DOING BUSINESS IN KENYA

PROCEDURES AND REGULATIONS, OPPORTUNITIES, SOURCES

OF FINANCE AND INCENTIVES

A handbook for local investors

Booklet prepared by Mary Mbithi and Jamuhuri Mainga

for

United Nations Development Programme (UNDP)

January 2006

1
Why this Handbook
The motivation for preparing a handbook for local investors in Kenya is the need
to promote local investments. This arises from the current government efforts to
promote both local and Foreign Direct Investments (FDIs). While there is a
significant material available on foreign investment promotions particularly on
investment opportunities, requirements, procedures and regulations, there is little
of such material on local investments.

The recent Government of Kenya (GoK) move to simplify business licenses, the
on going efforts to amend the Companies Act, the enactment of the Investment
Promotion ACT (2004) and the preparation of the Sessional Paper No. 2 of 2005
on Development of Micro and Small Enterprises for Wealth and Employment
Creation for Poverty Reduction introduces new opportunities for indigenous Kenyan
entrepreneurs. However, access to and awareness of such legislations as well as
other legal business requirements and information has remained largely confined
to elitist business leaders. Rural entrepreneurs in provinces, districts and other
towns may not have access to such investment information, which they could
take advantage of.
This is particularly true for small-scale entrepreneurs, who, not being well informed
of the necessary legal business requirements they should adhere to with respect to
their enterprises, may often feel that they are harassed by local authorities.
Many local entrepreneurs prefer to run their businesses in an informal state,
which hampers their potential for growth, expansion and innovation. This also
prevents them from taking advantages of the incentives provided by the government
for formal investment businesses.

Purpose of the handbook

The purpose of this handbook is to provide information to the local entrepreneurs
and business leaders on the regulations, procedures and requirements, the
opportunities and incentives offered by various laws and regulations, the kinds of
support services they can seek from the government, and widen their access to
information on business opportunities and sources of funding for investment.

2
Target
This handbook targets the local investors, particularly the small business
entrepreneurs. Those intending to start a small scale business will find it useful as
it provides a wide range of business and investment opportunities to assist one in
decision making as to where to invest. It also provides an indication of the regulatory
requirements for various businesses. Those already in business will also find it
useful. It provides information on government incentives and other opportunities
that formal or businesses registered with the registrar of companies could take
advantage of. This information is important to the entrepreneurs who want to
grow and expand their businesses. It also provides a list of important agencies
and organizations where a local investor could find more information with respect
to their business requirements.
The handbook should be taken as a guide only, and more information on the relevant
business should be sought from the relevant agencies.

3
IN THIS HANDBOOK

Introduction 5

Starting A Business: What You Should Do 6

Procedures And Requirements For Establishing A Business 7

Other Regulatory Requirements In Operating A Business 9

Regulatory Requirements For The Mses 15

Where To Invest 18

Export/Import Business Opportunities 21

Where To Borrow Money And What You Are Required To Do 23

The Taxes You Are Required To Pay 25

Incentives For You 26

For More Information: Some Useful Contacts 29

4
INTRODUCTION
The Investment Promotion Act (2004) is the main Government of Kenya legislation
with a purpose of promoting and facilitating both local and foreign investments.
The Act particularly states the licenses and other related requirements that a local
or a foreign investor in Kenya should have.
Most of the local investment businesses in Kenya fall under the Micro and Small
Enterprise (MSE)1 business sector. The sector employs about 74.2% of the Kenyan
workforce and contributes to about 18.4% of the countrys Gross Domestic Product
(GDP). The government of Kenya therefore considers this sector as an important
sector in the development process, and is in the process of putting in place some
programmes to develop this sector. The Economic Recovery Strategy Paper for
Wealth and Employment Creation (ERS) 2003-2007 identifies SMEs and in
particular jua kali expansion as one of those activities that will assist in economic
recovery and growth.
The publication of Sessional paper no. 2 of 2005 on Development of Micro and
Small Enterprises for Wealth and Employment Creation for Poverty Reduction is
one of the most important current government efforts to develop the MSE sector.
The Act sets policies for developing the MSEs. Some of these policies include,
among others:
Continued legal and regulatory reforms in the sector,
Harmonization of trade licensing and regulatory services,
Decentralization of business registration to the provincial levels and
eventually to district levels,
Quickening the process of business registration,
Reforming and enforcing the local authority Act to limit and maintain its
essential regulatory powers,
Formulating and implementing a MSE Act to provide a framework for
implementing the MSE policies,
Improving market and marketing opportunities for MSEs both locally and
internationally, through improved business linkages, increased
participation of MSEs in public procurement and increased subcontracting,
among other initiatives.
Increasing financial services to MSEs,
Promoting gender equity by increasing equal access to financial services
for women and men, empowering women, improving gender access to
education, technology development and entrepreneurship.
Reforming the tax regime to improve its transparency and efficiency,
strengthening tax collection and harmonizing the tax system, and,
1
These are businesses employing 1-50 workers in all the sectors of the Kenyan economy.

