LEGAL SERVICES KENYA: OBTAINING AN INVESTMENT CERTIFICATE IN KENYA

LEGAL SERVICES KENYA: OBTAINING AN INVESTMENT CERTIFICATE IN KENYA: In Kenya, an Investment Certificate is issued by the Kenya Investment Authority under the Investment Promotion Act, Cap 485B, upon applic...

OBTAINING AN INVESTMENT CERTIFICATE IN KENYA

In Kenya, an Investment Certificate is issued by the Kenya Investment Authority under the Investment Promotion Act, Cap 485B, upon application, to investors who invest at least US$ 100,000 for foreigners or K.Shs. 1,000,000 for locals.

The following are the requirements for obtaining an investment certificate:-

1. Duly filled investor application form;
2. A cover letter addressed to the managing Director Kenya Investment Authority;
3. Copies of Memorandum and Articles of Association;
4. Copy of the Certificate of Incorporation or Certificate of Compliance; and
5. Proof of the Investment.

Once the application and all supporting documents listed above are received by the Authority, it will respond within Ten (10) days, all factors remaining constant, acknowledging receipt of the application and setting a date for the inspection of the premises of the applicant. The acknowledgment letter may be sent via email or through postal address or the Applicant/Contact person may collect the letter from Kenya Investment Authority offices.

On the day scheduled for the inspection of the work premises, an officer from the authority inspects the investors work premises and fills an investor feedback form. After evaluation of all the applicants documents and the investor feedback form the Authority makes its decision on the application.

Where the application is granted, an investor certificate is issued to the applicant. Where the application is rejected, the applicant may request the Minister in charge of investments to appoint a panel for the review of the Authority’s decision. The decision of the panel shall be final.

The holding of the Investment certificate entitles the Investors to the issuance of a number of licenses if the applications for the licenses are made within Twelve (12) months of the issuance of the Certificate. Further, holders of the certificates are entitled to three (3) class D entry permits for management or technical staff and three class C, F or G entry permits for owners, shareholders or partners for a maximum period of two(2) years. The permits will be issued together with dependant’s passes for each dependant of the person to whom the permit is issued as well as any re-entry permits as may be required.

It is always important to engage professionals in this process. If you wish to obtain an Investment Certificate in Kenya please do not hesitate to contact us on legalserviceskenya@gmail.com.

OBTAINING A DEPENDANT'S PASS IN KENYA

The Kenya Citizenship and Immigration Regulations, 2012 provides that an immigration officer shall not issue a dependant's pass unless he or she is satisfied that:

a)   the person, on whose behalf the application is made, depends on the person making the application for his or her maintenance;

b)   the dependant is a spouse or child of the applicant or is by reason of age, disability or any incapacity unable to maintain himself adequately or for some other reason relies upon the applicant for his or her maintenance; and

c)      the applicant has an income sufficient to enable him or her to maintain and continue to maintain the dependant for the duration of the dependant’s stay in the country.

The Dependant’s pass is issued to persons who are Dependants of:

• Kenya Citizens
• Permit holders
• Exempted persons
• Permanent residents

The following are the necessary requirements to enable one obtain a Dependant’s pass:

1. Duly filled and signed Form 28 - Dependant Pass, which should be filled online, printed out and signed;
2. Detailed and Signed Cover letter from the applicant addressed to the Director of Immigration Services;
3. Two (2) recent colored passport size photographs of the dependant;
4. Copy of a valid national passport / National ID for both the applicant and the Dependant;
5. Evidence of the relationship between the applicant and the dependant, being a Copy of Marriage Certificate, Birth Certificate e.t.c;
6. Proof of sufficient and assured income to sustain self and the dependant;
7. Processing fee of K.shs. 5, 000.00.

Once the application and all supporting documents listed above are received by the Authority, an immigration officer shall after considering the application made issue a dependant's pass in Form 29 which shall entitle the dependant in respect of whom it is issued to enter into Kenya within the period specified in the pass and to remain in Kenya during the validity of the pass.

Please note that this pass does not entitle the holder to receive education or training at an educational or training establishment, engage in employment, business or trade whether paid or unpaid or in any other income generating activity within Kenya.It is an offence for the dependant to engage in employment or other income generating activity.

