Business Registration Framework in Kenya
Kenya has streamlined its business registration process through the Business Registration Service (BRS), which operates under the Attorney General's office. The country's business environment is governed by multiple legislative frameworks, with the Companies Act No. 17 of 2015 being the primary legislation for company incorporation.
As of 2024, Kenya ranks 56th out of 190 economies in the World Bank's Ease of Doing Business report, with business registration taking approximately 11 days and costing around 9.5% of income per capita.
Types of Business Entities
Limited Liability Companies
The most popular business structure for formal enterprises, governed by the Companies Act 2015:
- Private Limited Company - Minimum 1 director and 1 shareholder, maximum 50 shareholders
- Public Limited Company - Minimum 7 shareholders, can raise capital from the public
- Company Limited by Guarantee - Typically used for non-profit organizations
Business Names and Sole Proprietorships
Regulated under the Business Registration Service Act No. 15 of 2015:
- Sole proprietorship registration
- Partnership businesses (2-20 partners)
- Business name registration for existing companies
Special Licenses and Entities
- Limited Liability Partnerships (LLP) - Under the Limited Liability Partnerships Act No. 42 of 2011
- Foreign Companies - Must register local branches under Part XI of the Companies Act
- Cooperative Societies - Governed by the Cooperative Development Act
Step-by-Step Registration Process
1. Name Reservation and Search
All business registrations begin with name reservation through the BRS online portal or physical offices:
- Name search fee: KES 100 for business names, KES 1,000 for companies
- Name reservation valid for 30 days
- Names must comply with naming guidelines under the Companies Regulations 2015
- Prohibited names include those resembling government entities or existing trademarks
2. Required Documentation
For Private Limited Companies:
- Memorandum and Articles of Association
- Form CR1 (Application for Registration)
- Form CR2 (Statement of Nominal Capital)
- Form CR8 (Particulars of Directors and Secretary)
- Copy of ID/passport for all directors and shareholders
- PIN certificates for all Kenyan directors/shareholders
For Business Names:
- Form BN1 (Application for Registration of Business Name)
- Copy of proprietor's ID/passport
- PIN certificate
- Consent letters from partners (if applicable)
3. Registration Fees Structure
Company Registration Fees (as of 2024):
- Companies with share capital up to KES 100,000: KES 10,200
- Share capital KES 100,001 - 1,000,000: KES 12,200
- Share capital above KES 1,000,000: KES 15,200
- Expedited service (same day): Additional KES 10,000
Business Name Registration:
- Standard registration: KES 2,000
- Expedited service: KES 5,000
Post-Registration Compliance Requirements
Tax Registration and Obligations
Under the Tax Procedures Act No. 29 of 2015, all businesses must register with the Kenya Revenue Authority (KRA):
- PIN Registration - Personal Identification Number for tax purposes
- VAT Registration - Mandatory for businesses with annual turnover exceeding KES 5 million
- PAYE Registration - Required for businesses with employees
- Withholding Tax - For businesses making specified payments
National Social Security Fund (NSSF)
Registration mandatory under the National Social Security Fund Act for all employers:
- Monthly contributions: 6% of gross salary (shared equally between employer and employee)
- Maximum monthly contribution: KES 2,160 (as of 2024)
- Registration must be done within 30 days of employment
National Hospital Insurance Fund (NHIF)
Compulsory for all employees earning above KES 1,000 per month:
- Contribution rates range from KES 150 to KES 1,700 based on salary bands
- Employer responsibility to register and remit contributions
Sector-Specific Licensing Requirements
Trading and Commercial Licenses
- Single Business Permit - County government licensing for local trading
- Import/Export License - For international trade activities
- Weights and Measures License - For businesses using weighing equipment
Professional and Regulated Services
- Financial services - Central Bank of Kenya licensing
- Healthcare - Kenya Medical Practitioners and Dentists Council
- Legal services - Law Society of Kenya certification
- Construction - National Construction Authority registration
Environmental and Safety Compliance
Under the Environmental Management and Coordination Act:
- Environmental Impact Assessment (EIA) for specified projects
- NEMA environmental compliance certificate
- Occupational Safety and Health Act compliance for workplaces
Foreign Investment Considerations
Investment Promotion
The Kenya Investment Promotion Act No. 6 of 2004 provides the framework for foreign investment:
- Kenya Investment Authority (KenInvest) serves as the one-stop shop
- Investment certificate required for certain sectors
- Minimum investment thresholds apply for foreign investors (to be verified)
Restricted Sectors
Certain sectors have foreign ownership restrictions:
- Telecommunications - maximum 70% foreign ownership
- Banking - subject to Central Bank approval
- Media and broadcasting - restrictions apply under relevant sector laws
- Land ownership - generally restricted to Kenyan citizens
Annual Compliance and Reporting
Statutory Returns
Companies must file annual returns with the Registrar of Companies:
- Form CR6 - Annual return due within 30 days of AGM
- Filing fee: KES 2,500 for private companies
- Late filing penalties: KES 5,000 plus KES 100 per day
Tax Compliance
- Monthly VAT returns (where applicable)
- Monthly PAYE and withholding tax returns
- Annual income tax returns
- Quarterly instalment tax payments
Digital Transformation and eCitizen Services
Kenya has digitized most business registration processes through the eCitizen platform:
- Online application and payment systems
- Digital certificate issuance
- Integration with KRA PIN registration
- Mobile money payment options (M-Pesa integration)
The government targets reducing business registration time to 5 days through continued digitization under the Digital Economy Blueprint.