The government has also taken specific steps to promote investment in the country. Some of these include:
Establishment of the South Sudan Investment Authority (SSIA);
Development of investments laws that spell out the investment guidelines in the country;
Equal treatment and opportunity for local and international investors; and Enactment of specific laws that support investment by making provisions for attractive fiscal regimes, protection of industrial and intellectual property rights, the credible guarantee of legal security and investment stability, repatriation of profits and dividends, custom duties exemptions, as well as reduced red tape and bureaucracy.
The specific investment principles include:
Policy of non-discrimination: Foreign investors can invest in and run businesses in any sector in Southern Sudan;
Guarantees against expropriation: The government shall not nationalize any enterprise. Further, no investor will be compelled (by law or otherwise) to cede any part of investment capital;
Protection of Intellectual Property laws: The government shall protect all intellectual property and rights of all persons and investors. All trademarks, copyrights, patents, etc. will be enforced;
Access to Public Information: Investors have open and direct access to all laws and decisions of courts, other adjudicative bodies and to any public information;
Repatriation of capital, profits and dividends: Investors have the right to freely repatriate their money in freely convertible currency or dispose of it in any manner they deem fit, subject to tax and other lawful obligations; and
Dispute Resolution: Any aggrieved investor has recourse to the courts of Southern Sudan which has jurisdiction over business disputes. Parties to a dispute are also free to specify alternative dispute resolution mechanisms they may agree upon. Any investor in dispute with the Government of South Sudan has recourse to internationally accepted dispute resolutions mechanisms.
The Government of Kenya recognizes the critical role investments play in economic development and realization of Vision 2030 objectives. To this end, Kenya has streamlined business licensing regimes and adopted online investment facilitation portals to ensure faster registration and approval of investment new projects.
The Kenya Investment Authority (KenInvest) is the lead agency on investment matters. Established by an Act of Parliament, Investment Promotion Act, 2004 cap 485 B of the laws of Kenya. The Authority’s core mandate as spelt out in the act is to promote and facilitate the growth of both local and foreign investments in Kenya. The Act allows foreign investments minimum investment threshold of USD100,000 and USD 10,000 minimum for local investment.
KenInvest set up a One Stop Center (OSC) in 2017 under the Investment Facilitation department to provide for timely and transparent processing of investment applications and approvals required. The OSC brings on board officials from relevant government agencies involved in investment facilitation such as the Registrar of Companies (Business registration Services), Kenya Revenue Authority, Ministry of Lands, NHIF and NSSF, Immigration Services Department and NEMA. The Authority is progressively embracing and integrating digital facilitation services to ensure investors can place their applications for new investments from all over the world and be able to access some of the requisite documentations online. The Kenya Investment Authority has developed an online portal (http://eregulations.invest.go.ke/), to further showcase investment procedures in the country; and increase accuracy and transparency on access to relevant information and data by investors.
The Kenya investment environment is governed by other laws as well, affecting investment. For instance, The Kenya Constitution 2010, the Company Act 2015, Business Registration Act 2015, Foreign Investment Protection Act (FIPA), The Public Private Partnerships (PPP) Act 2013, The Insolvency Act 2015, among other laws. Details of this laws can be accessed from http://www.klrc.go.ke/
Since independence, in 1963; the Government of Kenya has formulated strategic policies, legislations and developmental blue prints that focus on investment growth and support. The Kenya Vision 2030 is the latest blue print to guide the country on developmental issues. These include export compensation schemes to duty draw backs and remission, import substitution and manufacturing under bond. These schemes were succeeded by import substitution, Industrial policies on export processing zones, and other export promotion programmes. Currently, the Vision 2030 drives the country’s developmental objectives. The advent of devolution in 2010 also created more investment opportunities for investors seeking to locate in the 46 Counties. There is also work in progress towards development of a Kenya National Investment Policy (KIP). The KIP is envisaged to be a comprehensive and harmonized policy to guide attraction, facilitation, and retention of private investments. It will create an institutional framework that allows for coordination for more efficient investment promotion and facilitation as well as creating a favorable investment climate. In addition, Kenya subscribes to African Union agenda 2063 and the United Nations Sustainable Development Goals (SDGs) which are designed to ensure that development activities are conducted with a long-term view towards sustainability and continued social development of her citizens.