It is always important to engage professionals in this process. If you wish to obtain a dependant's pass in Kenya please do not hesitate to contact us on legalserviceskenya@gmail.com.

THE LAND LAWS (AMENDMENT) ACT NO.28 OF 2016 PART 3

AMENDMENTS MADE TO THE NATIONAL LAND COMMISSION ACT NO. 5 OF 2012-PART 3

The Land Laws (Amendment) Act No. 28 of 2016 (the “LLAA”) received presidential assent on 31^st August, 2016, coming into force shortly thereafter on 21^st September, 2016.

Legal Redress of Historical Injustices

The LLAA, has introduced provisions on investigation and adjudication of claims arising out of historical land injustices to give effect to Articles 67 (2) (e) of The Constitution of Kenya which deals with the National Land Commission’s function of initiating investigations on its own initiative or on a complaint, into present or historical land injustices, and recommending appropriate redress into present or historical land injustices and reparation.

A “historical land injustice” is now defined under the National Land Commission Act (the “NLCA”) as a grievance which:-

a)      was occasioned by a violation of right in land on the basis of any law, policy, declaration, administrative practice;

b)      resulted in displacement from habitual place of residence;

c)      occurred between 15^th  June 1895 when Kenya became a British East African Protectorate  and 27^th August 2010;

d)      has not been sufficiently resolved and subsisted until 27^th August 2010;

e)      meets the following criteria:

                                    i.            it is verifiable that the act complained of resulted in displacement of the claimant or other form of historical land injustice;

                                  ii.            the claim has not or is not capable of being addressed through the ordinary court system on the basis that the claim contradicts a law that was in force at the time when the injustice began or the claim it is debarred under the Limitation of Actions Act (Cap 22 of the Laws of Kenya) or any other law.

f)       the claimant was either a proprietor or occupant of the land upon which the claim is based;

g)      it is brought within five (5) years from 21^st September, 2016; and

h)      no action or omission on the part of the claimant amounts to surrender or renouncement of the right to the land in question.

The National Land Commission (the “NLC”) has been mandated to receive, admit and investigate all historical land injustice complaints and recommend appropriate redress by various authorities as provided.

For a claim alleging historical land injustice to be permissible, it has to be occasioned by: colonial occupation; inequitable land adjudication process or resettlement scheme; independence struggle ;politically motivated or conflict based eviction; a pre-independence treaty or agreement between a community and the government; development-induced displacement for which no adequate compensation or other form of remedy was provided; corruption or other form of illegality; natural disaster; or any other cause approved by the NLC on a case by case basis.

Upon the successful investigation of any successful case of historical land injustice referred to it the NLC may recommend various remedies including restitution, compensation, refund, revocation, resettlement on an alternative land and reallocation of the land and declaratory and preservation orders.

Any authority mandated to act under the recommended redress must do so within three (3) years upon determination of a claim of historical land injustice.

The provisions relating to legal redress of historical injustices shall stand repealed after ten (10) years from 21^stSeptember 2016.

THE LAND LAWS (AMENDMENT) ACT NO.28 OF 2016 PART 2

AMENDMENTS MADE TO THE LAND REGISTRATION ACT NO.3 OF 2012(the “LRA”)-PART 2

The Land Laws (Amendment) Act No. 28 of 2016 (the “LLAA”) received presidential assent on 31^st August, 2016.

1. Joint Tenancy

Section 91 (8) of the LRA limited joint tenancy to only between spouses, except with the leave of the Court. The LA has done away with this restriction.

2. Overriding Interests

Section 28 of the LRA is amended by section 11 of the LLAA by deleting subsections (a) and (f). Hence, the following shall no longer be deemed to be overriding interests over all registered land without them being noted on the register:-     

a)      Leases or agreements for leases for a term not exceeding two(2) years, periodic tenancies and indeterminate tenancies; and

b)      Spousal rights over matrimonial property.

3.      Lost or Destroyed Certificates and Registers

Where a certificate of title or certificate of lease is lost or destroyed, the proprietor may now apply to the Registrar for the issue of a “replacement” and not a “duplicate” certificate of title or certificate of lease as previously provided for under the LRA.

