How to register a Company in Kenya(Updated For 2024)

Are you embarking on the journey of entrepreneurship in Kenya? One crucial step you can't skip is registering your company. It's not just a formality; it's a pivotal move that lays the foundation for your business's legal existence. Don't worry. It's not as daunting as it sounds. Thanks to the advancements in digital platforms, registering your company in Kenya has become more streamlined than ever before.

Now, why should you register your company? First off, it gives your business a distinct legal identity, separating your assets from your business liabilities. Imagine having a safety net that keeps your finances secure, even if your business hits a rough patch. That's what legal protection offers. Also, a registered company amplifies your credibility. Customers and suppliers tend to trust a registered entity more, knowing that the law recognizes it. Plus, it opens doors to funding opportunities, be it bank loans or investor funding, as financial institutions typically prefer dealing with registered businesses.

The process of registering a company in Kenya predominantly takes place online through the government's eCitizen portal. This portal is a one-stop shop for various government services, including business registration. The beauty of this system? You can handle most of the registration process from the comfort of your home or office with just a few clicks—no more endless queues or bouncing from one office to another.

In this comprehensive guide, we'll walk you through every step of registering your company in Kenya. From setting up your eCitizen account to submitting your registration forms, we've got you covered. We'll also dive into the post-registration essentials like obtaining permits and ensuring tax compliance. By the end of this article, you'll be fully equipped with the knowledge and confidence to launch your business in Kenya officially.

So, are you ready to turn your business dream into a reality? Let's get started on this exciting journey of company registration in Kenya!

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Preparing for Registration

Setting up an eCitizen Account

Before you dive into the world of business in Kenya, the first step is to get yourself an eCitizen account. Think of it as your digital gateway to government services, including company registration. Here's how to set it up:

1. Gather Your Documents: Make sure you have your Kenyan ID (or a Foreigner Certificate if you're a non-citizen residing in Kenya), a functional email address, a mobile number, and a recent passport-sized photo in digital format.
2. Accessing eCitizen: Hop onto your web browser, connect to the internet, and visit the eCitizen website.
3. Creating Your Account: Enter your national ID number and personal details. Remember, if one of the company directors is abroad, they still need to be part of this process.
4. Contact Information: You'll be asked to provide a valid email and mobile number. These will be crucial for future communications and verifications.
5. Setting a Password and Accepting Terms: Create a secure password and agree to the terms and conditions laid out by the portal.
6. Mobile Verification: A verification code will be sent to your mobile. Enter this code on the website to complete the setup process.

Voila! You're now the proud owner of an eCitizen account, your first step towards registering your company.

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Choosing and Reserving a Business Name

Choosing a name for your company is more than just a creative exercise; it's a crucial business decision. Your business name represents your brand and ethos, so pick wisely.

1. Uniqueness is Key: The name you choose should be unique and not already in use. Use the eCitizen portal to search the business name database and ensure your desired name is available​​​.
2. Respecting the Legalities: There are specific legal requirements for naming your business in Kenya. For instance, the name of a limited company should end with "Limited" or "Ltd."
3. Reservation Process: Once you've landed on a unique name, you need to reserve it. You can do this either through the eCitizen portal or physically at the Huduma Centre. This reservation holds your chosen name for 30 days, giving you ample time to proceed with the registration.

Gathering Necessary Documentation

With your eCitizen account set and your business name reserved, it's time to compile all the necessary documents for the actual registration process. You'll need:

• National Social Security Fund (NSSF) card.
• Kenya Revenue Authority (KRA) certificate.
• National Hospital Insurance Fund (NHIF) membership.
• National ID or passport for all directors.
• A recent passport-sized photo in a soft copy format for each director.
• Business name and company details, including information about the directors​​.

Armed with these documents, you're now ready to embark on the exciting phase of actually registering your company. Keep these documents handy as they form the backbone of your registration application.

The Registration Process

Filling in Registration Forms

With your documents in hand and your eCitizen account ready, it's time to get down to the nitty-gritty of the registration process. Here's what you need to do:

1. Company Details on Form CR1: Begin with the CR1 form. Here, you'll specify your company's name, location, type, and critical details like the start date, number of employees, and accounting period. Don't forget to include the contact addresses and details of all directors, along with their KRA PIN certificates, passport-sized pictures, and IDs. It's also essential to clearly define your company structure and paid-up capital in this form​.
2. Director Information on Form CR8: This form is all about your company's directors. Fill in the legal names, home addresses, and other personal details of each director. Remember, the government of Kenya requires this information to be accurate and complete.
3. Nominal Capital on BN6 Questionnaire: This is where you declare your company's capital holdings to the Kenya Revenue Authority (KRA). Specify the amount of capital in Kenyan shillings and, for public limited companies, the number of shares.
4. Payment of Stamp Duty: The stamp duty is crucial and is calculated as 1% of your nominal capital. The minimum charge is Ksh. 2,140. You'll also need to pay Ksh. 100 for each document requiring verification. This step formalizes your capital declarations.
5. Drafting the Memorandum and Articles of Association: These documents are the heart of your company's identity, outlining its objectives, rules, capital share, subscribers, and more. They need to be well-written, often with the help of a legal expert.
6. Submitting the Forms and Payment: Gather all the completed forms - CR1, CR8, BN6, Memorandum of Association (MOU), and Article of Association. Attach all required documents and seal them in an envelope addressed to the Registrar of Companies. The total registration fee is Ksh—10,650, which can be paid via the eCitizen portal or at the Registrar's office.

