Kenya attracts much attention from international investors, thanks to its high GDP, its position as the economic centre of East Africa, and for Nairobis finance, business, and trade markets. Here is an overview into setting up a business in Kenya as an expat.
Investor Immigration Permit
An individual wishing to open a business or invest in Kenya is required to have an appropriate visa, known as the Class G Investor Immigration Permit. To apply and qualify for this visa, the applicant must have proof that they have access to USD 100,000 or more, held within a Kenyan bank, to fund the company or to invest. A range of other documents and registrations related to the company are also required, including a copy of the company's registration certificate, and a cover letter from the applicant, on the stationery of the company.
The visa is only likely to be granted if the applicant can demonstrate that the business or investment will be of benefit to the Kenyan people.
Procedures
If you do not qualify for the investment visa, you still may be able to open or invest in a Kenyan business by having a local business partner, or one of several other options. If you have a Kenyan business partner, and they are someone you trust with the business, you may consider registering as a foreign company with your partner as the Kenyan director.
You may also be able to open a new branch of an international company, or may be able to acquire an existing Kenyan company through a merger. Both processes are quite complex, and any business in Kenya should only be done after extensive research and consultation with local experts and a legal team with a speciality in international business in Kenya. There are also consulting companies who can assist with this.
If you qualify for the investment permit, you can then open your company with yourself as the director, and the business can be 100% foreign-owned. You must decide on the type of business structure, which can be a private limited company, a limited liability partnership, a public company, or a branch office of an existing company.
The final option is to register as an EPZ, if your business is within the manufacturing or agricultural export industries, and meet the qualifications to be based within one of the country's export processing zones (EPZ). To register as an EPZ, the business must first be approved by the Export Processing Zone Authority.
Corporate tax
The corporate tax rate in Kenya is currently at 30%. However, branches of international companies operating in Kenya are taxed at 37.5%. Manufacturing and agricultural businesses who qualify to operate in one of Kenya's export processing zones (EPZ), receive tax breaks as an incentive for operating within the country. This includes no corporate tax payments for the first ten years of business operations, and a special rate of 25% thereafter. Other customs and duty exemptions may also apply.
Useful links:
Export Processing Zone Authority
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