4. Time Limit for Registration of Instruments

The time limit within which instruments should be presented for registration has been set at three (3) months. Late presentation of an instrument shall as well as registration fee, attract an additional fee equal to the registration fee payable for each of the three (3) months which have elapsed since that date: Provided that the additional fees, shall not exceed two times the original registration fees payable.

5. Ranking of Interests in the Register

Interests appearing in the register shall have priority according to the order in which the instruments which led to their registration were presented to the registry, irrespective of the dates of the instruments and notwithstanding that the actual entry in the register may be delayed.

6. Execution and Attestation of Instruments of Disposition by a Corporate Body

The execution of any instrument by a corporate body, association, cooperative society or other organisation shall in the first instance be effected in accordance with the relevant applicable law and in the absence, the execution shall be effected in the presence of either an advocate of the High Court of Kenya, a magistrate, a Judge or a notary public.

7. Spousal consent

Matrimonial property has now been defined in the LRA as any interest in land or lease that is acquired by a spouse or spouses during the subsistence of a marriage. This has brought clarity as to the instances in which consent of a spouse is necessary as property acquired by spouses prior to their marriage does not qualify as matrimonial property. However, spousal consent to charge, lease, and transfer or otherwise dispose of land should still be obtained over:

a)      All property acquired by a spouse during the subsistence of a marriage; and 

b)      The matrimonial home.

The duty imposed on a lender or transferee to inquire of the borrower or transferor, on whether the borrower’s or transferor’s spouse(s) has consented to the charge or transfer, has been removed by the LLAA.

8. Register of the Government Lands Act (the “GLA”) and Land Titles Act (the “LTA”)

It is now confirmed that the register or folio maintained under the GLA and LTA in respect of interest in land shall be deemed to be the register under the LRA. 

THE LAND LAWS (AMENDMENT) ACT NO.28 OF 2016 PART 1:

THE LAND LAWS (AMENDMENT) ACT NO.28 OF 2016 PART 1:

The Land Laws (Amendment) Act No. 28 of 2016 (the “LLAA”) received presidential assent on 31^st August, 2016.

AMENDMENTS MADE TO THE LAND ACT NO.6 OF 2012(the “LA”)-PART 1

Highlights of changes introduced by the LLAA to the LA include the following:-

·       The Cabinet Secretary with effect from 21^st September, 2016 is now empowered to publish guidelines on the penalties for non-compliance with the provisions of Article 60(1) (a) and (c) of the Constitution as regards maximum land holding acreage and Article 40, with regards to minimum land holding acreage. 

·         The Land Compensation Fund which was previously provided for under Section 153 of the LA, has been done away with completely. The Land Compensation fund offered compensation to any person who, as a result of the implementation of any provisions of the LA by the National Government, County Government, Urban Area or City suffered any loss or deprivation or diminution of any rights or interests in land or any injurious affection in respect of any ownership of land.

·         With effect from 21^st September, 2016, the owner or the person in charge of private land is now empowered to serve a noticeof not less than three (3) months before the date of the intended eviction to an unlawful occupier.

·         The proprietor/occupier of land will no longer have the right to cancel and extinguish any easements or analogous rights granted.

·         The National Land Commission will no longer have the mandate to administer the Land Settlement Fund, it will with effect from 21^st September, 2016 be administered by a board of Trustees known as the Land Settlement Fund Board of Trustees.

·         The retrospective effect of the LA, on charges made before the coming into effect of the LA shall no longer be applicable, hence this means that any charge, mortgage or other security instrument which was valid before the commencement of the LA shall continue to be valid in accordance with its terms. However, notice to spouses shall still be required to be served.

·         The National Land Commission is now required to notify the lessee within five (5) years before the expiry of the leasehold tenure, by registered mail, of the date of expiry of the lease and inform the lessee of his or her pre-emptive right to allocation of the land upon application; and if within one (1) year the lessee shall not have responded to the notification, publish the notification in one newspaper of nationwide circulation.This however shall only apply to Kenyan citizens and only if the land is not required by the national or county government for public purposes.

