Acquiring a Company in Kenya vs. New Setup: A Foreign Investor’s Checklist

Whether you’re planning to acquire an existing business or register a new company in Kenya, success starts with the right legal partner. WKA Advocates provides everything you need — from due diligence and share transfer to KRA registration, licensing, and immigration compliance.

Kenya is one of Africa’s top destinations for foreign investors seeking to establish a strong foothold in the East African market. The country’s robust economy, stable political climate, and modern business regulations under the Companies Act, 2015 make it a leading hub for sectors such as real estate, construction, fintech, agriculture, logistics, and gold trading.

If you’re considering expanding into Kenya, you have two main options — acquiring an existing company or setting up a new company from scratch. Each choice has distinct legal, tax, and regulatory implications. With expert guidance from WKA Advocates — Kenya’s trusted law firm specializing in foreign company registration, KRA PIN facilitation, nominee director services, and corporate acquisitions — investors can make confident, compliant, and well-informed business decisions.

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Understanding the Kenyan Business Environment

Kenya’s dynamic economy offers easy access to regional markets through the East African Community (EAC). Its business environment is supported by digital platforms such as:

• The Business Registration Service (BRS) for company incorporation

• The Kenya Revenue Authority (KRA) for tax registration

• The eCitizen Portal for licensing and regulatory filings

• The Kenya Investment Authority (KenInvest) for investor facilitation

Foreigners are allowed 100% ownership of Private Limited Companies (PLCs) in Kenya, provided they comply with KRA and BRS requirements. Investors typically choose between two paths:

• Company Acquisition: Purchasing shares or assets of an existing registered company.

• New Company Setup: Registering a new Private Limited Company through BRS.

Both options provide full market access, but differ in cost, control, speed, and legal exposure.

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Option 1: Acquiring a Company in Kenya

An acquisition allows a foreign investor to take over an existing company through share purchase or asset transfer. This is a strategic option for investors who want immediate operations and access to a company’s licenses, employees, and bank accounts.

Advantages of Acquiring an Existing Business

• Instant Operations: The company already has a corporate KRA PIN, bank accounts, and county business permits.

• Brand Recognition: You benefit from existing goodwill, customers, and reputation.

• Transferable Licenses: Entities in construction, agribusiness, or mining may already hold NEMA, AFA, or EPZ licenses that can be reassigned.

• Skilled Workforce: Employees are already familiar with Kenyan compliance and market trends.

Legal Process for Acquiring a Company

1. Due Diligence and Legal Audit
   WKA Advocates performs in-depth due diligence via BRS and KRA to verify:

   • CR12 and incorporation documents (CR1, CR2, CR8, BOF1)

   • Tax compliance status

   • Employment contracts, leases, permits, and licenses

   • Outstanding debts or litigation

2. Share Purchase Agreement (SPA)
   WKA drafts or reviews a legally binding Share Purchase Agreement, clearly defining warranties, liabilities, and payment structures.

3. Share Transfer and CR12 Update
   Once approved, WKA updates shareholder and director details in BRS, generating a new CR12 Certificate reflecting ownership change.

4. KRA PIN and Tax Updates
   WKA Advocates coordinates with KRA to link the corporate PIN to new directors and shareholders while ensuring VAT and PAYE continuity.

5. Bank Account and Regulatory Adjustments
   WKA notifies banks and government regulators about ownership changes, enabling full control over the company’s corporate accounts and trading licenses.

Key Considerations

Before acquisition, investors should confirm all KRA filings, tax arrears, beneficial ownership registers, and licensing approvals. For sensitive industries like mining, aviation, or insurance, additional consent from relevant authorities may be required.

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Option 2: Setting Up a New Company in Kenya

Starting a new company offers full ownership control, a clean compliance record, and a customized corporate structure. Through the BRS eCitizen portal, the process takes around 5–7 business days with the help of WKA Advocates.

Step-by-Step Registration

1. Name Reservation: Submit preferred company names for approval.

2. Document Preparation: WKA prepares incorporation forms — CR1, CR2, CR8, and BOF1 — listing shareholders and directors.

3. Nominee Director Appointment:
   At least one resident or nominee director with an Individual KRA PIN is required. WKA provides secure nominee services for foreign owners.

