Doing Business and Company Registration in Kenya – Did you Know that Kenya is the country with the second highest ranking in World Bank’s Ease of Doing Business index in Eastern Africa?
Kenya is the Largest Economy in the East African Community, the 65th Largest economy in the world and the Financial, technical and Communications hub in East Africa.
The Kenyan GDP has on average grown at a rate of 6% since 2004 with a Per Capita GDP estimated at $1,991. After Company Registration in Kenya you get access to the East Africa Community giving you access to a market of about 150 million people and a market size with a GDP of Billion USD 145.
The Tax Regime in Kenya is Quite Straight forward with the Tax rate for personal Income ranging from 0 to 30 %, Corporation Tax is at 30% and Vat at 16%.
For over 1 decade now, East Africa Business Consultants Has assisted many clients with the following Key Company Set Up Services in Kenya;
|Entity||Subsidiary Company||Branch Company|
|How Long does the Company registration process Take?||10 Days||10 Days|
|How long Does it take to Open Bank Account?||5 Days||5 Days|
|After how Long can you Invoice and Hire||15 Days||15 Days|
|Minimum Number of Directors and Shareholders||1||–|
|Foreigner Can own the Company 100%||Yes||Yes|
|Can the entity hire expatriate staff||Yes||Yes|
|Tax Identification Registration required||Yes||Yes|
|Access to Kenya’s double Tax treaties||Yes||Yes|
|Can bid for Government Contracts?||Yes||Yes|
|Can Secure Trade Finance?||Yes||Yes|
|Can Secure an Import and Export Licence?||Yes||Yes|
|Can Easily Convert into a PLC?||Yes||No|
|Can Secure Work permits for foreign Employees and Directors?||Yes||Yes|
|Multi Currency Bank Accounts Available?||Yes||Yes|
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|
Click here to talk to one of our Business Set-up Expert for More Insight on Branch vs Subsidiary Company Registration In Kenya and East Africa