Whether you’re a local entrepreneur or a foreign investor, understanding the legal framework for business incorporation in Kenya is essential. This guide answers the most common questions about registering a company in Kenya, including entity types, requirements, fees, and foreign ownership rules.
What types of business entities can I register in Kenya?
Kenya recognises several forms of business entities: Sole Proprietorship, Private Limited Company (Ltd), Public Limited Company (PLC), Company Limited by Guarantee (CLG), Limited Liability Partnership (LLP), and Foreign Company Branches.
What are the features of a Sole Proprietorship in Kenya?
- Owned and run by one individual
- No legal separation between owner and business
- The owner has unlimited personal liability.
- Simple and fast registration via eCitizen
- Taxed as part of the owner’s personal income
- Ideal for freelancers, small traders, and consultants
What are the features of an Ordinary Partnership in Kenya?
- Formed by 2 to 20 individuals
- Partners share profits and liabilities
- No separate legal identity
- Requires a partnership deed
- Taxed individually (not as a separate entity)
- Suitable for professional firms like law or audit practices
What are the key features of a Private Limited Company in Kenya?
- Separate a legal entity from its owners
- Shareholders have limited liability- the liability of its members is limited by the company‘s articles to any amount unpaid on the shares held by the members.
- Requires at least one director and one shareholder (can be the same person)
- Maximum of 50 shareholders
- Can be 100% foreign-owned, but must appoint a local director or company secretary for compliance.
- Cannot offer shares to the public
- Must file annual returns, maintain statutory records, and comply with tax obligations
What features define a Public Limited Company (PLC) in Kenya?
- Can offer shares to the public, may be listed on the Nairobi Securities Exchange.
- Minimum three directors and seven shareholders required.
- There is no limit to the number of shareholders.
- Stricter reporting and governance requirements; must appoint a certified company secretary.
- Used for larger businesses and capital-raising initiatives
What is a Company Limited by Guarantee (CLG)?
- Formed typically for non-profit operations or charitable activities.
- Liability limited by a guarantee amount by members in case of winding up.
- Cannot distribute profits to members.
- No share capital.
What are the features of a Limited Liability Partnership (LLP) in Kenya?
- A hybrid of company and partnership
- Partners have limited liability
- Separate legal personality from the partners.
- It has a managing partner who is responsible for compliance.
- Flexible internal structure
- Tax-transparent (profits generally taxed on partners, not at the entity level).
- Ideal for professional services and joint ventures
What are the features of a Foreign Company (Branch)?
- Registration of an overseas company to carry on business in Kenya.
- Not a separate Kenyan legal person, the parent remains liable.
- Must file prescribed foreign-company particulars with BRS.
What is the difference between a public and a private company in Kenya?
Private Companies do not offer shares to the public, have a maximum of 50 shareholders and have fewer disclosure requirements. Public Companies can list shares on the stock exchange and invite the public to subscribe; they require minimum directors and shareholders (three and seven, respectively), they do not have a limit to shareholders, and are subject to stricter regulatory and compliance standards.
What are the advantages of an LLP over a private limited company?
A company is taxed at the corporate income tax level as well as taxing of dividends paid to shareholders, while an LLP under the existing tax laws is not taxed corporate income tax; profits distributed to the partners are taxed income tax at the individual partner level. An LLP also offers operational flexibility, easier profit sharing, tax efficiency for professional firms and has lower compliance for small organizations.
What is the Advantage of a Private Limited Company over an LLP?
- A private limited company requires a minimum of 1 shareholder and director (can be the same person) to register, while a limited liability partnership requires a minimum of 2 partners.
- Easier to raise capital through equity.
- More credibility with banks and investors.
- Suitable for scaling and international expansion.
Can a foreigner register a company by themselves in Kenya?
Yes. A private company may have one director, and the Act does not impose a director residency requirement. However, since 15 Sept 2023, if a private company has no resident director and no company secretary, it must appoint a Kenya-resident “contact person” under section 243A to liaise with the Registrar and hold statutory records. In practice, many foreign-owned companies appoint either a resident director, a certified company secretary, or a contact person to satisfy this and smooth KRA/banking.
Can a foreigner register a Sole Proprietorship in Kenya?
No. Foreigners are not allowed to register a sole proprietorship in Kenya. They must register a Private Limited Company or a Limited Liability Partnership.
What are the requirements for a foreigner to open a Private Limited Company in Kenya?
- Proposed Company Name (3 options in case of availability issues)
- Names, Passport Copies, and KRA PINs of all Directors and Shareholders
- Residential Addresses and Email Addresses of all Directors and Shareholders
- Nature of the Business (objectives and business activities)
- Shareholding Structure (distribution of shares among shareholders)
- Proposed Physical address of the business and contact details.
- Filled and signed forms: CR1 (registration), CR2 (memorandum), CR8 (registered address), Statement of Capital, BOF1 (beneficial ownership).
