foreign company registration in Kenya

foreign company registration in Kenya

The Kenya Companies Act allows foreign companies to register in Kenya as a branch office, a subsidiary, or a representative office. A company may only have one office in Kenya, and the office is not required to be located in the home country of the company.

Foreign companies are subject to the same rules as domestic companies, including the requirement to have a minimum of two directors. A company that does not have a local office in Kenya must have at least one of its directors be a Kenyan citizen or company. The company must also have a Kenyan address, and one of its directors must be a Kenyan citizen or company.

You might think that you can use a company in another country to do business in Kenya. While this is possible, the company must have a registered office in Kenya, which means that they must have a local address and a Kenyan address.

Foreign companies in Kenya may also have a representative office in Kenya. A representative office is an office that is used to do business in Kenya but does not have a local address. If a foreign company has a representative there are various options that a foreign company or corporation has with regard to establishing a presence in Kenya. These are listed as follows:

  1. Registration of a new local company
  2. Registration of a subsidiary company of the main foreign company
  3. Opening a registered branch office of the parent company

These are discussed in separate headings hereunder:

1. Registration of a new local company

The Companies Act No. 17 of 2015 of the Laws of Kenya is the main statutory provision for all companies in Kenya and by extension registration of a company by a foreigner in Kenya. The first step is the reservation of a name, in this case, you would be reserving a name similar to the name of the mother company. Once successfully reserved, the directors of the company will need to share the following:

  • A copy of their passport bio-data page
  • Passport photos of all directors
  • E-mail addresses
  • Postal addresses
  • Residential physical addresses.

In addition to the above, the following information is also needed:

  • The name of the company
  • The nature of the business of the company
  • The company’s residential physical address
  • E-mail addresses of the company
  • Postal address of the company

It takes between two weeks to one month to have a local company registered.

2. Registration of Subsidiary Company

There is a minimal distinction in the procedure in which a subsidiary company is registered as opposed to registering a foreign company. The main distinction being that any party seeking to register a subsidiary must produce a certificate of incorporation together with the memorandum

and articles of association of the mother company.

The rationale behind this is that a subsidiary can only exist if the mother entity is legally recognized by the law governing the republic in which the mother company carries out its business. The memorandum and articles of association are produced to show there are provisions allowing the

mother company to open subsidiaries.

Both the Certificate of Incorporation and the memorandum and articles of association of the mother company must be notarized in the parent country. The original notarized copies of the same will be used during the application for registration of the subsidiary company. The rest of the procedure and data needed for the registration of a subsidiary in Kenya is similar to the registration of a company by a foreigner as enumerated above. Despite the fore mentioned, it is of utmost importance to keep in mind the following key points:

  • Both a foreign company and a subsidiary company must have at least one director who is of Kenyan Origin. Kenyan origin in this regard means a person who is Kenyan by birth and has attained majority age, therefore, has a national identity card. The rationale behind is that he/she will be available for purposes of serving documents on behalf of the company. Further, the process of registration of companies in Kenya has been digitized and is conducted using the
  • national identity card number of the Kenyan citizen. The only possible exception to this is where one of the foreigners comes to Kenya, applies for an Alien Identity card and a work permit, together with consent from the Ministry of Foreign Affairs.
  • A foreign company cannot conduct business in Kenya unless it is duly registered in Kenya or an application is pending for registration in Kenya but the same has not been processed within the prescribed period.
  • Conducting business is defined to comprise of, but not limited to offering debentures in Kenya or being a guarantor for debentures offered in Kenya.
  •  In its application for registration in Kenya, a foreign company must appoint a local representative in Kenya who not only accepts service of process but also makes sure that the foreign company complies with the law.

Registration of companies in Kenya by Kenyan citizens is a digitalized procedure and is carried out in the e- citizen portal. Accordingly, all returns and other information which a foreign company may be required to file

under the new Act are currently based on a manual process.

3. Registration of a Branch Office of the Parent Company

Another option for legally being recognized in Kenya is by way of opening a registered branch of the parent company in Kenya. This is a faster process for foreign investors and a good alternative to registering a subsidiary company. For us to open the registered branch, we would need the following:

  • A Company Resolution to open a Registered Branch in Kenya;
  • The Company Memorandum and Articles of Association which should indicate the availability of the option of opening a branch in a foreign country;
  • The Certificate of Incorporation of the Company;
  • List of directors of the parent company with details as to full names, postal address, nationality, and business occupation;
  • Full address of the registered principal office of the parent company;
  • Full address of the place of business in Kenya.

Registration of a branch office takes on average 2 weeks. It is thus more expedient for foreign investors seeking to break into the Kenyan market. In a separate article, we will discuss the different tax implications for the three options.

contact ocl business associates for company registration in Kenya