for Investors, Exporters & Importers - EPC Kenya -...
Transcript of for Investors, Exporters & Importers - EPC Kenya -...
for Investors, Exporters
& Importers
2012
Export Promotion Council
1st and 16
th Floor, Anniversary Towers, University Way
P.O. Box 40247 00100 GPO
Nairobi Kenya
Tel. +254 20 222 853 4-8, 0722 205 875
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Forward
It gives me great pleasure to present to you the Roadmaps and Business Charter of the Export
Promotion Council for the financial year 2011 – 2012. The Export Promotion Council is Kenya’s
National focal point for the development and promotion of export of goods and services and
harmonises export related activities in the country. The Council identifies and engages other
stakeholders to address bottlenecks in the flow of trade and investment in order to facilitate
export development. The Council achieves this through establishment of forums for dialogue
between the exporting fraternity and relevant public and private sector organisations. These
forums enable the Council to engage with the public and private sector institutions in order to
capture any concerns affecting the export sector, including policy and administrative issues
hindering their business.
The Council annually engages respective stakeholders to review Roadmaps for Exporters,
Importers, Investors and incentives offered under various export schemes including the
business charter which spells out the code of conduct for business and commerce in Kenya.
The Maps, which are five in number, aim at providing guidelines to the business community in
order to maximise benefits of macro-economic reform and other policy changes and facilitates
the effectiveness of export and import procedures in Kenya. These guidelines also highlight the
available incentives under the various export incentive schemes. Constraints to increased flow
of trade include the administrative barriers and procedures associated with the movement of
goods for both import and export of raw materials, intermediate and finished products.
Opportunities created by recent reforms and measures to reduce regulation of economic
activities are vital to the process of enhancing production and improved export performance.
Expansion of trade can be heavily constrained by unnecessary procedures and formalities. The
reform process itself, through deregulation and simplification of procedures, can be hindered by
lack of knowledge and uncertainty over what the correct procedures are.
These Road Maps are an accurate record of current procedures that have been carefully
checked in collaboration with relevant organisations. However, the Export Promotion Council
accepts no liability for any consequences of variations or deviations found in their daily usage by
practitioners in business and commerce. Users are requested to advise the Chief Executive,
Export Promotion Council of any inaccuracies or variation of these procedures, which they
encounter. In this way, the Road Maps will be maintained as a true and accurate description of
the real procedures in trade and investment in Kenya.
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The Road Maps for Exporters and Investors aim to maximise the benefit of macro-economic
reform by imparting knowledge on existing and potential members of the business community
and facilitating the effectiveness of commercial transactions in Kenya. The revised Roadmaps
and business charter are available at EPC’s Centre for Business Information (CBIK) as
reference material which accurately describes the current procedures and which are readily
available to the business community. Additional copies will be sent to our stakeholders including
Trade support Institutions.
This year’s roadmaps were revised by EPC in collaboration with key stakeholders including
Kenya Revenue Authority (KRA), Kenya Investment Authority (KenINVEST), Kenya Bureau of
Standards (KEBS), Ministry of Finance (TREO), Kenya National Chamber of Commerce and
Industry (KNCCI), Export Processing Zones Authority (EPZA), Kenya Plant Health Inspectorate
Service (KEPHIS), Kenya International Freight & Warehouse Association (KIFWA) and the
Ministry of Trade respectively and therefore reflects the current status as prevailed at the time of
compilation.
The business charter on the other hand provides guidelines on the conduct of any business and
compliance to established regulations and procedures which are crucial to the success or failure
of any business enterprise. In order to enable entrepreneurs to conduct their affairs in a
coordinated manner, the Council found it necessary to develop a Business Charter for the
conduct of business and commerce in Kenya. The Charter therefore contains a set of practices
and business ethics that govern and binds the business community in the course of their
commercial transactions both locally and abroad. The Council is convinced that these guidelines
will be subscribed to by businesses in a manner appropriate to their particular businesses or
activities.
It is envisaged that these principles will be accepted and endorsed by the highest authorities in
both private and public sectors. Each company or institution, which chooses to subscribe to
them, will be expected to publicise and apply these governing principles to their businesses.
This document comes at an opportune time, with the advent of the new constitutional
dispensation. It is anticipated that the progressive implementation of the constitution will
strengthen governance, improve the administrative and regulatory framework, support the
overall reform process and guide exporters in making informed decisions. This is bound to have
significant effects on the flow of cross border trade and investments in the region.
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On behalf of the Council, I take this opportunity to thank all those who contributed to the revision
and subsequent production of both the Roadmaps and the Business Charter for their support in
this important activity. I now avail the two for use, wider circulation and hope that these
documents will be put into good use for the benefit of the entire business community.
Hon. Peter N. Ndwiga EHG
Chairman
Export Promotion Council,
1st & 16th Floors, Anniversary Towers, University Way,
P.O Box 40247 -00100 NAIROBI
Tel. +254 2228534 / 8; +254 722 205875; +254 734 228534; Fax +254 2218013,2 228539
E-mail: [email protected]; [email protected]
URL: www.epckenya.org
2012
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1. IMPORT OF GOODS: A GENERAL ROAD MAP FOR IMPORTERS
1. IMPORTER NEGOTIATES
AND FORMALISES PURCHASE CONTRACT WITH SUPPLIER
(Some goods require special import approvals by relevant authorities)
Contract of sale and purchase
Pro-forma invoice
2. SUPPLIER
FORWARDS PRO-FORMA INVOICE TO IMPORTER
5. CUSTOMS SERVICES
DEPARTMENT CHECKS FORM C61 FOR ACCURACY & COMPLETENESS.
