THE INCOME TAX (VENTURE CAPITAL Enterprise) (Amendment) Rules, 2008
L.N.103/1997LN NO. 82 13 June 2008
In exercise of the powers conferred by section 130 of the Income Tax Act, the Minister for Finance makes the following Rules
Citation and Commencement.
1. These rules may be cited as the Income Tax (Venture Capital Enterprise) Rules, and shall be deemed to have come into operation on the 1st September 1996.Interpretation.
2. In these Rules, unless the context otherwise requires -"eligible activities" means activities other than those listed in rule 4 of these Rules;
"fund manager" means a person licensed by the Capital Markets Authority under the provisions of the Capital Markets Authority Act for the purpose of managing a venture capital company;
"venture capital company" means a company incorporated in Kenya for the purpose of investing in a new or expanding venture company.
Registration of Venture capital Companies.
3. A Venture Capital Enterprise shall, upon application under rule 5, be registered by the Commissioner for the purposes of this Act if the companies Commissioner is satisfied that-- (a) it is incorporated in Kenya; and
- (b) it is incorporated for the purpose of investing in new or expanding Venture Capital Enterprises; and
- (c) it is registered by the Capital Markets Authority; and
- (d) it is managed by a fund manager; and
- (e) seventy-five percent or more of its portfolio of investable funds is invested by way of equity or quasi-equity investment in Venture Capital Enterprises; and
- (f) the primary activities of the Venture Capital Enterprise in which it has invested are approved activities.
Prohibited activities.
4. The primary activities of a Venture Capital Enterprise shall not include -- (a) trading in real property;
- (b) banking and financial services; or
- (c) retail and wholesale trading services
Registration procedure.
5.(1) An application for registration of a Venture Capital Enterprise under rule 3 shall be made in writing and shall be accompanied by-(a) two copies each of the company’s
- (i) memorandum and articles of association;
- (ii) certificate of incorporation;
- (iii) certificate of approval by the Capital Markets Authority;
- (iv) Personal Identification Number Card;
(c) any other information as may be required by the Commissioner.
(2) The Commissioner shall, as soon as practicable after considering the application, notify the fund manager in writing whether the venture capital company is acceptable for registration, and the same notification shall specify either –
- (a) the reason thereof, if it is not acceptable; or
- (b) the year of income in respect of which the registration is first to take effect, if it is so acceptable.
Withdrawal of Registration.
6.(1) The Commissioner may at any time, by notice in writing to the fund manager, withdraw the registration of a venture capital company if in the opinion of the Commissioner, that venture capital company no longer qualifies for registration under these rules.(2) A withdrawal of registration under this rule shall take effect from the beginning of the year of income in which the grounds for that withdrawal arose or such later time as the Commissioner may determine.