Private Company Limited by Shares (Ltd)
Company formation in Kenya
The Ltd is best suited for: Small and medium businesses entering the Kenyan and East African market, Tech startups and digital businesses, Foreign entrepreneurs establishing an East African presence, Service companies, consultancies, and NGOs. Private limited companies pay 30% corporate income tax on worldwide income. Non-resident companies operating through a Kenyan branch pay 37.5%. Newly listed companies on the Nairobi Securities Exchange receive a reduced rate for 5 years. VAT is 16% on most goods and services, with exemptions for basic food items and agricultural inputs. Withholding tax on dividends is 5% (resident) or 15% (non-resident), on interest 15% (resident) or 15% (non-resident), and on royalties/management fees 5โ20%. Kenya has 16 double tax treaties. Special Economic Zones offer reduced rates: 10% corporate tax for the first 10 years, then 15%. Digital services tax of 1.5% of gross turnover was replaced by the Significant Economic Presence tax for non-resident digital companies.
- Small and medium businesses entering the Kenyan and East African market
- Tech startups and digital businesses
- Foreign entrepreneurs establishing an East African presence
- Service companies, consultancies, and NGOs
Key Facts
Step-by-Step Formation Process
Reserve a company name with the BRS
Submit a name reservation request through the Business Registration Service (BRS) eCitizen portal. The name must be unique and not misleading. Up to three alternative names can be submitted. Name reservations are valid for 30 days.
Prepare incorporation documents
Draft the proposed Constitution (formerly Memorandum and Articles of Association under the Companies Act 2015), statement of nominal share capital, and forms for directors and shareholders. Under the 2015 Act, a single director and single shareholder are permitted for private companies.
File incorporation with the BRS via eCitizen
Submit the application online through the eCitizen/BRS portal, uploading the company Constitution, KRA PINs of directors and shareholders (or passport copies for foreign persons), and the registered office address. Pay the registration fee (KES 10,650 for standard companies).
Obtain the Certificate of Incorporation
The BRS issues the Certificate of Incorporation digitally. Apply for a company KRA PIN and VAT registration (mandatory if annual taxable supplies exceed KES 5 million). Apply for any sector-specific licences.
Register for tax, NHIF, and NSSF
Register the company with the Kenya Revenue Authority (KRA) for corporate income tax and VAT. Register with the National Hospital Insurance Fund (NHIF) and the National Social Security Fund (NSSF) if hiring employees.
Required Documents
- Passport copies or national ID for all shareholders and directors
- KRA PIN certificates for Kenyan residents (passport for foreign persons)
- Passport-size photos of all directors
- Company Constitution (Articles of Association)
- Statement of nominal share capital
- Particulars of directors and shareholders
- Registered office address confirmation
- Statutory declaration of compliance
Cost Overview
Tax Treatment
Private limited companies pay 30% corporate income tax on worldwide income. Non-resident companies operating through a Kenyan branch pay 37.5%. Newly listed companies on the Nairobi Securities Exchange receive a reduced rate for 5 years. VAT is 16% on most goods and services, with exemptions for basic food items and agricultural inputs. Withholding tax on dividends is 5% (resident) or 15% (non-resident), on interest 15% (resident) or 15% (non-resident), and on royalties/management fees 5โ20%. Kenya has 16 double tax treaties. Special Economic Zones offer reduced rates: 10% corporate tax for the first 10 years, then 15%. Digital services tax of 1.5% of gross turnover was replaced by the Significant Economic Presence tax for non-resident digital companies.
Pros & Cons
- East Africa's largest and most diversified economy โ natural hub for the region
- English-speaking with a well-educated, tech-savvy workforce
- No minimum capital requirement for private companies โ very low barrier to entry
- Single director and shareholder permitted under the Companies Act 2015
- Digital eCitizen portal streamlines the incorporation process
- EAC and COMESA membership provides preferential trade access across East and Southern Africa
- Nairobi is Africa's leading tech hub after Lagos โ home of M-Pesa and the "Silicon Savannah"
- Well-developed financial services sector and banking system
- 30% corporate tax rate is the standard African rate but high by global standards
- 16% VAT adds to the overall tax burden
- Regulatory changes can be frequent and unpredictable โ budget for ongoing compliance monitoring
- Infrastructure outside Nairobi and Mombasa can be limited
- Corruption remains a concern in some public sector interactions
- Work permit process for foreign employees can be slow and bureaucratic
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Get StartedThis content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.