3. IMPORTER COMPLETES
AND SUBMITS FORM C61 (IDF) TO CUSTOMS ONLINE (www.kra.go.ke )
Importer submits form C61 completely filled.
Goods originating from EAC member states do not require the payment of the IDF fees. (Submitted with a valid certificate of Origin)
6. CUSTOMS SERVICES DEPARTMENT
ISSUES COMPUTER GENERATED IDF WHICH HAS REFERENCE NUMBER AND DISPATCHES TWO COPIES TO IMPORTER
C 61 Importer Declaration Form (2 copies)
Importer copy
Customs copy
4. IMPORTER PAYS KSH
5000/= ADVANCE PAYMENT OF THE IDF FEES
IDF fee is 2.25% of the CIF value. The balance of the IDF fee is paid at the time of clearance of goods at the custom.
7. KEBS appointed agencies to
determine compliance to relevant standards
i) For list of inspection agents and
products covered by PVOC visit www.kebs.org
ii) For Goods that do not require PVOC, step 7 is not necessary
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8. GOODS COMPLIANT OR
THOSE NOT COVERED UNDER PVOC ARE THEN SHIPPED TO KENYA
9. SUPPLIER SENDS FINAL
INVOICE WITH AIRWAY BILL or BILL OF LADING (FOR GOODS THAT ARE TRANSPORTED BY SEA) TO THE IMPORTER.
10. IMPORTER
ELECTRONICALLY LODGES C17B IMPORT ENTRIES WITH CUSTOMS FOR PAYMENT OF DUTY.
12. RELEVANT GOVERNMENT
AGENCIES INCLUDING CUSTOMS, KENYA PLANT HEALTH INSPECTORATE SERVICES, PORT PUBLIC HEALTH AND KENYA BUREAU OF STANDARDS INSPECT SELECTED GOODS.
NOTE: i. Dealers in import of agricultural
products are required to familiarise with applicable Sanitary and Phytosanitary
controls
11. IMPORTER PAYS
APPLICABLE DUTIES AND BALANCE 0F 2.25% IDF FEES TO CUSTOMS PRIOR TO CLEARANCE OF GOODS.
PAYMENTS ABOVE KSHS 1 MILLION ARE TO BE DONE THROUGH RTGS (REAL TIME GROSS SETTLEMENT) WHERE IMPORTER USES ELECTRONIC FUNDS TRANSFER (EFT)
13. GOODS ARE RELEASED BY
CUSTOMS TO THE IMPORTER ON CONFIRMATION THAT PORT CHARGES HAVE BEEN PAID.
- Release of Goods
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2. EXPORTS: A ROAD MAP FOR EXPORTERS
1. EXPORTER APPLIES FOR
THE COMPANY P.I.N. FROM
KRA ONLINE
2. EXPORTER APPLIES FOR ANY SPECIAL EXPORT CERTIFICATE AS NECESSARY
Documents as specified in regulations controlling specific items being exported.
Special Certificates are commodity specific e.g. Horticultural Crops Development Authority (HCDA) for horticultural export, plant health certificates from KEPHIS and a KEBS’ certificate may also be necessary.
Note: Dealers in export of agricultural products are required to familiarise with applicable Sanitary and Phytosanitary controls
5. ARRANGE SHIPMENT INSURANCE
Marine cover to be obtained by exporter from company of choice
4. EXPORTER APPLIES FOR CERTIFICATE OF ORIGIN (AS REQUIRED BY COUNTRY OF IMPORT)
Certificates of origin to appropriate destinations: Exporters to EU obtain EUR 1; Exporters to COMESA obtain COMESA certificate of origin; Exporters to EAC to obtain EAC certificate of origin; Exporters to OECD countries obtain GSP Certificate of Origin; Exporters to countries other than above obtain Ordinary Certificate of Origin.
All these certificates are issued by KRA apart from ordinary certificate of origin which is issued by KEBS and KNCCI.
3. EXPORT ENTRIES FORM
C17B ARE ELECTRONICALLY LODGED WITH CUSTOMS BY CLEARING AGENTS FOR
PROCESSING
6. EXPORTER TO CHECK STANDARDS/REGULATIONS REQUIREMENTS OF THE COUNTRY OF EXPORT. – liaise with KEBS on www.kebs.org
7. CUSTOMS CERTIFICATION OF
EXPORTS
Export certification is done by customs at points of exit after confirming the authenticity of all supporting documents and physical verification.
8. GOODS ARE
SEALED AND SHIPPIED
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3. PROJECT IMPLEMENTATION PROCESS- A ROAD MAP FOR INVESTORS
1. REGISTRATION AT KENYA INVESTMENT AUTHORITY
(www.investmentkenya.com)
2. COMPANY REGISTRATION / INCORPORATION- Registrar of companies
3a. APPLICATION FOR PIN NUMBER (CERTIFICATE) FOR COMPANY
Pre-conditions:
For Limited companies-certificate of registration/incorporation, memorandum of association and articles of association.
