Everything You Need to Know About Foreign Company Registration in Kenya
The Step-by-Step Process of Setting Up a Foreign Company in Kenya
According to the Companies Act of 2015, a foreign company is one incorporated outside Kenya but intending to operate within the country. This requires compliance with local regulations and obtaining a Certificate of Compliance within the Kenyan jurisdiction. Registering a foreign company opens opportunities in Kenya’s thriving and diverse economy, attracting global enterprises.
Navigating the legal intricacies of registering a foreign company in Kenya can be daunting without proper guidance. This comprehensive guide aims to facilitate a smooth business establishment in this East African powerhouse.
Why Register a Foreign Company in Kenya?
Kenya’s economy offers abundant opportunities for growth. Global enterprises find the diverse economic landscape appealing. Proper registration ensures compliance with local laws and seamless integration into Kenya’s commercial scene.
Requirements for registration of a foreign company in Kenya
The documents for foreign company legal requirements include:
Certified copy of the company’s Charter, Statutes, Memorandum, Articles of Association, or relevant documents defining its constitution.
Certified copy of the foreign company’s current certificate of incorporation or registration in its place of origin, or an equivalent document.
Recognition that a foreign company may have a local board of directors with specific powers, in addition to foreign directors.
Assistance in opening a bank account for the company.
Which local statutory forms are required for company registration?
Complete local statutory forms for foreign companies that are incorporated outside Kenya. These include the following.
First is form 236 which is the list of documents that a corporation founded outside of Kenya filed for registration.
Another is form 237 that has a list and specifics of the secretary and directors of a foreign organization that hasn’t been founded in Kenya.
Thirdly is form 238 with the list of names and addresses of Kenyan citizens who are permitted to accept services in representation of a foreign company.
Lastly is form 250 that is a notification of a firm founded outside of Kenya’s officially recognized location.
Ensure to provide directors, secretary, names, addresses, and notice of registered office or change notification.
All these forms are requisite requirements for company registration in derived from Kenya for foreigners 2016 as business entities and limited liability companies.
Foreign company registration procedure
Once you prepare all the required forms and additional documents, submit the application for foreign company registration to the registrar of companies, along with the necessary application fee.
Upon approval of your registration by the registrar, a Certificate of Compliance is issued, indicating the successful registration of the foreign company.
Requirements for the appointment of a local representative
The New Companies Act of 2015 has been enacted to regulate foreign companies operating in Kenya. According to this Act, a foreign company cannot conduct business in Kenya unless it is registered in the country or has submitted an application for registration, even if the application is still pending approval within the specified period.
Registration and compliance requirements for foreign companies operating in Kenya
Operating in Kenya involves activities like offering debentures or acting as a guarantor for debentures in the country. Consequently, to engage in these activities, a foreign company must be registered in Kenya.
Moreover, to register a branch in Kenya under the 2015 Act, you need to submit an application to the Registrar of Companies. Additionally, we also assist companies in opening bank accounts.
Registering a foreign company in Kenya requires following regulations, appointing a local representative, paying fees, and providing necessary documents. You can also choose your business name.
Briantony International Consultants offers a nominee shareholder agreement, allowing them to hold shares in trust at a reasonable fee. Additionally, appointing a local representative in Kenya is mandatory to ensure compliance with the law.
If a company violates the Act and incurs penalties, the local representative may be held personally liable by the court.
Briantony International Consultants provides a “Certificate of Compliance” to foreign companies upon successful submission of required registration documents. Additionally, we offer PIN and VAT Registration services in Kenya. With our assistance, the entire foreign company registration process in Kenya can be completed in just 3 days.
Regulations and compliance while registering a foreign company in Kenya
This process, also referred to as formation of a foreign company in Kenya, incorporation of a foreign company in Kenya, or registration of multinational companies in Kenya, is cost-effective when using our services.
