Kenya recently had the honour of hosting the WRC Safari Rally 2021. This even among other sporting events have put Kenya in the global limelight. Many foreigners wish to move to Kenya for work or to invest in Kenya. We will discuss how a foreigner can move to Kenya for work or investment.

Kenya’s immigration laws require that a foreigner obtains the appropriate visa or work permit before settling in Kenya. Section 34 of the Kenya Citizenship and Immigration Act, 2011  provides that no person who is not a citizen of Kenya shall enter or remain in Kenya unless they have the appropriate visa or work permit.

Kenya issues work permits to foreigners to run businesses or render much-needed charitable services to the benefit of the general public or a particular segment of the population.

Kenya has the following different categories of work permits for foreigners aspiring to work in the country:

1. Class A. – Issued to persons who intend to engage in prospecting for minerals or mining;
2. Class B. – Issued to persons wishing to invest in Agriculture and Animal Husbandry;
3. Class D. –Issued to a person who is offered specific employment by a specific employer who is qualified to undertake that employment;
4. Class G. – Issued to investors in specific trade, business or consultancy;
5. Class I. – Issued to a member of missionary society approved by the Government of Kenya and whose presence is beneficial to the country;
6. Class K. – Residence permit issued to persons who have an assured income derived from sources outside and undertakes not to accept paid employment of any kind; and
7. Class M. –Issued to Conventional Refugees.

In order to apply for a work permit, a foreigner should apply online through the Electronic Foreign National Service (eFNS) portal and provide the required supporting documents.

Buying Property in Kenya

A foreigner can buy land, a house, an apartment or even office space in Kenya.

Employment

Employment in Kenya is mainly governed by the Employment Act, 2007 and its regulations. The Employment Act and its regulations provide the minimum terms of employment in Kenya that cannot be excluded from an employment contract. It is therefore important for each foreign employer and employee to get extensive legal advice on employment law in Kenya.

Consequently, any foreigner who establishes a company in Kenya and has employees will be liable to pay income tax on the employees’ remuneration as pay as you earn (PAYE). The Company will also be required to pay various statutory welfare payments including the National Social Security Fund and the National Health Insurance Fund for all their employees.

For more information or assistance with starting your life or business in Kenya, contact us on info@mmsadvocates.co.ke.

By Andrew Wanga

www.mmsadvocates.co.ke

Partnerships are one of the oldest forms of business. Gradually, however, the general form of a partnership has lost its demand because of the inherent disadvantages associated with it, the primary one being the unlimited liability of partners. Each partner’s assets are at risk in case any liability arises. For a long time, there has been a need for a business format that would combine the flexibility of a partnership and the advantages of a limited liability company at a low compliance cost. This led to the creation of Limited Liability Partnerships, which have gained increasing popularity over the years. Let’s get to understand what they really are.

Definition of a Limited Liability Partnership (LLP)

A Limited Liability Partnership (LLP) is a legal entity formed and registered by two or more persons for the purpose of doing business. Upon registration, the LLP becomes a body corporate with perpetual succession, and with a legal personality separate from its partners. Unlike in general Partnerships, Partners in an LLP sign what is known as an LLP Agreement, which determines their mutual rights and duties, as well as their rights and obligations in the partnership. An interesting feature of this entity is that the partners do not have to be natural persons; an LLP can include a body corporate, such as another company.

Process of Registering a Limited Liability Partnership (LLP)

Partners are required to lodge a statement with the Registrar for the registration of an LLP. The statement must contain the name of the proposed LLP, the general nature of its business, and the proposed registered offices of that entity. It should also include the names, ID numbers and residential addresses of each of the partners. If one of the partners is a body corporate, the document would need to include the name, the place of incorporation (whether the entity is incorporated in Kenya or it is a foreign entity), the registration number or the relevant substitute for it, and the registered offices of the body corporate.

Foreigners can also enter into a limited liability partnership by providing these details, but they will be required to obtain a work permit before starting their operations in Kenya.

