How to Register a Foreign Company in Kenya

Introduction

Kenya offers tremendous opportunities for foreign investors. Its strategic location, well-developed infrastructure, growing tech-savvy population, and robust economy make it an ideal destination for businesses expanding to Kenya, the East African region and Africa in general. Consequently, a foreign company may find itself opening its doors in Kenya. For a foreign company to operate in Kenya, it must be registered and licensed by the relevant authorities.

In this article, we detail the registration process and the documents required to register 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, No. 17 of 2015, a foreign company is a company incorporated outside of Kenya that establishes a place of business within the country. The outcome of registration of a foreign company in the manner outlined below is that the entity formed is a branch of the main company.

The registration of subsidiaries or agency/representative offices takes on different mechanisms, which we will discuss in separate articles. In the meantime, you can also read our article comparing the Branch of a Foreign Company, Subsidiary or Representative Office.

To legally do business in Kenya, the foreign company must be registered so as to obtain a Certificate of Compliance. It must then 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 57 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. Further, failure to register a foreign company operating in Kenya puts the directors and their officers at the risk of fines of up to 5 million shillings each, with further fines accruing for each day of default.

Registration not only allows the company to operate legally, but to operate fully, marketing and selling its products and services without limitation for wholesome growth and exposure.

Documents Required When Registering A Foreign Company

Foreign companies must provide the following documents during registration:

• A certified copy of the company’s current certificate of incorporation in its country of origin;
• A certified copy of the company’s articles of association, or constitution, charter, or statutes as they may be referred to in their country of origin;
• A list of the company’s directors and their particulars;
• If that list includes directors who reside in Kenya and are members of a local board of directors, a memorandum that is duly executed by or on behalf of the foreign company stating the powers of those directors.
• The name, address and other particulars of at least one local representative in Kenya and if not available at registration, provided within at least one month after registration;
• The company’s registered office or principal place of business in its home country (as applicable based on the laws of that jurisdiction);
• The proposed registered address or principal place of business in Kenya;
• A statement of particulars of the beneficial owners of the Company; and
• A declaration of compliance with the above requirements signed by a licensed lawyer/Advocate of the High Court of Kenya.

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.

The Registration Process

1. Name Reservation

You can choose to register a Foreign Company in its original name or an alternative name. If you choose a different name, you will be required to fill out additional forms 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

Prepare the required documents and fill in or provide the following:

• Form FC-1: the application for registration;
• Form FC-2: A statement of use of an alternative name if using an alternative name;
• The list of directors must be accompanied by the following
  • copies of their National ID for citizens, Foreigner Pass for Legal Foreign Residents, Passport for foreigners and Certificate of Incorporation for Corporate bodies.
  • copies of their Kenya Revenue Authority (KRA) PIN Certificates; 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; and
• Form FC-4: A Notice of the Company’s Official Business Hours.

3. Submit the Application Online

The Kenyan government has streamlined the Company registration process through the Business Registration Service. An applicant can submit their application directly or through an authorised representative such as a lawyer.

4. 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.

The above does not include legal fees. We charge a small nominal fee ranging from US Dollars One Thousand ( USD 1,000/= ) for the service, depending on the complexity of your matter.

5. Receive a Certificate of Compliance

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

The Local Representative of a Foreign Company

We have already highlighted that the foreign company must appoint and provide the particulars of a local representative. The local representative will handle the company’s legal affairs in Kenya, receiving any official notices.

The required details of a local representative are their

• full name; 
• contact information including a postal address, phone number and email address;
• their residential address;
• occupation;
• a copy of their National ID or passport;
• a copy of their KRA PIN Number; and
• a passport photo.

The local representative must be a resident in Kenya 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.

Compliance Requirements for Foreign Companies Post Registration

Once registered, foreign companies must comply with other local legislation to operate smoothly. This includes filing annual returns with the Registrar of Companies and filing applicable tax returns.

The Kenya Revenue Authority (KRA) requires all businesses to register for a Personal Identification Number (PIN). Some of the taxes applicable to a company include Pay As You Earn (PAYE) on the salaries or employees, Value Added Tax (VAT) and Excise Duty as applicable.

Further responsibilities apply for employees with the registration and payment of applicable deductions with the National Social Security Fund (NSSF) and the Social Health Insurance Fund.

Failure to meet these requirements can lead to penalties, fines, or legal action.

How Long Does it Take to Register a Foreign Company?

The registration process can take up to four (4) weeks for a straightforward registration and a little longer if approval from other regulatory authorities is required during the registration process. An example is when the company requires a Letter of No objection before the company can be registered.

Common Challenges in Foreign Company Registration

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.

The Companies (Foreign Companies) Regulations

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.

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.

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