How to Obtain a Business License in Kenya

Are you planning to start a business in Kenya? If your answer to this question is yes, then you are required by law to obtain a business license or permit. A single business permit is offered by the county government of your business jurisdiction. Let’s say for example that you want to start a car washing business in Nairobi. For you to run your business smoothly, you will obtain a business permit from the city council of Nairobi. They usually have stations in almost every location in the county.

In this article, you will find out the procedure you need to follow in order to obtain a single business permit or license for your business.

What is the importance of applying for a business license?

We start off with the benefits of having a business permit. The document is mandatory, so you should have it to avoid legal battle with the authorities. In some cases, you will have to close your business and/or pay fines for failure to obtain a business permit.

The second advantage of having a business permit in Kenya is to prove that your business is legal and credible. There are many businesses in the country that run dubious and illegal activities. A business license is needed to prove that you are not running such illegitimate course. The local government will also use a business permit as a way of collecting revenue to deliver services to your community, such as offering security, water and electricity. These are all important amenities for your business. Support the government to support you.

A business permit is also important if you are planning to apply for a government tender or a bank loan, the permit will be required. Hence, a business permit is a crucial document that no business can operate without.

Types of Business Permits

There are various types of business permits in Kenya, each one of them serving a different purpose. These licenses include:

  • Trading License: This is a compulsory single business for every business in Kenya. Its price varies according to the type and location of business.
  • Advertising Signage: this type of license is offered to businesses that have advertising signage of about 300mm×60mm or less.
  • Health Certificate: this business permit s offered to individuals who are running food selling business. Thus, if you are planning to start a restaurant business in Kenya you will be required to apply for a health certificate in addition to the trading license.
  • Food Hygiene Certificate: Businesses selling consumable products are also required to have a food hygiene certificate.

The annual rates for business permits are largely the same in a given county, but they might vary according to the type, size, and location of the business. For example, a supermarket in Nairobi will pay more licensing fees than a cyber café.

How much does a Business License Cost in Kenya?

The price of a business license varies from one county to another, and within one county it will also vary from one location to another. In Nairobi, most business permits will cost between KES 10,000 and KES 15,000 per year.

The secret of cutting costs on business permits in Nairobi is to choose the category of your business wisely. You should go to your county’s licensing authority, either online or physically, and ask the rates for various business. You then choose your category based on those rates.

Methods of Acquiring a Business Permit in Kenya

There are two methods of obtaining a trading license in Kenya. First, you can apply for your business permit manually by visiting the county offices and filling required forms. The second method is by applying for the license online.

1) Manual application and renewal of a business permit

You can apply for a new business permit or renew an existing one by visiting the county council offices near you. For example, businesses operating in Nairobi can obtain their business permits from the City Hall Annex.

The requirements for manual application of business permits include:

  • A business permit application form which can be downloaded online or obtained from the city hall.
  • A copy of the certificate of incorporation for a company.
  • Copy of the identification card for an individual
  • KRA Pin Certificate
  • Payment invoice to show that you have paid for the required fees.

After assembling all these documents, you should fill the business permit registration form (BR-1 form) with full details of your business.

The next step is to return the filled out form to the county office. In some cases, an inspection officer will visit your premises to check the business. The inspection is required to establish the location, number of employees, and type of business you are running. This will determine how much licensing rates you will be charged.

After inspection of the business premises, the Ward Licensing Officer will receive approval of your business permit from the licensing officer, who stamps the BR-1 form and generates an invoice for your single business permit.

To renew your business license in Kenya for the second and subsequent years, you should attach a copy of previous permit(s). You should then pay the renewal fee through M-Pesa or cash depending on your county office requirements. The county of Nairobi mandates individuals to pay their business permits through M-Pesa to their digital account.

After paying for your business permit, you will be notified when to collect your permit as soon as it is ready.

2) Online Application and Renewal of a Business Permit

If you are thinking of starting a business in Kenya, can obtain your business permit through online.

The requirements for online application and renewal of a business license are pretty much the same as those for manual application. However, an online application requires the documents to be scanned and uploaded on your county’s self-service portal or e-citizen.

The first step when applying for a business license online in Kenya is to sign up on the online portal of your county. In this step, you will provide your email, phone number and national ID. You then generate your password or PIN, which will be used subsequently to log into the website. Make sure to keep these details safely for future use.

This is the Online Business Permit Application Portal for Nairobi County

After signing up, you will check the rates for your business category, and then fill the required business permit application form.

The next step is to and obtain an invoice for the business license fee and make the required payments.

Then, the licensing officers will verify your application and generate a business permit for your business in Kenya. There you go, your license will be available for download on the portal.

Estimated Cost for a single Business Permit in Nairobi

Business Permit Application Fees                                                       KES 200

Business Permit Fee (for a business with up to 5 employees)            KES 15,000

Total Fees for a Business Permit                                                     KES 15,200

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