foreign company registration in Kenya

 Foreign company registration in Kenya

A Foreign Company is a Company registered outside Kenya, under the laws of that country and given compliance under Kenyan Law to do Business in Kenya. Companies incorporated outside of Kenya can do business in Kenya by registering a branch. The registrar of companies issues a certificate of compliance once all the requirements have been met.

Registration of foreign companies in Kenya is provided for under the new Companies Act 2015. Under the Act a foreign company’ is defined as a company incorporated outside Kenya. A foreign company cannot carry on business in Kenya unless it is registered in Kenya as well.

A foreign company should be distinguished from a company registered in Kenya by foreigners, in that the latter is deemed a Kenyan or resident company as it is first registered in Kenya, while the former is first registered outside Kenya. Under the Act, the term ‘carrying on business in Kenya’ includes offering debentures in Kenya or being a guarantor for debentures offered in Kenya.

Registration of a foreign company in Kenya starts by an application being made to the Registrar of Companies in the prescribed form. The application should contain the following documents and information:

  1. A certified copy of Incorporation Certificate in its country of origin
  2. Certified copy of the Constitution of the company in its country of origin
  3. Names, email addresses and phone numbers of directors and shareholders
  4. A signed Memorandum stating the powers of directors’ resident in Kenya
  5. A notice of the address of registered office and principal place of business in its country of origin
  6. A notice of the registered office in Kenya
  7. Name, email address, phone number and residential address of a local representative
  8. The name: the foreign company can use either its original name or an alternative name.

Upon registration the foreign company is issued with a Certificate which contains the name of the company, a unique identifying number, the date of its registration and the date of its incorporation in its country of origin. Foreign companies are registered in a special register called the Foreign Companies Register.

Foreign companies in Kenya are afforded some protection from investigations as provided by the Act. Whereas local companies under the new Act are subject to investigations into a company’s affairs, which may be instigated by the Attorney General, foreign companies are exempted from this provision.

The Attorney General cannot therefore commence investigations into the ownership of a foreign company or on any of its securities. Further the general Companies’ Regulations established under the Act only apply to foreign companies where it is expressly provided for.

Foreigners interested in doing business in Kenya should consider several factors that will determine which mode of registration would be preferable i.e registration of a foreign company in Kenya or registration of a Kenyan/resident company. There are two main implications arising:

 taxation rates will differ between the two in that the applicable tax rates for foreign companies are significantly higher compared to that of Kenyan or resident companies. Whereas Kenyan companies pay corporate tax at 30% and withholding tax on dividends at 5%, foreign companies are required to pay corporate tax at 37.5% and withholding tax on dividends at 20%.

There are other regulations in different industries requiring local involvement on contracts being done by foreign companies. For instance, in the construction industry which is regulated by the National Construction Authority (NCA), foreign companies are required to share 30% of the contract value with locally-owned companies. This means that foreign contractors are required to enter into joint ventures with or subcontract local companies for any construction works being done in Kenya.

In the telecommunications industry which is regulated by the Communications Commission of Kenya (CCK), a foreign company applying for a telecommunications license in Kenya is required to allot a minimum of 20% of their total shares to individual Kenyan citizens within three years from the date the license is issued.This means that foreign investors will have upto 3 years from the date they receive the licence to incorporate the local ownership into their company.

Registration of foreign companies in Kenya is provided for under the new Companies Act 2015. Under the Act a ‘foreign company’ is defined as a company incorporated outside Kenya. A foreign company cannot carry on business in Kenya unless it is registered in Kenya as well. A foreign company should be distinguished from a company registered in Kenya by foreigners, in that the latter is deemed a Kenyan or resident company as it is first registered in Kenya, while the former is first registered outside Kenya.

Under the Act, the term ‘carrying on business in Kenya’ includes offering debentures in Kenya or being a guarantor for debentures offered in Kenya.

Registration of a foreign company in Kenya starts by an application being made to the Registrar of Companies in the prescribed form. The application should contain the following documents and information:

  1. A certified copy of Incorporation Certificate in its country of origin
  2. Certified copy of the Constitution of the company in its country of origin
  3. Names, email addresses and phone numbers of directors and shareholders
  4. A signed Memorandum stating the powers of director’s resident in Kenya
  5. A notice of the address of registered office and principal place of business in its country of origin
  6. A notice of the registered office in Kenya
  7. Name, email address, phone number and residential address of a local representative
  8. The name: the foreign company can use either its original name or an alternative name.

Upon registration the foreign company is issued with a Certificate which contains the name of the company, a unique identifying number, the date of its registration and the date of its incorporation in its country of origin. Foreign companies are registered in a special register called the Foreign Companies Register.

Foreign companies in Kenya are afforded some protection from investigations as provided by the Act. Whereas local companies under the new Act are subject to investigations into a company’s

Procedure for the registration of a branch of a foreign company in Kenya

Under Section 975 of the Companies Act, 2015, the following are the requirements for the registration of a foreign company (branch);

(a) certified copy of a current certificate of the foreign company’s
incorporation or registration in its place of origin, or a document of
similar effect;

(b) a certified copy of its constitution;

(c) a list containing the names of its directors and shareholders and their
personal details;

(d) if that list includes directors who—
(i) reside in Kenya; and
(ii) are members of a local board of directors a memorandum that
is duly executed by or on behalf of the foreign company and
states the powers of those directors; and

(f) notice of the address of—
(i) if it has in its place of origin a registered office for the purposes
of a law there in force—that office; or
(ii) otherwise — its principal place of business in its place of origin;
(g) notice of the address of its registered office under section 983. A foreign company in Kenya is require to maintain a registered office where all communications maybe sent.

Registrar issues a Certificate of Compliance signifying the registration of the Foreign Company is complete.

Prescribed Forms for Foreign company Registration.

  • Form 236, this is the List of documents submitted for registration by a company incorporated outside Kenya.
  • Form 237, this the List and particulars of directors and secretary of a foreign company incorporated outside Kenya.
  • Form 238, List of names and addresses of the individual’s resident in Kenya authorized to receive service on behalf of a Foreign company incorporated outside Kenya.
  • Form 250, this is the Notice of location of registered or principal office or change notification of a overseas company incorporated outside Kenya.

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