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An American Private Equity firm is scouting for wealthy Kenyans to invest Sh51 million for an American citizenship

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An American PE firm is in the country scouting for wealthy Kenyans to invest their way into an American citizenship through the US immigrant investor visa programme.

Interested locals will have to fork out Sh51 million ($500,000) in order to qualify for the investor visa, commonly known as EB-5 (employment based-fifth preference visa).

It was created in 1990 under the administration of the late US President George H.W. Bush to stimulate the country’s economy through job creation and capital investment by foreign investors. The US issues 10,000 such visas every year, in the past largely utilised by Chinese investors.

Qualifying Kenyans will also pay Sh2 million in legal fees and an extra Sh4.6 million ($45,000) in investment management fees to Atlantic American Partners, the PE firm managing the investment on behalf of the applicant.

Funds such as Atlantic American partners are accredited by the US citizenship and immigration services department to offer support to those applying for the EB-5 visa

Atlantic American managing director Daniel Ryan told the Business Daily on Tuesday that the firm has already registered interest from about 100 Kenyans looking to take advantage of the window to get permanent residence.

“This kind of visa is gaining popularity especially from those people who want to educate their children in the US where public schools are of high quality and free of charge, since it allows people to move with their spouse and all unmarried children under the age of 21,” said Mr Ryan.

“About 100 Kenyan have shown interest, and we have lined up to 50 meetings in the next three weeks. We will also do two meetings at a couple of private members clubs in the city.”

He said the firm does background checks on applicants to ensure they have no criminal records or that they are not laundering money, with legal experts brought in to do a source-of-funds check.

There are thousands of Kenyans who have migrated to the US, with many going either using student visas or the diversity visa lottery, known as Green Card lottery.

The EB-5 visa offers an easier route for those with millions to spare, with fewer requirements and the promise of permanent residence or citizenship in five years. Successful applicants, Mr Ryan said, are given back the Sh51 million once they achieve permanent resident status—normally after five years— with citizenship following about a year later.

Atlantic American, as a trustee of the funds, invests the money in real estate in areas where there is above average unemployment in the US, giving the investor a return along with their initial Sh51 million upon gaining permanent residence.

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Africa

Kenya struggles to give life to futuristic Konza city

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Labourers milled around an unfinished eight-storey building in an expansive field in Konza dotted with zebra and antelope – the only visible sign of progress in a decade-old plan to make Kenya into Africa’s leading technology hub by 2030.

Grandiose plans, red tape and a lack of funding have left Konza Technopolis – the $14.5 billion new city to be built some 60 km (37 miles) southeast of Nairobi – way behind schedule on its goal of having 20,000 people on site by 2020.

“It has taken too long and I think people have moved on,” said tech entrepreneur Josiah Mugambi, founder of Alba.one, a Nairobi-based software company, who was initially excited by the government’s ambitious project.

Dubbed the Silicon Savannah, Konza aims to become a smart city – using tech to manage water and electricity efficiently and reduce commuting time – and a solution to the rapid, unplanned urbanisation which has plagued existing cities.

About 40 percent of Africa’s 1 billion people live in towns and cities and the World Bank predicts the urban population will double over the next 25 years, adding pressure to already stretched infrastructure.

Konza’s dream is to become a top business process outsourcing hub by 2030, with on-site universities training locals to feed into a 200,000-strong tech-savvy workforce providing IT support and call centre services remotely.

But the first building has yet to be completed on the 5,000-acre former cattle ranch, three years after breaking ground, and business has shifted its focus to other African countries, like Rwanda, with competing visions to become modern tech hubs.

“Nobody can wait that long for a city to be built. For a tech entrepreneur, they think about where their startup will be two to three years down the line,” said Mugambi.

Other smart cities planned across Africa include Nigeria’s Eko Atlantic City near Lagos that will house 250,000 people on land reclaimed from the sea, Ghana’s Hope City and an Ethiopian city styled as the real Wakanda after the film “Black Panther”.

Bringing such utopian schemes to life is no easy task for African governments that are struggling to provide adequate roads, power, water and security to their existing cities.

“Upgrading infrastructure in places like Kibera (slum) in Nairobi to provide water and a better sewerage system is equally as important as building a new city such as Konza,” said Abdu Muwonge, a senior urban specialist with the World Bank in Kenya.

Some critics say Konza was ill-conceived from the start.

“The vision is wrong; the vision is too big,” said Aly-Khan Satchu, a Nairobi-based independent financial analyst.

“This is miles from anywhere. There are not leveraging the existing infrastructure … It is assuming that you can bring in academia, you can bring in venture capital, you can bring in corporates.”

The first serious hurdle arose in 2012 when the National Land Commission (NLC), which manages public land, introduced a cumbersome land acquisition procedure, said Bitange Ndemo, who led a team that conceived Konza Technopolis in 2008.

“The NLC was saying we should follow the processes of acquiring public land, which would take years to complete,” Ndemo, now an associate professor of business at the University of Nairobi, told the Thomson Reuters Foundation.

The delays caused at least one deal with a German university to fall through, he said, as the process was much slower than the old one where investors signed deals directly with government ministries which took care of land leases.

To resolve this, the government transferred ownership of the site to the Konza Technopolis Development Authority (KoTDA), set up in 2012 to co-ordinate development of the new city, which now allocates land to investors on 50-year renewable leases.

