Starting a business in Kenya

Hi,  The link below gives a good overview of the process of registering a company in Kenya:

https://m.wikihow.com/Register-a-Company-in-Kenya

To the best of my knowledge you can be listed as a director, as a foreigner without a work permit, but you will need a PIN from Kenya Revenue Authority.

Why would you register two separate companies? You could have one company with articles of association which cover all the business activities you wish to carry out.  I think that this would be easier.  Of course you need different licences for different sectors of your business, but that shouldn't be a barrier........just look at some large companies who have diversified hugely.  Diversifying will allow you to spread your investment, which is always better than concentrating it

Unfortunately, I don't know enough about taxation to properly advise you.

Have you researched the sectors that you want to enter?  The transport industry particularly is very crowded and a difficult industry to penetrate, particularly concerning the transport of people.  I speak from personal experience.  You need a lot of capital, operating vehicles is expensive and so on.  You really need to thoroughly research before committing, to avoid losing a lot of money.

I would also say that I would be hesitant to invest heavily in Kenya until the current political turbulence has calmed down and it is clearer which direction the country will take.   The current situation is bad for business and it's not unlikely that attempts to overthrow the October presidential election could be made, if the opposition loses again, which would put the country into a deeper state of uncertainty.  I think that the investability in Kenya in the short to medium term depends upon who eventually wins the presidential election.

Thanks Longonot, as always appreciated. You have highlighted important concerns.  We will discuss and decide on the way forward.

KR,
Naj

Hi Longonot,

Is a PIN from KRA the only document required from a foreign national?

Hey Nessi. i opened my own company with the help of a middleman. most people use middlemen to avoid the hussles and also because they know the  little hacks and shortcuts. They can advise you accordingly.

Hi Ivy,

Thanks for your feedback. Indeed using a middleman is a good idea; one that we would like to consider when the time comes but at the moment we are keen on researching on different aspects involved in starting a business.

Another concern is getting a highly reliable one.

KR,
Naj

It's best to hire a lawyer.......not just any middleman.  This is especially important for the process of drawing up the Articles of Association for your company.

Thanks Longonot, will keep that in mind.

Any suggestion of best areas to do agriculture that has enough water etc & people you can trust to watch over the crops or does that not work well here

Nessi Naj wrote:

Hi guys,

1. What are the basic requirements for starting up a small company here in Kenya where the owners are two Kenyans and a foreigner?Of course the foreigner cannot work in it but would like to be considered a director,is that possible?

2. My Italian boyfriend and I are considering starting two companies, a transportation business and a restaurant.In terms of the line of business,they are very different but considering the fact that the two companies belong to one person,what are the tax / legal implications?I know the legal documentation needed for example in the food industry is more than in the transport business but regarding tax issues, please enlighten me.

3. We are considering giving the companies the same name, an example is like Q foods and Q transporters, Will that help in matters taxation in that, whereas each entity is regarded separate and distinct and maybe tax is remitted separately for each, we can just remit the total tax as one now that the two companies are owned by the same person?

I had a little more questions but will raise them as they come to mind.

Nessy,
I have just seen your question and would like to assist if you are yet to get any assistance.
Currently the registration of a company is quit easy in Kenya. Application is done online and if done correctly you can get a certificate of incorporation, a CR 12 and a pin within a weeks time.
In regard to the companies having the same name that is acceptable but one will have to be a subsidiary of the other, However note that if registered separately you will be required to file returns separately too as they are different legal entities.
Licences will differ since they seem to be operating on two extremes that is for the restaurant you will be required to get a licence from the relevant county government and sometimes clearance from the ministry of health.

I hope i have answered some of your concerns. Let me know if you need further clarification.

Regards.

Longonot62 wrote:

Hi,  The link below gives a good overview of the process of registering a company in Kenya:

https://m.wikihow.com/Register-a-Company-in-Ken
To the best of my knowledge you can be listed as a director, as a foreigner without a work permit, but you will need a PIN from Kenya Revenue Authority.

Why would you register two separate companies? You could have one company with articles of association which cover all the business activities you wish to carry out.  I think that this would be easier.  Of course you need different licences for different sectors of your business, but that shouldn't be a barrier........just look at some large companies who have diversified hugely.  Diversifying will allow you to spread your investment, which is always better than concentrating it

Unfortunately, I don't know enough about taxation to properly advise you.

