Types of legal business structures in Kenya

1. Company limited by shares;
2. Company limited by guarantee;
3. Unlimited company;
4. Branch of a foreign company;
5. Partnership;
6. Limited liability partnership.

The Republic of Kenya is a state in East Africa. Considered offshore, not included in the blacklists of the Organization for Economic Cooperation and Development and the European Union.

In the World Bank’s Doing Business ranking, Kenya is ranked 61st for ease of doing business, 11th for shareholder protection, and 8th for obtaining loans.

Business registration in Kenya

• Providing a unique name for a future company;
• The minimum number of directors, and shareholders is one. For PLC – seven, for LLP – two, individuals and legal entities;
• Director – must be a resident of Kenya;
• There are no requirements for the presence of a secretary;
• A corporate account must be opened with a bank in Kenya;
• Contribution of the authorized capital: 2 USD. For PLC – 97 thousand USD;
• Having a physical address in Kenya;
• Payment of state fees;
• Providing monthly reports.

Advantages of jurisdiction

Kenya has a stable and positive economic growth trend. In addition, Kenya is the center of the economy, finance, and tourism in Africa. The country has trade relations with leading jurisdictions in Europe, Asia, America, and Africa. As well as:

1. It guarantees entrepreneurs a lot of opportunities to improve business efficiency and create startups;
2. Low cost of labor;
3. Flexible taxation;
4. African Free Trade Zone (AFTZ) Development Outlook;
5. Availability of DTA agreements.

Taxes in Kenya for legal entities

• The standard income tax rate in Kenya is 30%. EPZ companies are exempt from tax. For branches, the rate is 37.5%;
• Dividend tax – 10%. For EPZ Company and LLP – 0%;
• VAT – 16%.

Kenya is a state in East Africa washed by the Indian Ocean, the capital is Nairobi.

Kenya has long been in the status of a British colony and at the moment continues to be a member of the British Commonwealth of Nations and the most loyal and friendly country to Great Britain and the United States in Africa. Currency – Kenyan Shilling.

Kenya is now becoming an attractive destination for international business, due to several changes in legislation aimed at attracting investment and providing sites for various activities. The changes are part of a plan aimed at developing the economy, which must be implemented by 2030.

Kenya has a Trust Law that allows asset management based on trust agreements.

The most convenient form of corporate structure allowed for registration, from our point of view, is a Limited Liability Partnership (LLP). This form of registration allows you to act as participants in the partnership (partners), both legal and non-resident individuals.

Registration conditions 

Registration of legal entities takes up to ten business days. A bank account can be opened for a period from two weeks to a month.

There is no financial control in the country, but all transactions over 10,000 USD are reported to the central bank.

From the point of view of optimizing the tax burden, it makes sense to consider the registration of a partnership as a legal form of activity in the Special Economic Zones (SEZ) of Kenya, which are located throughout the country.

FEZ

FEZ is a platform for various types of activities, involving the development of various industries within the country, increasing employment of the local population, attracting investment, as well as developing local infrastructure. The creation of FEZ and the attraction of investments for their development is a state project that allows non-residents to take advantage of favorable conditions to minimize the tax burden and bureaucratic procedures, as well as strengthen their rights.

The taxable base for legal entities licensed to operate in the SEZ is formed from 10% income tax, which is calculated based on the territorial principle i.e. only domestically earned profits are taxable. It is assumed that a company in the SEZ may conduct offshore activities. Since January 1, 2018, the tax on the payment of dividends to non-residents of the country has been abolished, and there is no VAT either. The stamp duty on the transfer of shares is 1% and the capital gains tax is 5%, which is the final rate.

KYC

To apply for registration of a legal entity in Kenya, the applicant must complete our KYC form and provide three proposed options for the name of the new company.

It takes up to three business days to reserve a company name, after which you can proceed with registration.

Documents

For individuals:

– Two photos;

– Certified Passport under apostille;

– Description of the activity;

– Proof of source of income (contracts and/or bank statements for the past three months);

– Signed registration forms.

For legal entities:

– Statutory documents of the company and declarative forms about all changes in the company for the entire period of its existence;

– Certified passport with an apostille of director / s and founder/lei;

If the founder or director of the company is a legal entity, then it is necessary to provide a full package of statutory documents under an apostille.

– Description of the company’s activities;

– Confirmation of the source of income (contracts and/or bank statements for the past three months);

– Signed statutory forms for registration applications.