Starting a small business in Nairobi is mostly online now. The order below is the order you will do things in.

1. Choose the structure

  • Business name (sole proprietorship or partnership). The quickest and cheapest. You and the business are legally the same, so you are personally liable for its debts.
  • Private limited company. A separate legal person, with at least one director and one shareholder. Needed if you want investors, to limit your liability, or to bid for many corporate and government contracts.
  • Limited liability partnership (LLP). A middle option used by some professional firms.

2. Register with the Business Registration Service

Registration is through the Business Registration Service (BRS) on eCitizen.

  • A business name costs KES 950 for the name search and registration together. You propose names, and the certificate comes as a download.
  • A company needs a name reservation, then an application with the directors’ and shareholders’ details, IDs and KRA PINs. The company’s own KRA PIN is issued with the incorporation certificate.

3. Tax

  • KRA PIN. A company gets its own. A sole proprietor uses their personal PIN.
  • eTIMS. Businesses must issue invoices through KRA’s electronic tax invoice system, eTIMS, whether or not they are registered for VAT. There is a free app and a web version for small traders.
  • Turnover tax. Small resident businesses below the VAT threshold usually pay turnover tax at 3% of gross sales, filed monthly on iTax.
  • VAT. Registration is compulsory once turnover passes KES 8,000,000 in twelve months. VAT is 16%; see the VAT calculator.
  • Corporation tax for companies is 30% of profit.

Thresholds and rates change with Finance Acts, so confirm with KRA or an accountant before relying on them.

4. The Nairobi county permit

To trade from premises in Nairobi you need the county’s Unified Business Permit (UBP), which replaced a stack of separate licences. Apply and pay through the county’s services on eCitizen. The fee depends on the type and size of the business and is renewed every year. The county has waived fees for some new startups, so check before you pay.

Some businesses need more: a food hygiene licence and health certificates for anything serving food, and sector licences for things like pharmacies, transport and alcohol.

5. If you employ people

Register as an employer with NSSF, SHA (for SHIF) and, for the Housing Levy and PAYE, on iTax. Deduct and pay over every month. See Working in Kenya and the salary calculator.

Foreigners

Foreigners can own Kenyan businesses and companies, but working in one needs a permit - usually a Class G permit for investors. See Moving to Nairobi.

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