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How to Register a Technology Transfer Agreements in Kenya
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|How to Register a Technology Transfer Agreements in Kenya by Kenyans247(1): Fri Mar 2020 08:08pm|
Procedure for Registration
The actual procedure can be outlined thus
Step 1 : Transferee sends in completed Application Form, Monitoring Forms, and Questionnaire with a covering letter,copies of the Technology Transfer agreement, Memo and Articles of Association of the local company, and Registration Fees.
Step 2 : Application is evaluated by Kenya Investment Authority.
Step 3 : If all is okay, the agreement is registered within 48 hours.
If there are problems (e.g. of monopoly pricing, restrictive business practices, export restrictions, high royalty rates, tie-in clauses, no training provision, etc.) the agreement is recommended for review.
a) Duly completed Form A
b) License Agreement as approved by Kenya Investment Authority.
c) Demand Note from the beneficiary
d) Confirmation of Reasonableness of fees by Kenya Investment Authority.
e) Technical Service Agreement as approved by Kenya Investment Authority.
f) Evidence that the services were rendered locally (e.g. hotel bills and relevant pages of passport and air-tickets of the technical experts)
g) Certificate of satisfactory completion issued by the Kenya employer.
h) Evidence of tax paid on the amount to be remitted
Office Locations & Contacts
MINISTRY OF SCIENCE AND TECHNOLOGY
Jogoo House "B"
Telephone: +254-020-318581 ,
P.o Box 9583-00200,
Harambee Avenue ,Nairobi
All Individual or companies interested in Technology transfer agreements and other related software copyright licensing agreement,Intellectual property rights, industrial property rights, know-how, copyright and neighbouring rights in Kenya.
Three different types of fees are usually approved for Software License Agreements depending on the components of the agreement and the request from the parties. The fees are:
1. Software License fee
A lump-sum depending on the type of software product, the number of end-users and the prevailing rates of fees for similar products by the same licensor in the industry where the software is to be used.
2. Implementation fee
A lump-sum depending on the obligations to be rendered by the licensor i.e. whether the implementation involves any/all of customization, upgrading, training etc.
3. Annual Technical Support (ATS) fee -
A fee between 15% and 25% of the Software License fee. The payment of the fee should commence after the first year of implementation of the agreement and shall not last for more than 3 years.
Technology transfer fees should be based on locally manufactured goods and not imported goods. Companies with several product lines should separate the net sales of each product in their audited accounts so as to pay royalty for specific product covered by the industrial property rights and not on the entire/total sales of the company.
The short certificate usually last for the period of 0ne -three (1-3) years.
(a) Technology contracts should include a provision whereby the recipient enterprises in Kenya acquires explicit rights for the use and exploitation of the technology in question, and the period covering these rights should be clearly specified in the contract.
(b) In cases where the Kenyan enterprise is acquiring the right to practice a process, the concept of know-how should be clearly expressed and defined in the contract. In this connection, concepts such as technical information or technical services should only be treated as complementary to the know-how.
(c) Provision for capacity building must be part of all Agreements signed, and details on the Kenyan understudying the experts should be readily available/submitted, to ensure that skill is domesticated.
(d) All contracts should make provision for deduction of appropriate local taxes, such as withholding tax, etc.
(e) All agreements should incorporate research activities carried out in-house and also in collaboration with the Kenyan National Innovation System such as Universities, Research Institutes, private laboratories, Polytechnics, etc.
(f) Companies which sell imported products should separate the net sales of the imported products from the net sales of the locally manufactured products and this should be reflected in their Audited Accounts. Payment of technology fees should be based only on the locally manufactured products.
(g) All Kenyan Government Projects must be governed by Kenyan Laws of Arbitration and the seat of arbitration should be in Kenya.
(h) There would be no approval for agreement based on assembling of Completely Knocked Down (CKD) parts brought into the country except payment for short term technical services relating to such project.
(i) The scope of services in technology transfer agreements should clearly state the services to be rendered by the transferor/licensor.
(j) The technology content of the agreement should state the methods for the domestication of technology, local raw material development, skills acquisition, etc.
(k) A detailed plan for the local development and production of raw materials used in manufacture, as substitute for imported raw materials.
(l) Companies sourcing over 75% of its raw materials from abroad will not enjoy enhanced technology transfer fees, in particular, if it has been in operation in Kenya for more than 5years without making efforts to source its raw materials locally. Companies in this category should render Technical Support Service and encourage indigenous entrepreneurs in that sector to produce raw materials or intermediary products that will meet the required standard.
(m) Evidence of registration of intellectual property e.g. trademark, patent, know-how
(n) Technology transfer agreements relating to food items such as bread, noodles, sausage, etc will no longer be approved because there is no technology content. Payment will only be approved where the agreement is for short technical services for installation, commissioning of plants, training, etc to enable the recipient company commence operation. However, 1-2% of net sales may be approved for a start-up company involved in this type of business to enhance its smooth take off.
The key information required is as follows
1.All applicants for IT Agreements must provide concrete evidence of Letter of Award / contract for supply from the end-users of the products or third parties.
2.The applicant should also submit a copy of certificate of installation for jobs done. All IT Agreements must complete Technology Transfer Agreement (TTA) Pre-Qualification Form in addition to the Application Form and Questionnaire.
3. Applicants must submit invoices from the licensor for the payment of software license fees. The invoice(s) must cover the total remittable fees on the software license agreements and must also contain the names of the licensor, the licensee, types of software products and the end users
4. Detailed information on the licensor including the website, postal address etc should be provided.
All Companies seeking to register technology transfer agreements in NOTAP through third parties are required to issue an authorization letter to their clients alongside the listed documents.
Need for the Document
A technology recipient who concludes a technology transfer agreement related to his investment should submit the agreement to the Agency for registration. Any such agreement that is not registered by the Agency has no legal effect. The agreement may also be renewed as per the request of the technology recipient by submitting the renewed agreement to the Agency.
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