For individuals-copy of ID/Passport Done within 1 day following PIN application (No charge)
The PIN NO can be applied for on-line at the KRA website (www.kra.go.ke )
3 b. APPLICATION FOR ENTRY PERMITS FOR FOREIGN INVESTORS (DIRECTORS CLASS H)
The immigration department requires evidence of availability of investment fund of USD 100, 000 in accordance with the Investment Promotion Act 2004 by way of certified copies of bank statements.
Application forms for work permits are available at KenInvest and Ministry in-charge of immigration matters
Note: This Step applies only to Foreign Investors
3 c. APPLICATION FOR EXPATRIATE EMPLOYEES (CLASS A)
Requirements: - Cover letter from the licensed EPZ company to
EPZA, - Form 3 and 22 duly filled, - C.V., Testimonials and Certificates of the applicant, - Certificates of understudy and Kenyanization form
duly filled, - 3 passport size photographs of the applicant, - Photocopy of applicant’s Passport,
Additional requirements for class H work permit:
Share certificate from Registrar of Companies,
Memorandum & Articles of Association,
Certificate of Incorporation,
PIN of company and applicant,
Proof of investment – Bank statement, Audited accounts if renewal
NB: All these documents must be provided in duplicate Note: This Step applies only to Foreign Investors
4. APPLICATION FOR PIN NUMBERS FOR DIRECTORS
Complete application TQ1, attach photocopy of passport plus work permit if foreigner, or attach photocopy of ID if national.
PIN NO. can be applied on-line at the KRA website (www.kra.go.ke ).
PIN issuance is instant
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6. LOCAL AUTHORITY/RELEVANT SERVICE PROVIDERS
Single Business permit licence application
Application for utility services from other service providers (water, electricity) etc.
8. APPLICATION FOR OTHER RELEVANT LICENCES/ APPROVALS WITHIN A PERIOD OF ONE YEAR (12 months)
This provision is necessary to enable investors commence business within the shortest time possible. As per the law (Investment Act 2004), the Authority assumes that the investor will have acquired all other necessary documentation within 12 months. Whereas other processes may take long e.g. land transfer, change of user and registration of property.
KENINVEST assists investors to acquire all other licences and approvals (e.g. NEMA, CCK, MIN OF HEALTH)
Project approvals are subject to compliance with health, environment, and safety requirements
7. INVESTMENT CERTIFICATE ISSUED
5. ACQUISITION OF PREMISES
For land in private ownership - Zoning – Approval change of use – Approval to undertake construction – Approval of building plans – Approval of building plans code – Inspection
For agricultural land – Application to Land Control Board For Government Land
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4. TAX REMISSION FOR EXPORTS OFFICE (TREO SCHEME) A ROAD MAP FOR EXPORTERS
WHAT DOES IT PROVIDE A manufacturer/ producer can have duty and VAT inputs related to any export remitted. The manufacturer/producer can opt for single order arrangement, relating to specific importation or a 6-month continuous arrangement for on-going imports. WHO IS ELIGIBLE: Gazetted manufacturers who import raw materials that are directly or indirectly utilised in production/ manufacture goods for export/ Production of essential goods for home use
1. SUBMISSION OF APPLICATION i) Collect forms from KAM or
download from www.kam.co.ke ii) Submit completed forms to KAM
with certificate of Tax compliance.
iii) PIN certificate & Certificate of Incorporation
iv) KAM verifies application and forwards form to TREO in Treasury.
2. COMPANY VERIFICATION i) A team comprising of KAM
representatives from TREO & KRA visits the Company if its new
ii) The team makes a report of the visit and submits to TREO Committee for deliberation.
iii) TREO Committee deliberates on the eligibility of the applicants and recommends for gazzettment to Commissioner of Customs Services.
3. APPROVAL i) The TREO convenes a meeting to consider the
application to the TREO programme in line with the TREO regulations
ii) The TREO Committee either accepts or declines or defers the request
iii) TREO Committee deliberates on eligibility of the applicants and recommends for Gazettement to Commissioner of Customs Services because of VAT and the EAC secretariat because of import duties on imported inputs
iv) The decision of the Committee is communicated to the company by KAM
4. GAZETTEMENT i) If approved, the new company is
Gazetted and therefore allowed to make applications through forms C56 or C60 for Duty/ VAT remission on raw materials.
ii) Users of inputs that have import are gazetted by EAC secretariat and only those that have VAT are gazetted by the commissioner of custom.
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5. SUBMISSION OF APPLICATION TO TREO PRIOR TO
IMPORTATION 1) For single order arrangement:
C 56 /C60 Application Form
Form C61 (IDF)
Pro-Forma Invoice/Import Invoice
Statement of Raw Material utilisation through letter of credit (L/C)
Confirmation of purchase by buyer.
Detailed Introductory letter by the applicant
Copy of company registration/certificate of incorporation
Copy of VAT Registration
Copy of PIN Certificate
2) For 6 months continuous arrangement:
Evidence of past export performance over previous twelve months.
Details of production and export plans for the next 6 months.