5
 Improving health and safety in workplaces by ensuring that order,
occupational safety, health, hygiene and environmental management
principles are observed by all operators.
The Procurement and Supplies Act (Cap 412) of the laws of Kenya became
operational in November 2005. This Act recognizes the need to give priority to
local companies in procurement of goods and services. The purpose is to protect
the local companies, particularly the MSEs from unviable competition, increasing
the market opportunities, therefore giving the local enterprises opportunity to grow.

Restrictive Trade Practices, Monopolies and Price Control Act (Cap 504) of the
laws of Kenya encourage competition in the Kenyan economy. It also prevents the
abuse of dominance and market entry barriers (both formal and informal); therefore
giving MSEs a fair chance to do business.

STARTING A BUSINESS: WHAT YOU SHOULD DO

The formal procedures for starting a business in Kenya are to a great extend
determined by the type of business one wishes to establish and the sector to which
the business belongs.

Investment Certificate
As a local investor, does the law require that you must have an investment
certificate?
No. It is not a must for a local investor to have an investment certificate. One
however may apply and obtain an investment certificate, from the Kenya Investment
Agency (KIA) provided that:
The amount they want to invest is at least KSh. 1 Million, and,
The investment and the activities related to it are lawful and beneficial1

What is the use of the investment certificate?

The investment certificate entitles the investor to licenses which they need to apply,
for a particular investment.

Investment registration: is it necessary?

The investment promotion Act (2000) requires that local investors without investment
Certificate register their investments with the Kenya Investment Authority (KIA).
All investments should register their business names with the registrar of Companies.
2
Activities beneficial to Kenya are those that:
Create employment,
Lead to acquisition of new skills and technology,
Transfer technology,
Contribute to government revenue,
Lead to use of local raw materials, supplies or services,
Lead to value addition of local, natural and agricultural resources,
Increase foreign exchange through export or import substitution,
Utilize, promote, develop and implement information and communication technology.

6
PROCEDURES AND REQUIREMENTS FOR
ESTABLISHING A BUSINESS
The common procedures and requirements for a local investor establishing a
business in Kenya are presented below.

Type of business Main procedures Costs

Enterprise
Registered Two procedures: name 1. For name search,
Companies search and registration. payable fee depends
This involves: on companies, share
Companies are Proposing your companies capital and ranges
registered as limited name between Ksh.
liability companies Applying to the registrar of 2,800-60,000.
and regulated by companies at the Attorney
the Companies Act General's Chambers in 2. For registration, a
(Cap 486). Nairobi to reserve this standard fee of Ksh.
name for your company. 6,800
Supplying the following
documents which are
prepared with the help of
a lawyer:
Memorandum and
articles of association
Notice of situation of
registered Office
Particulars of directors
and secretaries
Declaration of
compliance
Share capital form.
Branch offices of You should deliver the
companies following documents to the
registered outside Registrar of Companies:
Kenya A certified copy of the
Charter, Statutes or
Memorandum and Articles
of Association of the
Company, or other
instruments defining the
constitution of the
company.
A list of the directors and
secretary of the company,
giving full names,
nationality and other
directorships of companies
in Kenya

7
Type of business Main procedures Costs
Enterprise
Registered Two procedures: name 1. For name search,
Companies search and registration. payable fee depends
This involves: on companies, share
Companies are Proposing your companies capital and ranges
registered as limited name between Ksh.
liability companies Applying to the registrar of 2,800-60,000.
and regulated by companies at the Attorney
the Companies Act General's Chambers in 2. For registration, a
(Cap 486). Nairobi to reserve this standard fee of Ksh.
name for your company. 6,800
Supplying the following
documents which are
prepared with the help of
a lawyer:
Memorandum and
articles of association
Notice of situation of
registered Office
Particulars of directors
and secretaries
Declaration of
compliance
Share capital form.
Branch offices of You should deliver the
companies following documents to the
registered outside Registrar of Companies:
Kenya A certified copy of the
Charter, Statutes or
Memorandum and Articles
of Association of the
Company, or other
instruments defining the
constitution of the
company.
A list of the directors and
secretary of the company,
giving full names,
nationality and other
directorships of companies
in Kenya

8
OTHER REGULATORY REQUIREMENTS IN
OPERATING A BUSINESS
Once a business has been registered, there are other legal requirements that
these businesses are required to meet. Some of these requirements are specific to
the business types.

Requirement How often Businesses Businesses

(frequency) applicable applicable
Single business Permit Every year All businesses Local
Issued under Local in Kenya authorities.
Government Act (Cap
265).

Trade License Every year All businesses. Ministry of

Issued under Trade Trade and
Licensing Act (Cap 497). Industry
One has to provide:
- A tenancy agreement/
lease/ or title deed of
the business premises;
- identity card or passport
- Personal Identification
Number (PIN);
- Certificate of incorpo-
ration or certificate of
registration of business
name.