The Advantages of Limited Liability Partnerships

• Limitation of the liability of partners

The biggest advantage, no doubt, is the limitation of the liability of the partners, which is limited only to the extent of their contribution to the partnership. Their personal assets are protected. This is because a limited liability partnership is a separate legal entity that is distinct from its partners. It can sue or be sued in its name, and it can own property. Therefore, the LLP is responsible for its own liabilities.

• Management of the partnerships

The flexibility of traditional partnerships was brought into this entity, and thus the partners are at liberty to decide on the management of the LLP. They could decide to have one partner manage all the affairs of the LLP, while the other partners act as financiers, or they could have all the partners actively involved in the management of the LLP. The registered agreement sets out the rights and responsibilities of each partner, as will be agreed upon.

• Lack of double taxation

Another big advantage is that there is no double taxation in an LLP, as partners only pay their individual taxes depending on their income from the Partnership. This helps increase profits and reduce on expenditures incurred.

Disadvantages of Limited Liability Partnerships

• Minimum eligibility of two partners

The only downside to it is that the LLP must have a minimum of two partners. In the event of one of two partners exiting the partnership, the remaining partner would have to look for a replacement, or would have to convert it to a different entity altogether.

Conclusion

It is clear that limited liability partnerships are just the perfect entities for individuals seeking to start out on a business venture, and especially two or more professionals who would like to start offering their services in a structured business-like manner.

Check out our article on How to Start a Business in Kenya

By: Dennis Kachero

If you would like to set up a limited liability partnership and would like more guidance on the process, Contact us at praxcy@mmsadvocates.co.ke or kachero@mmsadvocates.co.ke

As the digital capital of Asia, Singapore is the preferred base for Information and Communications Technology (ICT) firms. Ranked as the world’s most digitally connected country, some of the benefits of setting up in Singapore include: ease of doing business, a stable economy, active and favorable tax rates and incentives among others. Another important benefit is the boost to investor image especially for Kenyan SMEs seeking foreign investment.

Singapore allows foreigners to set up businesses in their country, with favorable regulations for setting up holding companies. A holding company is a legal entity set up mainly to hold shares and control other companies with minimal risks to the owners and obligations limited to the extent of ownership in the subsidiaries. They are usually registered in Singapore as private limited companies.

A few details on Singapore holding companies:

• The registration process is purely online but must be done by a Singaporean business registration service provider.
• Whilst there is no minimum local shareholding requirement, a foreign owned company must have a local nominee director. The local director ensures that the company complies with all the local requirements and would be the contact person for the company.
• Part of the registration process involves an extensive KYC on the shareholders and directors including verification of identification and proof of address documents; scrutiny of the applicant’s corporate structures and checks on the professional background of proposed shareholders and directors of the company.
• An interesting point to note about Singapore is that they do not recognize postal addresses. This means that you would have to provide home addresses and utility bills to confirm the address.
• The company must also have a local company registered address and this address cannot be a P.O. Box.
• ACRA, Singapore’s Registrar of Companies now requires the local nominee director to fill and submit the information on the beneficial owners of the holding company to be incorporated.
• The holding company must also appoint a local qualified company secretary within 6 months of incorporation.
• Similar to Kenya, there is also a requirement to prepare financial statements and file annual tax returns. Small companies or start-ups with annual revenues below a certain level are exempted from filing audited accounts.
• There is also a requirement for USD 10,000 to be deposited in escrow as security for compliance by the foreign-owned holding company in case of winding up.
• Start-ups may not be able to enjoy tax incentives which are pegged to conditions relating to local expenditure, creation of local employment and generation of local revenues, however these would be available as the business grows. Nonetheless, the holding company will enjoy the lower tax rate of 17%.

As MMS, we work with qualified corporate service oriented firms to assist our clients set up in Singapore. Please contact Felicia Solomon at felicia@mmsadvocates.co.ke and Praxedes Kageha at praxcy@mmsadvocates.co.ke for any assistance in setting in Singapore.