Kenya provides opportunities for business growth across several sectors such as agriculture, mining, and tourism. Setting up a business involves registering the company with the Business Registration Service and obtaining necessary licenses. Kenya offers a relatively business friendly tax system with corporate tax at 25% and various incentives. Obtaining proper visas and permits is important for foreign investors. Key sectors for investment include agriculture around popular towns like Thika and mining in areas like Garissa due to infrastructure projects. The COVID-19 pandemic impacted the economy but the government responded with various reforms to support businesses.

1. CA Divakar Vijayasarathy
Doing Business in Kenya

2. RESEARCH CREDITS
Vigneesver P
CA Jugal Narendra Gala

3. Legends Used in the Presentation
CIT Corporate Income Tax
CPI Consumer Price Index
DTAA Double Taxation Avoidance Agreement
EODB Ease of Doing Business
FDI Foreign Direct Investment
GDP Gross Domestic Product
PCP GDP Per Ca Pita GDP
VAT Value Added Tax

4. Presentation Schema
Country Overview Setting up Business
Registration with
BRS
Taxation System
VISA and Permits
Exchange Control
Regulations
Conclusion

5. Country Overview

6. Demography and Wealth
• 53.7 Million People (2020)
• 7th largest in Africa
• 27th in World
• Nominal GDP: $ 99.2 Billion
• PCP GDP- $ 2010 (140th in world)
• 27.51% urbanized as of 2019.
• Oil, gas, limestone, gypsum, soda ash, diatomite,
gemstones, fluorspar, zinc, wildlife, and hydropower.
• Currency Unit: Kenyan Shilling (KES); ER: $1= KES 109
• Annual CPI: 4.9%
Currency
Population
GDP
Urbanisation
Real Wealth

7. Rankings by World Bank
Out of 190
Countries

10. Popular Locations for Setting Up Business
NAROK
Most suited for supply of imported clothes, supply of cooking gas, supply of
spare parts for motorcycles, restaurants and curio shops. renowned for its
significantly cut bureaucratic red tape in the business environment.
THIKA
Known for its perfect blend of pineapple and coffee farms. Transport business,
middle-income real estate, supply of construction material, ICT-based and
grocery supplies are well-performing here. Cheaper rent prices and good road
infrastructure makes it an attractive business spot.
MALABA
Malaba is a small town in Busia County in the Western part of Kenya. The
border town handles 70% of cargo in transit to and from the port of Mombasa
to neighbouring landlocked countries. It is the best place in the country to get
construction permits and the third best for enforcing contracts.
GARISSA
the town enjoys relatively good infrastructure and is strategically located next
to the ongoing LAPPSET project, Mombasa Port and the NEP frontier. The
World Bank once recognised this place as the best town to enforce contracts.

11. Setting Up Business

12. Regulatory Agencies
Business Registration Service
Kenya Revenue Authority
National Social Security Fund
Central Bank of Kenya
Kenya Investment Authority
(KIA)
Registrar of Companies
Tax Collecting Authority
Regulator for Social
Security Schemes
Overseas Exchange
Control Policy
Investment Promotion
Authority

13. Types of Business Structure
Types of
Business
Structure
Company
Limited Liability
Company
(Private and
Public)
Branch office of
a foreign Co.
Sole
Proprietorship
Partnership
Limited Liability
Partnership
Both Public and Private Limited Liability Companies are the most common structures. All
Companies have to be compulsorily registered with Business Registration Service (BRS). A sole
proprietor or partnership concern need not be registered with BRS.

14. Registration with BRS

15. Company Registration
Name Search and Reservation - 1 day
Registration of Business name – 1 to 2 days
Submission of registration form and other related
forms along with supporting documents
Open a bank account – 1 week
Obtain relevant business license and start the business
Forms and Supporting Documents to be uploaded
• Company Registration Form (Form CR1)
• Application for reservation of a company name
(CR14)
• Memorandum of Association
• Particulars of Directors and Secretary (Form CR2
and Form CR 10)
• Statement of nominal capital
• Articles of association*
• Notification of the residential address of
directors and company secretary (Form CR8 and
CR12)
• copy of the Kenyan national identification of
each director and secretary or, copy of the
Kenyan foreigner certificate
• In the case of a director who is not a Kenyan
citizen and is not resident in Kenya, a copy of
that director’s passport
Steps to Register
1
2
3
4
The total registration fees for all companies is KES. 10,750
and is regardless of the nominal share capital, where
applicable.
This comprises of the registration fee, Official Search
Results and convenience fee. No stamp duty is payable at
the point of incorporation of a company.
Cost & Time of Registration
*If model articles are adopted in entirety, there is no
need for a copy to be lodged at the Companies
Registry for filing
5