Value added Tax (VAT) Once All businesses Kenya Revenue

No. Authority

Personal Identification Once All businesses Kenya Revenue

Number (PIN) Authority

National Social Security Once All businesses (NSSF),

Fund (NSSF) No employing Ministry of
more than 5 Labour.
workers

National Hospital Once All businesses NHIF

Insurance Fund (NHIF) employing Ministry of
No. more than 5 Health
workers

Environmental Impact Every year All National

Assessment No. manufacturing Environmental
and processing Management
businesses Authority
(NEMA).

9
 Requirement How often Businesses Businesses
(frequency) applicable applicable
Exporters Code Number Once All export Department of
One has to provide: businesses. Customs and
- Copy of Certificate of Excise.
Incorporation
- Copy of Certificate of
Registration of Business
Name
- Copy of Trade License

Export Licenses Every year Businesses Department of

Issued under Exports and which touch on Internal Trade
Essential Supplies Act public and (Ministry of
(Cap 502). food security; Trade and
One has to produce conservation of Industry).
Authority or permit from wildlife and
the relevant government natural
agency resources and
preservation of
national
heritage3.

Import Licenses Every year Import Department of

businesses of a External Trade
few items (Ministry of
restricted for Trade and
security, health Industry)
or
environmental
reasons.
Additional requirements for specific businesses
Business type Requirement How often Responsible Agency
Plants and plant products Plant Import Every year KEPHIS.
import or export. Permit.
Plant export
Permit.
Phytosanitary Every time
Certificate import or
export is made

Drugs and Drugs and Every time Pharmacy and

Pharmaceuticals imports. Pharmaceuticals imports are Poisons Board.
Import permit. made.

Buying and selling of Registration of Once Pharmacy and

Pharmaceuticals. premises. Poisons Board.

Livestock trading Stock traders Every year City/County

license. Councils
3
These include: military equipment, antiquities and works of art, wood-charcoal and timber, products
related to endangered species such as rhino horns, and live animals other than livestock and domestic pets.

10
 Additional requirements for specific businesses
Business type Requirement How often Responsible Agency
Horticultural products. - Export permit Every time Horticultural
- Compliance exports are Crops
to traceability made Development
of produce, Authority
hygiene, (HCDA)..
Maximum
Residue Level
(MRL), Good
Agricultural
Practices (GAP)
and proper
post harvest
handling
procedures.

Live animals export Health Every time Department of

Clearance exports are Veterinary
Certificate made Services.
Motor vehicle components Dealers license Every year. City Councils
or accessories.

Used motor vehicles. Buying or Every year. City Councils

selling business
license.
-Certificat of Every time Ministry of
Roadworthiness imports are Transport
for used made.
vehicles
originating
from Japan
and Dubai.

Public transport - Public Every year Ministry of

carriers Transport/
license
- Road license Every year Kenya Revenue
Authority (KRA)
- Transport Every year Kenya Revenue
Business authority (KRA)
License (TBL)
Scrap metal License under Every year Ministry of
Scrap Metal Trade and
Act. Industry

11
 Additional requirements for specific businesses
Business type Requirement How often Responsible Agency
Fishing - Certificate of Every year Department of
registration fisheries.
of fishing
vessel.
- License to Every year
catch fish
under
Fisheries Act.

Processing and Export of - Processing Every year Department of

Fish. license fisheries.
- Fish
movement
permit
- Certificate of Every time
compliance exports are
with KEBS for made.
fish handling
and
processing
- Export permit
- Health
certificate.

Hotel/ restaurant - Hotel/ Every year City/Town

business. restaurant Council after
license. providing a
- Restaurant certificate of
mangers health.
license
- General
retail liquor
license.

Food business (selling, License to use Every year City /County

preparing) premises for Council
that purpose.

Milling of Maize Millers license Every year National

Cereals and
Produce Board.

Tea Factory Manufacturing Every year Ministry of

license Agriculture

Sugar mill Sugar or Every year Ministry of

jaggery mill Agriculture
license

12
 Additional requirements for specific businesses
Business type Requirement How often Responsible Agency
Coffee buying, selling, License to carry Every year Ministry of
milling, warehousing or out the relevant agriculture
exporting transactions.
Movement
permit.

Dairy - Registration Every year Department of

under the Veterinary
Dairy Services.
Industry Act.
- Dairy
manager
license.

- Registration
of premises
as a dairy.
- Milk
Purveyor
license.

Hides, skin and leather. - Buyers Every year Department of

license. Veterinary
Services
- Exporter or (Ministry of
importer Livestock and
license. Fisheries
Development)
- Registration
certificate for
the premises
under Hides,
Skin and
Leather
Trade Act.

Bacon factory License Every year Department of

under Pig Veterinary
industry. Services
(Ministry of
- License to Livestock and
slaughter Fisheries
Pigs. Development)

- License to
keep pigs.

13
 Additional requirements for specific businesses
Business type Requirement How often Responsible Agency
Slaughter house - License to Every year Department of
operate a Veterinary
slaughter Services
house. (Ministry of
- License Livestock and
under the Fisheries
Kenya meat Development)
Commission
Act.
- License to
slaughter
Pigs.
- License to
keep pigs.

