Company Registration in Kenya

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Kenya. It examines the procedures, time and cost involved in launching a commercial or industrial firm with between 10 and 50 employees and start-up capital of 10 times the economy's per-capita gross national income.The most recent round of data collection was completed in January 2016.

1 . Reserve a unique company name at the Huduma Center or the Companies Registry

Agency: Huduma Center

The procedure begins by reservation of the company name pursuant to companies provision which is a counter service provided by both companies registry and Huduma Centres. The name is reserved for 30 days but can be extended for a similar period upon application. Once the name is reserved, one is required to present the memorandum and articles of association and the statement of nominal capital for stamping.  1 day on average Ksh 100 per name reservation

2 . Receive stamp duty assessment on the memorandum and articles of association and the statement of the nominal capital

Agency: Huduma Center

As of January 2005, the Kenya Revenue Authority (KRA) took over the stamp duty collection from the Ministry of Lands and Housing. As an administrative requirement, the KRA now requires the personal identification numbers (PINs) of all parties on whose behalf duty-stamped documents are submitted. Documents are first assessed by the Stamp Duty Office before payment can be made at the KRA-designated banks. The process has initially lengthened to about 2 weeks because the Stamp Duty Office waited to receive confirmation of bank payment after clearance of funds. However, the time was reduced to 5-10 days in 2008 as a result of better communication between the Ministry of Lands and Housing and the Kenya Revenue Authority (KRA). A fee of KES 100 is payable as Bank handling charges.Under the Stamp Duty Act (Cap. 480), the stamp duty on the nominal capital of the company is KES 20 for every KES 2,000 or part thereof. The stamp duty on the memorandum and articles of association is KES 2,000.Stamp duty can now be assessed at Huduma Centers. Huduma centers are Government service centers located in major towns in Kenya. These service centers were first launched in November 2013.   1 day1% of nominal capital (KES 20 for every KES 2,000 or part thereof of capital) + KES 2,000 for stamp duty on Memorandum and Articles of Association

3 . Pay stamp duty at the Huduma Center

Agency: Huduma Center

The entrepreneurs pay the stamp duty at the Huduma Centers, if it does not exceed KES 80,000. Alternatively, it can be paid at the National Bank of Kenya or the Kenya Commercial Bank which are the designated Banks for the collection of stamp duty revenue on behalf of Kenya Revenue Authority.      1 day     KES 110

4  .Stamp the memorandum and articles of association, and a statement of the nominal capital

Agency: Huduma Center

After the stamp duty assessment and payment are completed, the company founders return to get the memorandum and articles of association stamped. 1 day     no charge

5 . Sign the Declaration of Compliance before a commissioner of oaths or a notary public

Agency: Commissioner of Oaths /notary public

According to the Companies Act (Cap. 486), an advocate engaged in the formation of the company or a director or company secretary named in the articles of association must sign the declaration of compliance (Form 208). This form is submitted to the Registrar of Companies along with the registration documents.         1 day     KES 200

6 . Register with the Registrar of Companies at the Attorney General Chambers in Nairobi

Agency: Registrar of Companies at the Attorney General's Chambers

The entrepreneur must submit the incorporation deed and the following to the Registrar of Companies:

• Stamped memorandum and articles of association

• Statement of capital

• Notice of Situation of Registered Office (Form 201)

• Particulars of Directors and Secretary (Form 203)

• Declaration of compliance with the Companies Act (Form 208)

• Copy of the company name approval

Fee schedule for registration under the Companies Act (Cap. 486):

• For the first KES 100,000: KES 2,200

• For every KES 20,000 after the first KES 100,000 or part thereof: KES 120, subject to a maximum of KES 60,000

• Filing fee for three forms: KES 600 (KES 200 each)  12 days on average KES 9,280

7 . Register for taxes at the Kenya Revenue Authority

Agency: Tax Department

The personal tax identification number (PIN) and the company tax identification number are required to register for VAT, local service tax, and the Pay-As-You-Earn (PAYE) tax.

The PIN certificates of at least two signatories (2 directors or 2 shareholders or a director and the secretary) of the company are required. To register for taxes, the entrepreneur must also file the certificate of incorporation and a copy of the memorandum and articles of association.

Due to new online reforms, the application for a PIN number and the registration for VAT registration can now be done online. Unless the KRA has already received confirmation of the company incorporation from the Companies Registry, the entrepreneur must submit the certificate of incorporation and receive log-in details to proceed with online tax registration. 1 day  no charge

8 . Apply for a business permit

Agency: County Government

Applicable permit fees fall within the following scales:

- Large trader, shop, or retail service with 21-50 employees and premises of 300-3,000 square meters (or at a prime location): KES 30,000

- Medium trader, shop, or retail service with 5-20 employees and premises of 50-3,000 square meters (fair location): KES 15,000   5 days   KES 15,000

9 . Register with the National Social Security Fund (NSSF)

Agency: National Social Security Fund

The National Social Security Fund provides the employee with a lump-sum retirement benefit. Historically, the rate of return paid by the state is considerably less than that achieved by private schemes, but participation is mandatory. The employer pays a standard contribution of about 1% of salary, subject to a maximum of KES 400 per month. Half the contribution is deductible from the employee’s salary. The precise amount of the contribution (less than the maximum) is determined by reference to salary bands. As of June 2014, following the enactment of the new National Social Security Fund Act (2013), the pension contribution is 12% of the pensionable wages made up of two equal portions of 6% from the employee and 6% from the employer subject to an upper limit of KES 2,160. 1 day  no charge

10 . Register with the National Hospital Insurance Fund (NHIF)

Agency: National Hospital Insurance Fund

The employee contributes a fixed sum to the National Hospital Insurance Fund (NHIF), which must be deducted by the employer from the employees’ salary. The maximum contribution is KES 320 per month. The contributions are used to offset the costs of medical treatment, but they only cover a fraction of actual costs. Hence, most companies provide employees with medical insurance.  1 day no charge

11 . Make a company seal

Agency: Seal maker

Seal makers request a copy of the certificate of incorporation in order to make a company seal..2 days, simultaneous with previous procedure  between KES 2,500 and KES 3,500