A Guide to Starting a Business in Kenya
According to a Kenya National Bureau of Statistics survey, the country has around 7.5 million small businesses. Furthermore, the growing trend of business-minded entrepreneurs starting their own venture in Kenya isn’t going to slow down any time soon, thanks to a boom in high-speed internet connectivity and deeper penetration of cellular network providers. They also have a young, dynamic, and skilled workforce which means that Kenya has all of the ingredients required for a fertile business environment.
Starting a business in Kenya is just like starting a business anywhere else in the world. It all starts with a stellar business plan, but you will need to check all the legal requirements first if you even want your business to get off the ground. This is why it is recommended that anyone looking to become a small business owner in Kenya (whether local or foreigner) get familiar with the legal requirements of starting their own business in Kenya.
Getting the Right Permit
You need a permit for everything these days, and starting a business in Kenya is no exception. However, there are different types of permits, depending on the type of business and industry you wish to enter. To find out more about getting a business permit legally, you can visit the Nairobi City Council’s official website to get all the information you need on the various types of available business permits.
You should also make the trip to your local City Council office and chat with the officers there to get a better idea of the documents necessary for owning a business in your area and how you can go about getting those documents. This is a key component that is often overlooked by starry-eyed entrepreneurs starting a business in Kenya.
Since getting a business permit is a crucial legal requirement for starting a business in Kenya, it should not be ignored. The fee will mainly depend on the size and industry of your business. To get an idea of the overall cost of getting a business permit, the City Council charges around 8,000 KES per year for a regular size bakery. You will also get a receipt of the payment you make, followed by the official certificate a week later.
Paying taxes is the responsibility of any small business owner since those taxes are used for the betterment and well-being of communities. To find out more about VAT tax rules and regulations, you can visit the KRA website. However, you are also advised to seek advice from a tax lawyer to find out more about business taxes and the registration process.
Getting Your Business Registered
In Kenya, there are two options when it comes to getting a business registered. The first option is to register your business name, which is ideal for those who do not have a large budget and are unable to register their company yet. Those who want to go with this option should visit the Huduma Center located in Nairobi and search for a business name. According to the rules, you get to provide three names of your choice for your business that will cost 100 KES per name and takes three days to get approval. Once a name has been approved, you can go ahead and get it registered. This usually takes around five business days and will cost you 1,000 KES.
Another option is to register as an individual or sole-proprietor or as a partnership (in the case of two or more people starting a business in Kenya). In which case, you will then be given a certificate of registration for your business that will ensure that no one else can legally use the business name you’ve chosen for your business.
For entrepreneurs with a budget of 20 to 30 thousand KES, you can hire a certified lawyer who can walk you through the entire process, which will take around two weeks to complete. Hiring a certified lawyer is key if you’re going down this route mainly because it will ensure that you get your business registered the right way. It will also get you a certificate of incorporation and a company seal (for an extra fee). Having an experienced lawyer by your side will ensure that you will get a tax PIN certificate as well.
Other Permits and Certificates
Depending on the industry, you may also need food and health-related permits or have a health inspector visit your business for an inspection. All businesses in Kenya require a fire safety certificate for obvious reasons. A fire safety inspector will visit your business, and after a thorough inspection (make sure you have a fire extinguisher on site), will grant you the fire safety certificate. The Nairobi City County has also announced a Unified Business Permit, which aims to consolidate the requirements for starting a business in Kenya. You can get more detailed information from Nairobi City County.
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