How to start a business in Kenya

20Sep, 2019

Business Idea

  • For a startup, a sound business idea is imperative and the business idea must reflect the needs of the market.
  • Questions that you can ask yourself are, does your business idea reflect the needs of the market? Does it identify a market gap, and how do you plan to address this gap? For this you need to conduct a market research.

Name Search

  • Name on search on E-citizen Portal is the first process of making your business a legal entity in Kenya.
  • Name search costs around Ksh300 and the process takes less than 5 minutes, and the name must be unique and has not been used.

Business Registration

  • You need to decide which type of structure best fit your Business.
  • In Kenya there are there basic forms of business, sole proprietorship, partnership and Limited Liability Company.
  • Sole proprietorships and Partnership do not require Registration and are easier to start compared to Limited Liability Company.
  • For sole proprietorship you will just need to have it registered after the name search and no more legal procedures required.

PIN/VAT Registration

  • Setting a KRA Pin/VAT is an important part of business registration process.
  • This does require that both or all directors present their personal KRA pin certificates
  • For Companies, original certificate of incorporation and the Memorandum and articles of association will have to be presented in person at the KRA offices

Business Licensing

  • Business license is a permit that allows you to operate business in a particular area or region.
  • You can pay for the license online, pay with your e-wallet and print a legal colored license as many times as you please.
  • However, it is important to understand that the online system does not automatically generate a business number and so you might be forced to visit City Hall Annex in the case of Nairobi or go to respective county headquarters in case you are business is outside Nairobi.
  • There is always schedule charges for each type of business and hence the need to look at the schedule charges beforehand.
  • Looking at the schedule in advance can help you frame your business and pay the correct amount for licensing.

Get a Website

  • If you want to build a serious business in Kenya and particularly in Nairobi you will need a website.

Get an office

  • You might need an office depending on the nature of your business. However, you need to understand that cost of renting an office varies from town to town, Nairobi being the prime area.

Online Platforms   

  • Depending on the nature of your business, you might want to exploit the growth of online business in the country.
  • Online platforms such as Olyx and PigiaMe are some of the best online selling platforms which can prove vital to your business. Jumia and Kilimall are also popular platforms which you could consider venturing into.
  • Convenience is a key feature that modern consumers seek and hence the need to invest in online business due to its convenience.

Demographic Dynamics   

  • Your brand positioning will depend on how well you understand the market and demographic details and information.
  • Kenya is a market based economy and is generally considered as the commercial and economic hub of East Africa and hence ideal for business.
  • As at 2016, Kenya had a population of 48.46 million and with an annual growth rate of 2.7%.
  • Kenyan Middle-Class who are the economy‚Äôs consumer is growing and the youths (individuals between the ages of (18-35) form more than 60% of the population.
  • The above data and information are ideal in deciding the type of business to invest and the market to venture in Kenya.

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