SEVEN THINGS TO KNOW BEFORE STARTING A BUSINESS IN KENYA

SEVEN THINGS TO KNOW BEFORE STARTING A BUSINESS IN KENYA

Starting a business in Kenya may sound like a simple thing to venture into. However, it is not just about putting up an entity. We had highlighted majority of the things needed here. Also if you are a foreigner who is looking on starting a venture in Kenya, our article on the same would prove quite helpful for you. We have further highlighted the most key things below that one needs to check on when starting a business in Kenya

Should the business be registered?

Yes, especially if you plan on building a reputation locally and even internationally. Before starting out, you need to do a few things, such as registering the business name, obtaining necessary licenses and permits, and complying with business taxation requirements.

Which laws or regulations govern the business’ field of operation?

  • Laws relating to taxation.
  • Laws relating to employment, depending on the size of the entity you wish to put up.
  • Consumer protection laws: Your business activities are subject to certain consumer laws and policies, depending on its field of operation.
  • Health and safety planning laws: Is your business hazardous to the health of your clients? Depending on the nature of business, certain laws will affect or benefit your business.
  • Laws governing work place injuries.
  • Laws governing the employer-employee relationship.
  • Environment protection laws.

Do you have legal aid?

If you still haven’t hire a lawyer for paperwork. Although it might be expensive, it is better to hire a professional to deal with the legal bit, such as drafting the Memorandum and Articles of Association, doing the Statement of Nominal Capital, and drafting your contracts. The lawyer could also give general legal advice in relation to the business.

Do you have all the necessary documentation?

Your essential business certificates include: PIN, VAT & Pay-As-You-Earn registration with the Kenya Revenue Authority; National Hospital Insurance Fund registration which is a compulsory requirement for starting a business; and National Social Security Fund registration.

Do you have an eCitizen account?

A Kenyan company can have directors who live abroad and are not Kenyan citizens. However, at least one of the directors should be a Kenyan citizen so that they can access the eCitizen platform and submit certain forms with ease. A foreigner who has KRA PIN and Alien ID can still own a company in Kenya alone, although it will take an enormous amount of time and effort to acquire these. Hence the easiest way is to have a Kenyan partner. In essence, having an eCitizen account is essential for directors of private companies registered in Kenya.

Understand Employer Responsibilities

This applies to entities that are to employ people. As an employer, learn the legal steps you need to take to hire employees lest you get into trouble. How will you treat, remunerate and even house (if applicable) your employees? Also understand that work permits are required for all foreign nationals wishing to work in the country. Investors are allowed to have expatriate staff in senior management, or where locals with specific skills are not available. Work permits are usually valid for a maximum of two years and can be renewed by the Immigration Department.

Authors : Andrew Wanga & Victory Wanjohi

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