How to register a business in Kenya

Starting a business can be a daunting task, and the process of registration is often seen as a hurdle. However, in Kenya, this has been made significantly more accessible with the advent of eCitizen, an online portal that streamlines the business registration process. Whether you're launching a sole proprietorship or a larger company, this guide will walk you through business registration in Kenya.

Why Register a Business in Kenya?

Registering your business in Kenya is a legal requirement. It ensures that companies operate within set guidelines, adhere to the laws of the land, and fulfill their tax obligations. This registration process adds credibility to your venture, protecting it under Kenyan law.

How to Register a Business in Kenya

To register a business in Kenya, follow these steps:

Step 1: Business Name Search and Reservation

Before anything else, you'll need to choose a unique business name. You'll need to search for and reserve your desired business name via the eCitizen portal, ensuring it still needs to be taken.

Here's how to conduct a name search and reserve your business name:

1. Visit the eCitizen portal and log in to your account. You can create one using your national ID or passport if you don't have one.
2. Click on the 'Business Registration Service' tab.
3. Select 'Make Application.'
4. Choose the type of business you wish to register.
5. Propose up to five potential business names.
6. The government will search to see if the proposed name is available. If your proposed name is rejected, you'll be informed why and given instructions on how to proceed.

Step 2: Business Registration

Once your business name has been approved and reserved, the next step is to register the business. Here's the process:

1. Log in to your eCitizen account and select 'Business Registration.'
2. Click the 'Add a business' button, enter your business name, and find it.
3. Once your business name is found, select it and click 'Next.'
4. Choose your role and pay for the registration.
5. Download the invoice and the statement of particulars, sign them, and submit them back to eCitizen.
6. Once all the forms are filled, you'll receive a certificate of registration in 2-3 weeks. The cost of roll is Ksh. 10,000 for a company and Ksh. 1,000 for sole proprietorships.

Step 3: Opening a Company Bank Account

After registering your business, you must open a company bank account with a local or international bank. Once the account is open, deposit your share capital immediately and begin your company's business activities.

Step 4: Register with Relevant Organizations

In Kenya, business owners are required to register with the Kenya Revenue Authority (KRA), the National Social Security Fund (NSSF), and the National Hospital Insurance Fund (NHIF).

How to Register a Sole Proprietorship in Kenya

The process is similar but slightly less involved if you're setting up a sole proprietorship. You'll follow the same steps to search and reserve your business name. After this, you'll:

1. Visit the 'Business Registration' tab and click 'Sole Proprietorship.'
2. Fill in the relevant details on the BN2 form.
3. Upload scanned copies of the ID card or passport and colored passport photographs of the business owner.
4. Registration for a sole proprietorship costs Ksh. 1,000, and the certificate is available for download on the eCitizen platform after a week.

READ ALSO: How to Register a Company in Kenya

Conclusion

Registering a business in Kenya may seem complex, but with the eCitizen portal, it becomes much more manageable. This online platform simplifies the process, making it possible to register your business from the comfort of your home or office. The key is to follow the steps carefully and ensure you have all the necessary documents and details. With these in order, you're well on your way to becoming a business owner in Kenya.

Frequently Asked Questions (FAQs)

Q1: How much does it cost to register a business in Kenya?

A: The cost to register a company is Ksh. 10,000, while for sole proprietorships, it is Ksh. 1,000.

Q2: How long does it take to register a business in Kenya?

A: After submitting the required documents and forms, you can expect to receive your registration certificate within 2-3 weeks.

Q3: Can I register a business in Kenya online?

A: The eCitizen portal allows you to register your business online. This includes searching and reserving your business name and submitting the required documents.

Q4: What do I need to register a business in Kenya?

A: You will need a national ID or passport to create an eCitizen account. For the business registration, you'll need details of the shareholders, including scanned copies of Identity Cards or keys, KRA Pin Certificates, and colored passport photographs.

Q5: Is registering a business with KRA, NSSF, and NHIF necessary?

A: Yes, it is a legal requirement in Kenya for businesses to register with these organizations after they are established.

Q6: Can a foreigner register a business in Kenya?

A: Yes, foreigners can register a business in Kenya. However, they need a work permit or pass, and the company should have a minimum of Ksh. 5 million in capital investment.

Disclaimer!!!

This article is intended to provide a general guide to the subject matter. It should not be seen as a replacement for professional advice. It is always prudent to seek professional advice before making financial or legal decisions.