Branch Registration In Kenya
Branch Registration In Kenya
Establishing a branch in Kenya allows foreign companies to expand their operations into the East African market without the complexities of establishing a separate legal entity. A branch is a physical representation of a foreign company within the country. It’s not a separate legal entity but an extension of the parent company. This means the branch operates under the parent company’s legal structure and is subject to the same liabilities.
Key characteristics of a branch include
- No separate legal identity: The branch is not a distinct entity from the parent company.
- Liability: The parent company is responsible for the branch’s debts and obligations.
- Taxation: The branch is subject to Kenyan taxes on its income generated within the country. The corporate tax rate of branches in Kenya is 37.5%.
- Regulatory compliance: The branch must adhere to Kenyan laws and regulations.
Establishing a branch in Kenya involves the following key steps
1. Appoint a Local Representative
Designate a Kenyan resident to act as the branch’s legal representative. Appointing a local representative is crucial for establishing a successful branch in Kenya. This individual serves as the legal and operational face of your company within the country.
Key Responsibilities of a Local Representative
- Legal Representation: Acts as the official point of contact for legal and regulatory matters.
- Operational Management: Oversees day-to-day operations of the branch.
- Compliance: Ensures adherence to Kenyan laws and regulations.
- Government Liaison: Interacts with government agencies on behalf of the parent company.
2. Secure a Physical Office Address
Establish a registered office within Kenya. This address will serve as the official location for your branch and will be used for legal and administrative purposes.
3. Prepare Necessary Documentation
- Gather certified copies of the parent company’s incorporation documents, memorandum, and articles of association.
- Provide passport copies and details of directors and shareholders.
- Prepare a detailed description of the branch’s operations.
Note: documents originating from a foreign jurisdiction must be notarized by a duly registerednotary public to validate their authenticity.
Secondly, any document presented in a foreign language must be translated to English by an authorized institution
4. Reserve a Business Name:
Conduct a name search and reserve a suitable name for your branch.
Process Overview
- Name Generation: Brainstorm potential names that resonate with your target audience and align with your brand identity.
- Name Search: Utilize the eCitizen portal to conduct a thorough search for available business names. You can typically submit multiple options for consideration. Useful link;
- Name Reservation: Once you’ve identified an available name, proceed with the reservation process through the eCitizen portal. This usually involves a fee.
- Name Approval: After successful reservation, you’ll receive confirmation of the approved business name.
5. Register with the Registrar of Companies:
The registration process typically involves:
- Submitting the required documents: This includes the completed registration forms, certified copies of identification documents for directors and shareholders, and any other relevant paperwork.
- Payment of registration fees: The Registrar of Companies charges fees for company registration, which vary depending on the type of company.
- Processing time: The registration process can take several days to complete, depending on the efficiency of the Registrar’s office and the completeness of your application.
- Issuance of Certificate of Incorporation: Upon successful registration, the Registrar of Companies will issue a Certificate of Incorporation, which serves as official proof of your company’s existence.
6. Obtain Tax Identification Number (PIN):
Register for a PIN from the Kenya Revenue Authority (KRA) for the branch. A Tax Identification Number (PIN) is essential for any business operating in Kenya. It is used by the Kenya Revenue Authority (KRA) to identify taxpayers and administer tax obligations.
7. Acquire Necessary Permits and Licenses: Depending on your business activities, obtain specific permits and licenses
8. Foreign Employees, Immigration Considerations and Labor Laws in Kenya
Employing expatriate staff is often necessary to fill specific skill gaps. this requires careful consideration of immigration and employment regulations.
Immigration Requirements
Foreign employees must obtain appropriate work permits from the Department of Immigration Services. The process typically involves:
Work Permit Application: The employer applies for a work permit on behalf of the foreign employee, providing details about the employee’s qualifications, job description, and salary. The work permit issued to employees is Class D permit which allows them to work and live in Kenya.
- Visa Requirements: The foreign employee must obtain a suitable visa to enter and work in Kenya, such as an employment or investor visa.
- Dependent Permits: If the employee is accompanied by family members, they may require dependent permits.
Employment Regulations
Labor Laws: Employers must comply with Kenyan labor laws, including minimum wage, working hours and register with relevant labor bodies like NSSF and NHIF for employee benefits.
Taxation: Expatriate employees are subject to Kenyan income tax, and employers have obligations regarding PAYE deductions.
Remittances: There are regulations governing the remittance of funds to foreign employees.
Conclusion On branch registration in Kenya
In conclusion, branch registration in Kenya offers foreign companies an effective way to expand into the East African market without forming a separate legal entity. The process involves several critical steps, including appointing a local representative, securing a physical office, and preparing necessary documentation. Compliance with Kenyan laws and regulations is essential, as is obtaining the necessary permits and licenses for both the business and its foreign employees. For professional assistance in navigating these requirements, including tax advisory services and work permits, our team is available to provide comprehensive support and guidance for branch registration in Kenya.
We will guide you on;
- Securing a physical office
- Provision of a local representative
- Legal registration of a branch in Kenya
- Tax advisory services
- Acquiring work permits for investors and employees, and also dependent passes to their spouses and children.
- Any other related issue thereof.
