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American starting a tour company! Open discussion on what to expect

Hello everyone!

I'm currently living in Afghanistan and I'll be moving to Nairobi to start a business with my Kenyan friend. We will be starting small with a few vehicles and a small office. I need any and all advice on what to expect (good and bad) on starting a business in Nairobi. I also need advice on where to live. Where can I network and have a satisfying social life.

Cheers!

Brian

Hello Bryan,
Am Lina n I take this chance to welcome u to Kenya. Its a great place to start up business, conpetitive yes but room for growth depending on your services n customer care. As long as your kenyan partner is honest n takes u through getting all tequired documents u wont have trouble here.
Ad to where to live, that depends on where your business will be located. However if u want quite n serene settup thats available, if u want busy community we have apartments too.
Incase u need help with house n documentation  say alien identity n work permit let me, am willing to help. If u neef to employ guys let me know. Once again welcome to Kenya- u can reach me on +254723623745

As I have a relative employed in the tour industry, I would say that you should wait until the political situation has calmed and the country's way forward is clearer.  The tour industry has been relatively depressed since 2008, after the post election violence and a series of terrorist bombings (although none were aimed at tourists, it takes little to put them off) and travel advisories.

The industry was really starting to pick up earlier this year, but the issues and uncertainty around the election has seen a sharp decline across the country with some operators going out of business in what is an already extremely crowded marketplace.

As a foreigner, you can register a business without a work permit, but won't be permitted to operate your company in any capacity without a work permit.  You would need a Class G Permit and I have pasted the requirements below from the Dept of Immigration website:

Class G Requirements.

◦Documentary proof of capital to be invested/already invested minimum of 100,000 US dollars or equivalent in any other currency.
◦Registration certificate of the company OR certificate of incorporation.
◦Copies of personal and company PIN (Personal Identification Number) if business is running.
◦For renewals; audited accounts for previous 2 years and a certificate of tax compliance from the Kenya Revenue Authority.
◦Processing Fee Kshs.10,000 non-refundable.
◦Fee is Kshs. 100,000/= per year or part thereof.


For many, the main stumbling block is the $100,000 minimum capital.  For anything in the tour/hospitality industry, additional permits are required from the Ministry of Tourism.

Hi,

Question, about the 100k investment.

Does it say in way form the investment has to be done. Can it be ;
real-estate, inventory to be sold, a bank guarantee, license fees, leasing contract ... a salary commitment ?

The investment is often a relative thing. If I have a bank guarantee for paying my self a 100k salary for the next two years, then is that sufficient. The question / risk is then, the tax that has to be paid on the salary, which in this case would be 30%. Then the investment fee would become 15k per year (deductible in the business).

If it is sufficient to have a bank guarantee then, you can own an apartment somewhere, rent it out, maybe even have mortgage on it. You could also take a loan for the investment, lock the funds on a high interest account for the needed duration, and then release the funds pay back the loan.

It is not that, I need to have the 100k in hand, I need to have the funds to show that I can operate the business (I guess ?).

Kean

The wording that the government use is:

'Documentary proof of capital to be invested at least USD 100,000'

On another dept of immigration website:

'Documentary proof of capital to be invested/already invested minimum of 100,000 US dollars or equivalent in any other currency.'

You do need to have the money in hand, or already invested.  I don't think that something like a bank guarantee, or mortgaged property would suffice.  Ultimately its at the discretion of the officials assessing your application. 

In my case, when I applied, I did have at least $100,000 equivalent in the bank and my application was then complicated by all sorts of other issues that were brought up - maybe they wanted bribes.  I withdrew the application and invested the money in property.

Hello
Karibu Kenya if you are intending to open up a tourcompany get in touch with me i have vast experince in the field

peter
Hakuna matata safari

Hello
Karibu Kenya if you are intending to open up a tourcompany get in touch with me i have vast experince in the field

peter
Hakuna matata safari

I agree,with you guys,kenya is a bit shaky for one to start a business,coz of the heated politics that we don't know what to expect.for now hold on  for some few months before you start the business. The truth such tour business is quite good.google bonfire adventures it's a tour company that is doing well though,goodluck.

Hi,  I would advise you wait for political heat to cease.
Tours n travel business is thriving well in Kenya and East Africa at large.
In case you start and need an admin, let me know.  You can reach me on ***

Moderated by Priscilla last week
Reason : Do not post your personal contact details on a public forum for your own security

Anthony;  the tours and travel business has been depressed for quite a few years - the situation at the coast is fairly dire. 

My wife worked in the tourism sector as does my brother-in-law.  He was laid off about 2 or 3 years ago, due to the lack of visitors. 

2017 saw things begin to recover significantly, particularly in central Kenya.  The instability around the elections and its fallout saw business fall away again.

One of the issues are concerns about safety.  An ongoing issue is the very high cost of a Kenyan safari and the dual pricing strategy for parks, lodges and so on (foreigners pay a huge amount more than locals, usually in $).

Anyone entering the crowded tourism sector now, needs to be innovative and be able to offer a product/service perhaps not offered by others.

what my fellow expat members are saying is true but i would suggest start early this situation is not permanent and tourists don't plan overnight so if you want to get business for coming high season start setting base now  .eg create your website start marketing it , get your papers in order (government license,county government,recruit staff ,there is alot to be done so its not early get in touch am able to assist
thank you

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