China Square Supermarket domiciled at Unicity Mall at Kenyatta University elicited debate if foreigners are allowed to own companies in Kenya.
This was after Trade Cabinet Secretary Moses Kuria stated that the supermarket should exit the Kenyan market due to unfair competition.
He further ordered the store premises to be handed over to Kenyan-owned entities.
“I have today given an offer to Kenyatta University to buy out the lease for China Square, Unicity Mall and hand it over to the Gikomba, Nyamakima, Muthurwa and Eastleigh Traders Association,” the CS remarked on Saturday, February 24.
Kenyans.co.ke detailed if and how a foreigner can own a company in Kenya.
It is legal for a foreigner to fully own a company in Kenya without having local directors or co-owners.
Types of businesses a foreigner can start in Kenya
A foreign citizen or firm can set up a statutory or a registered company.
A statutory company is one that is created through a special act of parliament. Even when it has foreign stakeholders, the initial capital for this company is funded by the government making it a state entity.
The company has no shareholders but can make profits and operate under stated commercial laws. When it accrues losses, the government can come to its rescue and the creditors cannot make an application to the court for the company to be dissolved.
On the other hand, Registered Companies are created under the guidelines of the company’s act as stipulated in the Kenyan constitution.
Unlike in statutory business, the Kenyan government has no direct interests and influence on the formation and operation of registered companies.
Types of Registered Companies a foreigner can set up in Kenya
Branch Office
This is when a foreign company wants to open a branch in Kenya. This type of company does not require incorporation in Kenya but there must be financial disclosure from the parent company.
Local Company/Subsidiary
This happens when a foreigner wants to set up a local company with no ties with a company outside the country.
Registering a local company for a foreigner follows the same process as the registration of a local company by a citizen through eCitizen portal.
The companies can be registered online through www(dot)ecitizen(dot)go(dot)ke/ebusiness-services(dot)html
Requirements needed for setting up a local company
1. Business name
The foreigner will be required to submit three names to be considered for the business name.
2. Objectives of the Business
The foreign citizen or firm aiming to start the business must state the type of activities the business aims to carry out. This is to make sure that the business is legal according to the laws of Kenya.
3. Names of the Directors and their particulars
This is a requirement by Kenya Revenue Authority (KRA) for transparency and accountability purposes.
4. Proof of Identification
For foreigners who are legally residing in Kenya, a foreign national registration certificate – an Alien card is required. While for non-resident aliens, an international passport is required.
5. Passport Photo
A clear and recent passport photograph must be provided for each director and officer of the company.
6. KRA PIN
All directors whether resident or non-resident are required to provide a Kenya Revenue Authority (KRA) Personal Identification Number (PIN) certificate copy to prove registration with the tax authority.
7. Form CR1 – This is the company registration form.
8. Form CR2 – This is the Memorandum of the company with share capital
9. Form CR8 – This is the notice of registered address form and
After submitting the above documents, the Kenyan Registrar of Companies will issue a Certificate of Incorporation.
