Foreign Company Registration in Kenya: How to Establish a Business as a Non-Resident

Foreign company registration in Kenya follows one of two routes under the Companies Act, 2015 (Cap. 486). The overseas business can incorporate a Kenyan company, which is a separate legal entity owned by the foreign parent. Or the foreign company itself can register under Part XXXVII of the Act as a foreign company with a presence in Kenya. The two routes carry different filings, local officers and ongoing duties. This guide sets out what the Act requires for each, so you can choose with the facts in front of you.

Two Routes for Foreign Company Registration in Kenya

The first route is a local subsidiary. A company incorporated in Kenya is governed by the incorporation provisions of the Act. The second route is registration of the overseas company itself under the foreign companies provisions, which apply to a foreign company that has established a place of business or carries on business in Kenya (section 979(2) refers to a registered foreign company that “carries on business, or has a place of business, in Kenya”). The right choice depends on liability, tax, funding and sector licensing. Take tax advice before choosing, because the Act itself does not decide those questions. For payments back to the parent, see our guide on paying a foreign parent company from Kenya.

Incorporating a Kenyan Subsidiary

A Kenyan company has its own legal personality, so the parent’s exposure is generally limited to its investment, subject to any guarantees it gives. The Companies Act sets a few structural requirements that foreign investors often ask about:

• Directors: a private company must have at least one director, and a public company at least two (section 128). Every company must have at least one director who is a natural person (section 129).
• Company secretary: a private company needs a secretary only if its paid-up capital is KES 5 million or more (section 243(1)).
• Beneficial owners: the application for registration must include a statement of particulars of the company’s beneficial owners (section 16A), and the company must keep a register of beneficial owners (section 93A).

Beneficial ownership disclosure matters most for foreign-owned structures with holding companies or trusts above the Kenyan entity. Prepare the ownership chain before you file, because the statement asks for the people behind the shareholding, not only the immediate shareholder.

Registering the Foreign Company Itself

Under section 975, a foreign company that wishes to be registered applies to the Registrar. The Registrar registers it in the Foreign Companies Register if the application contains the prescribed information, is accompanied by the prescribed fee and required documents, and complies with the Part’s requirements on the company’s name and the appointment of a local representative. The documents that must accompany the application include:

• a certified copy of the company’s certificate of incorporation or registration in its place of origin, or a document of similar effect;
• a certified copy of its constitution;
• a list of its directors and shareholders with their personal details;
• where directors reside in Kenya and sit on a local board, a memorandum stating the powers of those directors;
• documents for any existing charge on property that would be registrable if the company had been formed under the Act;
• the address of its registered office in its place of origin, or its principal place of business there, and the address of its registered office in Kenya; and
• a statement of particulars of its beneficial owners under section 93A.

On registration, the Registrar allocates a unique identifying number and issues a certificate of compliance (section 975(4)).

Local Representative and Registered Office

The Registrar may not register a foreign company unless it has at least one local representative who meets the requirements of the foreign companies regulations (section 979(1)). If a registered foreign company that carries on business or has a place of business in Kenya loses its last local representative, it must appoint another within twenty-one days. Failure is an offence by the company and each officer in default, punishable by a fine not exceeding KES 500,000 (section 979(2) and (3)). The company must also maintain a registered office in Kenya for communications and notices. That office must be open on each business day from at least 10 a.m. to 12 noon and from at least 2 p.m. to 4 p.m., with a local representative present at all times when it is open (section 983). The Act also deals with the liability of the local representative in section 981, so choose a representative who understands the role.

Comparing the Two Routes

A subsidiary keeps the Kenyan business legally separate from the parent and is usually easier for banks, landlords and customers to deal with. It needs its own directors, its own accounting and its own filings. A registered foreign company keeps the business inside the foreign entity, which can suit a short project or a limited presence, but it requires a local representative and a staffed registered office, and the foreign company’s own documents and beneficial owners are on the Kenyan record. Neither route is better in every case. Decide on the basis of the expected scale of operations, the risk you are willing to leave in the parent and whether a sector regulator requires a locally incorporated applicant.

Sector Licences After Registration

Registration under the Companies Act lets a business exist in Kenya. It does not authorise regulated activity such as banking, insurance, telecommunications or capital markets work, each of which has its own licensing law. Check the licensing law for your sector at the outset, because some regulators set ownership or local-presence conditions that affect which structure you choose.

Frequently asked questions

This article is general information on Kenyan law as at its publication date, not legal advice. Reading it does not create an advocate and client relationship.