Kenya has a market-based economy and is generally considered the economic, commercial, and logistics hub of East Africa. With the strongest industrial base in East Africa, Kenya has been successful in attracting venture capital investments. According to recent reports, startups in Kenya raised over $571m in 2021. More and more foreign companies and investors are setting up local and regional operations to take advantage of Kenya's strategic location, comprehensive air routes, and status as a regional financial center. Business registration in Kenya is also straightforward. Kenya's Business Regulatory Service (BRS) recently updated its service charter  to improving business delivery timelines required to register a business in Kenya.

Can a foreigner do business in Kenya?

Absolutely, foreigners wishing to do business in Kenya must register a company. They are required to register with the e-citizen portal and proceed to obtain the company registration documents.

Business registration in Kenya

There are two business forms open to foreigners in Kenya. These are registering a local company or registering a foreign branch. Most individuals and groups prefer to register a local company for obvious reasons. Now let's look at the process for registering these entities in greater detail.

1. Local Company/Subsidiary

The procedure of incorporating a local company by a foreigner is similar to the registration of local company by a citizen but for the requirements. There are different types of companies but most foreign individuals or entities opt for a private company limited by shares.

2. Branch Office

This can be open for companies with a reduced level of activity. These don't generally require incorporation in Kenya, but to register one, certain financial disclosures are required by the parent company.

Business Registration Requirements in Kenya

The requirements for Registering a Company in  Kenya include the following:

1. Proposed Company/Business name

The proposed business name search is conducted to ensure it is not similar to an existing registered business. If approved, it is reserved for 30 days. BRS requires a minimum of 3 names to be submitted.

2. Objectives of the Business 

This is essentially the business that the company is being set up to carry out. This business must be entirely legal and not against public policy.

3. Names of the Directors, contact details and email 

For transparency and accountability purposes, KRA requires that the director's information be indicated on the application for registration.

4. Proof of Identification 

A valid and unexpired proof of identification must be provided for each director during the registration process. For foreigners who are legally residing in Kenya, a foreign national registration certificate - Alien card and for non-resident aliens, an international passport is required.

5. Passport Photo

A clear and recent passport photograph must be provided for each director and officer of the company.

6. KRA PIN

All directors whether resident or non-resident are required to provide a Kenya Revenue Authority (KRA) Personal Identification Number (PIN) certificate copy to prove registration with the tax authority.

In addition, the following forms must be signed by all directors and submitted during registration

7. Form CR1 – This is the company registration form.

8. Form CR2 – This is the Memorandum of company with share capital

9. Form CR8 – This is the notice of registered address form and

10. Statement of Nominal capital by all Directors.

The Certificate of Incorporation is received from the Kenyan Registrar of Companies after submitting all required documents.  If a branch was registered. A certificate of compliance will be issued.

Of course, it is vital to state the need to consult with experts who have worked on incorporation processes in Kenya, as well as regulators within the space. The essence of this is to have a better viewpoint on ever changing laws.

Sidebrief

Sidebrief is a RegTech startup that makes starting and maintaining a business easy for founders, entrepreneurs, and business owners across Africa by removing lengthy paperwork, legal complexity, and hidden fees. We provide the tools for founders to start and scale across borders from a single interface single interface.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.