16. Other Conditions
• Minimum Directors: 2; No maximum limit; Minimum Age limit: 18 years
• Must have a company secretary
Public
Company
• Minimum Director: 1 ; No maximum limit; Minimum Age limit: 18 years
• Maximum shareholders: 50
• Need not appoint company secretary if share capital < KES 5,000,000
Private
Company
A branch of a business establishment incorporated outside Kenya is a foreign company. A foreign
company is prohibited to do business in Kenya unless it is registered in Kenya.
A local representative is always required to be present at the registered office of the company in
Kenya when the office is open. He may be any person of the company’s choice but must be
resident in Kenya.

17. Taxation System

18. Tax Profile
Tax
Income Tax
Value
Added Tax
Excise Duty
Customs
Duty
• Individual – taxed on slab rate basis
(Maximum rate is 25%)
• Corporate tax – Resident (25%) and Non-
resident (37.5%)
 Methods of collecting income tax include
Corporation Tax, Pay as you earn, Withholding
Tax, Advance Tax, etc.
• Taxable goods and taxable services –
14% (general rate)
• Petroleum products except for
Liquefied petroleum Gas – 8%
• Threshold for registration – Annual
Turnover exceeds KES 5,000,000
• Rate varies depending on
goods and services
produced and imported
• Two types – Specific and Ad
valorem excise duty
• Average rate – 25%
• Imports into Kenya are
subject to a standard VAT
rate of 16%

19. Registration for Personal Identification Number
(PIN)
• PIN is a Personal Identification Number used while doing business with Kenya
Revenue Authority, other Government agencies and service providers
• Personal includes both individuals and artificial persons (i.e. company, club, Trust,
etc.)
• A sole proprietorship will use the proprietor’s individual PIN for all transactions
What is PIN?
• Persons who are employed, engaged in business, having rental income, wishing to
apply for a loan from Higher Education Loans Board (government agency providing
loans to needy Kenyan students for pursuing their higher studies locally and abroad)
• Persons intending to perform transactions like registering properties, motor vehicles
and Companies, trade licensing, application for VAT registration, underwriting
insurance policies, facilitating importation of goods, etc.
Who should have
PIN?
Kenya Revenue Authority (KRA) is the regulatory body for tax and customs compliance in Kenya

20. How to register for PIN?
PIN registration is an online process done on iTax (online portal under the aegis of KRA)
Residents receive their PIN Certificate instantly after completing the online registration form
Non-residents receive an acknowledgement receipt which they should present to KRA, alongside other
relevant documents, to complete their registration process
Detailed list of documents required for PIN registration can be checked in KRA website

21. Tax Incentives
An investor who incurs capital expenditure on building and/or machinery used for manufacture
is entitled to an investment deduction equal to 100% of the cost
For capital expenditures on building and/or machinery exceeding KES 200 million if the
investment is outside Nairobi the investor can claim 150% allowance
Capital expenditure on a building used for industrial purpose is eligible for 10% allowance on
the cost
Public expenditure on the construction of a public school, hospital, road or any similar
infrastructure will be an allowable deduction
Capital expenditure incurred on purchase of telecommunications equipment or right to use a
computer software and used in business is entitled to a straight line deduction at the rate of
20% of such cost
Capital allowance is granted to a farmer who incurs capital expenditure on the construction of
farm works at the rate of 100% of the cost

22. Special Tax Incentives
Special Economic
Zone (SEZ)
• Capital expenditure on buildings and machinery for use in SEZ shall be entitled to
Investment deduction equal to 100% of the capital expenditure
• Corporate taxation is at the rate of 10% for first 10 years and 15% for the next 10
years
• Withholding tax rates on payments made to non-residents (royalties, interest,
management fees) is 5%
• Dividends paid to non- residents by the SEZ entity is exempt from tax
Export Processing
Zones (EPZ)
• A 10-year corporate income tax holiday is available to certain designated
enterprises that undertake activities consisting of manufacture of goods for
exports only (under the Export Processing Zones) and a 25% tax rate for a further
10 years
• 10 year withholding tax holiday on dividends and other remittances to non-
resident parties (except for EPZ commercial licence enterprises)
• 100% investment deduction on new investment in EPZ buildings and machinery

