Kenya plans a single online portal on which foreign investors will apply and register nearly all business permits in reforms to improve the business climate for new firms and ease regulatory costs.
The United Nations Conference on Trade and Development (Unctad) says it is developing an online platform that will integrate business registration systems at national and county levels on behalf of Kenya Investment Authority (Keninvest).
The Unctad-led Kenya Investment Single Window project is expected to be a one-stop online platform for investors seeking to set up shops in Kenya.
“The system will connect with existing government databases such as the eCitizen portal [for business registration], the Kenya Revenue Authority’s iTax system, and county government portals,” Unctad said in its newly published World Investment Report 2024. “This integration will enhance the functionality of existing platforms, making it easier for businesses to navigate the regulatory environment.”
Keninvest currently runs a one-stop, in-person shop that helps foreigners register their firms and directors for taxation, and get their firms connected to electricity and workers to get work permits.
The services offered at KenInvest do not, however, include crucial permits and licences at the county levels since the systems are not integrated.
Investors have to further separately apply for other crucial permits such as environmental impact assessment approvals from the National Environment Management Authority.
“Although some applications can be completed online, the lack of integration among systems adds significant barriers for investors and entrepreneurs,” UNCTAD says. “There is a pressing need for enhanced facilitation to elevate investment levels sufficiently to address interconnected economic, health, security and climate challenges.”
The system will further boost KenInvest’s capacity to register investment projects online, collect data, or provide effective investor aftercare services, enabling the investment facilitation agency to monitor and support “successful investment outcomes”.
This has come at a time when surveys have suggested that increasing and overlapping compliance costs are forcing entrepreneurs to abandon investment plans, thus weakening healthy competition in some sectors.
Businesses have over the years complained of overlapping regulatory requirements at national and county levels for driving up operating costs. Some agencies perform overlapping and duplicative roles, they claim.
Generally, companies in Kenya need nearly 20 permits and licences to comply with various regulatory requirements, but this varies depending on the nature of the business.
Some of the permits businesses need to comply with include those on business registration and licensing, calibration, premise safety, environmental standards, food and beverages processing, waste management as well as water and sewerage rules.
Others are noise and vibration licenses, construction regulations, cess requirements, specialised materials certificates, controlled substance regulation as well as conservancy fees.
Some of the regulatory pain points for manufacturers include business registration and licensing where investors have to pay fees to Business Registration Service (BRS) and the counties.
The firms have also cited overlapping duplicative roles performed by the Kenya Bureau of Standards (KEBS), NEMA, and the Department of Weights and Measures in approving standards, labels, and calibrations for products.
Other State agencies the firms say perform overlapping mandates are the Directorate of Occupational Safety and Health Services (DOSH), National Construction Authority, Nema, and counties in approving premise safety and health regulations.
“The excessive red tape and compliance requirements imposed by labour laws, tax regulations, and other legal obligations result in increased expenses for businesses. These additional costs can be a burden to both large and small businesses, making it difficult for them to compete in the market,” Kenya Association of Manufacturers wrote in the Manufacturing Priority Agenda 2024.
“Businesses in Kenya are often bogged down by time-consuming bureaucratic processes, which divert their resources and hinder their ability to focus on their core operations.”
