Kenya’s SEZs: Purpose-Built for Growth, Powered by Opportunity
Establishing a Presence in Kenya's Special Economic Zones
Kenya's Special Economic Zones (SEZs) represent a strategic initiative aligned with the national development agenda, particularly Vision 2030. The overarching goal is to propel Kenya towards becoming an industrialized, middle-income nation, fostering economic diversification, job creation, improved trade balances, and heightened investment attractiveness. SEZs aim to cultivate an environment conducive to integrated infrastructure development, incentivize economic and business ventures, and eliminate operational barriers to enhance profitability.
Well-defined, well-placed, and purpose-built to power investment.
A Legal Framework for Strategic Growth
Kenya’s SEZs combine strong legal backing with strategic locations and sector-specific infrastructure—making them a smart launchpad for scalable, tax-efficient investment.
Framework & Location
Regulations:
Special Economic Zones (SEZs) in Kenya are governed by SEZ Act, 2015 and SEZ Regulations, 2016
They provide a secure, business-friendly environment with integrated infrastructure, favorable customs treatment, and a suite of fiscal and tax incentives. Goods entering SEZs are treated as outside Kenya’s customs territory for import and tax purposes.
Strategic Locations:
Kenya’s SEZs are located across major economic corridors to provide access to ports, raw materials, power, skilled labor, and trade hubs:
Mombasa – Industrial + logistics
Lamu – Freeport development
Kisumu – Regional lakeside trade
Nairobi – Services, innovation, tech
(Additional hubs: Athi River, Naivasha, etc.)
SEZ Focus Sectors
🌾 Agricultural Zones
Supporting farming, agri-tech, and processing ventures.
🏢 Business Service Parks
For legal, finance, advisory, and admin services.
⚓ Free Trade Zones
Streamlined logistics, warehousing, and export hubs.
💻 BPO Zones
Business processing, outsourcing, data services.
🐄 Livestock Zones
Feedlots, slaughterhouses, and animal product processing.
🚛 Freeport Zones
Duty-free goods movement and international logistics.
🏭 Industrial Parks
Heavy industry, manufacturing, assembly, and processing.
🧪 Science & Tech Parks
R&D, innovation labs, and tech startups.
Setting Up in an SEZ
To establish an enterprise in an SEZ, registration and engagement in eligible activities (manufacturing, services, trading, etc.) are prerequisites. Tax and fiscal incentives are primarily extended to companies engaged in core activities like manufacturing, entailing benefits such as tax exemptions, duty waivers, work permit facilitation, and profit repatriation.
SEZ Tax Incentives: Designed to Accelerate Investment and Maximize Returns
Tax Benefits
Key tax incentives offered to SEZ enterprises include:
Corporate Income Tax
10% for the initial 10 years, and 15% for the subsequent 10 years (standard rate 30%).
Withholding Tax
Interest on Borrowings: Exempt for the first 10 years, then 5% thereafter (standard rate 15%).
Management and Professional Fees
Exempt for the first 10 years, then 5% thereafter (standard rate 20%).
Royalties to Non-Residents
Exempt for the first 10 years, then 5% thereafter (standard rate 20%).
Value-Added Tax (VAT)
Zero-rated (standard rate 16%).
Stamp Duty
Zero-rated for land transactions (standard rate 4%).
Import Duty
Exempt (standard rate approx 30%).
Capital Gains Tax
Exempt (standard rate 15%).
Dividends
Exempt for both residents and non-residents when paid by SEZ Enterprises.
Capital Investment Deduction
100% deduction allowance for capital investments made in an SEZ.
SEZ Licensing
Stakeholders seeking to operate in SEZs obtain specific licenses:
Developer License
Granted to private entities for infrastructure development.
Operator License
Issued for managing SEZ facilities.
Enterprise License
Authorized for corporations engaged in value addition, manufacturing, or trade.
Business Service Permit
Provided to entities supporting core activities within SEZs.
Commitment to Excellence
For comprehensive guidance and support on establishing your business within Kenya's Special Economic Zones, reach out to us today. Let us navigate the process together towards your success.