List of goods to be imported including description, tariff classification, quantity, value and estimated duty to be remitted
6. SUBMISSION OF APPLICATION FOR BOND TO
CUSTOMS SERVICES DEPARTMENT AFTER EXECUTION OF THE BOND AT BANK OR INSURANCE IN PRESENCE OF CUSTOMS, EXPORTER CAN PROCEED WITH IMPORTATION.
An Insurance Bond or a Bank Guarantee for 100% of the total import Duty and VAT to be remitted must be issued. (See Road Map for Importers)
CB 13 Application form (4 copies) distributed to:
Original – Customs
Duplicate – Customs (point of entry processing)
Triplicate – Importer
Quadruplicate- Guarantor
Approved Form C56/C60
7. IMPORTATION OF RAW MATERIALS
AND CLEARANCE THROUGH CUSTOMS
Apply to customs for self clearance or Engage Licensed Clearing Agents
8. UTILIZATION OF THE RAW MATERIAL
Maintain proper records of used & un-used materials.
Random Inspection by Customs Officials.
Submission of quarterly reports.
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11. SUBMISSION OF RECONCILIATION
DECLARATION ON FORM C57 (TRIPLICATE) AND (C 61)
- Reconciliation Declaration within 12 months or in case where a renewal was issued after 6 months, with following documentary evidence:
- In the case of inputs gazetted by EAC secretariat reconciliation declaration
- Import entry - Ex-warehouse entry (for customs bonded goods) - Proof of export – foreign exchange payment
through commercial bank / Export entry certification
- Evidence of raw material utilisation showing inputs/outputs/by-products/production losses/scrap
- Copy of security bond-CB 13 - Copy of form C56/C60 - Form C58 (Transfer forms)
10. INSPECTION OF CUT-OFF WASTE
Under this procedure the Customs Services Department: - Inspects on-site the waste. - Issues the Certificate of Destruction of
waste for cut off waste of no customs commercial value.
- Assesses taxes on unused inputs or cargos that are of commercial value
12. VERIFICATION OF
RECONCILIATION FILES Under this procedure: - A letter of recommendation for the
cancellation of the bond is issued. Inspection of the operations on
need basis.
13. APPLICATION TO CUSTOMS
FOR CANCELLATION OF BOND CB Form
C 30 Application form for bond cancellation
Letter of recommendation on cancellation
Attach triplicate copy CB Form
14. CANCELLATION OF BOND
The Customs Services Department cancels the Bond and notifies the exporter and the guarantor (Bank or Insurance Co.)
The original CB Form bond security is returned/retired.
9. EXPORTATION OF GOODS PRODUCED
(Ref. Exports: roadmap for
exporters)
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5. EXPORT PROCESSING ZONES (EPZ) PROGRAMME A ROAD MAP FOR EXPORTERS
WHAT IT PROVIDES - Corporate Tax Holiday: For first 10 years and
tax at 25% for next 10 years, - Withholding Tax Holiday: For first 10 years on
dividends & other payments to non-residents, - Customs and Excise Import Duty Exemption:
machinery, raw materials & intermediate inputs, - Stamp Duty Exemption, - Facilitation and Aftercare: Work permits,
Customs, Industrial Relations & Utilities, - Single Licence: for most activities, certain
sectors may require special permits and licences,
- 100% Investment Deduction: over 20 years on initial capital investment.
- Exemption from pre-shipment inspection (PSI) and import declaration form (IDF) fees
- EPZ manufacturing, service and zone developer/operator licence allow upto 20% domestic sales; EPZ commercial licence requires 100% exporting
ELIGIBILITY Companies incorporated in Kenya for the sole purpose of engaging in the following export oriented activities: - Manufacturing or Processing
Activities - Commercial Activities including:
bulk breaking , trading, re-labelling, grading, packing e.g. regional distribution centres
- Service Activities including: brokerage, repair, consultancy and information and telecommunication enabled services (ITES) e.g. BPO, Call & Contact Centres, etc.
- Zone Developer/Operator Activities
- Business Service Permit (BSP): services rendered primarily to EPZ enterprises & staff
ADMINISTERING AGENCY Export Processing Zones
Authority (EPZA) www.epzakenya.com
Note: For Commercial Activities - Import of inputs & machinery duty free, - Not entitled to the 10 year corporate tax & withholding tax holidays, - No sales to domestic customs area - Firm must label goods indicating country of origin e.g. manufactured in China repacked in Kenya, - Activity must be carried out in separate building from where manufacturing is taking place, - EPZA is required to consult with Commissioner General of KRA before licensing.
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2b. APPLICATION FOR ENTERPRISE LICENCE (Manufacturing, services & commercial activities) Form EPZE (1) with following annexes: - Manpower requirement, - Electricity requirement, - Water requirement, - Telecommunication requirement, - Port and airport requirement, - Management posts (including expatriates), - Environmental checklist. Submitted with US$250 application fee; Export buyers and bank reference letters; qualifying projects approved in principle by EPZA.
2a. APPLICATION FOR EPZ DEVELOPER/ OPERATOR Form EPZD (1)
Application for developer/operator licence which involves designation of an area (piece of land) in Kenya as an EPZ.
Submitted with US$250 application fee.
Application evaluated, site visits made and building plans inspected.
