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The Income Tax (Venture Capital Enterprise) Rules

Legal Notice 103 of 1997

This is the latest version of this Legal Notice.
The Income Tax (Venture Capital Enterprise) Rules
Citation
Legal Notice 103 of 1997
Primary work
Income Tax Act
Date
Language
English
Type
Legal Notice
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LAWS OF KENYA

INCOME TAX ACT

THE INCOME TAX (VENTURE CAPITAL ENTERPRISE) RULES

LEGAL NOTICE 103 OF 1997

  • Commenced on 1 September 1996
  1. [Amended by Income Tax (Venture Capital Company) (Amendment) Regulations, 2008 (Legal Notice 31 of 2008) on 20 March 2008]
  2. [Amended by Income Tax (Ventures Capital Company) (Amendment) Rules, 2008 (Legal Notice 82 of 2008) on 20 June 2008]
  3. [Revised by 24th Annual Supplement (Legal Notice 221 of 2023) on 31 December 2022]

1. Citation and commencement

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.[L.N 82 of 2008, r. 3.]

2. Interpretation

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 Act (Cap. 485A) under the provisions of the Capital Markets Act for the purpose of managing a venture capital enterprise;"venture capital enterprise" means a company incorporated in Kenya for the purpose of investing in new or expanding venture capital enterprise.[L.N. 31 of 2008, r. 2., L.N. 82 of 2008, r. 4.]

3. Registration of venture capital companies

A venture capital enterprise shall, upon application under rule 5, be registered by the Commissioner for the purposes of this Act if the 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.
[L.N. 31 of 2008, r. 3., L.N. 82 of 2008, r. 5.]

4. Prohibited activities

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.
[L.N. 31 of 2008, r. 4., L.N. 82 of 2008, r. 6.]

5. Registration procedure

(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 registration by the Capital Markets Authority;
(iv)Personal Identification Number Card;
(b)the fund manager's licence under the Capital Markets Act;
(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 therefor, 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.
[ L.N. 31 of 2008, r. 5., L.N. 82 of 2008, r. 7.]

6. Withdrawal of registration

(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.
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History of this document

31 December 2022 this version
20 June 2008
Read this version
20 March 2008
01 September 1996
Commenced