Financing has also proven a major issue.

In its strategic plan, the government promised to fund 10 percent of Konza, laying the infrastructure, while the private sector would come in with the rest of the money to build universities, offices, housing and hotels.

But the government was slow to contribute its share and has yet to pass a law to create KoTDA as a legal entity which would make it easier to sign contracts with external lenders, said Lawrence Esho, one of Konza’s project planners until 2013.

“They are way behind schedule partly because the government took time to give Konza money,” he said, adding that no money came in until 2013.

“This stopped any work from starting at the site and investors may have developed cold feet as they waited.”

KoTDA’s chief executive, John Tanui, said the government has committed to invest more than 80 billion shillings ($780 million).

“When I say committed does not mean we have absorbed. Our absorption is less than 10 percent of that figure,” he said, without elaborating.

The government has stepped up funding since last year, said Abraham Odeng, deputy secretary at Kenya’s Information Communications and Technology ministry, without giving figures.

Odeng pointed to a 40 billion shilling contract signed in 2017 with an Italian firm to build roads, water and sewerage infrastructure by 2021, funded by the Italian government.

“That is a concessional loan, which is a long-term loan that the Kenyan government will pay,” he said.

But Kenya’s growing reliance on loans is causing jitters, with the International Monetary Fund warning of an increased risk of default this year.

Cities cannot be financed through central government but the absence of international firms points to a lack of investor confidence in the project, said the World Bank’s Muwonge.

“Getting Konza city off the ground will require that we pull in private capital with concessions for them to deliver certain kinds of infrastructure for which the government may not have resources,” he said.

“The issue is eliminating the challenges for the private sector to come and do business.”

Five local investors, including Nairobi-based software developer Craft Silicon and the state-run Kenya Electricity Transmission Company, are expected to build offices, residential buildings and hotels by 2020, KoTDA head Tanui said.

But critics say it is not enough.

“What (investors) have allocated so far is still a drop in the ocean,” said Ndemo, the former government technocrat.

And international interest is shifting elsewhere.

Rwanda – widely regarded as the least corrupt country in East Africa – launched its Kigali Innovation City in 2015, designed to host 50,000 people in universities and tech companies on a 70-hectare site outside the capital.

The $2 billion plan, due for completion by 2020, is seven times cheaper than Konza.

“All these other (cities) have better proximity, have better density and have better collaborative feedback loops,” said financial analyst Satchu. “We are now at a serious disadvantage vis-a-vis these other countries.”

Reuters

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Africa

Kenya’s Wawira Njiru wins the 2018 Global Citizen Prize for Youth Leadership

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Kenya’s Wawira Njiru has won the 2018 Global Citizen Prize for Youth Leadership at the Global Citizen Festival hosted on December 2 in Johannesburg, South Africa.

The prize honours an activist or changemaker between the ages of 18 and 30 who has contributed meaningfully towards the goal of ending global poverty. Wawira won Ksh. 25,000,000 ($250,000) and will also receive networking and development opportunities to support her work. It is sponsored by Cisco.

Wawira started Food for Education in 2012 while studying for her undergraduate degree in Bachelor in Food Science and Nutrition. The organisation addresses the inequality in education which is caused by limited access to food in Ruiru. Since its inception, Food for Education has provided over 120,000 meals which has helped improve school attendance and performance.

Aside from the Global Citizen Prize for Youth Leadership, she has also received a UNISA Alumni Award in 2017, recognized as a Spark International Change maker (2012), a Transform Nutrition Champion and a Hunger free ambassador in 2013.

Wawira Njiru is currently studying for her Master’s degree in Public Health at Jomo Kenyatta University of Agriculture and Technology.


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Africa

KQ cuts Nairobi New York flights to 5 a week

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Kenya Airways has reduced the number of flights on the newly launched New York route from the current seven to five a week effective January 15.

The national carrier made the announcement on Thursday indicating that flights to the US will now be on Tuesday, Thursday, Friday, Saturday and Sunday every week.

“Kenya Airways has today announced that it is adjusting the schedule for its Nairobi-New York route to five flights in a week effective January 15, 2019. Currently, the airline is flying this route daily,” read the statement from the carrier.

Chief executive Sebastian Mikosz said in the statement the move to adjust frequency a “strategic business decision”, adding that the airline remains strongly committed to the New York route and would continue to offer non-stop services to all its guests travelling between the two cities.

“As the only airline that offers a non-stop flight between East Africa and the USA, this route remains significant to us because of the role it plays in opening more economic and tourism growth opportunities for Kenya and East Africa,” he said.

“The decision to adjust our schedule is to cater for seasonality in line with global practices that allow airlines to reduce or add frequencies based on low or high seasons.”

He noted that KQ would evaluate the option of reverting to daily flights for the route next summer, just as they had been doing for the Paris and Amsterdam routes.

An earlier statement in November cited low demand during the winter season. This saw KQ cancel several scheduled flights along the new route since the launch in October.

The airline departs from Jomo Kenyatta International Airport (JKIA) at 22:55 on the said days, arriving at John F.

Kennedy in New York at 06:25 the following day. It then departs from the US at 12:00, landing at the JKIA at 10:30 the following day.

The national carrier started flying to New York on October 28 with the intention of having daily flights between the US and Kenya.

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