The establishing of companies of the following organizational and legal forms may be of practical interest for a foreign investor in Kenya:

Limited Liability Company
Partnership
Foreign company branch

Limited Liability Company

‍Limited liability company’s operations are regulated in Kenya by the Companies Act which contemplates that a company may be either public or private.

A company’s minimum charter capital may not be less than KES20’000 (US$1 is approximately KES75).

A private company may have no more than 50 shareholders, and the number of shareholders of a public company is not limited.

The minimum number of directors is 2.

A company has to appoint a secretary - a resident of Kenya (physical or legal person);

A private company’s shares may not be offered to public subscription, and a public company’s shares may be transferred from one shareholder to another. A public company (unlike a private company) has to appoint auditors and publish its financial statements from time to time.

Partnership

The Partnership Act distinguishes between unlimited partnerships and limited partnerships and specifies, in particular, that the maximum number of partners may not exceed 20. All unlimited partnership’s members are general partners with equal rights who bear unlimited liability for the partnership’s debts and obligations; All limited partnership’s members are divided into general unlimited partners and limited partners whose liability for the partnership’s debts is limited with their shares in the partnership’s capital. Limited partners may not be involved in the partnership management, otherwise they lose the status of a limited partner;

An unlimited partnership is not required to officially register a formal partnership agreement in the State companies register of Kenya, and a limited partnership must be registered with the Companies Registrar of Kenya. A partnership is not required to appoint auditors and to publish its financial statements. A partnership will be dissolved in the event of death or exit of any partner - physical person unless the partnership agreement provides otherwise.

Foreign company branch

A foreign company must be registered in Kenya, and the head company has to provide the following documents to establish its branch:

- a certified copy of the foreign company’s charter and memorandum of association or their equivalent documents;
- list of names, addresses, nationalities and occupations of the company’s directors and secretary;
- appointing a Kenyan resident agent authorized to receive proper notices on behalf of the company;
- evidence of the company’s registered or head office address.

A branch is supposed to file its financial statements with the Registrar of Companies. Although the Companies Act does not require branches to have their financial statements audited, in practice, they have do that since Kenya's tax authorities accept audited financial statements only.

Resident businesses in Kenya pay worldwide income tax.

Kenyan subsidiaries operating outside Kenya pay a profit tax at a flat rate in Kenya regardless of whether the profit is taxed outside Kenya or not. If a Kenyan company holds more than 12.5% of voting shares in a subsidiary, the dividends received from it are not taxed in Kenya.

Fees paid by insurance companies to their agents are subject to withholding tax.

Dividends and interests income are subject to withholding tax, except where those profits are earned by banking and financial institutions.

Profits from the sales of certain agricultural products are subject to withholding tax.

Significant tax and other benefits are granted in Kenya to companies operating in free zones of this country. Those benefits include:

- corporate tax holidays up to 10 years;
- corporate tax at a reduced rate within subsequent 10 years;
- exemption from VAT and withheld taxes on certain payments to non-residents.

Kenya has no currency control.

Kenya is not a tax heaven or offshore jurisdiction, and a concept of Kenyan tax exempt company (and/or Kenyan internationalbusiness company (IBC), offshore company, trust, foundation etc. registration) does not exist in Kenya as such. A company formation in Kenya could be arranged with a professional registered agent providing incorporation, virtual office and other corporate services in Kenya. To set up a company in Kenya is possible by correspondence, but to open a bank account in Kenya will, most probably, require a personal visit.

Kenya Double Taxation Agreements

Canada, Denmark, France, Germany, India, Iran, Norway, Qatar, Seychelles, South Africa, South Korea, Sweden, United Arab Emirates, United Kingdom, Zambia.

99 classical offshore, onshore and midshore jurisdictions of Europe, America, Middle East, Asia, Africa and Oceania‍