1. SUBMISSION OF PROJECT PROPOSAL TO EPZA
Project Proposal ( 2-3 pages) outlining: product or service; production process; destination markets; project costs; financing structure; location & premises desired; employment to be generated; technology to be transferred.
EPZA carries out preliminary screening by assessing the potential fit of the project. Application forms & guidelines are provided to investor.
2. INCORPORATION OF EPZ COMPANY IN KENYA FOR SOLE PURPOSE OF ENGAGING IN EPZ ACTIVITIES - EPZA approves draft Memorandum and Articles of Association then investor incorporates EPZ
company, - Submit copies of Certificate of Incorporation plus Memorandum and Articles of association to EPZA
with licence fee. - Submits copies of other relevant licences not issued by EPZA and not exempted by EPZ Act e.g.
Mines & Geology (processing of minerals), Pharmacy & Poisons Board (pharmaceuticals) and NEMA (activities listed in Second Schedule of Environmental Management Coordination Act, 1999).
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5b. GRANT OF LICENCE FOR EPZ ENTERPRISE (form EPD (3)) - Provided on payment of US$1,000 annual licence fee for
enterprise locating in an existing gazetted zone (e.g. Athi River).
- Licence bears firm name, activity and zone location.
4a. LETTER OF ADVICE Letter to the proposed investor advising that EPZA Board has recommended gazettement to Minister responsible for Trade and should proceed to
Incorporate an EPZ Company (refer to procedure 3b),
Obtain certificate of Registration,
Transfer/lease of land to EPZ entity,
Obtain Environmental Impact Assessment (EIA) licence from NEMA.
4b. ZONE GAZETTEMENT Legal Notice prepared, forwarded for approval by Attorney General’s Chambers, signed by minister responsible for Trade and published in Kenya Gazette
5a. DEVELOPER/OPERATOR LICENCE GRANTED TO EPZ FIRM Upon payment of US$5,000 annual fee, licence issued (Form EPD 1). Developer develops zone infrastructure using EPZ incentives with compliance with EPZ import/export procedures
5c. OTHER REQUIREMENTS FOR LICENCED ENTERPRISE
Company Personal Identification Number (PIN),
EPZ Import/Export Code
Valid EPZ licence
Letter of VAT Exemption from KRA
Certificate of Incorporation
3b. INCORPORATION OF EPZ COMPANY IN KENYA FOR SOLE PURPOSE OF ENGAGING IN EPZ ACTIVITIES - EPZA approves draft Memorandum and Articles of
Association then investor incorporates EPZ company, - Submit copies of Certificate of Incorporation plus
Memorandum and Articles of association to EPZA with licence fee.
- Submits copies of other relevant licences not issued by EPZA and not exempted by EPZ Act e.g. Mines & Geology (processing of minerals), Pharmacy & Poisons Board (pharmaceuticals) and NEMA (activities listed in Second Schedule of Environmental Management Coordination Act, 1999).
3a. REQUIREMENTS FOR ZONE - Land leased or owned by developer - Lease should have 30 unexpired years - Suitable infrastructure including:
Electricity at 11KV,
Water supply at 25 cubic metres per day,
Access roads,
Illuminated security wall,
Custom offices,
Ablution facilities for workers,
6 metres between building & fence.
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6. APPLICATION FOR EXPATRIATE EMPLOYEES FROM EPZ ENTERPRISE WITH ALL REQUIRMENTS: - Cover letter from the licensed EPZ company to EPZA, - Form 3 and 22 duly filled, - C.V., Testimonials and Certificates of the applicant, - Certificates of understudy and Kenyanization form duly filled, - 3 passport size photographs of the applicant, - Photocopy of applicant’s Passport, - Additional requirements for class H work permit:
Share certificate from Registrar of Companies,
Memorandum & Articles of Association,
Certificate of Incorporation,
PIN of company and applicant,
Proof of investment – Bank statement, Audited accounts if renewal NB: All these documents must be provided in duplicate
8. EXECUTION OF BOND CPZB/ CB Form – General Bond for the removal of goods to/from Export Processing Zone
9. GOODS TRANSPORTED FROM PORT OF ENTRY TO EPZ UNDER CUSTOMS SEAL BY SHIPPING CONTAINER OR ANY OTHER SEALABLE VEHICLE.
7. COMPANY PROCEEDS WITH IMPORT OF INPUTS/MACHINERY Exemption from Pre-Shipment Inspection (PSI), Exemption from payment of Import Declaration Fee (IDF), Customs Documentation done- C17B entry.
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13. EXAMINATION OF GOODS FOR EXPORT BY CUSTOMS PRIOR TO LEAVING EPZ
Copies of a C17B to accompany goods to port of exit
Packing List
Bill of Lading
Invoice
15. CANCELLATION OF BOND BY CUSTOMS
Copy of C30 on bond cancellation attached with C17B.
Cancellation done online.
14. GOODS TRANSPORTED FROM EPZ TO PORT OF EXIT UNDER CUSTOMS SEAL, CONTAINERIZED OR ANY OTHER SEALABLE VEHICLE.
10. CUSTOMS INSPECTION AND CERTIFICATE OF RECEIPT OF GOODS - C17B is stamped so that bond
(CPZB/CB Form) can then be cancelled.