4. KRA PIN Registration: Both company and directors are registered on the KRA iTax portal.

5. Corporate Bank Account Opening: WKA assists with opening accounts in top Kenyan banks like KCB Bank, Equity Bank, and NCBA Bank.

6. Licensing and Permits: WKA coordinates NEMA, county business permits, and other sectoral approvals.

Benefits of Setting Up a New Company

• 100% Foreign Ownership under the Companies Act, 2015

• No inherited tax or legal liabilities

• Tailored Articles of Association and Shareholder Agreements

• Flexible structure for expansion across Kenya or East Africa

• Choice of business location — Nairobi, Mombasa, Kisumu, or any special economic zone

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Comparative Overview

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How WKA Advocates Supports Foreign Investors

WKA Advocates is Kenya’s leading corporate and immigration law firm, providing tailored legal, tax, and business setup solutions for foreign investors.

Their specialized services include:

• Foreign company registration in Kenya via BRS

• Due diligence and Share Purchase Agreement drafting for acquisitions

• Nominee and resident director services for compliance

• Corporate and Individual KRA PIN registration through iTax

• Bank account facilitation with major banks

• Shareholder Agreements and Articles of Association drafting

• Licensing and regulatory approvals for construction, agribusiness, energy, ICT, and gold trading sectors

By working with WKA Advocates, investors benefit from full legal compliance, tax efficiency, and seamless business operations in Kenya.

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Final Checklist for Foreign Investors

Before choosing between acquisition and new setup, ensure that you:

1. Conduct full legal and financial due diligence.

2. Obtain corporate and director KRA PINs.

3. Appoint a resident or nominee director.

4. Draft customized Shareholder Agreements.

5. Open a corporate bank account.

6. Apply for all necessary licenses and permits.

7. Update the Beneficial Ownership Register with BRS.

8. Maintain tax compliance with KRA.

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Frequently Asked Questions (FAQs)

1. Can foreigners own 100% of a company in Kenya?
Yes. Kenya allows full foreign ownership under the Companies Act, 2015, provided registration and KRA compliance are completed.

2. How long does it take to register a company in Kenya?
Typically, 5–7 business days with assistance from WKA Advocates through the BRS portal.

3. What is the process of acquiring an existing company?
It involves due diligence, Share Purchase Agreement, share transfer, and updating CR12 and KRA records — all coordinated by WKA Advocates.

4. Do I need a local or nominee director?
Yes. Every company must have one resident director with a valid KRA PIN. WKA provides nominee director services for foreign investors.

5. Can WKA Advocates help me obtain my KRA PIN remotely?
Absolutely. WKA facilitates both corporate and individual KRA PIN registration through iTax, even for non-resident investors.

6. Which sectors require special approvals?
Industries like mining, aviation, telecommunications, and financial services may require additional licensing from relevant regulators.

7. Can WKA assist in opening a bank account without being physically present?
Yes. WKA coordinates remote KYC and corporate bank account setup through its legal partnerships with major Kenyan banks.

8. What taxes apply to foreign-owned companies?
Foreign-owned companies are subject to corporate income tax (30%), VAT (16%), and PAYE for employees, all administered by KRA.

9. Is VAT registration mandatory?
Only if annual turnover exceeds KES 5 million, but WKA Advocates can advise on VAT compliance and filings.

10. Why should I use a law firm like WKA Advocates instead of an agent?
Because WKA Advocates is a licensed corporate law firm in Nairobi, ensuring legal compliance, confidentiality, and regulatory accuracy — unlike unverified agents.

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Why Partner with WKA Advocates

Deciding between acquiring a company in Kenya or registering a new business demands legal expertise and precise documentation. WKA Advocates ensures full compliance with KRA, BRS, and KenInvest guidelines while protecting your investment.

From company incorporation, KRA PIN registration, nominee director appointment, and bank account facilitation to business licensing, WKA Advocates delivers end-to-end legal solutions that simplify the process for foreign investors.

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Acquiring a Company in Kenya

Start your investment journey in Kenya today with WKA Advocates — your trusted partner in foreign company registration, corporate law, and business setup in Kenya.