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Setting Up A Business In Kenya

Nairobi is a host to many international company headquarters being the gateway to East Africa. There are as many opportunities within Nairobi as there would be elsewhere in the world. And as it is in every country, there are certain guidelines that need to be followed when trying to register and incorporate a new business in the city of Nairobi. There are essentially four types of company that can be registered in Kenya; Companies limited by shares, Companies limited by guarantee, Unlimited companies and Representative Offices (Foreign companies).

Reservation of company name

Matters dealing with name search and company registrations in Kenya are done under the Office of the Attorney General. You will need to have a name that’s unique and hasn’t already been registered.  Large international corporations may not necessarily have to face this hurdle as their company names are known worldwide. However, for small to medium sized corporations, you might have to consider doing a name search to ascertain that the business name hasn’t already been used. A name search can be done through the eCitizen portal or through a text messaging service that will cost you some few hundreds of shillings.

Company registration

If your unique name hasn’t been registered, you can then proceed to register it or reserve the name for 30 days, with a possible extension of up to 60 days. One can choose to have the name registered at Huduma Center or use external companies that process company registrations on behalf of individuals. If using the right government channels, company registration will cost you a flat fee of 10,000 shillings, according the Official Gazette Notice Legal 61 published in April 2016. Outsourcing an external company to do it on your behalf might cost you double the amount but will come in handy if you don’t want to run around. You will be required to fill out a memorandum of association form, statement of nominal capital, a copy of identity card for each director, copy of PIN certificate, passport photos of each director and phone numbers.

Registration for taxes 

Once the registration is complete, you will receive a certificate of incorporation and a Kenya Revenue Authority PIN certificate for your registered business. You will then be required to register for VAT, local service tax and Pay-As-You-Earn (PAYE) tax which will take about a day. You will be required to provide the PIN certificates of two directors or two shareholders or a director and secretary to enable the processing of the tax documents. If any of the directors don’t have their personal PIN numbers, they can proceed to apply for one online at https://itax.kra.go.ke/KRA-Portal/. However, if KRA hasn’t received the confirmation of the company, the entrepreneur will be required to submit their certificate of incorporation so as to receive log-in details that will allow them proceed with online tax registration.

Business permit application

Once all the above steps have been achieved, one will be required to register for a business permit at the Nairobi City County. A payable application fee of 200 shillings is applicable for to trader, shop or retail services. The permit fees fall under two categories;

  1. Large trader, shop or retail service with 21-50 employees and premises of between 300-3,000 square meters at a prime location will be required to pay Kshs. 30,000.
  2. Medium trader, shop or retail service with between 5 to 20 employees and premises of 50-3,000 square meters at a fair location will pay Kshs. 15,000.

NHIF and NSSF registration

The entrepreneur will be required to register for the National Hospital Insurance Fund and National Social Security Fund. The employer will be required to remit those two from their employees’ salary every month payable to both NHIF and NSSF separately. The NHIF contributions are used to help offset about a fraction of the cost of medical treatment in selected hospitals by the employees. However, employers can still provide their employees with medical insurance covers. On the other hand, NSSF provides employees with a lump-sum retirement benefit. There will be monthly remittances to KRA, NHIF and NSSF every month for all the employed staff.

Companies can obtain company seals if they so wish. The process takes 2 working days and costs between 2,500 to 3,500 shillings. Seal makers will request a certificate of incorporation to enable them make a company seal.