After years of planning, the Nairobi International Finance Centre is set for an official launch on June 14th, 2022. The launch will be led by President Uhuru Kenyatta, who also chairs the NIFC Steering Council.
Backed by the government and anchored in law through the NIFC act, the Nairobi International Finance Centre describes itself as ‘a new business environment established to make it easier and more attractive to invest and conduct financial services and related activities in Kenya’. It is modeled on existing international financial centres in cities such as Tokyo, Johannesburg, New York and London.
It is meant to attract greater local and foreign investment to Kenya by offering various incentives to firms looking to set up shop in the country. It is a flagship program under the economic pillar of the Kenya Vision 2030.
The NIFC is targeting financial services firms in particular, such as asset managers, insurance companies, private equity, venture capital and investment firms, fintechs, green finance and digital finance firms as well as professional services that are tied to financial services such as actuarial, trust and custody services.
Among firms which have already committed to joining the NIFC is British underwriter Prudential Plc, which also intends to set up its Africa headquarters in Nairobi. NIFC also signed a memorandum of understanding (MoU) with TheCityUK, an industry-led body representing UK-based financial and related professional services, including the London Stock Exchange.
Firms intending to conduct business through the NIFC are required to apply for certification from the NIFC Authority. Certification is open to both domestic and international firms.
Some of the perks that come with joining the NIFC include fast-tracked licensing and regulatory procedures, a predictable tax regime and an improved dispute resolution framework.
In addition, NIFC firms will have the freedom to repatriate profits, employ certain categories of staff, not be subject to nationalisation and can be owned 100% by non-Kenyans.
Firms looking to join the NIFC will pay Ksh1 million for certification and an annual fee of Ksh500,000, regulations published by the Treasury indicate.
Start-ups will pay a lower fee of Ksh100,000 for certification and an annual fee of a similar amount. Start-ups are described as firms in the initial stages of setup, which provide an innovative or novel product or service.
“A firm will maintain its start-up status for a period of three years not including the first year of certification,” the regulations note.
The NIFC has faced criticism from some quarters – with concerns raised including that it could disadvantage Kenyan firms at the expense of foreign players, and open up avenues for tax evasíon.