Starting a business in Kenya gives you access to one of Africa’s fastest-growing markets. Nairobi in particular has a strong tech scene, a large English-speaking workforce, and a regulatory environment that’s friendlier than many countries in the region.

But if you’re a foreigner, you still need to follow specific procedures, meet legal requirements, and understand how things work on the ground.

Here’s what you need to know before you set up your company, hire employees, or sign a lease.

Why Kenya Attracts Foreign Entrepreneurs

Kenya is a natural hub for trade, tech, logistics, and creative industries. English is widely spoken. Internet speeds are good. Mobile payments (especially M-Pesa) make transactions simple. And the local talent pool is strong, especially in Nairobi.

You’ll also find that Nairobi’s lifestyle makes it easier to settle in. If you plan to stay for a few months while you explore business opportunities or hire your first team, staying in a serviced apartment is usually easier than a long-term lease.

You can check out furnished and serviced apartments in Nairobi, including options in Westlands, Lavington, Kilimani, and Kileleshwa, if you want something ready on arrival.

1. Choose the Right Business Structure

Kenya gives you several ways to set up a company. Most foreigners choose one of these:

A Private Limited Company (Ltd.)

This is the most common structure. You can own 100% of the company as a foreigner.
You only need one director.

A private limited company works well for consulting firms, agencies, startups, online businesses, import/export, and local service businesses.

A Branch of a Foreign Company

If your company already exists abroad, you can register a branch.
This avoids starting a new company from scratch, but you still need to file tax returns and keep proper records in Kenya.

A Partnership or Sole Proprietorship

This is less common for foreigners because you need at least one Kenyan partner.
Most foreigners skip this option.

2. Reserve Your Company Name

You’ll reserve your company name on the eCitizen platform.
It takes just a few hours. Keep your choices simple, easy to spell, and unique.

Once the name is approved, you can move to the next step.

3. Register Your Company Through eCitizen

Kenya moved most registration processes online. You’ll register your company under the Business Registration Service (BRS).

You’ll need:

  • Passport copy for each director

  • Passport-sized photograph

  • Kenyan postal address (you can get this through a rental office or service provider)

  • Physical business address (again, you can use a temporary office if needed)

After submitting your documents, you’ll get:

  • Certificate of Incorporation

  • CR12 (company shareholder/director listing)

This process is straightforward, but read everything carefully. Kenya is strict about mismatched names, unclear scans, and missing pages.

4. Get a KRA PIN for the Company

You can’t run a business in Kenya without a KRA PIN.
The Kenya Revenue Authority uses this number to track taxes.

Once you have your PIN, you can:

  • Open a bank account

  • Sign major contracts

  • Start issuing invoices

  • File tax returns

Every director also needs an individual KRA PIN. If you’re a foreigner without residency, you may need to apply under a special category (your registration agent or lawyer can guide you through this).

5. Apply for the Right Permits and Licenses

Your permits depend on your line of business. Here are the common ones:

Single Business Permit

Issued by the county government. Everyone needs this.

NEMA License

Only needed if your business affects the environment (construction, manufacturing, etc.).

Tourism License

For tour operators, travel companies, hotels, and Airbnb management businesses.

Import/Export License

If you move goods across borders.

Food Handling Certificates

If you work in restaurants or catering.

Counties enforce permits. Nairobi County is strict, especially in commercial areas like Westlands and Kilimani.

6. Work Permits for Foreign Directors and Employees

This is one of the biggest questions foreigners have when starting a business in Kenya.

Kenya has several permit classes, but the main ones for entrepreneurs are:

Class G (Investor Permit)

You must show you’re investing at least USD 100,000 in Kenya.
You’ll need bank statements, incorporation documents, and a business plan.

Class D (Employment Permit)

If your company wants to hire you as an employee (for example, as the CEO), you must show:

  • The role requires your skills

  • The business has Kenyan employees

  • You’re contributing to local job creation

TIP

Apply early. Work permits can take weeks or months. Most people hire a local immigration consultant to avoid delays.

7. Open a Business Bank Account

Every bank has slightly different requirements, but expect:

  • Certificate of Incorporation

  • CR12

  • KRA PIN

  • Passport(s)

  • Work permit (some banks allow “permit in progress” letters)

  • Board resolution to open the account (if you have multiple directors)

Popular banks for foreigners:

  • KCB Bank

  • Equity Bank

  • I&M Bank

  • Stanbic

  • Absa Kenya

If you want to run a modern or tech-driven business, also set up:

  • M-Pesa Business Till

  • M-Pesa PayBill

  • M-Pesa Daraja API (for apps and online platforms)

8. Understand Kenya’s Tax System

Kenya’s tax rules are straightforward once you get used to them.
Here are the main ones your company will deal with:

Corporate Tax

  • 30% for resident companies

  • 37.5% for non-resident companies

VAT

Standard VAT is 16%. Some items are exempt or zero-rated.

Withholding Tax

Applies when you pay consultants, contractors, or foreign suppliers.

PAYE

If you hire employees, you must deduct payroll taxes.

NHIF + NSSF

Mandatory health and pension contributions for employees.

TIP

If this is your first time in Kenya, hire a local accountant.
Most businesses do this from day one.

9. Find an Office, Workspace, or Home Base

You’ll need a physical address for your company.
Nairobi gives you plenty of options:

  • Coworking spaces (affordable and flexible)

  • Private offices (common in Westlands and Kilimani)

  • Home offices (allowed for many online businesses)

  • Short-term serviced apartments (easy while you set everything up)

If you’re relocating, or if you want a comfortable place while you build your network, check out furnished and serviced apartments in Nairobi. You can pick a place based on your business needs:

  • Westlands if you want to be near banks, embassies, and coworking spaces

  • Lavington if you prefer something quiet and residential

  • Kilimani for a balanced mix of lifestyle and convenience

  • Kileleshwa if you want peace without being far from the city

10. Transportation for New Entrepreneurs

You’ll move around a lot when you’re setting up your business — meetings, banks, government offices, inspections, suppliers.

If you prefer not to rely on taxis every day, you can rent a car through our Nairobi car hire service. It’s cost-effective when you have tight schedules or multiple stops in a day.

11. Tips for Succeeding as a Foreign Entrepreneur

Here’s what people wish they knew earlier:

Hire local talent early

You’ll understand the market faster. Kenyans know how to navigate systems, suppliers, and bureaucracy.

Keep your documents organized

Kenya loves stamped papers, receipts, and official letters. Don’t lose anything.

Build relationships

People want to know who they’re dealing with.
A short coffee meeting can move things faster than ten emails.

Expect things to take time

Not everything moves at the speed you expect.
Give yourself buffer time — especially with permits.

Understand local culture

Be polite. Be patient. Don’t raise your voice.
Kenyans generally respond well to calm, respectful communication.

12. Common Mistakes Foreigners Make

These mistakes slow down new entrepreneurs:

  • Assuming the laws work the same way as home

  • Underestimating how long work permits take

  • Waiting too long to hire an accountant

  • Not checking zoning rules for their business

  • Renting long-term housing before learning the city

If you want a smoother transition, start with a flexible place like a serviced apartment before committing to a lease. Browse our serviced apartments to see what fits your needs.

Final Thoughts

Starting a business in Kenya is doable if you follow the right steps.
Kenya welcomes foreign investors, but the system expects you to follow the rules and stay organized.

Once you get past the paperwork, you’ll find a fast-growing market, strong talent, and a city that’s easy to build a life in.

If you’re planning your move, you can base yourself in one of our serviced apartments to make the transition smoother and use our car hire options while you set up meetings, look for offices, and handle registrations.