Export of meat - License Every year Department of

under Kenya Veterinary
Meat Every time one Services
Commission has to export (Ministry of
Act. Livestock and
Fisheries
- Certificate of Development)
Health.

Pest control products License for Every year Pest Control

premises. Board (PCB)

Dealing in precious License to Every year Ministry of

metals trade in Trade and
unwrought industry
precious
metals.

Diamond dealing Diamond Every year Ministry of

dealers Trade and
license. industry

Making of films - Filming Every year Ministry of

license Information
- Authorization and
to make film Telecommunica
in a national tions
park.

14
REGULATORY REQUIREMENTS FOR THE MSEs
Most of the MSEs are not registered businesses under the registrar of Companies
and are therefore referred to as informal. To take advantages of the government
incentives and access the formal financial services, the businesses need to be
registered.
The regulatory requirements for MSEs are presented below

Requirement How often Businesses Businesses

(frequency) applicable applicable
Hawking. - License Every year City/ County
Given on Council
production
of:
Identity Card
Certificate of
good
conduct
- A fee of Ksh.
25 daily.
- Hawking to
be done on
designed
areas

Bulk agro businesses - License Every year City/ County

Including Council
Vegetables - Pay a fee of Every time one
Fruits Kshs. 100 sells from the
Grains markets.
Potatoes - One
Tomatoes operates in a
designated
market in
cities or
towns e.g.
Wakulima
Market in
Nairobi.

Jua kali products including: - Single Every year City/ County

Motor mechanic business Council
Engineering permit
Manufacturing industries - Fee Monthly fee of
- One Ksh: 200
operates in Or
designated weekly fee of
areas, or in, Ksh. 50
- Jua kali
sheds

15
Requirement How often Businesses Businesses
(frequency) applicable applicable
Paper & paper products, - Single Every year City/ County
printing & publishing Business Council
Permit given
on
production
of:
Physical
address
Certificate of
good
conduct

Textile, wearing apparels - Single Every year City/ County

& leather product shops Business Council
Permit given
on
production
of physical
address

Wood, wood products Single Business Every year Ministry of

and carpentry Permit Environment

Whole sale & retail trade - Single Every year City/

Business County Council
Permit
- Trade
License

Restaurant and hotels - Single Every year City/

Business County Council
Permit and Ministry of
- Trade health.
License

Textile and tailoring - Single Every year City/

Business County Council
Permit
- Trade
License

Textile and tailoring - Trade Every year City/

License County Council
- Weekly fee of
Ksh. 50
- Sell in
designated
areas

16
Requirement How often Businesses Businesses
(frequency) applicable applicable
Meat and meat products - Single Every year City/County
Business Council
Permit
- Trade Department of
License Veterinary
Services

Live animals - Fee of On entry to the City/

Ksh. 50 designated County Council
- Operate in market areas
designated
market areas

Transport and - Fee: Ksh. 70 Daily City/

communication County Council
(Matatu business)
- Transport Every year Ministry of
Business Transport
License
- Certificate of
good
conduct
- Road license
- Insurance
- Root number

Real estate, and Single Business Every year City/

businesses services, Permit Issued County Council
brokers, auctioneers on provision of
location details

Handicrafts and carvings - Trading Every year City/

(curios) license County Council
- Fee: Ksh:
100
- Operate in
designated
market areas
or places

Other small business e.g. Single business Every year City/

Barber shops Hair Permit Issued County Council
dressing on provision of
location details

17
WHERE TO INVEST
Requirement Sector
Agriculture and agro-processing

Food crops Maize, potatoes, wheat, various

Market opportunities exist in local,
EAC and COMESA region. horticultural crops, sorghum, millet, peas,
coconuts, cashew nuts, sugar.

Commercial crops4
Market opportunities exist in local Tea, coffee, pyrethrum, flowers, Fruits and
and export markets in Europe vegetables, cashew nuts, cotton, barley,
and United States of America as Macadamia nuts, oil crops (sunflower).
well as in other developed
countries.

Forestry and related activities - Planting of softwood plantations,

- Manufacture of paper products,
Value addition of hard and soft wood
products such as: furniture and joinery
flooring and panelling, veneer and
plywood, organic honey-processing
industry, manufacturing of beekeeping
equipment, beeswax processing,
development of bee-pollination-based
industries, production and promotion of
bee products such as royal jelly, provision
of services for the certification of organic
honey production, planting for herbs and
medicinal purposes.

4
Opportunities exist in organic and inorganic production, as well as in value addition
activities related to these products. In horticultural sector for instance opportunities in related
activities include:
Export of produce,
Provision of transport facilities,
Production of propagation materials,
Establishment of soil-analysis services,
Manufacture of greenhouse plastics,
Production of inputs such as fertilizers, herbicides and pesticides,
Production of packaging materials.
Processing,
Certification services,
Provision of chilling, freezing and cold-storage facilities,

18
Requirement Sector
Livestock and related activities Cattle (both beef and dairy), goats and
Opportunities exist in production, sheep, Pig, poultry, wildlife farming (e.g.
processing, forage feed Ostrich and crocodiles).
production, animal feed
processing, transport, export and
provision of related services such
as breeding, provision of veterinary
drugs and certification services.