Finalizing the Registration

Once you've submitted your application and paid the fees, your job is almost done. Here's what happens next:

1. Review and Approval: The Companies Registry will review your application. If everything checks out, you're on the fast track to getting your certificate of incorporation.
2. Receiving Your Certificate of Incorporation: This certificate is the official document that marks the birth of your company. It's a big moment! You'll download this certificate from your eCitizen account, usually within a week, though it can sometimes take up to 21 days.
3. Record Keeping: It's essential to keep copies of all submitted documents and certificates. They are not just pieces of paper; they are the legal backbone of your company.

Post-Registration Requirements

Obtaining Permits and Licenses

After your company is officially registered, there's still some groundwork to be done before you can open your doors for business. Depending on the nature of your business, you might need specific permits or licenses. This step is crucial for ensuring that your company operates legally and adheres to the regulations of your industry.

1. Identify Necessary Permits: Research to find out what permits or licenses are required for your type of business. This can vary greatly depending on whether you're in retail, manufacturing, food service, etc.
2. Application Process: You'll generally apply for these permits at various government departments or agencies. Each permit or license may have its own set of requirements and fees.
3. Compliance is Key: Ensuring that your business is compliant with all regulations not only avoids legal issues but also builds trust with your customers and partners.

Tax Compliance and Opening a Business Bank Account

With the legal structure in place, it's time to focus on financial setup and tax obligations.

1. Registering with Kenya Revenue Authority (KRA): Your next step is to register your company with the KRA. You'll need to obtain a Personal Identification Number (PIN) for your company, which is essential for all tax matters. Being tax compliant is not just a legal requirement but also a responsibility that contributes to the nation's development.
2. Setting Up a Business Bank Account: It's wise to separate your finances from your business finances right from the start. Open a business bank account with a reputable bank. This account will handle all your business transactions, making it easier to manage finances and fulfil tax obligations.
3. Keeping Financial Records: From day one, start keeping meticulous records of all your financial transactions. This will not only help in managing your business effectively but also come in handy during audits and tax submissions.

Launching Your Business

Now that your company is registered has the necessary permits, and is tax-compliant, it's almost time to launch. However, there are a couple more steps to ensure everything is in place, especially if you plan to hire employees.

1. Register for Statutory Deductions:

• National Social Security Fund (NSSF): Register your company with the NSSF. This is a mandatory social security scheme for all employees in Kenya. Contributions to the NSSF provide a safety net for employees upon retirement or in case of incapacitation.
• National Hospital Insurance Fund (NHIF): Similarly, registration with NHIF is essential. This fund provides your employees with access to medical insurance, a critical aspect of employee welfare.
• Other Deductions: Depending on your business and the number of employees, there might be other statutory deductions to consider, like PAYE (Pay As You Earn) tax.

2. Setting Up Payroll:

• System Setup: Implement a payroll system that automatically handles these statutory deductions. This will save you time and reduce errors in manual calculations.
• Compliance with Labour Laws: Ensure your payroll system is compliant with Kenyan labour laws, including minimum wage requirements, leave entitlements, and overtime payments.

3. Commence Business Operations

With all the legal and regulatory requirements out of the way, it's time for the most exciting part - starting your business operations!

a.Launch Preparation:

• Marketing and Branding: Develop a strong marketing and branding strategy. Your brand identity should reflect the ethos and values of your business.
• Setting Up Your Workspace: Whether it's a physical store, an office, or a digital platform, ensure your workspace is ready to welcome customers or clients.

b.Operational Strategies:

• Business Plan: Revisit your business plan and operational strategy. Make sure they align with your current situation and the market environment.
• Customer Service: Set up efficient customer service protocols. Happy customers are essential for the growth and sustainability of your business.

c.Continuous Learning and Adaptation:

• Market Analysis: Keep analyzing market trends and adapt your business strategies accordingly.
• Feedback Loop: Establish a system to receive feedback from customers and employees, as this will be vital for continuous improvement.

READ ALSO: NHIF Online Registration for Self-Employed Kenyans

Frequently Asked Questions About Registering a Company in Kenya

Can foreigners register a company in Kenya?

• Yes, foreigners can freely incorporate and register a company in Kenya.

Is a local shareholder required for a foreign-owned company in Kenya?

• Generally, no. However, specific regulated industries, such as the telecommunications industry, may require some local shareholding for licensing.

Does a company in Kenya need a local Kenyan director?

• Legally, there's no requirement to have a local Kenyan director. Still, practically, a Kenyan director may be needed for the company's taxpayer registration.

How long does it take to register a company in Kenya?

• The process takes about 1-3 weeks, depending on whether the registry requires corrections on the application​​.

Can foreigners set up a branch instead of a resident company?

• Yes, foreigners can set up a branch, which is taxed at a higher rate than a resident company.

What is a company Name Search?

• A Name Search is the process of submitting proposed company names to the Registrar of Companies to ensure no similar or deceptively similar names are registered.

What kinds of companies are there in Kenya?

• Kenya recognizes several types of companies, including Company Limited By Shares, Company Limited By Guarantee, and Public Limited Company.

What are the memorandum and articles of association?

• These are legal documents that outline the company's name, objectives, nominal capital, division of shares, and the internal constitution of the company.

What is the difference between a Business Name registration and a Limited Company registration in Kenya?

• A Business Name is a trade name under which an individual or partnership conducts business, with no separate liability and no nominal capital. In contrast, a limited liability company has distinct tax regimes and limited liability.

Do I need a Registered Office Address for my company in Kenya?

• Yes, a registered office address in Kenya is required for all official correspondence. You can use your home address as long as it is provided in the required format.