Kenya's registration process has gone genuinely fast through its eCitizen platform, but there's one rule that catches new founders more than any paperwork step: every business, VAT-registered or not, must invoice through the government's eTIMS system, and your first B2B customer will ask about it within a week if you skip it. Here's what it takes to start a business in Kenya in 2026.
1. Which business structure fits you?
Before you register anything, it helps to know what you're actually choosing between.
- Sole Proprietorship. Fastest and cheapest, but exposes personal assets. Good for freelancers and small traders testing an idea.
- LLP. Works well for professional partnerships like law, audit, or consulting.
- Private Limited Company (Ltd). The best fit for most B2B businesses and diaspora or foreign investors, and generally recommended if you plan to invoice B2B, raise capital, or build a brand to eventually sell.
2. Register your business
Everything runs through eCitizen's Business Registration Service (BRS): a name search and reservation (KES 150, lasts 30 days, up to 3 names submitted), then filing CR-1, CR-2, CR-8, and your Memorandum and Articles. A sole proprietorship costs around KES 950 total and typically takes 1 to 3 business days. A private limited company runs KES 10,000 to 10,650 in government fees (or KES 15,000 to 25,000 all-in with professional help), with a Certificate of Incorporation issued in 1 to 3 working days for simple one-person companies, or 5 to 14 working days for standard BRS review. You'll need a registered postal and physical address, though co-working spaces and virtual offices are widely accepted.
3. Get your KRA PIN and onboard to eTIMS
Every business needs a KRA PIN via iTax, now linked directly to eCitizen and free to obtain. Since 2024, every business in Kenya, regardless of VAT status, must invoice through KRA's eTIMS (electronic Tax Invoice Management System), with simplified Lite versions available for micro businesses. Foreign nationals can be 100% directors and shareholders of a Kenyan private limited company, but at least one director needs a KRA PIN, and actively managing the business in-country requires a work permit or special pass; a Kenyan resident co-director simplifies banking.
4. Check licenses and permits
Kenya doesn't issue a single national business license. Every business needs a Single Business Permit from its county government, costing KES 4,000 to 100,000-plus depending on size and location.
5. Understand Kenyan taxes
Corporate income tax is a flat 30% for resident companies. VAT is 16% standard, mandatory once turnover reaches KES 5 million, with Turnover Tax available as a simplified alternative for businesses with annual gross sales between KES 1 million and 25 million. SHIF (Social Health Insurance Fund) replaced NHIF in October 2024: contributions are 2.75% of gross salary with no upper cap, more comprehensive coverage but a bigger deduction for higher earners. The Affordable Housing Levy adds 1.5% for any employees.
6. Stay compliant
Annual income tax returns are due to KRA by 30 June, with monthly and annual filings handled through iTax. Employers also register for NSSF (National Social Security Fund) contributions. Realistically, budget 2 to 3 weeks from registration to being fully operational once eTIMS onboarding, a Sender ID, and your county permit are all in place.
Kenya business costs at a glance
| Item | Cost |
|---|---|
| Sole proprietorship registration | ~KES 950 |
| Private limited company registration | KES 10,000 to 10,650 |
| Corporate income tax, resident companies | 30% |
| VAT, standard rate | 16% |
| VAT registration threshold | KES 5 million turnover |
| SHIF (health insurance) contribution | 2.75% of gross salary |
Frequently asked questions
What is eTIMS in Kenya?
KRA's electronic Tax Invoice Management System, mandatory for every business regardless of VAT status since 2024, with simplified Lite versions for micro businesses.
How much does it cost to register a private limited company in Kenya?
KES 10,000 to 10,650 in government fees, or KES 15,000 to 25,000 all-in with professional help.
What's the corporate tax rate in Kenya?
A flat 30% for resident companies.
When do I need to register for VAT in Kenya?
Once turnover reaches KES 5 million. The standard VAT rate is 16%.
What replaced NHIF in Kenya?
SHIF (Social Health Insurance Fund), effective October 2024, with contributions of 2.75% of gross salary and no upper cap.
Fees and rates above come from the Business Registration Service (BRS) and Kenya Revenue Authority (KRA) as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Kenya-qualified accountant or lawyer about your specific situation.