A foreign company is a corporate entity incorporated outside Kenya but wishes to establish operations within the country. The Companies Act, 2015 provides the legal framework for registering such companies, ensuring that they comply with Kenyan laws while doing business locally. Registration grants the foreign entity legal recognition, enabling it to enter contracts, open offices, and operate officially in Kenya.
Legal Framework Governing Foreign Companies
The registration and compliance of foreign companies in Kenya are primarily governed by the Companies Act, 2015, alongside the Kenya Revenue Authority (KRA) regulations for tax matters and other industry-specific laws for licensing.
Pre-Registration Requirements
Eligibility of a Foreign Company
Any company incorporated outside Kenya that intends to establish a branch or permanent place of business in Kenya must register as a foreign company.
Required Documents
Some of the documents required include:
- Certified copy of the Certificate of Incorporation from the home country.
- Certified copy of the Memorandum and Articles of Association.
- List of directors and shareholders.
- Memorandum of Compliance signed by a practicing advocate in Kenya.
Appointing a Local Representative
Every foreign company must appoint at least one local representative who will act as a liaison with the Registrar of Companies and government agencies. This representative is legally responsible for ensuring the company’s compliance with Kenyan laws.
Name Search and Reservation
Conducting a Name Search on eCitizen
Before registration, the company must conduct a name search on the eCitizen platform to confirm that the intended name is unique and not already registered in Kenya.
Guidelines for Company Name Approval
Names that are offensive, misleading, or too similar to existing registered names are not approved. Once approved, the name is reserved for 30 days, with an option for renewal.
Application for Registration
Filling the Application Form (Form FC2)
Foreign companies apply for registration using Form FC2, which captures details such as company name, business activity, registered office, and directors.
Uploading and Submitting Documents
All supporting documents must be uploaded on the eCitizen platform. The application must be complete to avoid rejection or delays.
Payment of Prescribed Fees
A statutory registration fee is paid online during submission. The amount depends on the company’s nominal share capital.
Mandatory Attachments
Certified Copy of Certificate of Incorporation (Home Country)
Proof that the company is legally incorporated in its country of origin.
Certified Copy of the Memorandum and Articles of Association
These documents define the company’s constitution, including governance structure and business objectives.
List of Directors and Shareholders
Details of directors and shareholders, including their full names, nationality, passport/ID numbers, and residential addresses, are required.
Memorandum of Compliance
A declaration signed by a Kenyan advocate confirming that the company has complied with all requirements of the Companies Act.
Role of the Registrar of Companies
Verification of Submitted Information
The Registrar reviews the documents to ensure compliance with Kenyan law and verifies the authenticity of information provided.
Issuance of Certificate of Compliance
Upon successful registration, the Registrar issues a Certificate of Compliance, officially recognizing the company as a registered foreign entity in Kenya.
Post-Registration Requirements
Obtaining a KRA PIN for the Company
Every foreign company must register with the Kenya Revenue Authority to obtain a KRA PIN, which is essential for tax compliance and transactions such as opening a bank account.
Opening a Bank Account in Kenya
With a Certificate of Compliance and KRA PIN, the company can open a local bank account to facilitate business operations.
Licensing and Permits (Industry-Specific)
Depending on the industry, additional permits and licenses (e.g., NEMA, NCC, CBK) may be required before commencing operations.
Compliance Obligations
Annual Returns Filing
Foreign companies must file annual returns with the Registrar of Companies, providing updated information on their structure and activities.
Updating Company Records with the Registrar
Any changes in directors, shareholders, or company details must be promptly reported and updated in the Registrar’s records.
Tax Compliance Requirements
The company must file tax returns, pay corporate tax, and comply with VAT and PAYE obligations as stipulated by KRA
Benefits of Registering a Foreign Company in Kenya
Access to the Kenyan Market
Kenya is a regional hub in East Africa, and registration gives the company legal access to its large and growing market.
Legal Recognition and Protection
Registered companies enjoy legal recognition, allowing them to enforce contracts, protect intellectual property, and operate under Kenyan law.
Eligibility for Government Tenders and Contracts
Only registered entities can bid for government and county tenders, giving the foreign company opportunities for growth.
Penalties for Non-Compliance
Failure to Register a Foreign Company
A foreign entity conducting business in Kenya without registration commits an offense and may face penalties, including fines.
Late Filing of Returns
Failure to file annual returns or tax obligations attracts penalties and interest charges.
Other Regulatory Breaches
Non-compliance with sector-specific regulations may lead to cancellation of licenses, court sanctions, or restriction from operating.
Conclusion
Registering a foreign company in Kenya provides legal recognition, access to opportunities, and ensures compliance with the law. It enables foreign investors to operate smoothly within the Kenyan market, engage in contracts, and participate in tenders, while also ensuring accountability through annual returns, tax compliance, and industry-specific licensing. Compliance not only avoids penalties but also builds credibility, investor confidence, and a foundation for long-term success in Kenya’s business environment.
At Finfex Solutions, we specialize in guiding foreign companies through every step of the registration process in Kenya. Our team of experts helps with:
- Name search and reservation on the eCitizen platform.
- Preparation and certification of required documents.
- Filing of applications with the Registrar of Companies.
- Obtaining a KRA PIN and tax compliance support.
- Advisory on licensing and permits for different industries.
- Ongoing compliance management, including filing annual returns and updating company records.
By partnering with Finfex Solutions, foreign investors enjoy a seamless, efficient, and legally sound registration process, allowing them to focus on growing their business in Kenya while we handle compliance and regulatory requirements.
