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How To Start A Business in Kenya

DOING BUSINESS IN KENYA: A STEP BY STEP GUIDE


Starting a Business:

The formal procedure for starting a business in Kenya is to a great extent determined by the type of business you as the investor wishes to establish and the sector to which the business belongs.

The principal types of business enterprises in Kenya are:
  1. Registered Companies (Private and Public)
  2. Branch offices of companies registered outside Kenya
  3. Partnerships
  4. Sole Proprietorships
  5. Co-operatives
Companies are registered as Limited Liability Companies as in i and ii above, and regulated by the Companies Act (Cap 486). Kenya's legal system is based on the English law and practice with a wide range of legal services locally available.

Company Registration

The initial step in forming a company in Kenya is to register the proposed company's name with the Registrar of Companies at the Attorney General's Chambers in Nairobi. The Memorandum and Articles of Association should then be filed with the Registrar of Companies who, upon satisfaction, will issue the company a Certificate of Incorporation.

Opening a branch office of an overseas company

A foreign company wishing to open a branch office in Kenya is required to deliver the following documents to the Registrar of Companies:
  • A certified copy of the Charter, Statutes or Memorandum and Articles of Association of the Company, or other instruments defining the constitution of the company.
  • A list of the Directors and Secretary of the company, giving full names, nationality and other directorships of companies in Kenya.
  • A statement of all existing charges entered into by the company affecting properties in Kenya.
  • Names and postal addresses of one or more persons resident in Kenya authorised to accept, on behalf of the company, service of notices required to be served on the company.
  • Full address of the registered or principal office of the company in its home country.
  • Full address in Kenya of showing the physical location of the business.
Registered Companies (both private and public companies) may allot shares for considerations other than cash. Companies should inform the Registrar of Companies of such allotments and submit a written contract constituting the title of the allottees.

Investment certificate

As a local investor, it is not a must to have an investment certificate. One may however apply and obtain an investment certificate from the Kenya Investment Authority (KIA) provided that:

  • The amount to be invested is at least Ksh. 1 million
  • The investment and the activities related to it are lawful and beneficial, i.e. they create employment; lead to acquisition of new skills and technology; transfer of knowledge; contribute to government revenue; lead to use of local raw materials, supplies or services; lead to value addition of local, natural and agricultural resources; increase foreign exchange through export or import substitution and; utilize, promote, develop and implement ICT.
Investment Registration

The Investment Promotion Act (2000) requires that local investors without an Investment Certificate should register with the KIA. All investments should also register their business names with the Registrar of Companies.

5 Quick Steps to establish a business in Kenya

The Government of Kenya through its investment institution, the Kenya Investment Authority (KenyaInvest) encourages Israeli business community to invest in Kenya following the Government’s simplified framework of establishing businesses in the country. You require the following 5 Quick steps to establish your business in Kenya:
  1. Fill the Investment Application Form (Download here)
  2. Engage legal advice in Kenya
  3. Register your business
  4. Submit the Investment Application Form together with the Certificate of Incorporation and Articles and Memorandum of Association to Kenya Investment Authority
  5. Issue of the Investment License
 
Patents and Trade Marks

Patents for any innovations, ideas and products in the Republic of Kenya are regulated by the Industrial Property Act and are administered by the Kenya Industrial Property Institute (KIPI) while trademarks are regulated by the Trade and Service Marks Act (Cap 506) and administered by the Registrar of Trademarks at KIPI. (Read More...) 

Normally, the duration of trademarks is 7 years from the date of filing and is renewable after every 14 years.

Work permits

The Government of Kenya allows foreign investors to have key expatriate staff in senior management positions or where local Kenyans with specific skills are not available. Work permits for such expatriates are issued by the Immigration Department and are valid for 1 to 2 years renewable on application.

Import and export procedures

There is no import licensing except for a few items restricted for security, health or environmental reasons detailed in the Imports, Exports and Essential Supplies Act (Cap 502).

The Government has waived the 2.75% Import Declaration Form (IDF) Fees applicable on imported goods used in manufacturing goods for exports under the Tax Remission for Export Office (TREO) scheme. Manufactures under the TREO however have to pay Kshs. 5, 000 which is a processing fee.

For more information, please visit the  Kenya Investment Authority Website.