Implications of the new companies ACT 2015 and insolvency ACT 2015
The New Act imposes more detailed disclosure and compliance requirements on companies formed outside Kenya that seek registration in Kenya as business entities.
Requirements for Foreign Company Registration Under the New 2015 Act
The 2015 Act states that foreign companies operating in Kenya must register or have a pending registration application. This includes activities like offering debentures or acting as a guarantor. Applications must follow regulations and include company name, appointment of a local representative, fees, and required documents.
In addition, assistance is also provided for tasks such as opening bank accounts and starting business operations.
Local representatives for foreign companies in Kenya
A foreign company originating from Kenya can register under the country’s name or another name for business purposes. Subsequently, to comply with new law requirements, the company must appoint a local representative in Kenya.
The local representative could be held personally liable if the court determines that the company is a limited liability company and violates the Act. Additionally, we assist companies in opening bank accounts.
Changes affecting obligations of foreign companies in Kenya
Protection against disclosing a natural person’s residential address to the company when required.
Establishment of a process for appointing a foreign company’s liquidator to manage its property in Kenya.
Recognition that a foreign company may have a local board of directors with specific powers in addition to its foreign directors.
Regarding the registration timeline, it typically takes three (3) days after submitting the statutory documents. Additionally, a tax rate is applicable to foreign companies operating in Kenya.
Consequences of Foreign Company Registration in Kenya
The new registration requirements in Kenya will make it more challenging and expensive for foreign companies to conduct business there. Additionally, a foreign company operating in Kenya without registration commits an offense. Upon conviction, each of its officers is liable to pay a fine of five million shillings.
The rate of CIT for resident companies, as well as subsidiary companies of foreign parent companies, is 30%.
Foreign companies and Permanent Establishments’ (PEs) branches in Kenya are subject to a Corporate Income Tax (CIT) rate of 37.5%, which applies to both business entities and limited liability companies. Additionally, we offer assistance in opening bank accounts and starting a business.
Foreign company winding up under insolvency act, 2015
Members’ Voluntary Liquidation under the insolvency act, 2015.
The Insolvency Bill, approved by the president on September 11, 2015, came into effect in January 2016, affecting various parts and schedules.
The legal notice now covers Part VI, which is the relevant section on the liquidation of companies.
Overview of winding up procedures under the insolvency act, 2015
The Insolvency Act of Kenya aims to redeem insolvent companies through administration, with a particular focus on voluntary winding up through member liquidation.
Furthermore, the Act assists insolvent entities, encompassing both natural persons and unincorporated bodies, in continuing their operations as going concerns. It’s important to note the Act’s significant impact on the rights of secured creditors.
Insolvency of incorporated and unincorporated bodies
Liquidation of a company by order of the court
Creditors have the right to request the liquidation of a company that can’t repay debts. Subsequently, a liquidator is appointed, who then sells assets and distributes the proceeds to creditors.
Expenses of liquidation take precedence over other claims. Following this, creditors can then assert debts, including interest, while the remaining assets are utilized to settle unsecured debts.
Section 522 of the Insolvency Act allows an insolvent company to maintain its status as a going concern. This provision enhances its credit status by realizing its property and distributing it to preferential creditors.
Appointing an administrator
The court, a floating charge holder, the company, or its directors can appoint an administrator. This requires a qualifying charge on the company’s property.
The court can issue an administration order to a company, even if it can repay its debts.
A foreign company registered outside Kenya desirous of doing business in locally may either register a branch or a subsidiary in Kenya. A subsidiary is considered a local company with compliance requirements similar to those of local companies owned by locals. While a branch office is distinctive and is contemplated a foreign company under Part XXXVII of the Companies Act, 2015 (Companies Act)
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A foreign company registered outside Kenya desirous of doing business in locally may either register a branch or a subsidiary in Kenya. A subsidiary is considered a local company with compliance requirements similar to those of local companies owned by locals. While a branch office is distinctive and is contemplated a foreign company under Part XXXVII of the Companies Act, 2015 (Companies Act)
