EPZ Commercial Enterprise License Requirements in Kenya
EPZ Commercial Enterprise License Requirements in Kenya, Licencing Body & Contacts
Key Requirements
- Company must be incorporated as an EPZ company in Kenya
- Minimum 80% of annual output must be exported (20% can be sold within East African Community with ministerial approval)
- Evidence of export market required
- Environmental Impact Assessment (EIA) and NEMA certificate mandatory
- Commercial activities must be conducted in separate premises from manufacturing operations
- Application fee: USD 250
- License issuance fee: USD 1,000
- Two letters from foreign market buyers required
- Bank reference letter attesting to promoter's ability to raise capital
Licensing Body & Contact Information
Export Processing Zones Authority (EPZA)
- Address: Administration Building, Viwanda Road, off Nairobi-Namanga Highway, Athi River, Kenya
- Postal Address: P.O. Box 50563, Nairobi 00200, Kenya
- Phone: +254 713 051 172/3, +254 733 683 222
- Email: info@epzakenya.com / investments@epzakenya.com
- Website: www.epzakenya.com
Understanding EPZ Commercial Enterprise Licenses in Kenya
Kenya's Export Processing Zone (EPZ) program represents one of the country's most attractive investment opportunities for export-oriented businesses. Among the various licenses available under this scheme, the EPZ Commercial Enterprise License is specifically designed for companies engaged in commercial activities such as bulk breaking, repackaging, re-labeling, and trading for export purposes.
What is an EPZ Commercial Enterprise License?
The EPZ Commercial Enterprise License allows companies to engage in export-oriented commercial activities including breaking bulk, repackaging, re-labeling, and trading. Unlike manufacturing or service licenses, this license is tailored for businesses that focus on the commercial aspects of export operations without necessarily being involved in production processes.
Under Kenyan law, no person or entity is permitted to operate as an export processing zone commercial enterprise without obtaining the appropriate license from the Export Processing Zones Authority. The license is issued by EPZA upon receipt of a properly completed application and must comply with all statutory requirements outlined in the Export Processing Zones Act.
Statutory Requirements for EPZ Commercial License
To qualify for an EPZ Commercial Enterprise License, applicants must meet several critical statutory requirements. First and foremost, the company must be incorporated as an EPZ company with a minimum of 80% of its annual output designated for export. The remaining portion, up to 20% of annual output, may be sold within the East African Community, but only after obtaining ministerial approval.
Companies must provide evidence of their operational location and undergo an Environmental Impact Assessment to acquire a NEMA certificate. This environmental compliance requirement ensures that commercial operations do not have adverse impacts on Kenya's environment.
A unique requirement for commercial licenses is that commercial activities must be undertaken in building premises separate from those where manufacturing activities are conducted. This separation ensures clear delineation between different types of EPZ operations and facilitates better regulatory oversight.
Application Process and Documentation
The application process begins with submitting the investment proposal to EPZA. The commercial license application must be completed using form EPZE (1), which requires comprehensive information about the proposed business operations.
Applicants must provide several supporting documents including tariff HS codes describing the products to be traded, a detailed sales schedule showing projected units and values for the first three years of operation, and destination markets for the products. Two letters from foreign market buyers indicating their intention or desire to source from the new EPZ commercial entity are required, printed on company letterhead with officer names, telephone contacts, and email addresses.
Additionally, a bank reference letter is mandatory to attest to the promoters' ability to raise the required capital and demonstrate sound banking conduct. This financial verification helps EPZA assess the viability and sustainability of the proposed commercial enterprise.
Eligibility Criteria
The Export Processing Zones Authority evaluates applications based on specific eligibility criteria outlined in the Export Processing Zones Act. The proposed business enterprise must be incorporated in Kenya for the sole purpose of producing goods or services for export within an export processing zone, and must engage in activities eligible to be undertaken by an EPZ enterprise.
The business must not have deleterious environmental impacts, engage in unlawful activities, impinge on national security, or pose health hazards. Furthermore, all business operations must be conducted in accordance with Kenyan laws, except for specific exemptions that may be granted from time to time under the EPZ scheme.
There are no restrictions on ownership structure. An EPZ commercial enterprise can be 100% foreign-owned, 100% Kenyan-owned, or any combination of foreign and Kenyan ownership through joint ventures. This flexibility makes the EPZ program accessible to both local entrepreneurs and international investors seeking to establish commercial operations in Kenya.
Costs and Processing Time
The total cost for obtaining an EPZ Commercial Enterprise License includes a USD 250 application fee and a USD 1,000 license issuance fee, bringing the estimated total cost to approximately USD 1,500. These fees are considerably lower than many other business licensing requirements in the region, reflecting Kenya's commitment to attracting export-oriented investment.
The processing timeline varies depending on the complexity of the application and completeness of documentation. Typically, EPZA aims to review and respond to investment proposals within one to five days of initial submission. The complete licensing process, from application submission to license issuance, generally takes between 10 to 30 days, though projects requiring extensive environmental assessments may take longer.
Benefits of EPZ Commercial License
Obtaining an EPZ Commercial Enterprise License comes with substantial benefits that make it an attractive option for export-focused businesses. License holders enjoy perpetual exemption from VAT and customs import duty on inputs including raw materials, machinery, office equipment, and building materials. However, it's important to note that unlike manufacturing enterprises, commercial license holders do not benefit from the 10-year withholding tax holiday on dividends and remittances to non-resident parties.
EPZ enterprises also benefit from 100% investment deduction on new investments in EPZ buildings and machinery, applicable over 20 years, and perpetual exemption from stamp duty on legal instruments. The streamlined regulatory framework means businesses operate under essentially one license issued by EPZA, minimizing bureaucracy and administrative procedures.
Getting Started with Your Application
Prospective applicants should begin by contacting the Export Processing Zones Authority with their initial project proposal. EPZA provides guidance to help investors determine whether their intended commercial activities are suitable for the EPZ scheme. Once eligibility is confirmed, applicants receive the appropriate application forms and detailed instructions for completion.
For additional information or clarification on specific requirements, investors can reach out to EPZA's Investment Promotion Officers or the General Manager of Investments and Corporate Communication. The Authority maintains an open-door policy for prospective investors and provides comprehensive support throughout the application and licensing process.
For more information or to begin your EPZ Commercial Enterprise License application, contact EPZA at investments@epzakenya.com or visit their offices in Athi River, Kenya.
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