Registration of a branch of a foreign company in Kenya

Registration of a Branch of a Foreign Company in Kenya

Registration of a foreign company branch in Kenya is done under Sections 974 and 875 of the Companies Act No. 17 of 2015 of Kenya.

To conduct business in Kenya, a foreign company must be registered under the Companies Act. Failure to register may result in a fine of up to Kshs. 5,000,000.

Benefits of Registering a Foreign Branch in Kenya

1. Legal Compliance: Avoid hefty fines and legal action by ensuring compliance with local regulations.
2. Access to Local Market: Registration allows your company to fully operate within the Kenyan market, granting you access to one of East Africa’s largest economies.
3. Credibility and Trust: Registered foreign companies gain more trust from local customers, partners, and government institutions.
4. Tax Compliance: Once registered, the foreign company is obligated to adhere to local tax regulations, such as filing annual returns and paying taxes, allowing seamless operation without legal hindrances.

Requirements for Registration

According to Section 975 of the Companies Act, 2015, the following documents are required for registering a foreign company’s branch in Kenya:

1. Certified copy of the company’s incorporation certificate or registration document from its country of origin.
2. Certified copy of the company’s constitution (e.g., Memorandum and Articles of Association).
3. List of directors and shareholders, including their details such as names, addresses, nationalities, and contact information.
4. If the list of directors includes those who:
   • Reside in Kenya, and
   • Are members of a local board of directors
5.  Notice of the address of the registered office in the company’s home country, or its principal place of business if it has no registered office.
6. Notice of the address of the registered office in Kenya, where all communications may be sent. This is crucial for ongoing compliance, as the office will serve as the company’s formal point of contact within Kenya.

Common Challenges in the Registration Process

1. Document Authentication: All foreign documents must be certified, and in some cases, apostilled or notarized, depending on the country of origin.
2. Local Representation: It’s mandatory for a foreign branch to have a local representative/company secretary. Having local directors or representatives can simplify compliance and communication with Kenyan authorities.
3. Tax Implications: After registration, foreign companies must comply with Kenyan tax laws, including Value-Added Tax (VAT) (16%) , withholding tax, and corporate tax (37.5%) obligations. Taxation for Foreign Companies is at 37.5%. It’s essential to consult with a tax expert on the obligations required of the foreign company.
4. Annual Reporting: Foreign companies registered in Kenya must submit annual returns and financial statements to the Registrar of Companies. Failure to do so may result in penalties or deregistration.

Certificate of Compliance

Once all required documents are submitted and verified, the Registrar of Companies will issue a Certificate of Compliance, signifying that the foreign company’s branch is duly registered and compliant with Kenyan law. This certificate is equivalent to the local registration certificate for Kenyan companies and is essential for legal operations.

Timeline for Registration

The registration process typically takes 4 weeks, provided all documents are in order and the application is submitted correctly.

How We Can Help

We assist in registering a branch of your foreign company in Kenya, ensuring compliance with all legal requirements. Our services cover:

• Document preparation and certification.
• Submission of applications to the Registrar of Companies.
• Liaison with Kenyan authorities for a smooth and timely process.

Contact us at:

• Email: info@capitaregistrars.co.ke
• Phone/whatsapp: +254727789616

Post-Registration issues

• Register for Kenya Revenue Authority (KRA) PIN and comply with tax obligations (Income tax, PAYE, VAT, corporate tax).
• Annual returns: Ensure timely submission of annual returns and financial statements to the Registrar.
• Maintain a registered office in Kenya and notify the Registrar of any changes to its address.
• Apply for a Local Business Permit from the Nairobi County Government to enable the company to carry out business.

Next Steps

To begin the process, download our Foreign Branch Registration Checklist and submit it along with the required documents to info@capitaregistrars.co.ke

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