This article contains information on how to register a business company in Kenya. Kenya is known to have the largest Economy in East Africa. As at 2019, it was the 65th Largest economy in the world and the Financial,Communications and technical hub in East Africa.
In the recent past, Kenya has been attracting a lot of Foreign Direct Investment due to its Macroeconomic Stability, Improvement in Governance,Investment in Infrastructure, Security, supportive demographic dividend and ease of doing business. Compared to decades ago, it is easier and quicker to do business in Kenya now.
Registering a business in Kenya was once a herculean task. The process was highly complicated but the Kenyan government stepped in recently and made the registration process as easy as possible for both citizens and non citizens. This is to mean that whether you’re a Kenyan citizen or a foreign business owner looking to open your business in Kenya, the process can still take as short as a month to be completed especially if the required documents are not properly organized.
STEPS TO REGISTER A BUSINESS COMPANY IN KENYA
However, to register a business / company in Kenya, the following steps are to be taken:
LOG ONTO YOUR ECITIZEN ACCOUNT
Inorder to log into the ecitizen account, you ought to have registered on it already. Registration requires a simple process.
Steps On How To An Ecitizen Account
- Get your Kenyan ID and create an eCitizen account online. eCitizen is the online portal through which the Kenyan government conducts most of its official business. It’s free to use and easy to sign up/ register.
- When creating a personal account, you’ll need to type in your name type in your Kenyan ID number which is usually found on a Government issued ID.
- You will also be required to provide a working email address.
- If you’re a foreign citizen living in Kenya, you have an option using your Foreigner Certificate number to substitute for Kenyan ID number.
- Upload a 2.2 in × 2.2 inches passport photo. ECitizen requires you to upload a recognizable passport photo of yourself that was taken within six months of when registering the business. Then create an account.
After creating the account, you log in to the Business Registration service page via the online portal. This page can only be accessed once you’ve created an eCitizen account. Prior to making the account, you cannot link directly to the Business Registration Service
SUBMITTING A BUSINESS APPLICATION AND FILING PAPERWORK
The second step is the paperwork /application phase which has its own processes.
Name search
Once you’re on the business registration service page, click on make application. This will redirect you to another page where you will click on business name registration. Here, you are required to choose the type of business you wish to register and a business name inclusive.The business type could be Partnership, Sole proprietorship, Limited liability company, etc.
It is important to note that a business name can be rejected if it is similar to an already existing business name. Therefore, a name search is processed within a day and only one name can be submitted at a time.
If the name is accepted, the registrar will reserve the name for 30 days. This implies you have enough time to complete the business registration
The name search search requires the payment of a given fee to file your name search. The Kenyan government requires potential business owners to pay a small fee to run the business-name search. You can pay online with a credit card.
Business Registration
Once the name has been approved, you are allowed to proceed with the registration of your business. The name search approval is not notified through email so you have to keep checking the eCitizen website until you’re notified of the approval.
There are different requirements for each type of business to be registered.
Requirements for registration of Company:
- Fill company registration form CR1
- Fill details of directors and shareholders and upload scanned copies of I.D. card/passport, KRA PIN certificate and recent coloured passport photograph.
- Directors/shareholders have to be registered on the iTax platform.
- Fill shareholding details.
- Fill a notification of directors’ residential address – Form CR8.
Requirements for Partnership and Sole proprietorship:
- Fill BN2 form
- Upload ID card/passport, KRA PIN certificate and recent coloured passport photographs of sole proprietor or partners as the case might be.
N:B- If you have company directors who live outside of Kenya, also include a copy of their government-issued ID from the country that they reside in.
FILL THE STATEMENT OF NOMINAL CAPITAL
State your businesses’ nominal capital holdings on form BN6. The Kenya Revenue Authority (KRA) requires all new businesses to declare their capital holdings. On form BN6, fill in your business name, provide the amount of capital that your company possesses in Kenyan shillings. If your company is publicly traded, also state how many shares the company’s capital holdings are divided into.
PAY THE STAMP DUTY
Based on the amount of capital your company has, you will be required to pay a stamp duty. The Kenya Revenue Authority (KRA) oversees stamp duty collection. They are responsible for reaching out to business owners once the business name has been registered and will give necessary instructions on how to pay the Stamp Duty.
In the process of this, you will be asked to provide the Kenyan ID number of all of your company’s employees and shareholders.
Note, the amount of money that you pay will be equal to 1% of your company’s nominal capital. However, the minimum is Kes. 2,140 based on the minimum nominal capital of Kes 2,000.
As part of completing the Stamp Duty requirements, you’ll also be charged Kes 100 for each document which must be approved by Kenya Revenue Authority.
Sending in the required information and paying the Stamp Duty takes between 5 to10 days to be successfully completed.
DRAFT A MEMORANDUM AND ARTICLE OF ASSOCIATION
This is done before filing your final registration.
It outlines your business objectives. The Kenyan government requires new businesses to file 2 documents which describe the objectives, rules, mission, subscribers, and authorized share capital of your company. paperwork. These documents are normally prepared by an advocate, but can also be drawn up by an administrative assistant or the company’s director.
The Memorandum of Association details your business’s name, location,the business objectives, states the value of each company share, and specifies how many shareholders the company has.
It also contains the company’s rules and regulations. It lists each member’s liability, the powers of the company directors, the rights of all company members, and how directors are to be appointed and removed from their position.
Once this is done, file the completed forms and pay the fee at a Kenyan Registrar’s office. Collect the CR1, CR8, and BN6 forms as well as the Memorandum and Article of Association and Mail them to the Registrar’s office or deliver them to the Business Registration department in person.
To finish registering your company, you’ll also need to pay the mandatory fee of Kes. 10,650 either through the eCitizen portal or by check or credit card at the Registrar’s office.
DOWNLOAD YOUR BUSINESS CERTIFICATE
This is the final stage and it is downloaded from the eCitizen platform. The Kenyan government will take roughly 1 week to review all of the forms that you’ve sent in, make scans and copies, and register your business with the Kenya Revenue Authority. Once everything has been approved and your business is officially registered, the business certificate will be posted online in your eCitizen portal.
The amount of time this takes can vary. Hence, you may need to wait for a period of about 21 days. As soon as they receive the business Certificate, you have the authority to kick off your business in Kenya without any hindrances or whatsoever. It is that simple.
N:B- A Kenyan company can have directors who live abroad and are not Kenyan citizens but at least one of the directors will have to be a Kenyan citizen, so that they can access eCitizen and submit certain forms.
With the information in this article, you can register your Kenyan business at the snap of a finger.
