#

Ease of Doing Business in

Kenya

Kenya Download Profile (1789.3KB, pdf)
Region Sub-Saharan Africa
Income Category Lower middle income
Population 46,050,302
GNI Per Capita (US$) 1,340
City covered Nairobi

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 92 113 up
21
61.22 57.50 down
3.72
Starting a Business 116 150 up
34
83.13 74.45 up
8.68
Dealing with Construction Permits 152 155 up
3
57.18 55.59 up
1.59
Getting Electricity 106 127 up
21
64.43 58.57 up
5.86
Registering Property 121 122 up
1
54.40 53.44 up
0.96
Getting Credit 32 29 down
3
70.00 70.00
-
Protecting Minority Investors 87 112 up
25
53.33 46.67 up
6.66
Paying Taxes 125 122 down
3
61.72 61.54 up
0.18
Trading across Borders 105 107 up
2
66.38 65.83 up
0.55
Enforcing Contracts 87 85 down
2
58.27 58.27
-
Resolving Insolvency 92 140 up
48
43.39 30.64 up
12.75

Positive=Doing Business reform making it easier to do business. Negative=Change making it more difficult to do business.

DB 2017 Rank: 116

DB 2016 Rank: 150

Change in Rank: up34

DB 2017 DTF (% points): 83.13

DB 2016 DTF (% points): 74.45

Change in DTF (% points): up8.68

Standardized Company
Legal form: Private Corporation
Paid-in minimum capital requirement: KES 0
City: Nairobi
Indicator Kenya Sub-Saharan Africa OECD high income
Procedure – Men (number) info_outline 7.0 7.8 4.8
Time – Men (days) info_outline 22.0 27.3 8.3
Cost – Men (% of income per capita) info_outline 21.1 54.0 3.1
Procedure – Women (number) info_outline 7.0 7.9 4.8
Time – Women (days) info_outline 22.0 27.5 8.3
Cost – Women (% of income per capita) info_outline 21.1 54.1 3.1
Paid-in min. capital (% of income per capita) info_outline 0.0 33.1 9.2
  • No. Procedure Time to Complete Associated Costs
    1

    Reserve a unique company name at the Huduma Center

    Agency: Nairobi Huduma Center

    The name reservation is regulated by the Companies Act 2015 (Part V, Section 48). The procedure begins by making a payment for name reservation at the cashier's desk of one of the Nairobi Huduma Centers. Then a payment slip, together with an application for reservation of a company name (Form CR14) are submitted to the counter service provided by the Nairobi Huduma Centers. The name is reserved for 30 days and can be extended to a maximum period of 60 days from the time of reservation.

    In addition to the Hudumas Center, the name reservation can also be done through a text-messaging system or online through the ecitizen portal. The text-messaging system (through safari.com company) works both for fee payment and name reservation. However, applicants still need to visit the Huduma Center to receive final name approval. This is why the majority of applicants choose to visit the Huduma Center directly, rather than use the text-messaging system. The ecitizen online platform (www.ecitizen.go.ke) is fully electronic and enables online name reservation. However, due to various challenges--such as inconsistent reliability of the system and lack of good internet connection and infrastructure for entrepreneurs--the online platform is not widely used.

    1 day on average KES 100 per name reservation
    2

    Apply for company registration

    Agency: Nairobi Huduma Center

    Under the Companies Act 2015 there entrepreneurs are now provided with standard Articles which can be adopted by a company. However, articles to supplement or modify the standard Articles may be provided. Furthermore, applicants can no longer apply for company registration at the Registrar of Companies (Sheria House). The entrepreneur must submit a business application package at the business registration assessment desk of two of the three Nairobi Huduma Centers (GPO Branch and City Square Branch) containing the following documents:

    a. Form CR6 (Notice of Appointment of Directors and their Particulars) and Form CR8 (Notice of Residential Address/Change of Address of Director of Company)
    b. Application to register company limited by shares - form CR1
    c. memorandum and articles of association
    d. Statement of nominal capital
    e. Application for name reservation- CR. 14
    f. Copy of identity card for each director
    g. Copy of PIN certificate
    h. Passport photo for each director (and contact details for each director).

    Under the 2015 Company Act, the previously required Form 201, Form 203, and Form 208 have been replaced by Form CR6 and Form CR8.

    According to the Official Gazette Notice Legal 61 published April 2016, there is a flat fee of 10,000 shillings for new company incorporation.
    12 days on average KES 10,000
    3

    Register for taxes at the Kenya Revenue Authority

    Agency: Kenya Revenue Authority

    The personal tax identification number (PIN) of directors and the company tax identification number are required to register for VAT, local service tax, and the Pay-As-You-Earn (PAYE) tax.
    The PIN certificates of at least two signatories (2 directors or 2 shareholders or a director and the secretary) of the company are required. The directors must apply for personal PIN numbers online at https://itax.kra.go.ke/KRA-Portal/ .

    Once the PIN numbers are received for directors (which is immediate), the applicant can then apply for the company PIN, VAT and PaYE. Unless the KRA has already received confirmation of the company incorporation from the Companies Registry, the entrepreneur must submit the certificate of incorporation and receive log-in details to proceed with online tax registration.
    1 day no charge
    4

    Apply for a business permit

    Agency: Nairobi City County

    Applicable permit fees fall within the following scales:
    - Large trader, shop, or retail service with 21-50 employees and premises of 300-3,000 square meters (or at a prime location): KES 30,000
    - Medium trader, shop, or retail service with 5-20 employees and premises of 50-3,000 square meters (fair location): KES 15,000
    -There is a 200 KES application fee applicable to trader, shop or retail services
    5 days KES 15,200 (KES 15,000 single business permit fee + KES 200 application fee)
    5

    Register with the National Social Security Fund (NSSF)

    Agency: National Social Security Fund

    The National Social Security Fund provides the employee with a lump-sum retirement benefit. Historically, the rate of return paid by the state is considerably less than that achieved by private schemes, but participation is mandatory. The employer pays a standard contribution of about 1% of salary, subject to a maximum of KES 400 per month. Half the contribution is deductible from the employee’s salary. The precise amount of the contribution (less than the maximum) is determined by reference to salary bands. As of June 2014, following the enactment of the new National Social Security Fund Act (2013), the pension contribution is 12% of the pensionable wages made up of two equal portions of 6% from the employee and 6% from the employer subject to an upper limit of KES 2,160.
    1 day no charge
    6

    Register with the National Hospital Insurance Fund (NHIF)

    Agency: National Hospital Insurance Fund

    The employee contributes a fixed sum to the National Hospital Insurance Fund (NHIF), which must be deducted by the employer from the employees’ salary.

    As of April 1, 2015, the rates of contribution range from a minimum of KES 150 for employees earning up to KES 5,999 to KES 1,700 for employees earning more than KES 100,000 per month. The contributions are used to offset the costs of medical treatment, but they only cover a fraction of actual costs. Hence, most companies provide employees with medical insurance.
    1 day no charge
    * 7

    Make a company seal

    Agency: Seal maker

    The requirement for companies to obtain a company seal has been made optional as a result of passing the Companies Act, 2015. However, in practice companies still get seals made. Seal makers request a copy of the certificate of incorporation in order to make a company seal.
    2 days, simultaneous between KES 2,500 and KES 3,500

    * Takes place simultaneously with previous procedure.