If you own a foreign company and want to set up a local subsidiary in Kenya, the process is straightforward. A subsidiary is a separate legal entity from the parent company, meaning it operates independently while still being owned or controlled by the foreign company. Here’s a simple step-by-step guide to help you through the registration process.

Step 1: Choose a Company Name

Your first step is to select a unique name for your subsidiary. You need to check and reserve the name through the eCitizen platform, which is managed by the Business Registration Service (BRS) in Kenya.

Step 2: Determine the Structure of the Subsidiary

A subsidiary in Kenya is usually registered as a Private Limited Company (Ltd). This means it will have its own management, can enter contracts, own property, and be liable for its own debts.

Step 3: Prepare the Necessary Documents

You will need the following documents:

a) Parent Company Documents: A certified copy of the parent company’s certificate of incorporation and Memorandum & Articles of Association.

b) Subsidiary’s Articles of Association: A document outlining the company’s rules and regulations.

c) Details of Directors and Shareholders: Including names, addresses, nationality, passport copies and importantly the details of shareholding of the Parent Company.

d) Local representative: At least one director must be a Kenyan resident.

e) Registered Office Address: A physical location where the subsidiary will operate in Kenya.

Step 4: Register the Company

Submit the application online via the eCitizen platform under the BRS portal. Once approved, you will receive a Certificate of Incorporation, confirming the subsidiary is legally registered.

Step 5: Register for Tax and Compliance

After incorporation, the subsidiary is required to obtain the following statutory compliance documents:

a) Obtain a KRA PIN from the Kenya Revenue Authority (KRA) for tax purposes.

b) Register for VAT (if applicable), if the business will be selling taxable goods or services.

c) Enroll for NSSF (National Social Security Fund) and SHIF (Social Health Insurance Fund) for employees.

d) Apply for any necessary business licenses or permits based on the industry.

Step 6: Open a Bank Account

A corporate bank account in Kenya will be necessary for transactions. You’ll need the company’s Certificate of Incorporation, KRA PIN, and directors' identification documents to open an account.

Step 7: Begin Operations

Once all registrations and approvals are in place, your subsidiary is ready to operate legally in Kenya. Once your subsidiary has begun operations, the following are some of the ongoing compliance requirements that you need to look into to ensure smooth operations:

a) Filing annual returns with the Registrar of Companies;

b) Submit annual tax returns to the KRA, including corporate income tax and PAYE (for employees);

c) Preparing and submitting audited financial statements to the Registrar of Companies;

d) Ensuring timely remittance of SHIF and NSSF employee contributions; and

e) Renewing business licenses and permits as per their validity periods.

Permits and Licenses

Please note that depending on the nature of your subsidiary’s business activities, you may be required to obtain specific permits or industry-related licenses before commencing operations. These may include:

a) Trade licenses for general business operations;

b) Sector-specific permits, such as financial services, healthcare, manufacturing, or telecommunications;

c) Environmental permits if the business has environmental impacts;

d) Import/export licenses for businesses engaged in international trade.

Conclusion

Registering a subsidiary in Kenya is a relatively simple process if you follow the right steps. Using a legal or business consultant can help speed up the process and ensure compliance with all local laws. By setting up a subsidiary, your foreign company can expand its reach into the Kenyan market while maintaining a legally independent entity. Written by: Magdaline Njeru (mnjeru@cmadvocates.com)

Published on April 7, 2025, 2:25 p.m.