Best Market Entry Strategies for Foreign Companies in Kenya – Kenya is one of the key logistical conduits into the East African Community Regional Market consisting of south Sudan, Tanzania, Uganda, Rwanda and Burundi. Many foreign companies establish their regional headquarters in Kenya. Here are some of the entry strategies that foreign companies can consider.
The simplest and easiest way to meet the needs of the Kenyan and East African markets is by Exporting. This approach has minimal effect on the ordinary operations for your Company and the risks involved are less than other alternatives. There are two broad avenues of Exporting; Indirect and Direct Exporting. The two forms of Exporting are distinguished on the basis of how the exporting company manages the transactions flow between itself and the Kenyan Importer or Buyer. When it comes to Indirect Export the manufacture leverages on the services of various types of independent Marketing Organizations located in Kenya and are in the Business of Importing and Distribution of the Products. Direct Importing will involve your Company doing the Importation and Distribution of the products.
In this strategy, your company Joins Hands, Shares ownership and management with another company. This method works best for two Companies with complementary Assets, Distribution Channels, and Technology . This company Mutually benefits the two companies and enables them to achieve common objectives that include; risk/reward Sharing, technology sharing, Joint product development, Political Connections, and Conforming to Government Regulations
This is a system in which Local business owners (franchisees) pay fees and royalty to your foreign company (franchiser) in return for the right to be identified by your trademark, to sell your product or services and often use your business format or systems. There are two types of franchising relationships the business format relationship where you provide to the Local Business not just a trade name, product/service, but an entire system for operating the business. The other type is traditional or product distribution relationship the focus for this is not the system of doing business but mainly on the product you manufacture or supply the local Business.
A merger is a combination of your entity with a Local Entity Leading into the creation of a new one, the desired effect being the accumulation of assets and liabilities of distinct entities and several other benefits such as economies of scale, tax benefits, fast growth, synergy and diversification. The merging entities cease to be in existence and marge into a single servicing entity. Acquisition comes in when you acquire controlling interest in another company. It does not lead to dissolution of the company whose shares have been acquired but it leads to a change of the company ownership structure.
This is a voluntary formal agreement between your Company and a Local Entity to pool your resources to achieve a common set of objective while remaining independent entities. It is mainly used to expand the production capacity and increase market share for a product. Alliances help in developing new technologies and utilizing brand image and market knowledge of both the companies.
Ultimately the choice of a market entry strategy in Kenya is very important in the entrant’s future decisions and performance in the local markets due to complex, continual change and dynamic business environment. It is Vital for foreign companies to adopt entry strategies that will preposition them to take the chances in the Kenyan economy in a manner that is bearable.
Contact us Today for an in depth insight on the Best approach for your company. We are also happy to help you identify and contract local Partners in order to help you smoothly penetrate the local Market.
What to Consider when Starting a Business in Kenya – Entrepreneurs are widely recognized as the prime movers of economic development, this are the people who translate ideas into action. Having ideas which are actionable is just a tip of the iceberg, execution is key to make this ideas great concepts and successful businesses. So what are some of the factors that you need to consider before Starting a Business in Kenya? This article looks and the critical factors that may make your start-up a success.
It is quite hard for one to succeed in a business they have little knowledge about. Get to know the in and outs of the industry you are getting into. The best method is to have a business plan in place where it outlines a SWOT analysis (Strength, Weakness, Opportunism and Treats). Get to know if there any entry barriers in the industry and how to overcome them. Get to learn who the industry players are and who are considered the big wigs in that industry. Get to learn about your competitors, what are their strategies, their strengths and what are their weakness and what can you use to your advantage? This will help you develop a much more effective strategy for your business. Then get to understand your market in other words who will purchase your products/service. Other questions to ask yourself is the market big enough to sustain your business?
Capital is essential for any business however big or small. You need to calculate beforehand all the necessary capital that you will require to fully set up the business. Create a budget an operational, service/product and equipment budget. This kind of budget outlines all the company need to start and also a few months into the business before it picks up. After getting to know how much its need to be identify the capital source. Funding can be either from your savings, loans from friends or a bank loan.
Where your business is located matters to your customers. It is vital to choose a location that is accessible to people, a location that has a high population and a location that will give your business an advantage.
Know all the legal requirements for the business and have them ready before starting the work this will ease your way of doing business and you will have your mind at rest. Also get to know any other rule or regulation that may not be outlined but are required. Get yourself acquitted with all county regulations and national regulation each county government has its own set of rules.
A positive attitude will help you in passing all the challenges and difficulties that comes up with any new business. There will be a lot of risks and hurdles you will face in this process and the only thing that will save you is your attitude and a good attitude at that.
The development of a business is not a matter of a day or a week it will involve a lot of time that is spent with hard work. You will be needing the help of some experts. Make sure you are ready to have an adviser or business mentor who can provide with the best advice at the hour of need.
This are just some of the many essentials you would consider when starting your business. It is also critical to remember that some business pick up fast while others take a bit longer. It is vital that you be patient through this process.
We are always Happy to help our Clients Start Successful Businesses, Click Here to Request for a Free Consultation Session.