·         A registered proprietor shall no longer be obliged to surrender the freehold interest in exchange for leasehold. This comes as a welcome change to the previous position which required one to surrender their freehold title in exchange for a leasehold title, with new terms and conditions. Holders of freehold titles can now obtain planning permission without the fear of losing their freehold interest in the property.

A more in-depth analysis of the changes to the effected to the Land Act, is available below:

Minimum and Maximum Land Holding Acreages

The LLA, provides for a new Section 159, which empowers the Cabinet Secretary to publish guidelines on the penalties for non compliance with the provisions of Article 60(1) (a) and (c) of the Constitution as regards maximum land holding acreage and Article 40, with regards to minimum land holding acreage. 

Land Compensation Fund

The LA under Section 153, previously provided for a Land Compensation Fund which offered compensation to any person who, as a result of the implementation of any provisions of the LA by the National Government, County Government, Urban Area or City suffered any loss or deprivation or diminution of any rights or interests in land or any injurious affection in respect of any ownership of land. This fund has been completely done away with by the LLA.

Prohibition of Unlawful Occupation of Land

The LLA, expressively prohibits unlawful occupation of public, private and community Land and provides the procedure for eviction of such unlawful occupiers, depending on the classification of the land as below:

Public Land

The National Land Commission is mandated in this case to notify all affected persons, in writing, by notice in the Gazette and in one newspaper with nationwide circulation and by radio announcement, in a local language, where appropriate, at least three (3) months before the eviction.

Community Land

The County Executive Committee Member responsible for land matters is mandated to notify all affected persons, in writing, by notice in the Gazette and in one newspaper with nationwide circulation and by radio announcement, in a local language, where appropriate, at least three (3) months before the eviction.

Private Land

In the case of private land if the owner or the person in charge is of the opinion that a person is in occupation of his or her land without consent, the owner or the person in charge may serve on that person a notice, of not less than three (3) months before the date of the intended eviction.

Cancellation and Extinguishment of easements and analogous rights

The proprietor/occupier of land will no longer have the right to cancel and extinguish any easements or analogous rights granted.

Land Settlement Fund

The National Land Commission will no longer have the mandate to administer this fund, it will with effect from 21^st September, 2016 be administered by a board of Trustees known as the Land Settlement Fund Board of Trustees.

Interest on unpaid compensation

Payment of interest on unpaid compensation in respect of compulsory acquisition shall be the base lending rate set by the Central Bank of Kenya prevailing at that time as opposed to the rate prevailing bank rates as previously provided for under the LA.

Power of Sale

The Chargee in a sale by a private contract, is now entitled to rely on a valuation carried out by a valuer who is registered with the institute of Surveyors of Kenya and the report shall in the absence of a manifest error, be conclusive in relation to the market price, provided that the valuation report shall at the time of sale be not more than six (6) months old.

Power of Chargee taking possession of Charged Land

A Chargee taking possession of charged land due to default by the Chargor shall now only be able to exercise the power of entry either peaceably or forcibly after obtaining a court order.

Remedies of a Chargee

The Chargee will now only be able to exercise their remedies for default by a Chargor in a Charge, ninety (90) days after serving the default notice and not two (2) months as previously provided under the LA.

Sale of Land under an Informal Charge

A Chargor is prohibited from possessing or selling land whose title documents have been deposited by a chargee under an informal charge without an order of the court.

Order of Priority of Charges

The LA previously provided that Charges shall rank according to the order in which they are registered. The mandatory effect of this section has been removed by the LLA which provides that the ranking order shall not apply if the Charge instrument states otherwise. Hence, this gives the parties to the Charge, the power to rank the Charge within its provisions.

Retrospective effect of the LA

The LLA amends the LA which provided that Part VII of the LA (General Provisions on Charges) applied to charges on Land made before the coming into effect of the LA. Hence, this means that any charge, mortgage or other security instrument which was valid before the commencement of the LA shall continue to be valid in accordance with its terms. However, notice to spouses shall still be required to be served.