12. COMPANY PROCEEDS WITH EXPORT C17B, Bond (CPZB/CB14) allocated, Sales to customs territory requires IDF and
payment of import duties and VAT by customer in the domestic market and a surcharge of 2.5%,
Authority from Minister of Trade required to sell into domestic market,
KEBS inspection to ascertain conformity to standards prior to selling into the domestic market is required.
11. EPZ ENTERPRISE PROCEEDS WITH LICENSED EPZ ACTIVITY
The company required to maintain stock records and submit monthly returns to customs (commercial licence),
Quarterly and annual returns submitted to EPZA
Company complies with conditions of EPZ licence
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6. MANUFACTURING UNDER BOND (MUB) A ROAD MAP FOR USERS
8. MUB OPERATOR COMPLETES EXPORT ENTRY
CF. 4 MUB entry form
WHAT IT PROVIDES The Exporter is exempted from Duty and VAT on imported machinery and raw materials used in manufacturing goods for export ELIGIBILITY Manufacturing companies registered in Kenya that export all or part of their products. ADMINISTERING AGENCY Kenya Investment Authority (KenInvest)
1. APPLICATION TO KENYA INVESTMENT AUTHORITY (KenInvest)
Certificate of incorporation
Application for investment certificate
Upon acquisition of all relevant licences and approvals, KenInvest writes to Minister for Finance to facilitate MUB project
3. PAYMENT OF LICENCE FEE TO COMMISSIONER, CUSTOM SERVICES
Authority to pay the licence fees shall be issued to the applicant.
The license fees payable is US $1500.
In-case a licence is issued in the course of the year, the fees is computed on a pro rata basis.
Late applicants shall pay a non re fundable late application fee.
The license shall be issued on form C19.
A licensee of a bonded factory shall submit a return of goods remaining in the bonded factory to the Commissioner, for the period up to the 30th day of June of each year.
4. MANUFACTURING PROCESS STARTS
Documents are lodged (C17B) electronically with customs for processing
Execution of Security Bond CB ( MUB import Entry form) to cover Imported goods for manufacture under bond
2. APPLICATION TO COMMISSIONER, CUSTOMS SERVICES DEPARTMENT, FOR A MUB LICENCE
Application in a prescribed form C18
Attach approved architectural plans of buildings, Inspection of premises for suitability by a custom officer in terms of location, size, construction materials etc
A description of each building, room, place and item of plant, as well as the purpose for which each will be used
Approval by the Commissioner is granted. Bonded factory Number is allocated. A security bond shall be executed on form CB6.
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5. EXPORTER EXECUTES BOND
CB Form General Bond for the security of warehouse goods or removal of manufactured goods and export under bond.
Bond secures duty on goods on removal or in factory and compliance with all provisions relating to MUBs.
6. MUB OPERATOR ENTERS MACHINERY AND RAW MATERIALS INTO REGISTERS
Cf. 6 Machinery and raw materials register.
Separate entries made for imported and locally obtained equipments
10. EXPORTER TRANSPORTS GOODS IN SEALED CONTAINERS TO FINAL PORT/ POINTS OF EXIT
9. INSPECTION OF GOODS BY CUSTOMS AND SEALING OF
CONTAINERS
11. EXPORTER OBTAINS CERTIFICATE OF SEALED VEHICLES/CONTAINER TO PORT OF EXIT AND SUBMITS TO CUSTOMS OFFICER AT BONDED FACTORY WITHIN 30 DAYS
Certificate of Export
12. CANCELLATION OF SECURITY BONDS BY CUSTOMS
Lodgement of C30 application
Attachment of supporting documents
7. MUB OPERATOR ENTERS MANUFACTURED GOODS AND WASTES INTO REGISTERS
CF.7 Manufactured Goods Register
CF.8 Wastes and Rejects Register
Form EPD (2) Provided upon payment of US$5,000 annual fee
8. MUB OPERATOR COMPLETES EXPORT ENTRY
CF. 4 MUB entry form
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Annex 1
The Challenges Facing Kenya
The need for a new framework for the conduct of business
and commerce in Kenya
The process of economic reforms and growth calls for
supportive policy environment for business to thrive. To
achieve this, there is urgent need to develop a framework that
sets out modalities that will govern the conduct of business
transactions while at the same time conforming to international
standards.
In order to strengthen the policy framework, the Export
Promotion Council is promoting the use of a Business Charter,
which incorporates a Code of Conduct for all business and
commercial contracts.
This Charter establishes a clear set of standards and
performance for the supply of goods and services. These are
contained in a set of governing principles, to which all leading
private and public sector organisations in Kenya are invited to
subscribe and adhere to.
The Council believes that such a Charter will raise
expectations and change attitudes, concerning the
transparency of contracts and accountability for the use of
resources, in both public and private sectors. If it is to be
effective, this Charter will have to be adopted and promoted at
the highest levels of public and private sectors.
The Charter also needs the support of the Government
through the provision of an arbitration service and its adoption
as a condition of public sector procurement.
The Charter includes a statement of governing principles with
widespread application. The aims is of these principles are to
promote higher standards of service delivery, to be adopted by
all leading private and public sector organisations and
promulgated with appropriate adaptations by all concerned
companies and organisations engaged in commerce. Thus,
those companies and organisations, which are dedicated to
high standards for the conduct of business and commerce, will
be distinguished from those which are not. The companies,
which do not adopt or apply these principles, will not deserve
new business and will eliminate themselves from major
contracts.