Foreign Company Registration in Kenya – Are you looking to start up a Business in Kenya? Here is a checklist to help you start a Business in Kenya as a foreigner. This will help you avoid the many Pitfalls that you might come across.
What is in a Business/Company Name? A Business Name can make a very big difference on how well you are able to penetrate the market. Business & Company Names make a significant impact on Branding and Marketing of any company or business hence it’s very important to choose an Appealing Name. The name of your Business can be your own personal name or a “fictitious” name. It is important to note that the name should also be available for reservation.
You will want to ensure that your Chosen Name is not trademarked or used as an Internet Domain name by another entity. If you choose to do business as your legal name, this shouldn’t be a problem.
Under the Companies Act 2015 the start-ups are now provided with standard Articles which can be adopted by a company. However, Articles to Supplement or Modify the Standard Articles may be provided. It takes 12 days on average to complete the whole registration process. Once your Company/ Business Name is registered it can’t be registered by anyone else; and if another entity uses this Name, it will be easier to take legal action.
The Pin Numbers are issued to every individual and Companies Operating in Kenya for the purposes of Transacting Business with Kenya Revenue Authority, other Government agencies and private Companies in Kenya
Business location can also determine how well your Company/ Business performs. If you are setting up a Small Consultancy firm, you can rent an Office Space in one of the Serviced Office spaces Available and it is a large or medium Manufacturing company, you can lease space in the Industrial Area or choose to lease Land and set up the structures yourself.
This will involve Processing of all the Relevant Business licenses like the Business Permits form the local County Council, Manufacturing and Quality Standard Licenses from the Kenya Bureau of Standards, an Environmental Licenses from the National Environmental Management Authority and Lastly you will need to Process Work permits for the foreigners in the Company From the Department of Immigration and registration of Persons
This is very essential to operate your Accounts Receivables and Payables. You can choose a banking partner from over 40 Stable Local And International Banks in Kenya with reliable Internet Banking Solutions making it easy for you to Bank From whichever part of the region you are in.
Lastly, you will need a reliable workforce to help you realize your Business/Company Objectives. The Workforce in Kenya is generally educated and Pro Active hence you can easily train the Human Resource on how you want to run your business.
Click here to find out more on Foreign Company Registration in Kenya
Simple Steps on How to Register a Company In Kenya –
To Register a Company In Kenya You only need to Follow the Following Simple Steps. The Process is Equally Simple for Both Local and Foreign Directors.
1. We Meet you and get to Understand your Business
2. We Receive Official instructions and Registration Documents from the Client.
3. We Conduct a Name Search and prepare the Registration Forms
4. The Client Signs All the Registration Forms
5. Company Registration is Approved and Client receives the Incorporation Certificate and Form Cr12
6. KRA PIN, NHIF, NSSF Registration and Bank Account Opening
7. Client Receives all the Company Registration Documents
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New Company & Branch Registration Process in Kenya for Foreigners – Are you looking to start a Business in Kenya? Here are the guidelines that you would need to know.
There are two ways for you to register a company as a foreigner, one as a limited company and the other as a subsidiary company.
For a limited Company (LLC) / Subsidiary
The new procedures now allow a single person to register a limited Company as a Foreigner; this means you do not need a Kenyan director to co-own the company with you. You can own the company 100%.
The Registration process is as follows:
First you have to avail at least 3 names on which we are going to conduct a Name Search to ensure that the name is available for you. If the names are available we will continue with the process, which includes you providing the following
1. Copy of your valid Travel Passport
2. Passport size Photo
3. Telephone Number, Physical, email and Postal Addresses of the Directors
4. Occupation of the Foreign Shareholder(s)
5. Shares apportionment percentage incase the company has More than 1 Director.
Once you have all the requirements we go ahead and fill in the CR1, CR2, CR8 and the statement of nominal capital, which you are required to sign and send back to us to finish the process.
If the process is successful you will be issued with a Certificate of Incorporation and CR12. You will use the certificate of incorporation to register with the Kenya Revenue Authority for the company Pin number.
Registering a Branch Company
A Branch Company is an Entity that is not any Different from the Parent Company with a Name and Activities Exactly as the Parent Company and its Liabilities extends to the Parent Company. In Short, A branch is just an Extension of the Parent Company.
The process of Registration is similar to the limited Company mentioned above however you would need to avail the following documentations.
1. Certified copies of the parent Company’s Certificate of Incorporation
2. Certified copies of the Charter, Statutes or Memorandum and Articles of Association of the parent Company
3. List of the Directors of the Parent Company giving the following particulars: Full Names, Postal address, Nationality and Business Occupation
4. Name(s) and Postal Address of one or more persons resident in Kenya authorized to accept service on behalf of the company.
5. Full address of the Registered or Principal office of the parent company.
6. Full address of the place of Business in Kenya.
If the process is successful you will be issued with a Compliance Certificate. You will use the Compliance Certificate to register with the Kenya Revenue Authority for the company Pin number.
Kindly Click on this link to read more on the differences between Branch and Subsidiary