Subsidiary registration in Kenya

15
Mar

Branch vs Subsidiary Company Registration In Kenya

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

BranchSubsidiary
legal  StatusNot a separate legal entity but an extension of the Parent CompanySeparate legal Entity  distinct from its Parent Company
LiabilitiesLiabilities Extend to Parent CompanyLiabilities Limited to Subsidiary
Entity NameMust be the same as the Parent CompanyCan be the same or Different from Parent Company
Allowed ActivitiesMust be the same as the Parent CompanyCan be the same or Different from Parent Company
Validity PeriodRegistered forever until closedRegistered forever until closed
TaxationTaxed as non-resident entity, local tax benefits not availableTaxed as resident entity, local tax benefits available
Annual FilingMust file Branch Office as well as Parent Company’s AccountsMust file Accounts of the Kenyan Subsidiary
Bank AccountCan open Bank Account in KenyaCan open Bank Account in Kenya

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