the Internet, on a website managed by the Kenyan Ministry of Interior and Coordination of National Government http://www.evisa.go.ke

Please note that there are also fraudulent sites offering Kenyan visas; it is therefore very important to use only the specified page.

From 1/1/2021, you can only apply for a Kenyan visa electronically. From 1 January 2021, airlines will refuse boarding to all passengers who do not have a valid visa.

According to practical experience, you need to have a visa not only in your mobile phone, but also printed out. To apply, you must have a passport that is valid for at least 6 months longer than the period of your planned stay in Kenya.

The procedure for applying for an electronic visa is as follows:

1.click on the button create an account (Create an Account) 2. select registration for visitors (Visitors) 3. create an account – the system requires you to enter a valid email address (warning – some Czech email servers, for example corporate ones, do not receive a confirmation email, it is therefore advisable choose one of the international mail servers such as gmail or yahoo) and insert a photo 4. after logging into the account, select the immigration office (Department of Immigration Services) 5. select the application for a Kenyan visa (Kenyan Visa) 6. select the type of visa (single entry or transit) and read the instructions carefully 7. fill in the electronic application form (without diacritical marks) 8. attach a photo, a scan of the data page of the passport, a copy of the ticket and information about the purpose of the stay (itinerary of the stay, accommodation reservation, invitation letter,…) 9. pay via payment card 10.wait for an email with a decision (the processing time is around 24 hours) – in case of a positive decision, print the eVisa confirmation 11. present the printed eVisa upon arrival In the event of a delay in the response, the processing must be urged at the e-mail addresses or phone numbers listed on the page.

With regard to frequent email inquiries, we emphasize that the Kenyan e-Visa system is operated by the Government of Kenya; The Ministry of Foreign Affairs of the Czech Republic and the Embassy of the Czech Republic in Nairobi do not in any way guarantee its functioning, they do not have any preferential access to the system and are not even competent to solve any problems arising from its use (missing response to the application, wrongly issued visas – they occur, for example, when diacritical marks are used, etc.).

There is no legal entitlement to a Kenyan visa and the US$50 administrative application fee (children under 15 free) is non-refundable. A granted electronic visa does not automatically entitle you to enter the territory of Kenya, the final decision rests with the Kenyan border authorities.

This type of visa does not allow you to carry out gainful activities in the territory of Kenya, for which it is necessary to obtain the appropriate permit.

We recommend that you check the current conditions of entry into the country at the Kenyan embassy accredited to the Czech Republic before your trip.

The standard maximum duration of a Kenyan visa is 90 days from the date of arrival. The visa can be extended once, if necessary, for 180 days. Extensions can be arranged at the main office of the Immigration Service in Kenya. Contact:

Immigration and Citizen Services Nyayo House 20th floor, Kenyatta Avenue/Uhuru Highway PO Box 30395 – 00100 Nairobi Tel: +254 (0) 202 222 022 Email: [email protected] website: https://www.immigration .go.ke/

Entering the country

By air via Jomo Kenyatta International Airport in Nairobi or via Moi International Airport in Mombasa.

By road – either from the territory of Uganda or Tanzania. Entry into Kenyan territory from Ethiopia and Somalia is strongly not recommended for security reasons.

By Boat – Via Mombasa Seaport or Lake Victoria Kisumu Port. Due to the disastrous technical condition of the ferries on Lake Victoria and the frequent accidents, the use of boat transport on Lake Victoria is not recommended.

When entering the country, it is not necessary to prove the provision of funds for the stay. Upon arrival in the country from other African destinations (even in the case of transit, e.g. flights from Europe via Addis Ababa) or other health-risk areas, an international vaccination card with vaccination against yellow fever is required. In exceptional cases, proof of vaccination may also be required from passengers from other destinations.

An international vaccination card with vaccination against yellow fever is also required at the border control when arriving by road or using ship transport. Conditions for entering Kenya during the covid-19 pandemic change quite often, for up-to-date information we recommend visiting the website of the Nairobi Immigration Service

https://www.mzv.cz/nairobi/cz/viza_a_konzularni_informace/nazev_kena_aktualni_podminky_vstupu_do.html

Employment of citizens from the Czech Republic

The standard maximum duration of a Kenyan visa is 90 days from the date of arrival. The visa can be extended once, if necessary, for 180 days. Extensions can be arranged at the main office of the Immigration Service in Kenya. Contact:

Immigration and Citizen Services Nyayo House 20th floor, Kenyatta Avenue/Uhuru Highway PO Box 30395 – 00100 Nairobi Tel: +254 (0) 202 222 022 Email: [email protected] website: https://www.immigration .go.ke/

Employers are obliged to contribute to their health and social insurance – NHIF ( http://www.nhif.or.ke/healthinsurance/ ) and NSSF ( https://www.nssf.or.ke/ )

Fairs and events

Foreign exhibitors prefer specialized exhibitions held mostly at the Kenyatta International Conference Center (KICC, a high-rise building in downtown Nairobi). Smaller specialized exhibitions are also held in Sarit and Village Market malls, but also in conference rooms of major hotels in Nairobi, Mombasa and other major cities.

Nairobi International Trade Fair – NITF – https://ask.co.ke/nairobi-international-tradefair/ – Annually the largest showcase of the agriculture and food industry in Kenya. The first exhibition was organized by the East African Agricultural and Horticultural Society back in 1902 and is now the largest agricultural fair in East Africa. It takes place at the turn of September and October and lasts seven days. It will take place in 2022 from September 26 to October 2 after a two-year “covid” hiatus, and this year’s theme is “Promoting Innovation and Technology in Agriculture and Commerce.”

Agri-Africa Exhibition – 6 – 8 June 2022 at KICC – www.agriexpo.africa – The first annual agricultural exhibition.

SECUREX EAST AFRICA EXPO – 7-9 March 2023, Sarit Center Nairobi – https://www.securexpoeastafrica.com/about/when-where – Home Security Technology Expo

ASEC 2023 (Africa Security – May 2023 – Movenpick hotel, Nairobi, http://www.grvglobal.com/ASEC22 – security technology fair

Build Expo 2023 – May 2023 – KICC, Nairobi – https://www.expogr.com/buildexpokenya/index.php – Construction Industry Exhibition

PROPAK EAST AFRICA – May 2023 – Sarit Centre, Nairobi – https://www.propakeastafrica.com/ – East Africa packaging technology exhibition

Kenya Space Expo – June 2022 – Sarit Centre, Nairobi – https://kenyaspaceexpo.co.ke/ – Exhibition organized by Kenya Space Agency

Kenya Market Entry