Kenya: Foreign companies to face 30 per cent local ownership rule • Hacker News Board

Re: Kenya: Foreign companies to face 30 per cent local ownership rule

#31

Post by kabouseng » Mon, Jul 25, 2016, 5:08 AM UTC

finid wrote: post #21

kabouseng wrote: post #13

Earlier quoted context omitted.

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).

Zimbabwe had many problems that caused its economy to tank. The local ownership requirement was not even a major factor.

Ok please share what was in your opinion the major factors...

I can remember when 51% ownership was announced that suddenly the grocery stores (which is international companies) didn't have basic products like maize and salt on their shelves anymore because the companies didn't want to invest operating capital into the stores anymore.

Re: Kenya: Foreign companies to face 30 per cent local ownership rule

#32

Post by eis » Mon, Jul 25, 2016, 7:56 AM UTC

55555 wrote: post #19

mdonahoe wrote: post #6

30% 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.

It's 49% allowed foreign ownership for virtually all companies (apart from ones sponsored by the Bord Of Investment of Thailand). Land ownership for foreigners is not allowed.

The land ownership is creating big problems for expats trying to build a future there as they either try to circumvent the law by holding the land in a companies name (which they are not really allowed to control) or in their wifes/girlfriends name which tends to end badly in many cases.

Thailands court system is also not exactly stellar and tends to side with Thais.

Combine that with visa troubles (even if you should be so lucky to get permanent residency, you'll still need a work permit to do any work even voluntary for free, what the?) and you can see that it's tough for foreigners to invest in Thailand and to put roots down and build a future.

If they didn't have the BOI, Thailand would likely have no economy to speak of as none of the bigger companies would have set up their factories there.

Similar (and arguably even bigger) issues are to be found in virtually all countries in south east asia apart from Singapore, Hong Kong and Japan.

Re: Kenya: Foreign companies to face 30 per cent local ownership rule

#33

Post by throwaway049 » Mon, Jul 25, 2016, 9:24 AM UTC

mdonahoe wrote: post #6

30% of the entire company must be locally owned? That seems unlikely to work out. Does any country have local ownership rules of this kind?

Philippines does. It is not uncommon for a foreign entrepreneur to marry a local citizen and make them the co-owner. I have this anecdotally at SME level. I don't know if it holds true for, say, SM Corporation.

Re: Kenya: Foreign companies to face 30 per cent local ownership rule

#34

Post by internaut » Mon, Jul 25, 2016, 8:08 PM UTC

finid wrote: post #20

forgotpwtomain wrote: post #14

I 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.

I don't think it is comparable.

One is trade with caveats. This sounds closer to a shakedown and a possible prelude to future ownership demands and that is how it will be perceived by investors.

Big difference between a 30% tax hike and 30% ownership.