Wednesday, August 12, 2020 – Foreign tech firms keen to operate in Kenya will now be forced to cede 30 per cent ownership to locals before licencing.
This is according to the recently published National Information Communication and Technology Public Policy Guidelines of 2020.
The new policy is geared towards growing the ICT sector in Kenya by encouraging equity participation among citizens.
However, foreign tech firms already operating in the country have been given three years to comply with the new ownership regulation, with a one-year extension by the ICT Cabinet Secretary upon request.
“It is the policy that only companies with at least 30 per cent substantive Kenyan ownership, either corporate or individual, will be licensed to provide ICT services.”
“For purposes of this rule, ICT companies without a majority Kenyan ownership will not be considered Kenyan, and may thus not be calculated as part of the 30 per cent Kenyan ownership calculus,” reads the policy in a recent Gazette Notice.
Additionally, the new law stipulates that government ICT procurement processes give priority to local ICT companies while awarding tenders, including those from the security and defense sectors.
In an event where the local businesses cannot fulfil the tender requirements, foreign companies will be required to transfer the skills to the local firms.
“Kenyan built solutions will be preferred over any other solution; where there are no local businesses that meet the tender requirements, skills transfer to local firms and personnel will be a mandatory requirement,” continues the Gazette Notice.
The Kenyan DAILY POST