Starting a business in
🇰🇪Kenya
Checked November 9, 2026 · How we score
Corporate tax
30%
Top income tax
35%
Setup from
$400
all-in, first year
Time to form
7 days
can be done remotely
What is the corporate tax rate in Kenya?
The headline corporate tax rate in Kenya is 30% in 2026, and individuals pay up to 35%. 30% for resident companies and 37.5% for permanent establishments of non-residents. A 15% rate applies to newly listed companies for three years, and a 1.5% Significant Economic Presence tax on digital marketplace turnover applies to non-resident digital businesses.
| Corporate income tax | 30% 30% for resident companies and 37.5% for permanent establishments of non-residents. A 15% rate applies to newly listed companies for three years, and a 1.5% Significant Economic Presence tax on digital marketplace turnover applies to non-resident digital businesses. |
|---|---|
| Personal income tax (top) | 35% Progressive rates 10%, 25%, 30%, 32.5% and 35% (above KES 9.6 million a year). A KES 2,400 monthly personal relief and a 2.75% housing levy plus 2.75% social health contribution apply to wages. |
| Tax system | Worldwide income |
| Capital gains tax | 15%15% on net gains from transfer of property, including land and shares, after deducting costs; there is no annual exemption. |
| Dividend withholding (non-residents) | 15% |
| VAT / GST | 16% |
| Social security | Employers and employees each pay NSSF up to 6% of pensionable pay (capped), plus 1.5% housing levy and 2.75% SHIF. VAT is 16%. |
Forming a company in Kenya
| Usual entity | Private limited company (Ltd) |
|---|---|
| Minimum capital | None |
| Setup cost (all-in) | $400–$1,500 |
| Annual running cost | $1,500–$4,000 |
| Time to incorporate | 7 days |
| Form remotely as a foreigner | Yes |
| Local director required | No |
| Local address required | Yes |
| Owners on public register | Yes |
| Statutory audit for small companies | Yes |
| Business banking for non-residents | Moderate |
Residency and visas
Foreign investors need a Class G (business/professional) or Class D work permit. Visitor status does not allow you to run the business day to day, and permits are issued through the Department of Immigration.
| Digital nomad visa | No |
|---|---|
| Golden visa | No |
| Ease of residency for founders | 3/5 (1 = easiest) |
Taxes for individuals living in Kenya
Kenya taxes income that accrues in or is derived from Kenya, and residents' worldwide employment or service income; other foreign investment income is generally outside the net unless Kenyan-sourced.
| Foreign income of residents | Partly taxed |
|---|---|
| Income tax structure | Progressive rates |
| Inheritance / estate tax | 0%Kenya has no inheritance or estate duty; stamp duty may apply when assets are transferred. |
| Wealth tax | No |
| Annual property tax on your home | Yes |
| Exit tax when you leave | No |
| When you become tax resident | Resident if you have a permanent home in Kenya and were present during the year, or stay 183 days or more in a year, or 122 days on average over three years. |
Special tax regimes
Export processing and special economic zones
Corporate tax holidays of 10 years followed by 15% for qualifying zone enterprises.
Turnover tax
Small businesses with turnover under KES 25 million may pay 3% on gross turnover instead of income tax.
Nairobi International Financial Centre
Incentives for qualifying financial and professional services firms in Nairobi.
Pros and cons
Why founders pick Kenya
- Fast online registration through eCitizen
- East Africa's main startup and mobile-money hub
- No inheritance tax
- Low formation and accounting costs
Watch out for
- 30% corporate tax and 35% top personal rate
- 37.5% on branches of foreign companies
- Audit required for all companies
- Foreign owners need a work permit to run the business there
Best for: Founders serving East Africa · Fintech and agri-tech startups · Companies using Nairobi as an African regional hub
Kenya: common questions
Is Kenya a tax haven?
No. Kenya is a normal-tax country: companies pay 30% corporate tax and the top personal income tax rate is 35%.
What is the corporate tax rate in Kenya?
The corporate tax rate in Kenya is 30% for resident companies and 37.5% for branches of non-resident companies. Non-resident digital service providers pay a 1.5% Significant Economic Presence tax on turnover instead.
How much does it cost to register a company in Kenya?
Expect USD 400–1,500 in the first year. Registration is done online through the eCitizen and Business Registration Service portals, takes about 7–10 days, and a Kenyan lawyer or agent is advisable. Foreign shareholders can own 100% in most sectors.
What is the income tax rate in Kenya?
Personal income tax rates run from 10% to 35%, with the top rate applying above KES 9.6 million a year. Employees also pay a 2.75% housing levy and 2.75% social health contribution.
Does Kenya tax capital gains?
Yes, at 15% on gains from transfer of property such as land and shares, with no annual exemption. The gain is calculated after deducting the cost and improvement expenses.
Can a foreigner own a company in Kenya?
Yes. A foreigner can own 100% of a private limited company in most sectors and be a director, but needs a business or work permit to work in Kenya. Local address and registered office are required.
Sources
- Kenya Revenue Authority (KRA)
- Business Registration Service Kenya
- PwC Worldwide Tax Summaries – Kenya
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Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.