Kenya’s investment environment is fully liberalized. Foreign investors can invest up to 100% ownership; except in securities, Insurance, Power and Lighting and any other identified sectors by government that may be deemed to pose security risk to the country. The attainment of sustained growth and development is feasible through promotion of local and foreign investments.
There are no regulations restricting joint venture arrangements between Kenyans and foreigners or prohibiting the acquisition of Kenyan firms by foreign-owned firms. Nonetheless, there are some restrictions on investment in companies listed on the Nairobi Securities, the insurance sector, and the KPLC. The Kenya Communications Act No 2 of 1998 and Kenya Information and Communications (Amendment) Act 2008 limit foreign investments in the communications sector to 30%.
Protection of private property, is enshrined in the Constitution 2010. Private property may be compulsorily acquired by the government only for reasons of public safety, public interest or security; but with prompt and full compensation. The court of law (Industrial and Commercial Court) provides for arbitration mechanisms. Foreign investors also have the option to seek recourse from the International Centre for Settlement for Investment Disputes (ICSID) for which Kenya is a member Recourse to ICSID for arbitration requires the consent of both parties involved in the dispute. The Investment Disputes Convention Act (1967) stipulates that awards granted by the ICSID Arbitration Tribunal are binding in Kenya and have the same validity as final decrees of the High Court.
Rwanda has comprehensively improved its business environment through the enactment of the Investment Code 2015 on Investment and Export Promotion and Facilitation as the main law governing the country’s investment regime. The Investment Code calls for equal treatment of foreign and local investors. The Code also outlines the incentives available to investors who qualify.
Article 6 of the Code provides that the government is responsible for protecting invested capital and shall not acquire the rights of an investor … no action to expropriate an investor’s property in public interest shall be taken, unless the investor is given fair compensation in accordance with the laws. The specificity of this provision is comforting for foreign investors who fear loss of their investment at the hands of the Rwandan government.
In 2008, Rwanda established Rwanda Development Board (RDB) as a successor to the Rwanda Investment and Export Promotion Agency (RIEPA). The RDB is a multi-institutional body which was created by bringing together eight existing related public institutions and agencies to provide investment-related services under one roof and reporting directly to the office of the President. These include Rwanda Investment & Export Promotion Agency; Centre for Support to Small and Medium Enterprises; Rwanda Commercial Registration of Service Agencies; Environmental Impact Assessment (EIA) Unit; Privatization Secretariat; Rwanda Office of Tourism and National Parks; Rwanda Information and Communication Technology Authority; and Human and Institutional Development Agency (HIDA)(represented by a Unit of Human Resource and Institutional Capacity Development).
RDB is Rwanda Government’s specialized agency operating as a One-Stop Centre for investment. It is tasked with the mission to fast-track economic development in Rwanda. Its mandate is to enable private sector growth towards the transformation of Rwanda into a hub for global business, investment, and innovation. RDB invites, receives, and facilitates international investors to take full advantage of Rwanda’s sustained high economic growth, robust governance, investor-friendly climate, accessibility to markets within the region, and a range of well-planned projects for direct investment.
Investors (local or foreign) who choose to register with the Rwanda Development Board (RDB) can apply for additional benefits. An Investment Code adopted in 2015 specifies all fiscal incentives available to investors depending on the sector and amount invested. The benefits provided to holders of investment certificates consist mostly in access to facilitation services, fiscal incentives, and the entitlement to three work and residence permits for foreign citizens for an investment of at least two hundred and fifty thousand (USD 250,000), investment protection and guarantees for the repatriation of funds.
