Doing business in Kenya: Kenya trade and export guide
Updated 29 May 2015
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This publication is available at https://www.gov.uk/government/publications/exporting-to-kenya/exporting-to-kenya
Managing risk
Find out how UK companies can control risks when doing business in Kenya.
Export opportunities and advice
Find more export advice and explore opportunities overseas on great.gov.uk.
1. Kenya export overview
Kenya is a member of East African Community (EAC). It has the largest Gross Domestic Product (GDP) economy in south east and central Africa. Kenya’s has a population of approximately 41 million.
Contact a Department for International Trade (DIT) Kenya export adviser for a free consultation if you are interested in exporting to Kenya.
Contact UK Export Finance (UKEF) about trade finance and insurance cover for UK companies. You can also check the current UKEF cover position for Kenya.
Over 60 UK companies operate from Kenya, including Barclays bank, British Airways, BAT, Standard Chartered bank, Diageo, GlaxoSmithKline, Unilever, De La Rue, Finlays, G4S, Tullow Oil and BG Group.
Benefits to UK businesses exporting to Kenya include:
- fully liberalised economy – free flow of trade and foreign private investment
- good financial and legal systems compared to sub-Saharan Africa
- skilled workforce
- regional entry point for the east Africa region – Nairobi serves as a regional economic hub
- well established private sector
- English is the official language
- daily flights from the UK
2. Challenges
There are some challenges in doing business in Kenya. These include:
- strong competition from the east, especially on price
- security threats
- infrastructure limitations
- can be high cost of doing business (such as taxes)
- bureaucracy
- counterfeiting
- high levels of corruption (145 out of 175 on the corruption index)
- ranks 136 out of 189 for ease of doing business according to World Bank
You should ensure you take the necessary steps to comply with the requirements of the UK Bribery Act.
Read the latest Overseas Business Risk report for Kenya.
3. Growth potential
Kenya’s economy grew by 5.3% in 2014, a dip from the 5.7% recorded in 2013. The Gross National Income (GNI) per capita stands at USD 930, up from 840. The dip is attributed to the hit Kenya took from a decline in tourism earnings and a sluggish manufacturing industry.
Sectors that recorded a growth in the latest Kenya National bureau of statistics’ economic survey are:
- transport (13.7%)
- Information and Communications Technology (13.4%)
- energy (16.5%)
- education (22.8%).
The agriculture sector is the mainstay of the economy, it:
- contributes 26% to GDP directly and 25% indirectly
- forms 65% of Kenya’s total exports
- provides 18% of formal employment
4. Trade between UK and Kenya
The UK is one of the largest foreign investors in Kenya. Bilateral trade totals over £1.3 billion.
UK exports to Kenya declined from £272.4 million in 2012 to £252.1 million in 2013.
The top 4 UK exports for 2013:
- tea (£91.4 million)
- vegetables (£76.1 million)
- crude vegetable materials (£60.4 million)
- baby prams, toys and games (£3.7 million)
5. Opportunities for UK businesses in Kenya
Department for International Trade (DIT) provides free international export sales leads from its worldwide network. Search for export opportunities.
5.1 Energy
Oil and gas: Recent oil discoveries and high potential gas finds have created many opportunities. To support this growth, the related infrastructure will provide opportunities for its improvement.
Low carbon energy: The potential for geothermal energy is over 10,000 megawatts. The government has in the current budget allocated about £68 million towards geothermal development for 2014 to 2015.
In addition to this, there is high potential for solar and wind energy development.
Opportunities in this sector include:
- education and training
- supply of equipment
- support services like camping facilities, transport
Contact eric.mwema@mobile.trade.gov.uk for more information on opportunities in the energy sector.
5.2 Infrastructure
Ports: The government has allocated about £11 million for 2014 to 2015 towards:
- constructing 3 new airports
- upgrading 2 airports
- replacing ferries (about £4.1 million)
There is also a project to develop a large port off the Indian Ocean coast in the Lamu area. The port will serve the northern part of Kenya which recently discovered oil as well as landlocked South Sudan and Ethiopia.
Rail: For 2014 to 2015, the government has allocated approximately £132 million towards standard gauge rail. About £23 million has been allocated towards urban commuter rail system.
Contact Eric.Mwema@mobile.trade.gov.uk for more information on opportunities in the infrastructure sector.