Market opportunities exist in local,

regional and other export markets

Fisheries and related activities.

Market for fisheries products exists
locally, regionally, and in other
export markets including European
countries, Israel and Japan.

Opportunities
Fishing, fisheries processing and Nile perch, Freshwater crayfish, local fish
export of both processed and species, Shrimps, Ornamental fish, fish skin
ornamental fisheries, fish farming, leather, Fish meals, Tilapia, Mollusks,
local and regional cold distribution Crustaceans (lobsters, prawns, crabs), dry
facilities including production of shark fins, Marine shells
ice and drying and smoking of
fish.
Other opportunities include
processing of :
- Fish skins into leather,
- Fish oil
- Fish meal production
- Nile Perch fish bladder
- Skin and carcasses to gelatin.

Services sector Accommodation facilities, tour operator

Tourism services, eco-tourism, development of
cultural heritage sites and historical
locations, development of water sports such
as boat cruising and skiing, events and
exhibition facilities and services.

Transport infrastructure Opportunities exist in road development

and rehabilitation, water transport services,
Public transport, goods transport.

Port facilities Provision of conventional cargo operations,

container transport and cruise ships.

19
Requirement Sector
Information and communication Internet-related hardware and software,
technologies (ICT) Provision of value-added services in voice
and imaging products, teleconferencing,
data capture and processing, call centres,
radio paging, and broadband wireless.
Processing accounting data,
Provision of e-business services,
Printing and publishing media and
television,
Provision of high-level ICT training
facilities.

Information and communication Internet-related hardware and software,

technologies (ICT) Provision of value-added services in voice
and imaging products, teleconferencing,
data capture and processing, call centres,
radio paging, and broadband wireless.
Processing accounting data,
Provision of e-business services,
Printing and publishing media and
television,
Provision of high-level ICT training
facilities.

Telecommunications Telecommunications machinery and

equipments and the related services in
urban and rural areas.

Financial services Banking, insurance, brokerage

Energy
Petroleum and related products LPG, motor fuels and related services
mainly in rural areas.

Electricity Provision of electrical appliances and

gadgets and the related services such as
repairs.

Solar energy Provision of solar gadgets and related

services.

Mining Mining of cement, stone, refractory bricks,

paint and glass, special stones for
preparation of artefacts, phosphates for
agriculture,
Salt for domestic and chemical uses, and
gravel iron ore for the iron and steel
industry.

20
 Requirement Sector
Manufacturing Manufacture and making of textiles and
garments, cotton ginning,
Assembly of automotive components and
electronics,
Manufacture of tires, and vehicle spare
parts, Manufacture of paper, chemicals,
pharmaceuticals, animal-feed processing,
beverages, cement and ceramics,
chemicals, canning, bottling and glassware,
packaging and tins, for both the domestic
and the export markets, plastic articles and
agro processing.

EXPORT - IMPORT BUSINESS OPPORTUNITIES

There are opportunities to do export /import business. These opportunities are as
a result of Kenya being a member of a regional trading group or due to agreements
and special provisions Kenya has obtained from developed countries. Some of
these opportunities and the relevant benefits are presented below:

Regional group/agreement Provision Benefiting products

or initiative
East African Community Declining tariff on All products
(Kenya, Tanzania and Kenyan exports to
Uganda)5 Tanzania and Uganda,
with tariffelimination
The region is now a expected in year 2010.
Customs union.
Imports from Tanzania
and Uganda to Kenya
are duty-free.
Common Market for Duty free trading All products
Eastern and Southern between Kenya and other
Africa (COMESA) group. 10 COMESA countries:
Kenya has opportunities Burundi, Djibouti, Egypt,
to trade with 19 other Madagascar, Malawi,
COMESA member Mauritius, Rwanda,
countries. Sudan, Zambia and
Zimbabwe.
5
Goods from Tanzania and Uganda are now imported to Kenya duty-free. Goods from Kenya to
Tanzania and Uganda will be taxed on a yearly declining basis, with the taxes expected to be eliminated
by the year 2010. Goods from countries, other than the EAC to Kenya, Tanzania or Uganda will face
similar import duties (The Common External Tariff, CET) of 0%, 10% and 25% for raw materials or capital
goods, Semi-processed or intermediate goods and finished goods respectively.

21
Regional group/agreement Provision Benefiting products
or initiative
African Caribbean Pacific Duty-free market access A wide range of
European Union until 2008, when these agricultural products
(ACP-EU) Agreement. trading arrangements will (such as fruits,
Through this agreement, change. vegetables, flowers,
Kenya has access to the coffee, tea, spices,
markets of the 25 EU natural honey) as well as
member countries. some industrial products.

African Growth and Duty-free access to the A wide range of products

Opportunity Act (AGOA Unites states of America including agricultural
(USA) market products, manufactures,
textile and apparels
provisions, among
others.