Have you researched the sectors that you want to enter?  The transport industry particularly is very crowded and a difficult industry to penetrate, particularly concerning the transport of people.  I speak from personal experience.  You need a lot of capital, operating vehicles is expensive and so on.  You really need to thoroughly research before committing, to avoid losing a lot of money.

I would also say that I would be hesitant to invest heavily in Kenya until the current political turbulence has calmed down and it is clearer which direction the country will take.   The current situation is bad for business and it's not unlikely that attempts to overthrow the October presidential election could be made, if the opposition loses again, which would put the country into a deeper state of uncertainty.  I think that the investability in Kenya in the short to medium term depends upon who eventually wins the presidential election.

Longonot,
The process of company registration has significantly changed in the past years since the passing of the Companies act of 2015.
Some of the above provided information might be misguiding. However, i do appreciate the effort to assist her.
The link provided also shows the old method of registration so might be misguiding.

Regards.

Nessi Naj wrote:

Hi Longonot,

Is a PIN from KRA the only document required from a foreign national?

No the only document required from the foreign national is his Passport. However, if he has a KRA pin that would be great( this can however be procured after the company is registered. Note that he can also be a shareholder and a director even if he doesn't reside in Kenya.

Hi,i can lease a farm or if you want to buy,quite good too.plenty of water,still have someone who can take care of your commodities.

what type of crops do you want to grow?

Hi,
all the different advices you've been given are correct. I have 2 companies in Kenya and have used my lawyer to set them up. She is the one dealing with the go-betwwen (what you call middle man) they are useful to put “grease" where necessary, but it's better to deal with them through the lawyer as all advocates companies use middle-men with the different government structures and they knowhow much is the real cost of the walks.
I must confess that my lawyer is a relative

Hi guys,

Thanks Fraciah for the feedback, indeed on further research I found out pretty much everything can be done online and in a very short time, simply amazing 

That said, reading through all the information
  involved in setting up a business past and present was quite enlightening.

Thank you all for your feedback, will get in touch for further info.

Hi Fraciah,

What is a CR 12?

Regards,
Naj

Nessy.
it shows the list of directors, the share capital and the location of the company

Fraciah,

1. "Application is done online and if done correctly you can get a certificate of incorporation, a CR 12 and a pin within a weeks time"- Let's say I have a name in mind  and i pay for name search and reservation today,Does that mean in about a week's time I will have all the documents you've stated above?

2. "In regard to the companies having the same name that is acceptable but one will have to be a subsidiary of the other, However note that if registered separately you will be required to file returns separately too as they are different legal entities. "- Am considering registering  the transport business first then later can I register the restaurant and say that its a subsidiary of the transport business, is that the way to go or how do I go about it?

3. "No the only document required from the foreign national is his Passport. However, if he has a KRA pin that would be great( this can however be procured after the company is registered. Note that he can also be a shareholder and a director even if he doesn't reside in Kenya."- Kindly elaborate on the shareholder bit.

Regards,
Naj

Naj,

What form will your transport business take?  Having had some experience of the sector, i would strongly recommend thoroughly researching, before investing.  Particularly in the public transport sector, where there are some powerful and influential individuals and cartels operating.

Hi guys,

What does it mean when below a certificate of incorporation it says; to validate this document  send the word XXX to number 12345?

Regards,

And can I apply for a business permit in Nairobi county although the business will be located and operating from a different county?

As far as I am aware, your business permit is bought from the county government where your business is actually located and operating.

Noted;Thanks Longonot.

call ***she is a very good lawyer who deals in such issues. her office is in mombasa. Mwangata Korir & Co. Advocates, Nkrumah Road, Mombasa

@zunguheart > i invite you to recommend her in the Nairobi business directory. Thank you

I want to sale 50 percent my company to some one who can do real estate investment

Farming can do well here. Especially hydroponics Farming technology.

Personally, I'm trained in hydroponic farming technology and can help if you consider my idea. Feel free to get in touch with me

Here's a great guide on starting a business in Kenya: How to start a business in Kenya