5.3 Education and training
The government has allocated about £119 million towards improving education and training. There are opportunities for UK companies in:
- development of digital content
- training
- building capacity and local content development in the oil and gas sector
- supply of computers
Contact christine.kimaru@mobile.trade.gov.uk for more information on opportunities in the education and training sector.
5.4 Defence and security
The government has allocated over £600 million (about 8% of total budget), towards enhancement of security.
Opportunities in this sector include:
- surveillance equipment
- border control solutions
- anti-poaching equipment
- training of security personnel
- forensics equipment
- procurement of police aircraft
The Export Control Organisation (ECO) issues licences for the export of strategic goods. You must check your goods you are meeting legal requirements for export.
Contact emmanuel.maingi@mobile.trade.gov.uk for more information on opportunities in the defence and security sector.
5.5 Financial services
The banking sector is undeveloped. Loans amount to nearly 30% of GDP.
Opportunities exist for companies to provide products and services from advisory and capacity building to technical support.
The primary industries with financial services opportunities are:
- extractives
- energy
- agriculture
Contact Christine.Kimaru@mobile.trade.gov.uk for more information on opportunities in the financial services sector.
5.6 Aid Funded Business (AFB)
The international aid agencies fund projects to improve prosperity in developing countries.
Find more information on the Department for International Trade (DIT)’s Aid Funded Business Service which helps you identify opportunities to supply products and services to the international aid agencies.
5.7 Start-up considerations
UK companies can enter the Kenyan market by the following entry strategies:
- licensing
- joint ventures
- wholly owned subsidiary
- franchising
- direct or indirect export
- set up an agency or an appointed distributor
- acquisition
- foreign Direct Investment - set up an entire operation
It is advisable to have a local representative either on a commission basis or as an importer/distributor. This is especially recommended for companies new to the market, with limited knowledge on target customers.
Joint venture partnerships and acquisition options are chosen by many foreign companies. Their success depends on the nature of the product/service and the level of domestic competition. This is ideal for companies that have a more advanced knowledge of the market, seeking to gain further control of local business.
Companies that are registered as limited liability companies such as registered companies or branch offices are regulated by the Companies Act (Cap 486).
The principal types of business enterprises in Kenya are:
- registered companies (Private and Public)
- branch offices (of companies registered outside Kenya)
- partnerships
- sole proprietorships
- co-operatives
Find out how to start a business in Kenya.
You should seek legal advice as the tax and legal obligations of each business structure can differ.
6. Legal considerations
Kenya’s legal system is based on English law and practice.
UK companies entering into agreements in Kenya should undertake professional advice.
6.1 Standards
The Kenya Bureau of Standards (KEBS) is responsible for the preparation, adoption and application of standards for imported and domestically manufactured products. All products must have a test certificate from an ISO/IEC 17025 accredited laboratory.
6.2 Intellectual Property Rights (IPR)
Kenya is a member of the World Intellectual Property Organisation (WIPO). It is also a signatory for the Paris Convention for the Protection of Industrial Property and the Patent Co-operation Treaty.
The Kenya Industrial Property Institute (KIPI) has responsibility for patient protection.
7. Tax and customs considerations
7.1 Tax
Kenya has the following direct and indirect taxes:
- income tax
- customs and excise duties
- Value Added Tax (VAT)
- corporate tax
- personal income tax
More information can be found from the Kenya Revenue Authority or by contacting the Department for International Trade (DIT) Kenya.
7.2 Customs
You can find more about import tariffs in the Market Access Database.
7.3 Documentation
Companies need a number of documents to set up in Kenya, including:
- Certificate of Registration
- Company PIN Number
- VAT number
Department for International Trade (DIT) Kenya can give advice on these documents.
It is also essential to obtain or issue receipts and invoices whenever transacting to avoid potential disputes.
8. Entry requirements
You need a visa to enter Kenya. Passports should be valid for at least 3 months after the end date of your visit.
You can get different types of visa on arrival by air with a cash payment. The different types are:
- single entry (USD 50)
- multiple entry (USD 100)
- transit (USD 20)
8.1 Travel advice
If you’re travelling to Kenya for business, check the Foreign and Commonwealth Office (FCO) travel advice page beforehand.
8.2 Contact
Contact the Department for International Trade (DIT) team in Kenya for more information and advice on opportunities for doing business in Kenya.