Generalised System of Preferential duty Most products including

Preferences (GSP). treatment to a wide agricultural products and
Through this scheme, range of products manufactured products.
businesses in Kenya can originating in developing
export to: Australia, countries.
Canada, Japan, New
Zealand, Switzerland and
United States of America.

22
WHERE TO BORROW MONEY AND WHAT YOU ARE
REQUIRED TO DO
Type of institution Benefiting products

Commercial banks - You need to be a customer of the

- Provide short-term finances. bank,
There are about 40 commercial - A completed loan application form
banks in Kenya. Examples of these from the respective bank.
banks are: Kenya Commercial - A business proposal on what you
Bank want to do.
Barclays Bank - Bank statements for 6 months or less.
National Bank of Kenya - Collateral or security. This could be:
Standard Chartered Bank Title deeds
Cooperative Bank Chattels mortgage over machinery
Citibank and equipment
Commercial Bank of Africa Motor vehicles log books
Stanbic Debenture over company assets
First American Bank Non supported guarantees

Export-Import Banks (EXIM) You must be exporting or importing

- These banks have organized credit goods or services to or from the
facilities with some banks in Kenya. sponsor country.
More information on these credits is Countries such India and China are
obtainable from Central Bank of some of the key sponsors of such
Kenya, Industrial Development Bank banks.
(IDB) and from Commercial banks.

Development Banks
- Provide long-term development Copy of Certificate of Incorporation
funding Copy of Certificate of Registration of
They include: Business Name
Industrial and Commercial Copy of Trade License
Development Corporation (ICDC).
Industrial Development Bank (IDB)

External Finances
- These include global facilities to - Businesses must be registered with
finance private sector establishment the registrar of Companies.
in various sectors such as the - Requirements depend on the specific
European Investment Bank (EIB) investment facility.
facility operated through all major
commercial banks. More information
is available from Central Bank of
Kenya, commercial banks, and
Ministry of Trade and Industry.

23
Type of institution Benefiting products

Micro-finance institutions Copy of Certificate of

These include: Incorporation
K-REP Copy of Certificate of Registration
Faulu Kenya of Business Name
NGOs such as Action Aid, Care Copy of Trade License
Kenya
Equity bank
SACCOs
Cooperatives

24
THE TAXES YOU ARE REQUIRED TO PAY
Type of Tax Tax levied on Rate %
Income tax Income such as from business, Rate depends on taxband:
employment, rent, dividends, Income of KSh / year Rate (%)
interest and pensions First: 121 968 10
Next: 114 912 15
Next: 114 912 20
Next: 114 912 25
Over: 466 704 30

Corporate tax Corporate bodies such as 30

limited companies, trusts,
clubs, societies, associations
and cooperatives.

Withholding Dividends and royalties 5

taxes

Value Added Designated goods and services 16

Tax (VAT) (locally produced or imported)
for all registered businesses
with thresholds of Ksh 3 M per
year.
Excise taxes Some products including Alcoholic drinks: 15-85
alcoholic beverages, tobacco Tobacco products: 130
products, petroleum products,
motor vehicles, carbonated
drinks and mineral water,
cosmetics, jewellery and cell
phone airtime.

Import duty Goods imported into the Inline with the East African
country Customs Unions Common
External Tariff (CET):
Raw materials/ capital goods:
0%
Semi-processed/intermediate
goods: 10%;
Finished goods: 25%
Import duties 'sensitive
products6 can however be
higher than these rates.

6
Sensitive products to Kenya and indeed to the EAC region according to the EAC Common External
Tariff (CET) include: dairy, maize, wheat, rice, sugar, tobacco products, cement, second hand clothes and
cotton fabrics among other products.

25
INCENTIVES FOR YOU
Incentives for export and import oriented businesses
Incentives Main provisions Main requirements for
qualification

Duty drawbacks Draw back of import duty on Authorization from the

Provided for materials imported for the Commissioner of Customs
under the East manufacture of goods which before one starts
African Customs are to be: exported, manufacturing.
Management transferred to a free port or The goods for export must
Act transferred to an Export be a direct result of the
Processing Zone. imported material used in
their manufacture.
Present the goods
destined for export for an
examination by an officer.
Declare that the
conditions under which
drawback may be allowed
have been fulfilled and
that the goods have
actually been exported.
Present the claim for
drawback within a period
of 12 months from the
date of exportation of the
goods.

Manufacturing Exemption from A license from

Under Bond customs/excise duty and theCommissioner of
VAT on imported plant, Customs to operate a
(MUB) machinery, equipment, raw bonded factory.
A scheme aimed materials and other
at promoting imported inputs.
industrial 100% investment
production for allowance on plant,
export. machinery, equipment and
buildings.