Through Company Law (2017) that governs companies, their incorporation, registration, functioning, winding up and other related matters, Rwanda provides a foundation for investor protection. This is complemented by Investment Code (2015) that has important protections of particular concern to foreign investors. This makes Rwanda one of Africa’s most open FDI regime, with no restrictions on FDI entry and establishment. All foreign investments are allowed without screening or restriction of amount or sector, and foreign investors are granted national treatment for most intents and purposes. A positive element per se, this high degree of openness makes it all the more important that other regulations (relating to public health, consumer interests, environmental protection, etc.) be properly established and enforced
Investors (local or foreign) who choose to register with the RDB can apply for additional benefits. The Investment Code specifies all fiscal incentives available to investors depending on the sector and amount invested.
Article 42 of the Constitution specifies that “every foreigner legally residing in the Republic of Rwanda shall enjoy all rights save those reserved for nationals as determined under this Constitution and other laws.” The Constitution also grants protection over private property rights, which can be expropriated only for reasons of public interest and following fair and prior compensation. In addition, holders of investment certificates are entitled to fair compensation in a convertible currency in case of expropriation. They also benefit from the guarantee that the compensation will be free of any tax or duty and freely transferable overseas.
Kigali International Arbitration Centre (KIAC) was created by an act of Parliament in 2011 at the initiative of the Private Sector Federation in partnership with the Government as an independent body. The aim of KIAC is to strength the Capacity of Economic Operators in Rwanda to resolve their disputes themselves without need to go to courts. Investors can also utilize the Multilateral Investment Guarantee Agency (MIGA) to address investment disputes.
The government of Burundi has undertaken several legal reforms and has established regulatory institutions in various sectors of the economy to create a conducive environment for investment.
The Government of Burundi’s official attitude toward foreign direct investment is reflected in the new Investment Code, which ostensibly aims to attract and reassure foreign investors. The new Code encourages and promises to facilitate acquisitions, production, transformation and distribution of goods and services.
Burundi has over the last few years greatly benefited from the deliberate government efforts that have seen a total revamp of its economic policies with a view to bolstering economic development in the country. The investment Code led to the establishment of the Burundi Investment Promotion Authority (API) which provides streamlined and fair handling of all investors, whether local or foreign.
API offers a one-stop center/shop (with five counters i.e. Burundi Revenue Authority (OBR), Commercial/ Tribunal Court (TC), National Institute of Social Security (INSS), Labour Inspection Unit and Burundi Investment Promotion Authority (API)) for registering a business and issuing the required legal documents within 24 hours. The promulgation of a new Corporate Code reduced the procedures from 11 to 2. Currently, for a cost of Burundi Francs BIF40 000 (USD 25), the investor can get at API, in just one day, the company statutes; the Tax Identification Number (TIN) and the trade registry certificate and membership card of INSS and fees payment slip.
The Government of Burundi has set priority economic sectors from which investment projects are eligible for incentives. The agricultural sector including agro processing, fisheries and livestock, energy and mining and as well as transforming and manufacturing industry are seen as most important to boost the economy. Innovative technology transfer and export oriented can qualify for physical incentives.
The investor benefits from a tax rate reduction of taxes on profits of 2% if he employs between 50 and 200 Burundians full time and5% if he employs more than 200 Burundians. In agriculture and manufacturing sectors, 1 billion BIF (USD 550,000.00) is the minimum capital requirement. In energy and mining, 20billion BIF (USD 11,000,000) is the minimum capital requirement
The Government of Burundi has embraced economic liberalization in all sectors and a lot of government entities have been privatized. Thus, attracting private investment in sectors like telecommunication and energy. Burundi permits foreign investors to repatriate profits earned without any limitations.
The Investment Code contains provisions regarding the resolution of conflicts between investors and the state. Burundi ratified the Convention on the Settlement of Investment Disputes between states and nationals of other states. A dispute with the Government of Burundi (for example, regarding an eventual expropriation) may be brought before the International Centre for Settlement of Investment Disputes (ICSID). Alternatively, the Multilateral Investment Guarantee Agency (MIGA), also a member of the World Bank Group, may intervene in case of such a dispute arising. As well as insuring investors against risks, the MIGA mediates disputes between investors and Governments and tries to prevent those disputes growing out of proportion.
Burundi joined, on April 9, 2014, the Apostille Convention on mutual legal assistance and international administrative to simplify the authentication of documents used abroad to facilitate the free movement of people, goods and services. Further, since May 9, 2014, Burundi is member of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Sentences.
