Can Foreigners Own Businesses in Kenya?
Foreign Ownership of Businesses
Foreigners can take advantage of business opportunities in Kenya and set up or buy businesses while living in Kenya. However, they should take note of and adhere to the following legal considerations:
- Work Permits
A foreigner in Kenya requires a work permit to live in Kenya and run a business. There are various classes of work and residence permits depending on the type of investment you are coming to run in Kenya. Further, a foreign investor coming to Kenya with their family will need to obtain the requisite resident permits (dependents’ passes) to facilitate lawful immigration status in Kenya.
Depending on the sector you intend to invest in, listed below are some of the permits a foreigner investor will be minded to obtain before they can initiate their business while living in Kenya:
- ClassA: (for prospecting and mining)
- ClassB: (Agriculture and Animal husbandry)
- ClassC: (Prescribed profession)
- ClassF:(Specific manufacturing)
- ClassG:(Specific trade, business or consultancy)
- Minimum Investment Amount
Any foreigner intending to set up a business and obtain a permit to live and work in Kenya must show that they can provide minimum capital of at least USD 100,000. This is proved by audited accounts provided by the foreign investor in their application to obtain a Permit.
Work permits are expensive in Kenya, costing around US$ 2,000. In the true sense however it is no uncommon to spend around double that amount. When you factor in the need to get a short-term permit as well, plus all of the rigors of submitting applications and supporting documents, it does make sense to use a local expert to assist you.
- Duly filled and signed Form 25 online form. You will print out the form at the end of the application. You can also access your previous applications by clicking here
- Two copies of detailed and signed cover letter from the employer/self/company/organization, addressed to the Director of Immigration Services
- Copies of valid national passport
- Two(2) recent passport size colored photos (for both new and renewal)
- Current Immigration status if in the country
- Documents in foreign languages should be translated into English by either the Embassy, Public Notary, or authorized /recognized institution
- Copy of any previous permit(s) and or pass (es) held
- Proof of land ownership/leasehold
- Proof of capital availability (USD 100,000)
- Clearance/license from relevant bodies
- Copy of PIN certificate
- Current, Signed audited accounts for the last one year (for renewals)
- Valid organization Tax Compliance Certificate for new cases, and both organization and individual Tax Compliance Certificatesfor renewals cases from KRA
- Processing fees non refundable (Kshs. 10,000)
TEMPORARY WORK VISA/PERMIT
Check the current Kenya visa regulations at the foreign ministry or find the Kenyan embassy in your country of permanent residence to obtain the visa application requirements for Kenya;
- Apply for a business visa;
- On arrival fill the special pass form
- Get a temporary work visa application form and fill it accurately;
- Make all the necessary payments;
- Attach all the necessary documents like:-
- Letter of invitation from the Kenyan Entity.
- Letter of motivation (written by the applicant)
- Payment slips
- Submit all the documents to the Ministry of Internal affairs in Kenya or at the Embassy of Kenya in the Country of Origin;
- Go to Min of Internal Affairs to the ministry after about two (2) weeks and pay for a Special Pass.
- Pick up passport later with Special Pass as the work permit is being processed.
- Physically go to the Min of Internal Affairs Office to inquire about if your work permit has been processed.
- If it is, you give them your passport. I dont know if they need to keep it for a few days (or weeks) or if they can process it straight away.
- Make payment for Work Permit.
- Receive the Temporary work permit.
- Requisite Licences
It is important to note that certain sectors are regulated industries and you may need to apply for the requisite licence from the regulating authority (a statutory body under Kenyan Law) before you can legally operate certain businesses. Examples include the oil, energy, mining, pharmaceutical, liquor industries etc.
- Tax rules
Kenya has a residency-based tax system whereby a resident is taxed on their worldwide income while a non-resident is taxed on income derived from Kenya. Therefore, take into consideration whether Kenya has Double Taxation Agreements with your home country in order to take advantage of foreign tax credits with regard to Kenyan tax liabilities on your business income.
Authored by Henry Njuguna Adv, MCIArb
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