By: Kendi Latoya

When setting up a business in Kenya, foreigners have to take various matters into consideration such as taxation; licenses, permits and certificates; import and export duty; employment law etc.

Establishing a Business in Kenya

Foreigners who wish to establish a business/presence in Kenya have two options being:

Option 1: Establish a Branch of a Foreign company; or
Option 2: Establish a Subsidiary of the Foreign company.

Establishing a branch or a subsidiary both have advantages and disadvantages.

A BRANCH 
A branch is an extension of the parent company. It is not a distinct legal entity from the parent company.

For tax purposes, a branch is considered a non-resident and taxed as such.

In terms of liability, the parent company is held liable for the acts of the branch.

The rate for corporation tax for a branch is 37.5%.

For registration purposes, there is no requirement for a local director, however an authorized representative is required for the purpose of service of documents in Kenya.

Timeline for registration is one (1) week upon receipt of all documentation from the client.

A SUBSIDIARY
A subsidiary is a distinct legal entity from the parent company.

For tax purposes, a subsidiary is considered a resident.

In terms of liability, the parent company is not held liable for the acts of the subsidiary.

The rate for corporation tax for a subsidiary is 30%.

For registration purposes, there is no requirement to have a local shareholder or director. However, one director has to be a natural person. (There are however certain regulated sectors that require the same).

Timeline for registration is three (3) days upon receipt of all documentation from the client.

Licences
After registration of an entity, licenses would need to be obtained depending on the industry they are in. There are however general licenses that have to be obtained such as business registration permit, KRA PIN certificate, NHIF registration, NSSF registration.

Opening of Bank Accounts
We also assist in opening bank accounts for the foreign entities in Kenya.

Work Permits
We also obtain work permits for foreigners who will be conducting business in Kenya/Investing in Kenya or employed in Kenya.

Kindly click on the link below to access, the downloadable pdf version of the article.

DOING BUSINESS IN KENYA-02-03-2022-pdf

Please contact us if you require further advise on the above subjects.
Email: info@kendikadvocates.co.ke
Website: www.kendikadvocates.co.ke
Tel: +254768028504

Disclaimer:
This information provided in this Article is intended as a general overview of the subject dealt with. This information is not intended to be, and should not be used as, a substitute for taking legal advice in any specific situation. Kendi & Company Advocates is not responsible for any actions taken or not taken on the basis of this information.