Burundi’s investment regime takes into account Most Favoured Nation and National Treatment Principles. In other words, the regime does not discriminate against foreign investors, nor are there any general limits on foreign ownership or control of enterprises. There is no explicit discrimination against foreign investors at any stage of the investment process, nor are there any laws or regulations specifically authorizing private firms to adopt articles of incorporation or association which limit or prohibit foreign investment, participation, or control. Burundi’s economy has been liberalized and is open to foreign investors.
Each Partner State has put in place investment procedures to guide investments. The investment procedures can be classified under three categories:
Key investment procedures that include procedures on:
Starting a business
Hiring labour
Obtaining work and resident permits where applicable
Paying taxes
Acquiring land and property
Building and constructing
Trade procedures
Other procedures that include procedures on:
Sectoral permits
Export Processing Zones
Special Economic Zones
Investment incentives
The EAC Partner States have put in place legal and institutional frameworks for handling all the above investment procedures. Investment procedures in each Partner State are in:
Articles 15- 23 of the Uganda Investment Code Act 2019;
Articles10-13,15-21 of the Rwanda Investment Promotion and Facilitation Act 2015;
Articles17-18 of the Tanzania Investment Act 1997;
Articles 23-31 of the Zanzibar Investment Promotion and Protection Authority Act 2018; and
Articles 3-11 of the Kenya Investment Promotion Act 2014.
The investment Promotion Act 2009 of South Sudan does not have any provisions on investment procedures.
Also, institutional frameworks are represented at the One-Stop Investment Centres in each of the Partner States.
The government of Burundi has undertaken several legal reforms and has established regulatory institutions in various sectors of the economy to create a conducive environment for investment.
Rwanda has comprehensively improved its business environment through enactment of the Investment Code 2015 on Investment and Export Promotion and Facilitation as the main law governing the country’s investment regime.
The government has taken specific steps to promote investment in the country including the establishment of South Sudan Investment Authority (SSIA) and Development of investments laws which spell out the investment guidelines in the country among others.
The Government has taken significant measures and reforms to liberalize its economy and encourage both foreign and domestic local private investment to realize National Development Vision 2025.
Each Partner State has gazetted Export Processing Zones (EPZ) and Special Economic Zones (SEZ).
EPZ and SEZ across the Partner States focus on contributing to building strong export-led economic development through industrialization. EPZ and SEZ provide a number of specific incentives for investors operating within them, which include fiscal and non-fiscal incentives, including corporate tax holidays, duty and VAT exemptions.
Burundi Special Economic Zones
The Burundi SEZ together with its Managing Authority were established in Burundi by a Presidential Decree Law to promote exports, provide an enabling environment and attract local and foreign direct investments. The Burundi SEZ offers a number of attractive fiscal and non-fiscal incentives including reduction or temporary tax exemption.
Kenya Export Processing Zones
The Kenya EPZ were established in Kenya with an aim of attracting and facilitating export-oriented investments. Kenya’s EPZ provide an attractive and enabling environment as well as a range of fiscal and procedural incentives for such investments. The EPZ is managed by the Export Processing Zones Authority (EPZA), which was established in 1990, by the EPZ Act CAP 517, Laws of Kenya. The Authority’s mandate is to promote and facilitate export-oriented investments and to develop an enabling environment for such investments. The EPZ Authority is a State Corporation, under the Ministry of Trade, Industry and Cooperatives. EPZA under the EPZ program offers a range of attractive fiscal, physical and procedural incentives to ensure low cost operations, fast set up and smooth operations for export-oriented business.
Rwanda Special Economic Zones
Rwanda’s SEZ program is designed to address some of the domestic private sector constraints such as availability of industrial and commercial land, availability and the cost of energy, limited transport linkages, market access and reduced bureaucracy, and availability of skills. Designated, serviced land is provided for small and large scale industrial development, as well as reliable, quality infrastructure, competitive fiscal and non-fiscal regulations, and streamlined administrative procedures.