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The prime vehicle for implementing and enforcing of the
governing principles will be the commercial contract. It is
hoped that this will be reinforced with legislation to ensure
transparency with provision for registration and reporting,
including audit where appropriate. There should also be proper
arrangements for dealing with complaints and for seeking legal
redress in cases of dispute through an arbitration procedure.
2. A Strategy for Improving Business Ethics
The strategy for improving business ethics in Kenya will be
threefold.
First, to re-establish, in consultation with the public and
private sectors, a set of standards for the conduct of
business and commerce,
Second, to promulgate these widely and to seek their
universal acceptance in public and private sectors, and
Third, to solicit a genuine commitment by all parties
engaged in business and commerce to the highest
standards of business ethics.
The primary means of implementation will be through
persuasion and publicity targeting all leading business
organisations.
The secondary means will be through the fixing of higher
standards for public sector procurement and the provision of
an investigation and arbitration service to provide redress in
the case of disputes or departure from declared Governing
Principles.
The aim will be to achieve the attachment of a set of
appropriate standards, based on the agreed Governing
Principles, to every business and commercial contract for both
domestic and export markets.
These standards will set out the indicators of the quality of
product and service. Appropriate measures will then be taken
to ensure adherence to these standards through publicity and
transparency, credible arrangements for inspection and audit,
complaint procedures and legal redress as a last resort.
18
3. The Business Charter
The Business Charter comprises three statements:
A statement of basic rights, enjoyed by citizens of Kenya
and those doing business and commerce.
A statement of obligations, which accompany those rights,
enjoyed by citizens of Kenya and those doing business and
commerce under the protection of Kenyan law
A statement of principles, governing business and
commercial transactions.
3.1. Basic Rights
The buyer is entitled to:
Choice of supply, without favour or discrimination
Information on performance and quality, which is clear and
unambiguous
Performance and quality, which equals or exceed the
explicit standards
Quality of service, including meaningful advice
Value for money, within a contract acceptable to both sides
After-sales service, which is prompt and reasonable
Means of redress, when things go wrong.
The supplier is entitled to:
Information on business and sales opportunities
Equal opportunity to make an offer, without hidden
conditions
Payment with a contract acceptable to both sides
Opportunity to put things right when they go wrong
Redress under the law, when binding agreements are
broken.
19
3.2 Basic Obligations
All contracts shall provide for the following:
a) Specific terms and conditions of payment; clearly defined
responsibilities for production, delivery and other essential
elements, so as to create a clear and unambiguous
understanding of the obligations of the buyer and the seller.
There should be no hidden or parallel terms and conditions.
Both parties should be loyal to each other in the spirit and terms of the contract. All parties should have mutual co-existence and benefit from the agreement. b) Contracting parties should establish payment terms, which
are acceptable to buyer and seller, and establish a
mechanism for payment which allows for safe and timely
transfer of funds.
Any penalties due for failure to abide with the laid down terms of the contract should be clearly specified. Conditions for termination or non-performance through natural calamities or disasters should be indicated with provision for reasonable notice.
c) Generally, the interests of the general public shall be
watched over, promoted and safeguarded, by the highest
possible standards of professional behaviour in the
circumstances.
Care should be taken not to mislead the public, either through inappropriate information or deed. Public confidence shall be promoted through the prevention or correction of any abuse, which might undermine this confidence.
d) Environment - goods and services should be produced and
supplied in a manner which does not harm or permanently
detract, either directly or indirectly, from the environment
and Kenya's natural resources.
e) All parties to business and commercial contracts shall act
within the Laws, Regulations and Official Procedures of
Kenya and those of transit and destination countries,
relating to their product or service. There is a full portfolio of
laws in Kenya, covering the conduct of business and
commerce, which should be consulted for information and
guidance.
3.3 A Statement of Principles, governing Business and
Commercial Transactions
The governing principles of the Code of Conduct are:
20
Standards of quality and service - Standards of service to be explicit, published and prominently displayed. These should encompass any statutory entitlement, courtesy and helpfulness in delivery, and a commitment to prompt action.
a) Openness - The supplier should clearly indicate whether or
not the goods and services meet the standards set for their
performance.
b) Information - Full, accurate and up to date information,
about the goods and services being provided and the terms
and conditions attached, should be made readily available
in language, which is readily understood by the customer.
Performance - Indicators of performance should be established, measured and published by the supplier for the benefit of the customer and the managers of the producers and service providers.
c) Choice - wherever practicable, steps should be taken to
provide and maintain a choice of suppliers and service
providers within both public and private sectors.
d) Non-discrimination - Goods and services should be
offered and made available to all, regardless of race,
gender, religion, language or community. The interests of
minority or special interest groups should be properly
catered for.
Accessibility - Goods and services to suit the needs and convenience of clients, not of the suppliers or service providers; this requires flexible hours of service, flexible means of delivery, ready access to sources of information and enquiry points.
e) Complaint procedures - When things go wrong and the
desired goods or services are not delivered, the customer
is entitled to an honest explanation and appropriate
redress. The complaint procedure should be well publicised
and readily available.
f) Redress - Lessons should be learned from things which go
wrong. Severe failures, which cause damage to the
customer's interests, should be redressed through
appropriate compensation.