23. Tax Benefits for Newly Listed Companies
• 20% rate if 40% of issued share capital is listed (for 5 year period)
• 25% rate if 30% of issued share capital is listed (for 5 year period)
• 27% rate if 20% of issued share capital is listed (for 3 year period)
For newly listed companies, there are preferential corporate tax rates dependent on the percentage
of listed shares as follows-

24. Visas and Permits

25. Types of VISA
Single Entry Visa
• Issued for single entry to
persons whose nationalities
require visa to enter Kenya
either for business, tourism or
medical reasons.
• Valid for 3 months before you
travel. Present yourself to
immigration control at the
port of entry, you may be
issued with a stay period not
exceeding 90 days.
Transit Visa
• Issued to persons connecting
through Kenya to other
destinations for a period not
exceeding 72 hours.
• Those connecting flights
directly without leaving the
airport need not apply for
Transit visas.
Courtesy Visa
• issued to Diplomatic, Official
and Service passport holders
coming into the country on
official duties, or transiting
through Kenya to a third
country for official business or
duties.
• It is issued free of charge /
gratis.
Visa shall be applied online after checking eligibility and by submitting the required supporting
documents as prescribed in http://evisa.go.ke/

26. Exchange Control Regulations

27. FDI and Repatriation Norms
There are no exchange control
restrictions in Kenya, however,
commercial banks are required to
report significant foreign exchange
transactions (all transactions in
excess of USD10 000) to the
Central Bank of Kenya.
A foreign investor investing at least USD
100,000 in Kenya may apply to the KIA
for an investment certificate in the
prescribed form.

28. FDI Inflow as % of GDP
The United Kingdom, the Netherlands, Belgium, China and South Africa are the
main investors in Kenya.

29. Covid-19 Impact and Reforms

30. Covid-19 Impact on Economy
• Kenya’s economy contracted for the first time in almost 12 years in the second
quarter of 2020 as the impact of the coronavirus pandemic battered key sectors.
• GDP fell 5.7%, compared with growth of 4.9% in the three months through March
and expansion of 5.3% in the same period a year earlier
• Post Lockdown, there were substantial contractions in accommodation and food
services, education, taxes on products, and transportation and storage.
• Consumption of light diesel, a key input in transport activities, declined by 32%.
• Cut-flower and vegetable exports fell 35%, hurt by lockdown measures in key
markets, such as the European Union and U.K.

31. COVID reforms
•Reduction of Resident Corporate Tax from 30% to 25%
•Reduction of Maximum Individual Tax rate from 30% to 25% (beneficial if
income exceeds KES 47,059 per month
•Basic exemption fixed at KES 24,000 per month
•Reduction of Turnover Tax rate from 3% to 1%
•Reduction of Standard VAT rate from 16% to 14%
•Order to expedite the verified VAT refund clearing process
•Extension of time limit for filing of various returns and tax payments.
Tax
measures
•The Central Bank reduced the Central Bank Rate from 8.25% to 7.25% and CRR
from 5.25% to 4.25% in order to increase liquidity
•Voluntary reduction of salaries by president and Vice president by 80% and that
of his cabinet by upto 30%
•Settlement of verified pending bills amounting to KES 13 Billion within the next
three weeks
•Loan provisioning norms were made flexible for banking companies
•Temporary suspension of listing with credit reference bureaus for persons who
default on their loan obligations with effect from April 01, 2020.
Fiscal
measures

32. Conclusion
Kenya is the third largest economy in Africa and has been ranked 56 out of 190 countries
in EODB report issued by the World Bank.
The larger East African region is now one of the fastest emerging oil and gas frontier
regions in the world, with Kenya expected to become an oil producer in the near future.
Performance of agriculture, forestry and fisheries remained strong in spite of the COVID
pandemic hit which indicates high durability and stability in these sectors.
The country is gearing up to move from an agriculture and tourism based-economy to
one that is based on mineral resources. Most of the mines and cement plants are privately
owned.
Therefore, the future business prospects in Kenya is expected to be predominantly in
agriculture and allied sectors.

33. Thank You!
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