Service sector businesses operating within the TRIFIC Special Economic Zone will reap the benefits of tax incentives, world-class facilities, and the SEZ’s One-Stop-Shop business services centre to optimize their competitiveness in the global market.
- Both global and local enterprises within the innovation hub will not be charged VAT on the services that they supply to clients.
- Other tax exemptions including the Capital Gains Tax and Repatriation Tax on Dividends are projected to reduce the cost of doing business in the country.
- Businesses within TRIFIC SEZ also pay only 10% Corporate Tax for the first 10 years and 15% for the subsequent decade enabling startups to raise capital easily.
“Companies within TRIFIC enjoy friendly business incentives,” Winnie Wambugu, Director of Dalberg Implement, said at a breakfast event on Feb 15th, “We used to pay 30% Corporate Tax before seizing this opportunity. Now, we only pay 10%.”
The breakfast event themed ‘Kenya’s Special Economic Zones: The Right Place to Register Your Startup‘, sought to converge financial entrepreneurs, Venture Capitalists, and Startup founders interested in broadening their operations while minimizing business costs.
It comes in the backdrop of increased taxes, high input costs and regulations that have affected many businesses by narrowing their profit margins. Some enterprises have been forced to retrench their workforce and sideline innovative ideas to survive.
“Every dollar matters. A smart CEO is always looking to save money and TRIFIC SEZ guarantees incentives that cannot be ignored in the current economic climate,” said Andrew Barden, Lead Organizer & Content Director of the Africa Fintech Summit.
TRIFIC SEZ already hosts eleven businesses within its premises. At a breakfast event hosted by the company on Feb 15, CEO Brenda Mbathi welcomed innovators and tech companies to seize the opportunities available within the economic zone through TRIFIC’s new Innovation Hub.
“At TRIFIC, we don’t merely exist as a financial centre; we embody a dynamic ecosystem where strategic tax incentives harmonise with collaborative innovation,” said the CEO of TRIFIC SEZ Brenda Mbathi.
The Potential of SEZs
“The Two Rivers Ecosystem goes beyond physical infrastructure. It is a vibrant community where service providers collaboratively shape the future,” she added.
- The Special Economic Zones Act 2015 designated various areas within Kenya that offered tax incentives and slackened regulations to maximize foreign direct investment.
- They include free trade zones, industrial parks, agricultural zones, science and technology parks, and business service parks.
- Currently, TRIFIC is the only special economic zone that is geared to extend these incentives to the service industry.
“Fifty-three percent of Foreign Direct Investment in Kenya was in the services sector like hospitality, finance, and tech companies,” said CEO of Centum Investments Dr. James Mworia. “We need to focus on the service sector which has grown despite many economic challenges.”
Dr. Mworia mentioned that since last year, Kenya has signed several trade agreements with entities like the European Union (EU). Foreign investors looking forward to setting shop in the country will be attracted to the advantages posed by Special Economic Zones like TRIFIC.
Many startups are also repelled by the monumental task of adhering to many government regulations. TRIFIC helps businesses within its pupillage to get the licenses and documentation they require by working directly with regulatory entities in Kenya. The TRIFIC ecosystem works particularly well for startups and business services companies generating a significant proportion of their revenues outside of Kenya, while also having operations and needing a local entity in Kenya.
“TRIFIC has taken a lot of infrastructural responsibilities and mundane administrative tasks which businesses had to deal with,” said Winnie Wambugu of Dalberg Implement. “They have helped 20% of our staff members to get work permits and VISAs.”
Some of the startup founders who attended the event lauded TRIFIC SEZ for enhancing their position by opening doors for innovators. Tech players envision that SEZ expansion will be a major factor in the country’s economic growth going forward.
“I think TRIFIC SEZ is unique,” said the founder of TechSafari Caleb Maru. “By allowing tech companies to optimize how much they spend and bringing them within a central space, the industry’s future looks promising.”
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