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Kenya: Foreign companies to face 30 per cent local ownership rule
11–20 of 34 posts
Re: Kenya: Foreign companies to face 30 per cent local ownership rule
#1230% of the entire company must be locally owned? That seems unlikely to work out. Does any country have local ownership rules of this kind?
is it really the entire company or 30% of the local office? seems fairly straightforward to burden the local office with IP payments to the mothership and have no local profit/ dividends then, kind of making the local owners little more than rubber stamping officials
Re: Kenya: Foreign companies to face 30 per cent local ownership rule
#1330% of the entire company must be locally owned? That seems unlikely to work out. Does any country have local ownership rules of this kind?
Yes, Zimbabwe introduced a similar rule of 51% ownership and shortly afterwards their economy utterly collapsed (that and they seized white owned farming land to redistribute to blacks citizens).
Re: Kenya: Foreign companies to face 30 per cent local ownership rule
#14I suspect that every-time something like this is done, it is the triumph of the combination of stupidity and greed in the government (or those influencing it and expecting to profit from it). I very much doubt the economics here ever benefit the average citizen (actually it will likely weaken the economy) - if anyone has references of similar experiments that point to the contrary, I would be very interested to know.
Re: Kenya: Foreign companies to face 30 per cent local ownership rule
#15Disregarding the optics of this which is significant, can someone give me an idea of how difficult 30% ownership is? The closest analog would be like an ethnic food outlet in the US fully owned by a family who are all residents but not citizens.
Hopefully, just making the business a partial coop would be satisfactory.
Re: Kenya: Foreign companies to face 30 per cent local ownership rule
#1630% of the entire company must be locally owned? That seems unlikely to work out. Does any country have local ownership rules of this kind?
is it really the entire company or 30% of the local office? seems fairly straightforward to burden the local office with IP payments to the mothership and have no local profit/ dividends then, kind of making the local owners little more than rubber stamping officials
That's actually part of the problem. Such rules discourage forming companies directly in the local jurisdiction and encourage keeping local investment to a bare minimum.
Re: Kenya: Foreign companies to face 30 per cent local ownership rule
#1730% of the entire company must be locally owned? That seems unlikely to work out. Does any country have local ownership rules of this kind?
China has a 50% cap on foreign ownership. I've been invoked in a few companies forced into this JV arrangement to do business there and its typically not been a great result. I'm amazed they are allowed this as a member of WTO. I imagine this will be a point of contention in coming years.
Re: Kenya: Foreign companies to face 30 per cent local ownership rule
#1830% of the entire company must be locally owned? That seems unlikely to work out. Does any country have local ownership rules of this kind?
For most industries, Philippines has a cap at 40%, and for some industries, 100% of the company should be filipino except if you put more than $2M in capital ( retail ) if I remember right. Apparently it is going to change with the new president, let's see.
Re: Kenya: Foreign companies to face 30 per cent local ownership rule
#1930% of the entire company must be locally owned? That seems unlikely to work out. Does any country have local ownership rules of this kind?
Thailand has this. I believe it is 50% for a lot of forms of companies and land ownership.
Re: Kenya: Foreign companies to face 30 per cent local ownership rule
#20I suspect that every-time something like this is done, it is the triumph of the combination of stupidity and greed in the government (or those influencing it and expecting to profit from it). I very much doubt the economics here ever benefit the average citizen (actually it will likely weaken the economy) - if anyone has references of similar experiments that point to the contrary, I would be very interested to know.
This is really another form of what the Chinese practice - transfer of technology.
Want to do business here (in China)? Agree to transfer some of that fancy technology of yours. So far, it's worked so well for the Chinese.
This should be no different. Helps to keep more of the money in the local economy.