Tax Remission for Remission of import duty on You must either be a:

Exports Office inputs. - Direct Exporter,
Exemption of (Import - Indirect Exporter,
(TREO) schemes Declaration Form (IDF) fees - Approved Supplier,
on inputs except for - Indirect Manufacturer,
Aims at payment of processing fee - Importers under the
encouraging of Kshs. 5,000. Essential Goods
local Remission of VAT on inputs. Production Support
manufacturers to Remission of excise duty on Programme (EGPSP)7 .
export by fuel oil and kerosene. - Oil Refiner.
remitting duty You must be gazetted
and VAT on raw before being allowed to
7
This includes manufacturers who import goods for use in the domestic market under the following categories:
Pharmaceutical & medicament manufacturers. Official aid funded projects. Publishers of educational books.
Manufacturers of supplies to international airlines. Importers of white refined sugar. Manufacturers of paper
for packing liquids.
26
Incentives Main provisions Main requirements for
qualification
materials used participate in the TREO
in the scheme.
manufacture of One has to apply for the
goods for remission and provide the
export. It also following:
provides for tax
remission on - An export order or
inputs to make contract for specified
goods defined export goods or a letter
as essential for of credit.
the domestic - A detailed production
market plan.
- A list of goods to be
imported.
- Tariff classification,
quantity, value and
amount of duty/VAT to
be waived.
One has to undertake to
pay duty on the imported
goods that have not been
used in the production of
approved exports or
indirect exports or have
not been transferred to an
approved bonded factory
or to the next production
phase.
A security bond will need
to be posted covering the
taxes and is cancelled only
after the reconciliation
declaration has been
verified and approved by
the TREO office and any
unused imported goods
have been re-exported or
duty has been paid.

Export Tax incentives One should have either

Processing one of these two licenses
Zones (EPZ) - Exemption from issued by the Export
The aim of this Corporate Tax for a 10 Promotion Zones Authority
programme is to -year period after which (EPZA).
promote export one pays taxes of 25%. - The enterprise licence.
oriented - Exemption from For firms engaged in
industrial Withholding Tax on export oriented
investments dividends for a 10-year manufacturing or
within designated period. processing; commercial
areas. - Duty and VAT exemption activities such as bulk

27
Incentives Main provisions Main requirements for
qualification
on raw materials, One should have either
machinery and other one of these two licenses
inputs. issued by the Export
- Stamp duty exemption. Promotion Zones Authority
- 100% investment (EPZA).
deduction over 20 years - The enterprise licence.
on initial investment. For firms engaged in
export oriented
Procedural incentives manufacturing or
- Rapid project approval processing; commercial
and licensing (30 days). activities such as bulk
- Operation under breaking, re-labelling,
essentially one license grading, repackaging
issued by EPZ Authority. and services including
- No minimum investment brokerage and
level consultancy.
- Access to offshore
borrowing. To obtain this licence,
- Exemption from Industrial you will need to submit
Registration Act, Factories a project proposal
Act, Statistics Act, Trade outlining, among other
Licensing Act and things, your intended
Imports, Exports and activity, the production
Essential Supplies Act. process, the target
On-site Customs market and the
documentation and proposed level of
inspection. investment.
One-stop-shop service by
the EPZ Authority for - The developer/ operator
facilitation and after care. licence. Here you will
Physical Infrastructure need to apply for
Benefits designation of the land
- Ready factory buildings area as an EPZ as well
for rent or purchase. as for a
- Serviced land for developer/operator
construction of buildings. licence. You should
- Office premises. own the land or lease it
- Water, sewerage and for a minimum of 30
electricity supply. years.
- Landscaping, garbage
disposal, street cleaning
services.
- Illuminated perimeter
fence and 24-hour
security.
- Accessible Customs
offices.

28
 FOR MORE INFORMATION: SOME USEFUL CONTACTS
Name of Institution Type of information Address Telephone Fax Email Website
available
Association of Jua Kali Small and Micro (2) 4448160
Enterprises 0724 751 831
Association of Micro Information on (2) 576799
Finance Institutions Micro- finance
Ministry of Labour and Small and Micro P.O. Box (2) 2729800
Human Development Enterprises 40326,
Nairobi
Ministry of Livestock and Livestock and related P.O. Box (2) 632231 / (2) 2720586
Fisheries development trade requirement 30028, 632413 /4
Nairobi

