The National Assembly's Trade Committee is proposing a significant change to foreign investment regulations.

The committee wants to make investment permits mandatory for all foreign businesses looking to set up shop in the country.

This proposal comes amidst concerns that some foreign investors have been exploiting loopholes in the current system.

The Investment Promotion Act requires a minimum investment of $100,000 but obtaining an investment certificate, which verifies adherence to regulations, remains optional.

"The committee observed a gap in the law," said Embakasi North MP James Gakuya, who chairs the committee.

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"Registration of foreign investors is not mandatory under the Act."

The committee believes this optional system has been abused by some foreigners.

A recent lawsuit filed by Kenyan traders against Chinese retail giant China Square highlights these concerns.

Local businesses accused China Square of undercutting prices and engaging in unfair trade practices, potentially due to a lack of proper oversight.

The proposed amendment aims to address this by making investment certificates mandatory.

"We recommend that Parliament review Section 3(1) of the Investment Promotion Act," stated the committee, "to ensure compliance with the requirements set out under Section 4(2) of the aforementioned Act."

This change would require foreign investors to demonstrate adherence to regulations before starting operations.

The committee also recommends a more coordinated approach to foreign investment.

They propose a policy framework developed jointly by the Ministry of Investment, Trade, and Industry and the Council of Governors.

This collaboration, they believe, would streamline the process and prevent future confusion.

The committee's recommendations come at a time of heightened scrutiny towards foreign investment in Kenya.

Balancing the benefits of foreign capital with protecting local businesses is a delicate act.

This proposed change to investment regulations signifies Kenya's intent to ensure a fairer and more transparent investment landscape.