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.
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Branch vs Subsidiary Company Registration In Kenya – Which one is the Best for me? Many clients often ask us the above question and our answer to it is that “It all depends on the Business approach you want to take”. This is because in some instances, a Branch would be the most ideal entity while in other instances a Subsidiary would be the most ideal.
The major difference comes in when paying Taxes because a Branch Company will be taxed at 37.5 % Corporation Tax while a Subsidiary Company will be taxed at 30%.
However, having paid Tax at the higher rate, a Branch Company may remit after tax profits to its head office without any further deduction of tax whereas a subsidiary company must then deduct a further 10% on dividends paid to its parent.
See below a Comparison of a Branch vs Subsidiary Company Registration In Kenya
|legal Status||Not a separate legal entity but an extension of the Parent Company||Separate legal Entity distinct from its Parent Company|
|Liabilities||Liabilities Extend to Parent Company||Liabilities Limited to Subsidiary|
|Entity Name||Must be the same as the Parent Company||Can be the same or Different from Parent Company|
|Allowed Activities||Must be the same as the Parent Company||Can be the same or Different from Parent Company|
|Validity Period||Registered forever until closed||Registered forever until closed|
|Taxation||Taxed as non-resident entity, local tax benefits not available||Taxed as resident entity, local tax benefits available|
|Annual Filing||Must file Branch Office as well as Parent Company’s Accounts||Must file Accounts of the Kenyan Subsidiary|
|Bank Account||Can open Bank Account in Kenya||Can open Bank Account in Kenya|
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