29
Africa Trade Insurance Export credit P.O. Box (2) 2719727 (2) 2719701 infor@ati-aca.
Agency guarantee 10620, com
Nairobi
Association of Fish Processing and P.O. Box 345 (2) 4440858 (2) 4440858 afipek@access
Processors and Exporters export of fish and 00600, kenya.com
of Kenya fish products Nairobi
Eastern and Southern Production and P.O. Box (2) 446490/1 (2) 4445344 (2) 4445344
Africa Leather Industries export of leather and 1391 00606 admin@esalia
leather products Nairobi .org
Export Processing Zones Setting up a business P.O. Box (045) 26421-6 (045) 26427 epzahq@afric www.epzakeny
Authority in EPZ 50363, aonline.co.ke a.com
Nairobi
Export Promotion Export opportunities, P.O. Box (2) 228534 -8 (2) 218013 / chiefexe@epc. www.epckenya.
Council market information 40247 228539 or.ke org
00100,
Nairobi
 Name of Institution Type of information Address Telephone Fax Email Website
available
Fresh Produce Exporters Horticultural P.O. Box (2) 4451488 (2) 445148/9 [email protected]
Association of Kenya production and 40312 g
export 00100,
Nairobi
Horticultural Crops Vegetables, cut P.O. Box (2) 822570 / (2) 827264 hcdamd@wan www.hcda.or.ke
Development Authority flowers and fruits 42601, 827260/1 anchi.com.
exports Nairobi.
Investment Promotion Investment P. O. Box (2) 221401 4 (2) 336663 ipckenya@nbn www.investme
Authority regulations 55704 et.co.ke ntkenya.com
requirements, Nairobi
procedures and
incentives
Kenya Airports Authority Airport operations, P.0. Box (2) 825400 10 (2) 822078 info@kenyaair www.kenyaairp

30
flight information 19001-0050 ports.co.ke orts.co.ke
1, Nairobi
Kenya Apparel Apparel and textile P. O. Box (2) 3746005/7, (2) 3746028, [email protected]. www.kam.co.ke
Manufacturers Exporters manufacturing and 30225 3746021 /22 3746030 ke
Association (KAMEA) exports 00100, 0721-201368/0
Nairobi 734-646005
Kenya Association of Manufacturing P. O. Box (2) 3746005/7, (2) 3746028/ [email protected]. www.kam.co.ke
Manufacturers activities 30225-0010 3746021 /22 3746030 ke
0 GPO, Cell:
Nairobi 0721-201368 or
0734-646005
Kenya Bureau of Quality standards P.O. Box (2) (2) 503293 / [email protected] www.kebs.org
Standards 54974 600034 / 66 609660
00200, 602350 / 1
Nairobi
 Name of Institution Type of information Address Telephone Fax Email Website
available
Kenya Flower Council Flower production P.O. Box (2) 576597/ kfc@africaonli www.kenyaflow
and exporting 56325 560612 ne.co.ke ers.co.ke
00200, 0733 639523
Nairobi Tel/Fax:
254-20-883041
Kenya International Clearing and freight P.O. Box (2) 827704 / (2) 827854 kifwa@nbnet.
Freight and Warehousing forwarding 57969 0722 883953 co.ke
Association warehousing 00200,
Nairobi
Kenya Maritime Authority Maritime transport P.O. Box (2) (041) 220831
and related 95076 0721 393458
Mombasa,
Kenya.

31
Kenya National Trade and market P.O. Box (2) 220867 (2) 334293 kncci@swiftke
Chamber of Commerce information for 47024 nya.com
and Industry potential Nairobi
importers/exporters
Kenya Plant Health Sanitary and P.O. Box (2) 884545 / (2) 882265 kephis@nbnet www.kephis.org
Inspectorate Services Phytosanitary 49592, 882308 / .co.ke
(KEPHIS) matters, Nairobi 882933
Information on
regulations on
import ad export of
plant and plant
related
material/products
importers/exporters
Pest Control Products Pest control products P.O. Box (2) 4450242 / (2) 4449072 pcpboard@to
Board 13794, 4446115 days.co.ke
00800,
Nairobi
 Name of Institution Type of information Address Telephone Fax Email Website
available
Kenya Ports Authority Port operations, P.O. Box (041) 2312211 (2) 2311867 Kpa-md@afric www.kpa.co.ke
maritime information, 95009, / 2221211 aonline.co.ke
shipping guide Mombasa
Kenya Railways Rail transport P.O. Box (2) 221211 (2) 340049 /
Corporation Ltd 30121, 224156
Nairobi.
Kenya Revenue Authority -Customs matters P.O. Box (2) 310900 (2) 318197 www.revenue.g
-Taxes 48240-0010 o.ke
0, Nairobi
Kenya Transport Road haulage P.O. Box (041) 2311958 (041)2312015 executive@kta
Association 88502, / 2312015 msa.com
Mombasa
Ministry of Agriculture Agricultural imports P.O. Box (2) 2718870 (2) 2720586 www.agriculture
and exports 30028, .go.ke

32
Nairobi
Ministry of Finance Tax Remission for P.O. Box (2) 252299 www.treasury.g
Export Office 30007, o.ke
Nairobi
Ministry of Health Certificate of health P.O. Box (2) 2717077 www.health.go.
and related matters 30016, ke
Nairobi
Ministry of Livestock and Livestock and related P.O. Box (2) 2718870 / (2) 2721007
products trading, 34188,
Fisheries Development processing and 2720306
export information Nairobi

Department of Fisheries Fishing, processing P.O. box (2) 3742320/ (2) 3743699 Samakisaamn
trade, export 58187 3742349 et.com
requirement Nairobi
Ministry of Trade and Trade policy, bilateral P. O. Box (2) 315001 - 7 (2) 315011 kextrade@afric www.tradeandi
Industry and multilateral trade 30430 aonline.cgo.ke ndustry.go.ke
Nairobi