What are the government fees to register a business in Kenya (BRS official)?
- Private Limited Company: KSh 10,650.
- Public Limited Company: KSh 10,650.
- Business Name: KSh 950.
- LLP: KSh 25,000.
- Foreign Company (Branch): KSh 7,550.
Note: The fees are not inclusive of name reservation and other activities, but merely the official fee for incorporation.
What is Beneficial Ownership (BO) filing, and is it mandatory?
Yes. Companies must keep a BO register and file BO information with the Registrar; updates are required on changes. Unlawful disclosure is restricted by the BO Regulations, 2020. N.B. beneficial owner” means the natural person who ultimately owns or controls a legal person or arrangements or the natural person on whose behalf a transaction is conducted, and includes those persons who exercise ultimate effective control over a legal person or arrangement.
Do I need a company secretary?
- Public companies:
- Private companies: mandatory only if paid-up capital is more than KShs 5,000,000
What are the requirements to open a company bank account in Kenya?
Banks differ, but typically require:
- Certificate of Incorporation and Company KRA PIN;
- Company particulars (e.g., CR12);
- Board Resolution to open the account;
- Directors’/signatories’ Passports/IDs + KRA PINs and photos;
- Proof of registered company address.
Do foreigners need a KRA PIN and immigration status to operate?
Yes. To bank, pay taxes, or be a director/shareholder on record, individuals generally need a KRA PIN. For non-Kenyan residents, KRA typically requires a valid immigration status (e.g., work permit, special pass, or dependent pass) before issuing a PIN. However, a licensed tax can assist a foreigner to apply for the KRA Pin without an immigration status. You can contact us for assistance.
What industries require extra licenses after company incorporation?
Sectors like construction, hospitality, insurance, ICT banking and finance, and others require sector-specific licenses from authorities like NCA, CBK, NEMA, CAK, KEBS, KCAA, and the county government.
What is a CR12 certificate?
It’s an official document from the Registrar of Companies showing the current directors and shareholders of a company.
If I have no resident director or company secretary, can I still incorporate?
Yes, but you must appoint a Kenya-resident “contact person” under Companies Act s.243A (in force since 15 Sept 2023).
What are the main ongoing compliance requirements for registered companies?
- Register for Company KRA PIN and VAT (if the company has an annual turnover of over Kshs 5,000,000 or on election).
- Maintain updated records (directors, shareholders, registered address)
- Comply with KRA tax filings (VAT, income tax, PAYE, etc.)
- Register for statutory contributions (SHIF, NSSF, Housing levy, etc).
- Apply for the business permits from the relevant county government and the licenses from the sector-specific agencies.
- Apply for immigration permits/ visas if the company is hiring foreigners.
What industries require extra licenses after company incorporation?
Sectors like construction, hospitality, insurance, ICT banking and finance, and others require sector-specific licenses from authorities like NCA, CBK, NEMA, CAK, KEBS, KCAA, and the county government.
What is a CR12 certificate?
It’s an official document from the Registrar of Companies showing the current directors and shareholders of a company.
If I have no resident director or company secretary, can I still incorporate?
Yes, but you must appoint a Kenya-resident “contact person” under Companies Act s.243A (in force since 15 Sept 2023).
What’s the difference between a subsidiary and a branch?
- Subsidiary (Kenyan Private Ltd): separate legal personality from the parent company; has limited liability concept, i.e., parent’s risk ring-fenced; ownership management and governance are per the constitution and articles of association; required to file annual financial statements, directors’ reports, and auditor’s reports (unless the company is exempt from audit) with the Registrar of Companies within 9 months after the expiry of the relevant financial yea; and , is often preferable for local contracting and fundraising.
- Branch (Foreign Company): not separate from the parent; ownership, governance and management are per the constitution of the parent company; file foreign-company financial statements and returns with BRS; can only carry out the activities set out in the foreign company’s constitutive documents.
Where can one register a company in Kenya?
All registrations are now online via the eCitizen portal (BRS), which has streamlined forms, payments, and document uploads.
What is the timeline for registering a company in Kenya?
Typical registration timeline is 5 -14 business days, depending on completeness of documents and Registry queries; process may be expedited for simple entities or take longer if corrections are required.
How Njaga & Co Advocates LLP Can Help you in the incorporation of a business in Kenya?
Njaga & Co Advocates LLP offers expert guidance and end-to-end support for company registration, entity selection, legal compliance, bank account opening, and post-registration licensing. Contact us for bespoke solutions, document drafting, and regulatory advisory for both foreign and Kenyan clients.
Disclaimer: This article provides general information and does not substitute legal advice on specific circumstances of any individual or organization. While the information is accurate as of the date published, we cannot guarantee it remains accurate at the time you read it or that it will stay current. Before acting on any of this information, please seek professional legal advice tailored to your situation.
