Kenya

Company Formation in Kenya

Kenya is an attractive destination to set-up your company to cater to the fast growing African market with a large population. YourGlobalPro can assist in Kenya for Company Formation, Secretarial Compliance, Tax Registration, VAT Reclaim, Document Retrieval, Trademark Registration and Citizenship Services.

About the Country

The Republic of Kenya (“Kenya”) is a country in Africa and a founding member of the East African Community (EAC) and shares border with Tanzania to the south and southwest, Uganda to the west, South Sudan to the north-west, and Ethiopia to the north and Somalia to the north-East. The below content will explain you in detail about the requirements for company formation in Kenya , know more about the process of trademark registration in Kenya and understand the Kenya Legal Compliance requirements.

Kenya

Doing Business Introduction

Kenya Economy is the largest by GDP in East and Central Africa. The country traditionally exports tea and coffee and flowers. While investing in Kenya factors like industry and type of business, nationality and trade agreements need to be taken into consideration by the foreign Investor.

As per Doing business report of The World Bank –Kenya ranks 92 for 2017 survey. YourGlobalPro professionals are able to assist client with any type of company formation, trademark registration and other recurring services for your business in Kenya.

Incorporation - Types of Business Entities

There are different types of entities that can be incorporated in Kenya are as mentioned below:

  • Corporation
  • Public companies
  • Private companies
  • Branch office
  • Representative Office

Time Frame for Incorporation of Company in Kenya varies from depending on the type of entity selected. Each business type has its own advantages and disadvantages. Your global pro estimates the time required for Kenya Company formation process to be completed is 25-30 working days.

Benefits of Registration of a Company

Kenya’s capital, Nairobi, is the largest city in East Africa is home to the Nairobi Securities Exchange (NSE), one of Africa’s biggest and most lively stock exchanges. There are number of opportunities for doing business in Kenya – below are some of the advantages of company formation in Kenya:

  • Considered the economic, commercial, and logistics hub of East Africa
  • Strength of Kenya’s human resources – “young” country with almost 70 percent of the population under the age of 35
  • Their large number of well-educated English-speaking, and multi-lingual professionals
  • Information communications technology (ICT) is one of the fastest growing business sectors
  • Financial and manufacturing industries, while relatively modest, are the most sophisticated in East Africa

Tax Registration and Filing

The following tax structure gives an overview of Corporate Taxes in Kenya.

Corporate Income Tax Rate 30%
Turnover Tax Rate 3%
Capital Gains Tax Rate 5%
Branch Tax Rate 37.5%
Value-Added Tax On Imported Goods and Services - 16%
Dividends 10%
Interest 15%
Royalties 20%
Commissions 20%
Management, Professional and Training Fees 20%

Double Tax Treaty

Double Tax Agreements regulates the tax treatment of income or capital gains in situations where the same taxpayer is taxed twice in two countries for the same subject. Kenya has double taxation treaties with Canada, India, Sweden, Denmark, Norway, United Kingdom, France, South Africa, Zambia and Germany.

Trademark registration

For trademark registration in Kenya, application needs to be made to Kenya Industrial Property Institute. It takes approximately 14-18 months’ timeframe to complete the trademark registration process.  A Trademark Registration in Kenya is valid for 10 years from the application date and can be renewed indefinitely for period of renewal fees for 10 years by making request before the expiry date.

YourGlobalPro professionals are fully equipped to assist you with the process of trademark registration in Kenya for your business in Kenya. For assistance or advice in the matter of the trademark registration in Kenya or intellectual property – please feel free to write or contact us.

Secretarial Compliance

  • Below are some of the important points in relation to Company Secretarial Compliance in Kenya:
  • For Public Company requires at least two directors whereas Private Company requires One Director
  • Minimum one members with no maximum membership for a Public Companies, whereas Minimum two members and a maximum of fifty (50) excluding employees are required for Private Companies.
  • Public companies are strictly regulated hence the financial accounts are published and filed with the Registrar while the same is not required for a Private Limited Company
  • authorized capital/ nominal capital prescribed for the public Companies is Kshs. 6, 750,000 whereas for Private Companies no such requirement
  • The Public or Private Limited Company Must have a Company Secretary duly appointed and practicing in accordance with the law

Accounting Services

The Kenya Companies Act requires the Director to lay before the members once a year, Profit and Loss Account and Balance Sheet. Further insists that proper books of account must be prepared to cover the period, in case of first accounts, the period starting from the incorporation, and subsequent/preceding accounts made up to a date not earlier than nine months before the date of the meeting.

