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[ESTABLISHING A BUSINESS ENTITY IN KENYA]
state the date of incorporation, the company’s unique identification number, the type of company and the extent of limitation of the company’s liability. This certificate, once acquired, will be evidence of compliance with the regulations as to the registration of a company in Kenya. The documents required for the incorporation of a subsidiary, in summary, will be: 1. Signed notice of registered address-CR8 (copy) -Dully signed by the directors. 2. Signed company registration form -CR1 (copy) -Dully signed by the directors. 3. Signed memorandum of a company with share capital-CR2 (copy) -Dully signed by the directors. 4. Signed statement of nominal capital (copy) -Dully signed by the directors. 5. Signed register of beneficial owners – BOF1 (copy) -Dully signed by one director on behalf of the company 6. Passport (copy) -For each director showing the biodata page 7. Passport photo (copy) -For each director 8. Notarized certificate of incorporation (copy) Tax Implications Resident companies in Kenya are taxed on income derived from Kenya. (a) Corporation tax, the Corporate Income Tax for resident companies, is 30%. (b) Withholding tax – the payments made to the parent company are subject to Tax Treatments for Financial Investments and Related Incentives in Kenya Kenya continues to refine its tax regime for financial investments under the Nairobi International Financial Centre (NIFC) framework.
The regime is governed by the Nairobi International Financial Centre Act, 2017 (as amended), the Income Tax Act (Cap. 470), and successive Finance Acts, with the Finance Act 2025, introducing the most recent material changes. Principal sums and accrued interest on loans certified by the Nairobi International Financial Centre Authority (NIFCA) for qualifying investments in financial services, asset management, infrastructure financing, fintech, green bonds, or digital infrastructure remain wholly exempt from income tax. The Finance Act, 2025, extended this exemption to associated securities and guarantees, thereby enhancing liquidity for large-scale projects. The exemption co-exists with the thin-capitalisation rule that has limited interest deductibility to 30% of EBITDA on loans from non-residents since 1 January 2024. Capital gains realised by non- residents without a permanent establishment in Kenya from financial derivatives (futures, options, swaps, and other instruments, whether exchange-traded or OTC) continue to attract 15% withholding tax under Section 35 of the Income Tax Act with effect from 1 January 2023. The rate and the obligation on the paying agent to withhold and remit within five working days remain unchanged. Still, the Finance Act, 2025, introduced mandatory digital submission of transaction details through the iTax portal to strengthen enforcement. NIFCA-certified entities that commit a minimum investment of KES 3 billion (reduced from the earlier KES 5 billion threshold) into the Kenyan economy and hold the investment for at least five years now enjoy a fixed concessional capital gains tax rate of 5% on the eventual transfer, compared with the standard 15% rate applicable since 1 July 2023. The reduced rate is locked in at the time of certification. It applies regardless of future rate changes, provided the investment supports priority sectors such as green finance
ILN Corporate Group – Establishing a Business Entity Series
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