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All foreign entrepreneurs will be required to obtain an investment certificate before establishing businesses in the country if recommendations by a House committee becomes law.

The departmental committee on Trade, Industry and Co-operatives, led by Embakasi North MP James Gakuya, says it has identified a gap in the Investment Promotion Act. The Act currently mandates foreign investors to apply for an investment certificate because this is not mandatory currently. For an investment certificate, the Kenya Investment Authority (KIA) is mandated to issue the investment certificate to foreign investors that invest at least $100,000 and local Investors who Invest at least Sh1,000,000.

The investor’s license helps in facilitating the investor in terms of foreign taxpayer registration, immigration services, National Environmental Management Authority (NEMA) information, Kenya Power and Lighting Company (KPLC) services and Federation of Kenya Employers (FKE) services.

In its report on alleged unfair trade practices, the committee suggested that the Cabinet Secretary for Investment, Trade, and Industry, in collaboration with relevant stakeholders, must review existing investment policies and regulations.

The aim is to develop regulations and policies that foster a conducive environment for both foreign and local traders.

The investigation into unfair practices stemmed from complaints by local traders regarding the activities of China Square Mall, which they claimed threatened their businesses’ survival.

“That Parliament in exercise of its legislative authority, to review the provisions of Section 3(1) of the Investment Promotion Act, to provide a for mandatory requirement for a foreign investor to apply for an investment certificate to ensure compliance with the requirements, set out under Section 4(2) of the aforementioned Act,” the report reads in part.

Additionally, the Cabinet Secretary, in consultation with the Council of Governors, is directed to develop a policy framework within 60 days to harmonise investment policies at both national and county levels.

Local traders

The committee highlighted the lack of coordination in policy development and implementation across various government levels, which creates challenges and opportunities for exploitation by foreign investors at the expense of local traders.

Despite engagements between the Ministry of Investments, Trade, and Industries and local traders, as well as representatives of the Chinese business community, the committee found no evidence to demonstrate the protection of both local and foreign investors’ interests.

Upon reviewing submissions from China Square Ltd. and the Ministry of Investments, Trade, and Industries, the committee found no proposed buy-out or transfer of the lease held by China Square Ltd., nor was there any provided implementation strategy.

Represented by the Association of Local Traders, it alleged that China Square Mall’s trading and commercial activities posed a threat to their businesses, citing the proliferation of Chinese hawkers, shopkeepers, retail traders, and wholesalers, adversely affecting their members.

In response, China Square Limited defended its operations, emphasizing its commitment to offering a diverse range of quality products at affordable prices to Kenyan consumers. That the company sources its products from various suppliers, including local manufacturers, aiming to stimulate competition and innovation in the market.

China Square Limited asserted that its pricing strategy allows for a reasonable profit margin after paying all requisite taxes. They underscored their dedication to making life affordable for citizens, emphasizing the importance of reasonable pricing decisions.