Types of Business Entities in Kenya and applicable taxes.
| TYP OF BUSINESS | REQUIREMENTS | TIMELINE FOR REGISTRATION AND GENERAL COMMENT | APPLICABLE TAXES |
| Private Limited liability Companies | -Propose between 3 to 5 unique names for your company in the order of priority. -Share capital (no prescribed minimum). -Name, email, phone number, P.o box and residential address of proposed director (s)/ shareholder(s). -List of beneficial owners if different from proposed director/shareholders. -Articles of Association (Applicant may adopt model articles or come up with modified one). -address of the proposed company office. -Company Secretary for companies with a share capital of over Kshs. 5 million. – objective of the company (nature of business) -proposed company email and phone number. -It is advisable for companies without a Kenyan -Director/Shareholder to have a company secretary to enable the company to access Registrar of Companies services hosted on eCitizen Platform. -Registration fee | -They are registered under the Companies Act No. 17 of 2015 and it takes a period of between 3 to 5 days to be registered. – with the new changes at the registrar of Companies office, an applicant may be required to apply for the company pin separately (On the KRA iTAX Portal) after receiving the certificate of incorporation. | -Income tax (Corporate tax, PAYE, Withholding tax, advance tax & instalment tax) -Rental income tax -VAT -Excise duty -Agency revenue (stamp duty or betting tax) -Turnover tax -CGT NOTE: (I)These taxes apply differently depending on the circumstances. (ii) these companies are also required be filing annual returns (CR29) with the registrar of companies. |
| Branch of foreign companies | Copy of Memorandum and Articles of Association of the Parent Company or other instruments defining the constitution of the company. -A list of the directors/shareholders and secretary of the company together with their full names, nationality, passport/ID numbers, email addresses, phone numbers and residential addresses. -nature of business. -A registered office address. -full name, ID number, email, P.o box and residential address of the Authorized local representative of the Company. -Registration fee | They are registered under the Companies Act No. 17 of 2015. It will take between 3 to 5 days of submission of all required information | -relevant applicable tax as may be advices by KRA. – They are also required to file with the registrar of companies Parent company’s audited financial statements at the end of every year together with a declaration confirming the same. |
| Limited liability partnership | -At least 3 proposed names of the LLP -Full names of at least 2 partners. -Partnership agreement (confidential). -nature of business -Name of at least one managing partner. -registration fee -Email address, phone number, P.o box of the proposed office of the LLP. Email address, phone number, P.o box, ID number/passport number of each partner. | They are registered under the Limited Liability Partnerships Act No. 42 of 2011. They take at least 7 days of submission of all the requirements to be registered | Similar taxes applicable to private companies depending on the circumstances. Tax obligation on partners is apportioned based on the ratio of income on individual partner |
| Sole Proprietorships/business names | -At least 3 proposed names of the Business -Full names of the proprietor. -nature of business -registration fee -Email address, phone number, P.o box of the proposed office of the business. Email address, phone number, P.o box, ID number of the proprietor | They are registered under the Registration of business names Act CAP 499. They take between 3 to 5 days to be registered | VAT and any other tax as may be advised by KRA |
It is also important to note that upon successful registration of the business entity, owners may also have to consider other things like Trading License/ Business Permits (issued by County Governments where the business office is situated or Work Permits/Investment Permit issued by the Department of Immigration to foreigners.
For more information or assistance in setting up in Kenya contact us on info@mmsadvocates.co.ke
By Andrew Wanga
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