An Export Processing Zone (EPZ) is a State Corporation under the Ministry of Investments, Trade and Industry, established in 1990 by the EPZ Act CAP 517, Laws of Kenya.
It is a Customs area where one is allowed to import plant, machinery, equipment and material for the manufacture of export goods under security, without payment of duty.
The imported goods are subject to customs control at importation, through the manufacturing process, to the time of sale/export, or duty payment for home consumption.
In Kenyan law, a potential EPZ operator – more so Small and Medium Enterprise (SME) is categorized as an existing business whose total initial capital investment is less than Ksh.40 million and has a workforce of fewer than 100 workers and is at least 75 percent Kenyan owned.
Main objective of EPZ is to nurture SME exporters with the majority of local Kenyan shareholding desiring to be set up under the EPZA program.
It targets SMEs from the Horticulture/food processing, Textile/apparel, Leather, Commercial crafts, BPO, and ICT sectors.
Kenya has made it easy for the locals to set up an EPZ due to a number of incentives that are attached to it. The incentives include among others, purpose-built infrastructure with smaller warehouses, reduced rent rate and service charge; With a rent-free period of 4 months to allow for set up and capacity building where Business Development Services are provided.
In Kenya, EPZs is regulated by the Export Processing Zone Authority (EPZA).
EPZA issues licenses under three categories namely – Business Service Permit, Enterprise License, and Developer/Operator License.
How to apply for an EPZ license
According to EPZA, there exist five main subjects while seeking to acquire an EPZ license.
• Present business plan of proposed EPZ activity
• Submit a filled out EPZ application form and pay US $250 application fee.
• Register the EPZ company after the project has been approved by EPZA.
• Obtain National Environmental Management Authority (NEMA) Environmental Impact Assessment (EIA) compliance certificate.
• Obtain a one year EPZ Licence.
The EPZ is managed by the EPZA, which was established in 1990, by the EPZ Act CAP 517, Laws of Kenya.
EPZA has three operational Regional offices based on geographical locations, to oversee the promotion of EPZ programs.
The regional offices promote the mandate of the Operations and Investor Support Directorate and the EPZ Authority at large.
The regions are Coast Region & North Eastern, Nairobi & Eastern Region and Western Region.