Company Formation & Tax in Kenya
East Africa's commercial and tech hub — home to "Silicon Savannah", a 30% corporate tax, and the region's most connected financial and logistics gateway.
Kenya applies a 30% corporate income tax on resident companies (higher for non-resident branches) and a 16% VAT. As the anchor economy of the East African Community, with Nairobi as a regional headquarters, fintech and logistics hub, it offers access to a large integrated market and a maturing digital economy. The private limited company registers quickly through the eCitizen / BRS portal.
The headline numbers
| Tax | Rate |
|---|---|
| Corporate income tax (resident) | 30% |
| Corporate income tax (non-resident branch) | 37.5% |
| VAT (standard) | 16% |
| Dividend withholding (resident) | 5% |
| Dividend withholding (non-resident) | 15% |
Resident companies pay 30%; branches of non-resident companies pay 37.5%. VAT is 16% standard, with zero-rated and exempt categories. Dividends attract 5% withholding for residents and 15% for non-residents (treaty relief may apply). A digital-services tax and other withholding taxes apply to specific cross-border and digital flows.
What shapes the effective burden
- Branch vs subsidiary — the 37.5% branch rate makes a locally incorporated subsidiary usually more efficient than a branch.
- Withholding taxes — management fees, royalties, interest and digital services carry withholding taxes that shape cross-border structuring.
- Special Economic Zones & EPZs — reduced corporate rates and incentives for export-oriented and zone-based investors.
- EAC market access — membership of the East African Community customs union widens the effective market well beyond Kenya.
Forming the company
The standard vehicle is the private company limited by shares (Ltd), registered through the Business Registration Service on the eCitizen portal — typically within days. Requirements: at least one director and one shareholder (foreigners permitted), a registered office in Kenya, and a company secretary for larger companies. There is no meaningful minimum capital. A KRA PIN is obtained for the company and directors, with VAT and PAYE registration as thresholds require. 100% foreign ownership is permitted in most sectors, with some local-participation rules in specific industries.
Frequently asked questions
What is Kenya's corporate tax rate in 2026?
30% for resident companies; branches of non-resident companies are taxed at 37.5%.
How are dividends taxed in Kenya?
5% withholding for resident shareholders and 15% for non-residents, subject to reduction under an applicable tax treaty.
What is the VAT rate in Kenya?
16% standard, with zero-rated and exempt categories for certain goods and services.
Can a foreigner own a Kenyan company fully?
Yes — 100% foreign ownership is permitted in most sectors, with local-participation requirements in a few regulated industries.
Official sources
- KRA — corporate income tax and VAT
- Business Registration Service — company registration
- KenInvest — investment promotion and incentives
This guide is general information prepared by A.R.M. Management and is current as at July 2026. It is not legal or tax advice; withholding, zone and sector rules carry conditions and change. Confirm against the KRA, or with an advisor, before acting.
Structure a Kenyan company the right way.
A.R.M. Management advises founders, investors and regional groups on Kenyan incorporation, branch-versus-subsidiary choices, withholding taxes and East African expansion. Begin with a confidential conversation.