South Sudan Export Processing Zones
South Sudan Investment Authority is responsible for the setting up of export processing zones and special economic zones and this process is still in its infancy.
Uganda Free Zones
The overall objective for adoption of Free Zones in Uganda is to create an enabling environment aimed at enhancing economic growth and development of export-oriented manufacturing in all sectors of the economy, in order to diversify the country’s economic base, attract foreign direct investment (FDI), generate employment, increase foreign exchange earnings, enhance technology transfer, skill acquisition/upgrading as well as create backward linkages. The Uganda Free Zones Authorityis a corporate body under the supervision of the Ministry of Finance, Planning and Economic Development. It was established in accordance with the Free Zones Act, 2014 and started operations on 1st September 2014. The Agency is responsible for the establishment, development, management, marketing, maintenance, supervision and control of free zones and to provide for other related matters.
Tanzania Special Economic Zones
The Export Processing Zones Authority (EPZA)in Tanzania is currently responsible for both Export Processing Zones (EPZ) and Special Economic Zones (SEZ). EPZA operates under the Ministry of Industry, Trade and Investment. EPZA is responsible for steering and implementing government policy on promotion of Special Economic Zones (SEZ) in Tanzania. Other functions of EPZA include the development of EPZ and SEZ infrastructure, provision of business services to EPZ and SEZ investors and issuing of EPZ and SEZ licenses. Once an investor obtains the EPZ or SEZ licenses, he or she does not require any other license except for highly regulated industries like food and drugs. Free Economic Zones (FEZ) in Zanzibar have been purposely established to attract foreign direct investment (FDI), specifically targeting labour intensive projects and increasing exports. Companies who set up their business in the FEZ designated areas enjoy simplified customs and other administrative procedures. Zanzibar currently has five free economic zones.
The Treaty for the Establishment of the East African Community emphasizes a people centered, market driven and private sector led integration process for accelerating regional growth, creating wealth and reducing poverty.
The role of the private sector is therefore anchored at all levels as a vehicle for the development of the economies of the EAC Partner States. The EAC Treaty places private sector development high on its agenda and aims at fostering regional development that is private sector driven, internationally competitive and people-centered in utilizing the region’s resources.
The private sector in EAC considers political stability, strategic location, the climate and the abundant natural resources as the most attractive features of EAC as an investment destination.
The private sector urges the EAC and its Partner States to continue creating a favourable business environment through addressing infrastructure issues, simplifying business processes, addressing corruption and ensuring stable human capital development.
The private sector calls for tax regime harmonisation within the EAC. They also call on the Partner States to fully implement the four freedoms i.e. free movement of goods, free movement of labor, free movement of services, and free movement of capital.
EAC Partner States have well-established tax regime and national revenue authorities that are responsible for assessment, collection and accounting for all revenues that are due to the government in accordance with the national laws. Taxes applicable to business entities include Corporate Tax, Withholding Tax (WHT), Excise Tax, Value Added Tax (VAT) and capital deductions.
National revenue authorities in the EAC Partner States
Country
Agency
Website
Burundi
Burundian Revenue Authority (Burundais des Recettes) (OBR)
Each EAC Partner State currently has its own financial sector, consisting of a Central Bank, commercial banks, non-bank financial institutions, mortgage companies, insurance companies, development finance institutions, microfinance institutions, Savings and Credit Cooperative Organizations (SACCOs), social security funds, building societies, and foreign exchange bureaus among others.
The central banks in each of the countries regulate and supervise the financial sector.
Several commercial banks are operating as regional commercial banks and have branches across EAC Partner States.
Sources of investment finance other than domestic banks include the East African Development Bank (EADB), the Trade and Development Bank (TDB), the African Development Bank (AfDB), the European Investment Bank (EIB), World Bank (WB), Exim Bank of China, among other international banking institutions and individual foreign national development banks.
Each of the EAC Partner States with exception of South Sudan has an active Capital Markets Authority (CMA), that regulates and supervises the capital markets in that particular Partner State. There are calls to put in place the EAC Capital Markets Authority as part of the efforts to integrate the EAC Capital Markets.