YourGlobalPro professionals can assist you with the entire bookkeeping and accounting services for your Kenya Business Set up as per your business needs including implementation of financial accounting software, accounting records preparation and time to time preparation of budgets, forecasts.

Auditing service

In Kenya, the listed companies are required to prepare their financial statements in accordance with International Financial Reporting Standards (IFRS) while all other companies or partnerships in Kenya are subject to any other requirements have the option to prepare their financial statements in accordance with IFRS for SMEs or full IFRS.

Based on the size of the business – the companies are required to prepare and file financial statements with the Authority. YourGlobalPro professionals provide you auditing services for your business as required by your business.

Banking

The Bank of Kenya controls inbound and outbound investments and transfers of money in Kenya. The documentation requirement differs from Bank to Bank and need to be complied for the Bank account opening.  The Central Bank of Kenya located in Nairobi is the Kenya’s central bank.

The major banks in Kenya are ABC Bank (Kenya), Bank of Africa, Bank of Baroda, Bank of India, Barclays Bank of Kenya, Chase Bank Kenya (In Receivership), Citibank, Commercial Bank of Africa, Consolidated Bank of Kenya, Cooperative Bank of Kenya, Credit Bank, Development Bank of Kenya, Diamond Trust Ban. All banks are stable, reliable and offer the same level of services.

YourGlobalPro professionals can facilitate all the paper work in relation to banking need and can assist you in opening bank account for your business plan in Kenya.

Legal and Compliance

In Kenya, the responsibility of legal compliance is not a one-time affair, but a continuous process. Below is the various Kenya legal and compliance requirement to be followed by incorporated entities:

All private limited Companies and partnership must prepare annual financial statements and file these at the Company Registrar within 9 months of the accounting reference date, while public limited companies must file their financial statements at the Company Registry within 6 months of the accounting reference date.

Also, the public listed companies must file their financial statements at the Capital Markets Authority within 4 months of the accounting reference date

YourGlobalPro professionals can assist you in Kenya Legal and compliance requirements

HR and Employment Law and Immigration / VISA

Below are some of the important points in relation to HR & employment law in Kenya:

  • Normal working hours usually consist of 45 hours of work per week -generally eight hours from Monday to Friday, and five hours on Saturday.
  • Overtime if any paid at the rates of one and one-half time hourly rate on weekdays, and at the rate of twice the basic hourly rate on Sundays and public holidays.
  • Employee is entitled to rest from work after working for six consecutive days.
  • Kenya does not clearly provide for rest intervals/breaks during working hours
  • employee required to work on a holiday will be paid overtime for the hours worked at twice the ordinary basic hourly rate.
  • The visitors from British Commonwealth countries, Eritrea, Ethiopia, Ghana, Guyana, India, Namibia, New Zealand, Nigeria, Pakistan, San Marino, Sri Lanka, Turkey and Uruguay do not require visa and are issued visitors’ passes at the point of entry.
  • Special pass, which is issued to foreign nationals wishing to work in Kenya on a short-term assignment
  • Students’ pass, which is issued to foreign students who wish to study in Kenya
  • The Employer need to obtain entry permit that allows a foreign national to work in Kenya.
  • Foreign nationals who are over 18 years of age and stay in the country for more than 90 days must register as aliens.
  • The work permits are issued only to persons whose employment, business or presence will benefit the country.

Country Statistics

Capital Nairobi
Largest city Nairobi
Total Area 581,309. Sq. Km.
Population 46,661,552
Density 78 / Sq. Km.
Currency Kenyan Shilling (KES)
Government Unitary Presidential Constitutional Republic
Official Language English, Kiswahili
Religion Christian: 83%
Muslim: 11.2%
Indigenous beliefs: 1.7%
Non-religious: 2.4%
Government Offices Hours Monday to Friday (0900-1300 and 1400-1700)
Business Offices Hours Monday to Friday (0900-1300 and 1400-1700)
Banks and Exchange Houses Hours Monday to Friday - 8:30 am - 4:00 pm Saturday - 10.00 am to 12.00 Noon Sunday - Weekly Holiday

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