Kenya offers tremendous opportunities for foreign investors. Its strategic location, well-developed infrastructure, growing and tech-savvy population and robust economy make it an ideal destination for businesses looking to expand. For a foreign company to operate in Kenya, it must register with the relevant authorities and obtain a Certificate of Compliance.

In this article, we detail the registration process and the documents required for the registration of a foreign company in Kenya. We will also highlight the cost of registration, the amount of time it takes to register and the challenges you may face during registration.

What is a Foreign Company?

Governed by the Companies Act, 2015 a foreign company is defined as a company incorporated outside of Kenya that establishes a place of business within the country. This includes branches, agencies, or any form of business representation.

To legally do business in Kenya, the foreign company must registered to obtain a certificate of Compliance and comply with various other local regulations including those on the National Social Security Fund, the Social Health Insurance Fund, industry-specific regulations and taxation. 

Why Register Your Foreign Company in Kenya?

Kenya is a thriving economy and a well-known technology hub. With a growing population of over 54 Million people, a foreign company opening its doors in Kenya grants it access to the local and regional markets, protection under Kenyan law, and the ability to engage in contracts and other commercial activities. Without registration, your company cannot operate fully, limiting its growth and exposure.

The Companies Act governs the registration of all types of companies in Kenya including foreign companies.

Requirements for Registering a Foreign Company in Kenya.

Foreign companies must provide the following during registration:

• A notarized copy of the company’s certificate of incorporation in its country of origin.
• The company’s memorandum and articles of association or incorporation. These are also referred to as its constitution, charter, or statutes in different jurisdictions.
• A list of the company’s directors, directors and their particulars.
• The name and address of a local representative in Kenya who shall be a natural person. The local representative is required to provide their full name, contact information (email address, postal address and phone number), and residential address. The Local Representative must also provide their occupation, National ID, PIN Number, and passport photo.
• The company’s registered office is in its home country and its proposed registered address in Kenya.
• A declaration of compliance signed by a Kenyan lawyer.

If any of the documents are in a foreign language, make sure to also provide copies translated into English and the translations certified by a Notary Public.

Step-by-Step Process for Registering a Foreign Company

1. Name Reservation

You can choose to register a Foreign Company in its original name or an alternative name when registering your foreign company. If you choose a different name, you will be required to fill in an additional form during registration. The entity’s name must meet the usual requirements for the registration of a business in Kenya i.e. it must be unique and available for use in Kenya. You can check name availability by applying for a name reservation on the eCitizen portal. Once the name is approved, it is reserved for 30 days. A name reservation can be extended for up to 60 days.

2. Prepare the Required Documents

We have already highlighted the unique documents, information and persons that a foreign company must provide during registration. The company will also need to fill in or provide the following:

• Form FC-1: application for registration.
• The Certificate of Incorporation or Registration in the foreign country.
• The company’s constitution.
• Form FC-2: A statement of use of an alternative name if using an alternative name.
• A list of directors and shareholders allowing both individuals and corporate bodies accompanied by copies of the National ID for citizens, Foreigner Pass for Legal Foreign Residents, Passport for foreigners and Certificate of Incorporation for Corporate bodies. They shall also provide PINs and passport photos.
• A letter or resolution of appointment of the local representative by the directors of the company and consent by the local representative to act as such.
• Form FC-3: A notice of the residential address of a local representative.
• Form FC-4: A Notice of Opening Hours

3. The Local Representative

We have already highlighted that the foreign company must appoint and provide details of a local representative. This local representative will handle the company’s legal affairs in Kenya receiving any official notices. A local representative must be a resident in Kenyan and is legally required to be present at the company’s Kenyan registered office for specified days and hours as provided under the Companies Act.

4. Submit the Application Online

The Kenyan government has streamlined the registration process through the eCitizen portal. You can submit your application online by logging in and selecting the “Business Registration Service” option. Follow the prompts, upload all required documents and pay the applicable registration fees.

5. Pay the Registration Fees

The prescribed fee for the registration of a foreign company is Kenya Shillings Seven Thousand Five Hundred and Fifty (Ksh 7,550). Once you pay, you will receive a receipt, which you should keep for future reference.

We charge a small nominal fee of between Four Hundred to One thousand Five Hundred (USD 400 – USD 1500) for the service depending on the complexity of your matter.

6. Receive a Certificate of Compliance

After your application is processed, you will receive a Certificate of Compliance. This certificate confirms that your company is legally registered and can now operate in Kenya.

Compliance Requirements for Foreign Companies in Kenya

Once registered, foreign companies must comply with other local legislation to operate smoothly. This includes filing annual returns and filing tax returns. The Kenya Revenue Authority (KRA) requires all businesses to register for a Personal Identification Number (PIN), Value Added Tax (VAT), and, if applicable, the National Social Security Fund (NSSF) and Social Health Insurance Fund.

Failure to meet these requirements can lead to penalties, fines, or legal action. Therefore, you must stay up to date on your compliance obligations.

How long Does it Take to Register a Foreign Company?

The registration process can take up to four weeks, depending on the application and whether other regulatory authorities will be involved during the registration process. For example, businesses in some industries are required to obtain a Letter of No objection before the company can be registered such as those in Banking.

Common Challenges Faced by Foreign Companies

Foreign companies often face several challenges when entering the Kenyan market:

1. Bureaucratic Delays: Despite the streamlined process, delays can occur due to errors in documentation or miscommunication with local authorities.
2. Compliance Issues: Navigating tax laws, labour laws, and industry-specific regulations can be overwhelming without local legal guidance.
3. Cultural and Business Norms: Foreign companies may struggle to adapt to the local business culture, which emphasizes relationships and trust-building.

Noteworthy

The Office of the Attorney General is in the process of developing The Companies ( Foreign Companies) Regulations which are still in the draft stage. The Regulations will inter alia provide for the registration, management and cessation (similar to deregistration) of Foreign Companies.

It is also worth noting that the regulations set the prescribed fees for the registration of a foreign company at Ksh 7,500 and Ksh 500 exclusive of the convenience fees charged by the e-citizen platform for the various applications made to the Business Registration Service such as the filing of annual returns, change of local representatives, directors, and change of the particulars of local representatives and directors.

Case Study

Several legal precedents have shaped how foreign companies operate in Kenya. Sunset Boulevard Ltd v. Co-operative Bank of Kenya Ltd [2012] highlights the importance of proper company documentation and local representation. In the case, the court ruled that foreign companies must comply with all statutory requirements, including appointing a local representative to handle legal matters. This case underscores the necessity of fulfilling all legal obligations to ensure smooth operations in Kenya.

Conclusion: Ready to Expand Your Business in Kenya?

Registering your foreign company in Kenya opens doors to one of Africa’s most dynamic economies. Following the correct steps and complying with legal obligations ensures that your business can thrive in this market. While the process is straightforward, engaging a lawyer can make it even smoother and help avoid common pitfalls.

Don’t let the legal maze slow you down! Our expert team will help get your foreign company registered. Furthermore, legal advice is invaluable when navigating an unfamiliar business environment, particularly in ensuring that your company complies with tax laws, licensing, and other local regulations. Whether you’re eyeing the Kenyan market for the first time or looking to streamline your operations, we’ve got you covered.

Book a Consultation for tailored advice and support in registering your company in Kenya or fill out the form below and we will get back to you promptly.