The Code of Conduct
The Code of Conduct requires that each company, or
organisation, accepting the Business Charter and its
Governing Principles, shall undertake to do the following:
a) Prepare and adopt through their highest governing
authority a charter for their business and their customers,
21
which is based on and incorporates the Governing
Principles, adapted to the needs of their sector or industry
b) Publish this charter in the company's promotion and sales
literature and terms and conditions of business
c) Ensure that all executives, employees and agents are
thoroughly familiar with the Customers’ Charter and bind
themselves to apply it to the conduct of the company or
organisations’ affairs
d) Attach a copy of the Governing Principles and their
Customers’ Charter to every contract for the supply of
goods and services and to every contract of employment
e) Provide for appropriate means of receiving and recording
customers' complaints or difficulties and for redress
f) Include in their annual report details of the measures taken
to establish and maintain their Customers’ Charter and their
progress in achieving the standards, which they have set
themselves
g) Submit an annual report to their stakeholders, including
owners, shareholders, and business or trade association,
on the progress towards the achievement of these
standards.
22
Annex 2: LISTS OF REFERENCE FORMS
No DESCRIPTION REFERENCE ORIG/COPY
1 Declaration of Value Form C52 Copy
2 Import Declaration Form Form C61 Original
3 Certificate of Origin Form A Original
4 Movement Certificate EUR. 1 No A Original
5 COMESA/EAC Certificate of Origin Original
6 Certificate of Ordinary Certificate of Origin –KEBS/KNCCI Original
7 Import Entry Form C17B Original
8 Application for Personal Identification Number for an Individual Form TQ 1 Original
9 Application for Taxpayer Identification Number for Company,
Partnership, Trust or Association
Form TQ 2C Original
10 Registration of Business Names Act - certificate of registration Form r. 5 Copy
11 Certificate of Incorporation GPK (F9) Copy
12 Import/Export Code Number Copy
13 Application for Export Processing Zone Developer/Operations License Form EPZD (1) Copy
14 Application for Export Processing Zone Enterprise License
(Manufacturing)
Form EPZE (1) Copy
15 Application for Export Processing Zone Enterprise License
(Commercial)
Form EPZE (1) Copy
16 Export Processing Zone License Form EPD (1) Copy
17 Export Processing Zone Developer/Operations License Form EPD (2) Copy
18 Export Processing Zone Enterprise License Form EPD (3) Copy
23
19 Bond for the Removal of Goods to/from Export Processing Zone Form CPZB Copy
20 Application for Security Pass Form EPZ Pass (1) Copy
21 Road Customs Transit Declaration Form C35A Original
22 Export/Re-Export Entry Form C 17B Original
23 Application for refund of Deposit or cancellation of Bond in respect of
Goods entered in transit and subsequently re-exported or for refund of
deposit or cancellation of bond given as security in accordance with
part XII of the act
Form C 30 Original
24 Import Declaration form Form C 61 Original
25 Manufacture Under Bond Export Entry Form C17B Original
26 Manufacture Under Bond Import Entry Form C17B) Original
27 General Bond for the Security Warehoused goods or removal for
Manufacture and Export Under Bond
Form CFB I Original
28 Imports for Direct/Indirect Exports Application Form Form C 56 Copy
29 One Stop Approval Process - Investment Application Form Original
24
Annex 3 ABBREVIATIONS
COMESA Common Market for Eastern and Southern Africa
CRF Clean Report of Finding
TREO Tax Remission for Exports Office
EPZ Export Processing Zone
EPZA Export Processing Zones Authority
EU European Union
GSP Generalised System of Preferences
HCDA Horticultural Crops Development Authority
IA Inspection Agency
ID Identification Documents
IDF Import Declaration Form
KenInvest Kenya Investment Authority
KEPHIS Kenya Plant Health Inspectorate Service
KEBS Kenya Bureau of Standards
L/C Letter of Credit
LN Legal Notice
MUB Manufacturing Under Bond
PIN Personal Identification Number
FTA Free Trade Area
25
RFI Request for Information
VAT Value Added Tax
CIF Cost Insurance Freight
PVOC Pre-shipment verification of conformity to standard.
EPC Export promotion Council
EAC East African Community
KNCCI Kenya National Chamber of Commerce & Industry
KRA Kenya Revenue Authority
26
Annex 4 SAMPLE FORMS
EPZA KIA IA Form TREO Others
EPZE 1
EPD (3)
EPZA (1)
EPD (1)
EPD (2)
EPZ PASS
CPZ B
C 60
C 57
C 58.
CF2
CFS
CF.1
CFB
CF.5
CF6
CF7
CF.8
CF4
C56 – Customs
C 57
C 60
C61 “
CB13 “
C30 “
T.Q2C “
T.Q1 “
Single business Permit/Licence
Certificate of Incorporation
C29
EUR 1
COMESA/ EAC Certificate of Origin
C35A
Import Licence
RFI (Request for Information)
Air Waybill
Bill of Lading
CRF
C17B- Customs
CF1 - “
C56