Starting a business in Kenya requires more than an idea and capital. Entrepreneurs must complete several regulatory steps to ensure their venture is legally recognized. These include registering the business, obtaining a tax identification number, and securing the appropriate permits from the county government.

Many parts of the process can now be completed online through the eCitizen portal and the Business Registration Service (BRS). Understanding the required steps helps reduce delays and ensures compliance with national and county regulations.

This guide explains how to start a business in Kenya, including choosing a business structure, registering through eCitizen, obtaining a KRA PIN, applying for a Single Business Permit, and opening a business bank account.

Choose a Business Structure

The first step when starting a business in Kenya is selecting the appropriate legal structure. The main options include:

Sole Proprietorship
Partnership
Private Limited Company

Each structure affects liability, taxation, and registration procedures.

Sole Proprietorship

A sole proprietorship is the simplest form of business ownership.

Key characteristics include:

Owned and operated by one individual
The owner and the business are legally the same entity
The owner bears full liability for business obligations
Registration cost is approximately KES 950
Processing time is typically 1 to 3 days

This structure is commonly used for small retail businesses, freelance services, and independent traders.

Partnership

A partnership is suitable when two or more individuals jointly operate a business.

Key characteristics include:

Two or more partners share responsibilities and profits
Registration cost is approximately KES 950
Processing time is typically 3 to 5 days
Each partner files tax on their share of income
A written partnership agreement is recommended

Private Limited Company

A private limited company is a separate legal entity from its owners.

Key characteristics include:

• Shareholders have limited liability
• Registration cost is approximately KES 10,650 for companies with share capital below KES 1 million
• Processing time is typically 7 to 14 days
• At least one director must be Kenyan or a resident
• Companies must file annual returns and corporate taxes

This structure is often used by businesses planning to grow, hire employees, or raise investment capital.

Register Your Business Through eCitizen and BRS

Business registration in Kenya is conducted through the eCitizen portal and the Business Registration Service.

The registration process generally includes the following steps:

Create an eCitizen Account

Visit ecitizen.go.ke
Register using your National ID or passport
Verify your email and activate the account
Submit Business Name Options
Log into eCitizen
Open the Business Registration Service section
Select “Make Application”
Submit several business name options in order of preference

The Registrar approves the first available name that meets registration guidelines.

Complete the Registration Form

Applicants must provide:

• Business activity description
• Physical address
• Postal address
• Contact information

Required documents usually include:

• Copy of National ID or passport
KRA PIN certificate
Passport photograph
Pay the Registration Fee
Registration fee is approximately KES 950
Payment can be made through M-Pesa, card, or bank transfer
Download the Registration Certificate
Processing typically takes 3 to 5 working days
Once approved, the Business Registration Certificate can be downloaded from the portal

Register for a KRA PIN

Every business operating in Kenya must have a Kenya Revenue Authority (KRA) PIN. This number serves as the official tax identification for the business.

Application Process

• Visit the KRA iTax portal at itax.kra.go.ke
Select “New PIN Registration”
Choose the correct entity type
Complete the online form
Applicants typically provide:
Business registration certificate or certificate of incorporation
Owner or director identification
Physical and postal addresses
Additional Information
KRA PIN registration is free
Processing usually takes 5 to 7 working days

A KRA PIN is required to:

• Open a business bank account
Apply for permits and licenses
File tax returns

Apply for a Single Business Permit

County governments issue a Single Business Permit that allows businesses to operate within their jurisdiction.

Permit fees vary depending on:

Business size
Type of activity
Location

Typical fee ranges include:

•Small businesses: approximately KES 5,000 to KES 20,000 per year
Medium and large enterprises may pay higher fees depending on size
Application Methods
Nairobi County: Nairobi Services Portal or USSD service
Other counties: county government offices, Huduma Centres, or county online portals

Processing time generally ranges from 7 to 14 working days.

Operating without a required permit may result in fines or closure.

Open a Business Bank Account

Opening a separate business bank account helps separate personal and business finances and simplifies accounting.

Banks commonly require:

• Business registration certificate or certificate of incorporation
KRA PIN certificate
Identification documents for owners or directors
Additional documents for companies may include:
Memorandum and Articles of Association
Board resolution authorizing account opening

Some banks offer free business accounts, while others charge setup or maintenance fees.

Register for Statutory Deductions if You Employ Staff

Businesses with employees must register with relevant statutory bodies.

These include:

National Social Security Fund (NSSF)

Employers must register and remit employee pension contributions
Social Health Authority (SHA) (formerly NHIF)
Employers must register employees for health insurance contributions
Pay As You Earn (PAYE)
Employers deduct income tax from salaries and remit it to KRA
PAYE returns are filed monthly through the iTax portal

Businesses without employees can complete this step once they begin hiring staff.

Maintain Ongoing Compliance

After registration, businesses must meet ongoing compliance obligations.

General requirements include:

• Filing annual tax returns with KRA
• Renewing county business permits each year
• Keeping accounting records for at least five years

VAT Registration

Businesses with annual turnover exceeding KES 5 million must:

Register for Value Added Tax (VAT)
Charge VAT on taxable supplies
Issue VAT-compliant invoices
File monthly VAT returns
Limited companies must also:
File annual returns with the Registrar of Companies
Maintain company records and meeting minutes

Maintaining compliance helps businesses avoid penalties and remain in good legal standing.

Other Ways to Get Registration Support

Entrepreneurs who need assistance with the process may consider:

Visiting a Huduma Centre for help with eCitizen or KRA applications
Seeking professional services from agents, consultants, or advocates

Professional services may involve additional fees but can simplify the process.

Always verify the latest procedures and fees on official government portals, as requirements may change.

Why Proper Registration Matters

Registering a business correctly helps protect the owner legally and enables access to financial and commercial opportunities.

Benefits include:

Ability to open business bank accounts
Eligibility for loans and financing
Easier partnerships with other businesses
Greater trust with customers and suppliers

Completing the required steps early helps establish a solid foundation for long-term operations.

List Your Business on Directory Kenya

Once your business is registered and operational, increasing visibility can help attract customers.

Directory Kenya allows businesses across Kenya to be listed so that potential customers can find services in their area.

To submit your business listing, START TODAY HERE