Validity of Contracts in Sale of Land

The LLA, excludes the following contracts from the requirement that no suit shall be brought upon a contract for the disposition of an interest in land unless the contact upon which the suit is founded is in writing, is signed by all parties thereto and the signature of each party signing has been attested to by a witness who was present when the contract was signed by such party:-

a)      a contract made in the course of a public action;

b)      the creation or operation of a resulting, implied or a constructive trust; or

c)       any agreement or contract made or entered into before 21^st  September, 2016, provided that the verbal contracts shall be reduced to writing within two years from this date.

Lessee pre-emptive right to allocation

The National Land Commission is now required to notify the lessee within five (5) years before the expiry of the leasehold tenure, by registered mail, of the date of expiry of the lease and inform the lessee of his or her pre-emptive right to allocation of the land upon application; and if within one (1) year the lessee shall not have responded to the notification, publish the notification in one newspaper of nationwide circulation.

This however only applies to Kenyan citizens and only if the land is not required by the national or county government for public purposes.

Dealings with Controlled land

Prior written approval of the Cabinet Secretary shall now be required prior to any dealings in respect of Controlled Land. Controlled Land is defined under the LLA to mean land in Kenya which is:

a)      within a zone of twenty-five kilometres from the inland national boundary of Kenya;

b)      within the first and second row from high water mark of the Indian Ocean; or

c)      any other land as may be declared controlled land under any law or statute.

Retention of Freehold Interest when seeking planning permission

The LLA has added a new section to the LA which provides that, save as provided for in the Constitution, a registered proprietor shall not, for the purposes of obtaining planning permission, be obliged to surrender the freehold interest in exchange for leasehold. This comes as a welcome change to the previous position which required one to surrender their freehold title in exchange for a leasehold title, with new terms and conditions. Holders of freehold titles can now obtain planning permission without the fear of losing their freehold interest in the property.

NOTE: For any enquiries on the same please do not hesitate to contact us on legalserviceskenya@gmail.com

SCOPE OF THE BANKING (AMENDMENT) ACT, 2015

The President of the Republic of Kenya, assented to the Banking (Amendment) Act, 2015 on August 24, 2016. The Act seeks to protect consumers from high interest rates being charged by Banks and financial institutions. Borrowers in Kenya have over the years been subject to predatory lending practices, they have been faced with overwhelming interest rates due to Banks having the flexibility and the power to determine interest rates.

The principal object of the Act, is to provide a mechanism for regulation of banks and financial institutions' rates through the introduction of ceilings being a regulatory measure that the maximum interest rate that a Bank or a financial institution can charge a borrower for a loan. 

The Act amends section 33A of the Principal Banking Act (cap 448) of the Laws of Kenya by insertion of a new section bestowing powers to the Central Bank to enforce interest ceilings.

It provides that a Bank or a financial institution shall set the maximum interest rate chargeable for a credit facility in Kenya at no more than 4%, the base rate set and published by the Central Bank of Kenya. This means that no Bank or financial institution will have the liberty of setting their own interest rates as before, where they were able to exercise this flexibility they will have to comply with this section by ensuring that the interest rate does not exceed 4% of the base rate set by the Central Bank of Kenya.

It is also provided that the  minimum interest rate granted on a deposit held in interest earning in Kenya should not go below 70% of the base rate set by the Central Bank of Kenya.

The Act also attaches criminal sanctions to a Bank or financial institution for entering into an agreement or an arrangement with a person to lend directly or indirectly at an interest rate in excess of that prescribed by the law. A bank or a financial institution that contravenes this  shall be liable to a fine of not less than One (1) million shillings, or to imprisonment for a term not less than One (1) year, or to both.

It shall be also be required of a bank or financial institution to fully disclose to a borrower all the charges and terms relating to the loan prior to granting a loan. This is a very important aspect as now a consumer can compare the prices and terms of credit from different sources.

As regards commencement of the Act it is not provided when it shall come into force, however the Interpretation and General Provisions Act under Section 9 provides that "an Act shall come into operation on the day on which it is published in the Gazette however if it is enacted in the Act, or in any other written law, that the Act or any provision thereof shall come or be deemed to have come into operation on some other day, the Act or, as the case may be, that provision shall come or be deemed to have come into operation accordingly." In this case the Act is silent on commencement and hence it will be deemed to come into force on the date in which it is published in the Kenya Gazette.