Company and business registration is the first important step to start a business. Before starting and running a business in Kenya, registering your business will help you comply with Kenya’s laws related with business and company registration.
For both local and foreign investors, the process of company and business registration may take between 5 and 7 days. Sometimes, the process can exceeding the indicated period, but in genial the process may not exceeds two weeks. The process of registering and staring a company in Kenya was made easy by the current government reforms that digitalize this service and made it more affordable and accessible to both local and international investors.
In today’s post, we explore:
- Types of Companies and business in Kenya
- Requirements for company registration in Kenya
- Steps for the registration of a company in Kenya
1) Types of Companies and business in Kenya
In Kenya, the process of registering and operating a business is governed by several laws and regulations. The principal law is the Companies Act No 17 of 2015 that regulates the formation, management and dissolution of companies. This law provides the legal framework for company incorporation, defines role and responsibilities of directors and shareholders.
There is also the Business Registration Service Act No 15 of 2015, which established the Business Registration Services (BRS), the main agency responsible for administering the registration of companies, business names and partnerships in Kenya.
According to the above laws and regulations, companies and businesses in Kenya are in the following types:
a) Sole Proprietorship: It is a business owned by one person. It is ideal for small businesses, as the owner has full control and responsibility.
b) Partnership: This type of business owned by two or more people who share profits and losses.
c) Private Limited Company (Ltd): This is a typical business type with limited liability for shareholders, meaning personal assets are protected. Shares are not publicly traded.
d) Public Limited Company (PLC): This business can trade shares on the stock exchange. Larger companies typically use it to raise capital.
d) Foreign Companies operating in Kenya: These are international companies have established branches or subsidiary in Kenya.
2) Requirements for company registration in Kenya
The requirements for registering a company depend on the type of a company. Each type has its own set of requirements, including name reservation, identification documents, Kenya Revenue Authority (KRA) PIN registration, and payment of prescribed fees. Beyond registration, businesses must also obtain relevant permits and comply with tax and labor laws to ensure full legal operation within Kenya’s regulatory framework.
Generally, the following requirements are necessary for each type of business:
- Present at least 3 Company Names;
- Detailed documents showing Business Objectives;
- National ID Card Copy / Travel Passport copy of all the Directors, Shareholders, and Beneficial Owners;
- Passport-size photos of all the Directors, Shareholders, and Beneficial Owners;
- Physical Addresses, phone numbers, email addresses, and occupations of all Directors, Shareholders, and Beneficial Owners;
- Paying company registration fees and cost: Company registration in Kenya cost varies based on factors such as business type and share capital. Government fees range from KES 10,750 (about USD 100) to KES 25,000 (about USD 195).
3) Steps and process for company registration in Kenya
The following steps are followed while registering and operating a business company in Kenya:
Step 1: Login to eCitizen
Visit eCitizen and log in to your account. If you don’t have an account, sign up using your email address, Kenyan ID Number, or Travel Passport Number.
Step 2: Navigate to the Business Registration Service
Once logged in, select the Business Registration Service and proceed to initiate an application.
Step 3: Choose the Business Type
Select the type of company you want to register as indicated above.
Step 4: Submit Proposed Company Names
Provide at least 3 proposed company names (maximum of 5) in order of priority. The Registrar will approve the first available name within 1 to 2 working days. Avoid names similar to those of existing businesses to reduce rejection chances.
Step 5: Prepare Company Incorporation Documents
Once your company name is successfully reserved, the next step is to compile and submit the required incorporation documents through the eCitizen portal.
These documents include:
a) Form CR1: Lists the company’s first directors, secretary (if applicable), and authorized signatories.
b) Form CR2 : The memorandum for companies with share capital, showing shareholders and the number of shares each holds.
C) Form CR8: Provides the residential address of each director or notifies changes to those addresses.
d) Statement of Nominal Share Capital: Details the company’s share capital, types of shares, and their nominal value.
d) Form BOF1: A register of beneficial owners, including their names, shareholding percentage, addresses, and the source of ownership information.
Make sure these forms are correctly signed and uploaded in PDF format on the eCitizen Portal.
Step 6: Provide Director, Shareholder, and Beneficial Owner Details
At this stage, you will need to enter the following details for all directors, shareholders, and beneficial owners:
- National ID Card or Travel Passport copies.
- Passport-size photographs.
- Physical addresses, phone numbers, email addresses, and occupations
- A beneficial owner is any person holding at least 10% of issued shares or controlling 10% of voting rights directly or indirectly.
Step 7: Provide the Registered Address
Specify the registered office address, including:
- County, District, and Locality
- Name of the building and street.
- Postal Address and Postal Code.
- Mobile number and company email address.
Step 8: Specify Share Information
Define the share capital structure:
- Share category.
- Number of shares.
- Value of each share.
- The minimum share capital is KES 100,000.
- A company secretary must be appointed if the share capital exceeds KES 5 million.
Step 9: Download, Sign, and Upload Registration Documents
- Download the registration documents.
- Review and confirm all details.
- Sign the documents and upload scanned copies.
- Make the necessary payment.
Step 10: Approval and Issuance of Certificate
Once all information is submitted, the Registrar of Companies will review and approve the application within seven days or less. Upon approval, you can download your Certificate for Company Registration in Kenya and Form CR12, which lists the shareholders and directors.
For foreigners registering a company in Kenya, a local director or a local secretary must be appointed for ease of incorporation and compliance
Step 11: Post-Registration Requirements for Companies in Kenya
After successfully registering a company in Kenya, there are several key steps and compliance measures that must be followed to ensure smooth business operations:
- Company Tax Registration: Mandatory for all businesses in Kenya. A tax registration certificate is required for tax payments, opening a business bank account, and obtaining additional licenses. Company Tax Obligations in Kenya include: Corporate Tax: 30% on net profits, VAT: 16% for turnover above KSh 5M, PAYE: Deducted from salaries, Tax Returns: Filed monthly & annually via iTax
- Open a Corporate Bank Account: Choose from Kenya’s 39+ commercial banks to set up a business account for transactions.
- Registration in Social Health Authority ( SHA): this will help to comply with mandatory employee health insurance requirements.
- National Social Security Fund (NSSF) for retirement savings. You may also opt for a private retirement scheme.
- Business Premises License: If your company has a physical location, obtain this license from the county government, which takes between 5 to 10 working days. The cost varies based on factors like space size, number of employees, and location.
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