If you are thinking of starting a business in Kenya, then it is imperative you familiarize yourself with all the legal requirements you are expected to satisfy.
The first thing you must do is to go online to the Nairobi City Council Website and find out the kind of permits required to run your business legally. Another thing you might consider is going to your local City Council offices and talk to the officers. Ask them to explain the necessary documents you require and how to go about getting them. It’s very important that you speak to the local city council before going ahead with registration.
Another website you should visit for research is the KRA Website. It will give you details on how V.A.T. taxes are charged and should be paid. You should also get advice from a lawyer about tax requirements if you are registering a company.
In this article, I will share with you 4 legal requirements you require to start a business in Kenya. As always, ensure that you conduct further research about the particular industry you are planning to join before setting up the business.
1.) Business Name or Company Registration.
There are two ways you can legally register your business; you can start by registering your business name, this is ideal if you have a small budget and cannot be able to register a company yet. It’s a simple process, if you’re in Nairobi, first you go to Huduma Centre and do a name search (you give a list of 3 name options for your business) it’s Kshs. 100 per name, this takes three days. After the check, you can register the name of your choice and it usually takes at least 5 days and costs about Kshs. 1,000.
You can register individually, as a sole-proprietor or if you are 2 or more people, as a partnership. After you’re done, you will get a certificate of registration for your business and nobody will be legally able to use your business name.
Another way would be to register a Company if you have a higher budget of about Kshs. 20,000 to 35,000. This process is done by a certified lawyer. Choose a good, reliable lawyer to handle the matter for you and it should be done in about 2 weeks.
After the lawyer is done, you should have a certificate of incorporation, and for an extra fee (about Kshs.2500) you get a company seal. The lawyer can also assist you in getting a Tax PIN certificate for your business.
2.) City Council Business Permit.
This is a very crucial legal requirement to start a business in Kenya, without it you will not be able to conduct any activity. The details on the cost depend on the size of your premises and the industry you have chosen to do business in. For example, a regular sized bakery City Council permits costs Kshs. 8000 per year.
Talk to your local City Council officers on the cost and they may visit your premises to confirm the size of the location and they will advise on how to pay. You will get a receipt when you pay, and then the certificate itself after about a week.
3.) Food/ Health Related Permits.
Health permits are a necessary legal requirement for anyone looking to start a business in an industry that requires health certification such as food, bakery, beverage, salon etc. As per regulation, a Health Inspector will visit your place of business and after they have inspected your location, you will be certified. When you pay you receive a receipt and about a week later you get a certificate.
4.) Fire Safety Certificate
Currently, all businesses are required to be Fire safety certified. This requires you to have at least a fire extinguisher and any other fire safety requirements a Fire safety inspector will advise you on, based on your business. After the inspection, you will be certified and get a Fire Safety Certificate.
Just recently, the Nairobi City County announced the launch of the Unified Business Permit which consolidates all the requirements for running a business within the County.
This is a one-stop source whereby, after acquiring your Unified Business Permit, you will have paid for a Single business permit, fire Clearance Certificate, Advertising Signage (300 mm by 600 mm or less), Health Certificate, and Food Hygiene.
Hopefully the above tips will help you understand the legal requirements needed for starting a business in Kenya and set you on the right path as an entrepreneur.