The Special Economic Zones Act, No. 16 of 2015, provides for the establishment and regulation of special economic zones (SEZs) in Kenya, aiming to promote local and global investment. The Act was assented to on September 11, 2015, and commenced on December 15, 2015. This version incorporates amendments from the Finance Act 2016.

Key Components of the Act:

• Establishment and Declaration: The Cabinet Secretary, on the recommendation of the Special Economic Zones Authority (SEZA), can declare any area as an SEZ. A declaration must define the zone's limits and remains in force until revoked.

• Types of SEZs (Examples): The SEZs can be single or multiple sector and may include:

  • Free Trade Zones (FTZ)

  • Industrial Parks

  • Free Ports

  • Information Communication Technology (ICT) Parks

  • Agricultural Zones

  • Tourist and Recreational Zones

  • Convention and Conference Facilities (inserted by the Finance Act 2016).

• SEZ Authority (SEZA): SEZA is a body corporate established under Section 10 to administer the Act. Its functions include recommending designation, implementing government policy, identifying land, setting investment criteria, reviewing applications, and granting licences.

• Licensing: Any person operating as an SEZ developer, operator, or enterprise must have a licence issued by SEZA. SEZA must render its licensing decisions within one month of receiving a duly completed application.

• Benefits (Finance Act 2016 Update): Licensed SEZ enterprises, developers, and operators are granted tax incentives specified in the respective tax laws. They are also entitled to work permits for up to 20% of their full-time employees, with additional permits possible for specialized sectors upon SEZA's recommendation.

• Dispute Resolution: Disputes between an SEZ entity and the Authority or Government should first be settled through negotiation within thirty days. Unsettled disputes may be submitted to arbitration under agreed-upon rules, such as those of the International Chamber of Commerce or the Arbitration Act.