Presentation on theme: "EPZA Value Proposition for BPO and ITES Sector Investors"— Presentation transcript:
1 EPZA Value Proposition for BPO and ITES Sector Investors Presentation for NASSCOM delegates on 17th Sept 2013,Venue: Stanley Hotel.
2 PRESENTATION OUTLINE Introduction to EPZs Eligible EPZ activities Status of ProgramEPZ Value PropositionEPZ service business opportunitiesHow to invest in service EPZsHow to invest in new ICT zonesEPZA contact
3 INTRODUCTION TO EPZS EPZs established under EPZ Act, CAP 517 Background:EPZs established under EPZ Act, CAP 517Program managed by EPZ Authority, a government agency under the Ministry of TradeScheme intended to:provide for the promotion and facilitation of export oriented investmentaddress infrastructural and institutional constraints to efficient export-led production
4 ELIGIBLE EPZ ACTIVITIES Activities licensed under EPZ:Enterprise licences:manufacturing or processingcommercial activities – trading, breaking bulk, relabeling, repackaging, regional distribution centres (no 10-year tax holidays, no domestic sales (EAC)service – export related e.g. information, repair, brokerage, consultancy services excl. financial services (includesBPO/ITESDeveloper/Operator licence:for development of zone infrastructureEPZ Business Service permit:for non-EPZ activities within the EPZsproviding support services e.g. banks,catering, freight, consultancy e.t.c
5 SHARE OF EPZ INVESTMENT BY SOURCE COUNTRY Foreign investors from: Bahrain, Belgium, China, Germany, Hong Kong, India, Netherlands, Qatar, Sri Lanka, S. Africa, Taiwan, Tanzania, UK and USA among other countries
8 EPZ BUSINESS INVESTMENT TARGET SECTORS EPZ target sectors (1):Electrical/Electronic :Lighting, switchgear,Consumer electronics,transformersApparel & textile: fabric,garments, accessories,Cat. 9, sub-contractingEPZICT based services: callcentres, BPO/back officeoperationsHumanitarian ReliefSupplies and Services
9 EPZ BUSINESS INVESTMENT TARGET SECTORS EPZ target sectors (2):Agro-processing: food,fruits, fibres e.g. sisal,flowers, fresh produceRegional Corporate HQand corporate servicesEPZPharmaceutical and MedicalSuppliesLeather products: luggage,footwear, apparel, wallets,gloves
10 WHY INVEST IN Kenya’s EPZS? Value Proposition Benefits of operating in Kenya’s EPZsa) Improved competitiveness as a result of lower operating costsb) Increased shareholder value due to increased profitabilityc) Increased efficiency due to hassle-free operationd) Increased employee satisfaction and productivity due to convenient EPZ locations
11 WHY INVEST IN Kenya’s EPZS? Value Proposition : Benefits to You (a) Improved competitiveness as a result of lower operating costsLabor costs guided by minimum government wage rates and statutory deductions (starting at US$ 59/mo plus 15% housing in outlying towns to US$ 112 plus 15% in major cities).Application fees (non-refundable US $250)License fees (US $1000 for Enterprise licenses, $5000 for Developer/Operator licenses)Rentals – land (USS 5,000 /ha/yr) & buildings (ranging from US $2-$3.50/ sqft/yr)Utilities – exclude VAT
12 WHY INVEST IN Kenya’s EPZS? Value Proposition : Benefits to You b) Increased shareholder value due to increased profitability, resulting from tax exemptions10-year Corporate Tax holiday and 25% tax rate on profits thereafter (except for commercial activities)10-year Withholding Tax holidayDuty and VAT exemption on inputsStamp Duty exemption
13 WHY INVEST IN Kenya’s EPZS? Value Proposition : Benefits to You c) Increased efficiency due to hassle-free operation as a result of reduced bureaucracy & faster project start up:Operation under essentially one license issued by EPZ AuthorityNo minimum level of investmentRapid project approval (under 30 days approval on application)One-stop-shop service by EPZA for set-up, facilitation and aftercare (work permits, labour- relations, port, utilities etc.)On-site customs documentation and inspection
14 VALUE PROPOSITION – Benefits to You d) Increased employee satisfaction and productivity due to convenient EPZ locations, with requisite infrastructure, close to housing and social amenities with 24 hour security,Lease ready factory shells and start immediate operations - rentals range from $2-3.5/sq. ft/year depending on locationLease serviced land for construction of customized buildings - Athi River EPZ offers 1ha plots for $5,000 land rent annually + service charge or $100,000 stand premium for 50 yearsSet up own EPZ on own/leased land - EPZA physical requirements must be met
15 EPZ Export-Oriented Opportunities for NASSCOM Investors ServicesSoftware Applications DevelopmentCustomer support services including Call Centers and mobile phone data based customer careBack office operations including data entry, accounting services, document editing,Data mining, web design and web based researchShared Service Centers for global ICT companiesProfessional Consultancy including in ICT related fields
16 EPZ Export Oriented Opportunities for NASSCOM Investors ServicesData Centers-Animation and computer graphicsICT related training
17 Opportunities for NASSCOM Investors Real Estate Development (incentives apply)Development of ICT compatible real estateICT TowersICT Office Park Campuses
18 HOW TO INVEST IN EPZ SERVICE ENTERPRISE Investor makes enquiry on area(s) of interestInvestor submits a short project proposalOn acceptance, investor completes application form and submits with application fee of US$ 250EPZA evaluates project and provides investor with letter of approval in principle within 30 daysInvestor incorporates EPZ company, locates a zone, obtains environmental approval if requiredPays annual license fee (US$1,000) and gets licenseCommences operations
19 HOW TO INVEST IN EPZ SERVICE ENTERPRISE Major criteria for EPZ service enterprisesExport orientation (over 80% sales outside EAC partner states)Local sales subject to Ministerial approval and taxesNew investment ( not conversion of going concern)s in Kenya)EPZ location as primary place of business (not shell companies)100% foreign shareholding allowed
20 HOW TO INVEST IN EPZs -Developers Major requirements for New Zones including ICT towers and ICT parksIndividual land parcels on LR no. (not sectional title)Land tenure > 30 years; Unencumbered titleAccess roads, power and water supply suited to service-related activitiesLimited tenancy by non-EPZs under Business Service Permits(BSP)EPZA facilitates designation of land as EPZ by Minister for Industrialization & Enterprise DevelopmentInvestor pays license fee (US$ 5,000) and gets annual licence fee and begins operations!
21 We invite you to explore the attractive opportunities available under our EPZ Program.You can count on us for support!
22 Export Processing Zones Authority Athi River EPZ, Off Namanga Road HOW TO CONTACT EPZ AUTHORITYChief ExecutiveExport Processing Zones AuthorityAthi River EPZ, Off Namanga RoadP.O. Box Nairobi, KenyaTel: /2/3/4/5/6, Fax:Website: