How to register a company in Kenya: A guide for employers

Think of Kenya as your launchpad to East Africa’s booming business landscape.

Kenya stands at the dynamic gateway to East Africa, boasting a robust economy and a strategic location for businesses seeking regional expansion. Registering a company here provides access to a rapidly growing market, a skilled workforce, and a business-friendly environment.

This guide breaks down the advantages of setting up a company in Kenya, the step-by-step registration process, associated costs, and how an Employer of Record (EOR) can simplify and accelerate your market entry.

The business benefits of registering your company in Kenya

Since 2000, Kenya has focused on driving private sector growth, fostering a business-friendly environment that attracts investment and supports expansion. In 2007, with the introduction of ‘Vision 2030,’ the Kenyan Government’s initiated a long-term plan to transform the nation into a competitive, prosperous hub. This vision has driven a wave of reforms, improved infrastructure, and business-friendly policies.

The country’s ranking in the Ease of Doing Business index has shot up by 80 spots, placing them 56th globally, in 2019. And with the latest changes in the Business Laws Act of 2020, doing business in Kenya got even easier.

Here are some advantages of doing business in this nation:

• Strategic location: Kenya is a hub for East and Central Africa, providing access to a market of over 500 million people.
• Robust infrastructure: The country boasts well-developed ports, roads, and telecommunications networks, facilitating business operations.
• Skilled workforce: Kenya has a large pool of educated and skilled professionals across various sectors.
• Government incentives: The government offers various incentives, including tax holidays and exemptions, to attract foreign investment.
• Ease of doing business: Reforms have simplified business registration and reduced bureaucratic hurdles.

With its growing economy and continued legal reforms, Kenya is becoming an increasingly attractive place for entrepreneurs and businesses to set up shop.

However, companies must decide whether to register a legal entity or opt for a more flexible approach like an Employer of Record (EOR). Understanding the differences between these approaches is key to making the right choice for your expansion.

What is the difference between standard company registration and expanding through an EOR?

Kenya offers multiple pathways for setting up a business, each designed to cater to different operational and strategic needs.

When you use an EOR, you’re handing over the heavy lifting of international HR and labor management to a team of experts. They take care of everything from navigating labor laws and managing global payroll to handling tricky situations like disputes or terminations—making sure everything stays compliant with local regulations.

How an EOR simplifies company registration in Kenya

Starting a business in Kenya can be straightforward when you have the right support. With an EOR in your corner, you can bypass the complexities of setting up a local entity. From compliance to administration, they simplify every step of managing your workforce in Kenya, helping you confidently grow your business there.

Here’s how an EOR makes the process smoother:

• Accelerates your entry by eliminating the need to establish a local entity.
• Handles payroll, taxes, and filings efficiently and accurately.
• Lowers costs by removing the need for entity registration and upkeep.
• Provides flexibility to scale or downsize your workforce as per business growth.
• Streamlines hiring, helping you quickly onboard skilled Kenyan talent.
• Manages benefits that are compliant with local laws, helping you attract and retain the best talent.
• Mitigates legal risks by ensuring compliance with Kenya’s business laws and labor regulations

An EOR can help hire and build teams fast, stay compliant, and enjoy hassle-free growth in Kenya. You save time on the many steps involved in registering your company here. Let’s explore what these steps are.

A step-by-step guide to registering a company in Kenya

To register a company in Kenya, follow the legal and procedural steps set out in the Companies Act 2015 and the Company (General) Regulations. Thanks to technology, the registration of companies in Kenya is now a fully automated service through the eCitizen platform linked to the Business Registration System (BRS) system, which hosts the Companies Registry.

Step 1: Choose your business structure

Choose the entity type that aligns with your needs:

• Private Limited Company (Ltd): Suitable for small to medium-sized businesses; requires at least one director and one shareholder.
• Public Limited Company (PLC): Ideal for larger firms intending to offer shares to the public; requires a minimum of seven shareholders.
• Limited Liability Partnership (LLP): Combines elements of partnerships and corporations; partners have limited liability.
• Company Limited by Guarantee(CLG): Best suited for charities and nonprofits, where members serve as guarantors instead of shareholders, and any profits must be reinvested rather than distributed.
• Branch of a foreign company: Enables a foreign entity to operate in Kenya without incorporating a local subsidiary though it must still register with the Registrar of Companies.

Step 2: Reserve your company name

Pick a unique and compliant name for your company. Use the BRS on the eCitizen platform to check its availability. The name shouldn’t closely resemble any existing business name. You’ll need to submit at least three name options in order of preference. The Registrar of Companies will perform a name search to confirm that your chosen name is available and distinct from others already in use.

Step 3: Provide a defined shareholding structure

Outline the company’s ownership by determining how shareholders will distribute shares. There should be at least one shareholder and one director (can be the same person).

Step 4: Prepare incorporation documents

Gather and complete the necessary documents:

• Memorandum and Articles of Association: The Memorandum of Association defines the company’s purpose and foundational principles. Whereas the Articles of Association set the company’s internal operations guidelines, covering areas like decision-making, director responsibilities, and shareholder meetings. While the shareholders draft these documents, they can use the templates provided by the Registrar of Companies, either as-is or with modifications.
• Identification documents: You must have copies of the national ID cards or passports for your company’s directors and shareholders.
• Completed application forms: Including Form CR1 (company registration form) and Form CR8 (Notice of Registered Office/Postal Address).

Step 5: Pay statutory fees and submit your application

Upload the completed forms and required documents to the eCitizen portal. Pay the name reservation fee and registration fees based on your entity type and depending on share capital.

Step 6: Obtain the certificate of incorporation

Upon approval, the Registrar of Companies will issue a Certificate of Incorporation (typically within 3-5 days). This certificate serves as legal proof of your company’s existence.

Step 7: Register for tax and social security

After incorporation, register your company for:

• Kenya Revenue Authority (KRA) PIN: Necessary for tax purposes.
• Value Added Tax (VAT): If your annual turnover exceeds Kshs. 5 million.
• National Social Security Fund (NSSF): Mandatory for employee social security contributions.
• National Hospital Insurance Fund (NHIF): Mandatory for employee health insurance contributions.

Step 8: Open a corporate bank account

With your Certificate of Incorporation and KRA PIN, open a corporate bank account in Kenya to facilitate business transactions.

Step 9: Obtain the necessary licenses and permits

You may need additional licenses or permits from relevant regulatory bodies depending on your industry.

Cost breakdown of registering a business in Kenya

Understanding the costs of company registration in Kenya is vital for effective financial planning. A well-structured budget not only covers the initial registration expenses but also prepares businesses for ongoing operational costs, ensuring smooth and sustainable operations.

Registration costs

• Name reservation: Kshs 950
• Company registration:
  Kshs10,650 for a Private Limited Company
  Kshs 25000 for Limited Liability Partnership
  Kshs 10,650 for Public Limited Company
• Notary fees: Varies based on document authentication needs
• Legal services: Costs depend on whether you hire a lawyer for incorporation assistance

State fees and share capital

• Minimum share capital: No official minimum, but certain business types may require higher initial capital
• Additional licensing fees: Costs vary depending on industry-specific permits

Annual maintenance costs

• Accounting and tax compliance: Costs depend on the complexity of financial statements and required audits
• Annual returns filing: Fees vary but must be submitted to the Registrar of Companies
• Business address renewal: The fee to renew a business address in Kenya could be between Kshs 800 subject to Kshs 2000

Costs may vary at the time of registration. Check the latest fee schedule or speak to our experts. They can guide you on whether setting up a legal entity or leveraging an EOR is the best choice for your business in Kenya.

Cost comparison: standard registration vs. EOR

When setting up operations in Kenya, deciding between traditional company registration and using an EOR can significantly impact your costs and operational efficiency.

Let’s break down the key cost differences.

Cost Category	Standard Company Registration	Employer of Record (EOR)
Initial setup fees	Higher due to registration costs, legal fees, and share capital requirements	Lower as the EOR already operates in Kenya
Ongoing compliance costs	Annual filings, tax returns, legal requirements	Included in EOR service fee
HR and payroll management	Requires in-house HR team or outsourced service	Handled by EOR
Flexibility and scaling	Less flexible; expansion requires formal procedures	Highly flexible; quick market entry and exit
Time to market	Several weeks to months	Operational within days

By streamlining HR, payroll, and compliance, an EOR not only provides cost predictability but also allows you to focus on growing your business without the complexity of administrative tasks.

Take the stress out of your expansion to Kenya with Multiplier

For businesses seeking a quick, compliant way to expand in Kenya, partnering with an EOR like Multiplier can be a smart alternative to the traditional company registration process.

• Local hiring expertise: Easily onboard new employees in Kenya in minutes with Multiplier. Our intuitive platform lets you manage everything in one place—track attendance, approve leave and expenses, and oversee teams across multiple time zones without the hassle.
• Effortless payroll management: No more payroll headaches. Multiplier’s automated system handles taxes, benefits, and compensation for Kenyan employees, ensuring full compliance with local regulations. Plus, our Kenya-based payroll experts provide local insights and multilingual support.
• All-in-one HR management: From tracking employee work hours to managing expenses, our platform helps you stay organized and efficient. Keep everything centralized so you can focus on growing your business.
• Compliance assurance: Our contracts meet all Kenyan labor laws, covering benefits, statutory leave, termination policies, working hours, and salary details. Avoid penalties and establish a reputation as a reliable global employer.
• Attractive benefits packages: We partner with top Kenyan insurers to provide country-specific healthcare plans and other benefits that fully comply with local corporate and tax laws—ensuring your employees feel valued and protected.

Need expert guidance on entering the Kenyan market? Book a demo to discover how Multiplier can help you confidently scale your operations here.