Employing in
Kenya

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Expanding into
Kenya

Global expansion is a step to make for any business, regardless of what you wish to achieve. The opportunities that can come with an expansion can be both incredibly exciting as well as intimidating and confusing, especially when you consider all the registration procedures that need to be done and the documentation required.

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The Republic of Kenya’s economy is in the top two in East Africa with the International Monetary Fund (IMF) predicting that Gross Domestic Product (GDP) will grow to US$151 billion by 2028, as the country targets increased industrialisation through its Kenya Vision 2030 agenda and vies for regional supremacy with Ethiopia.

Kenya also faces strong competition in the region from Tanzania and Angola to attract Foreign Direct Investment (FDI), which is vital for upgrading agriculture production, infrastructure, manufacturing and diversifying its economic landscape. The agriculture sector, including forestry and fisheries remains an important component of the economy, alongside mining, energy generation, construction and real estate, financial services and tourism.

Each new markets bring new challenges, and these can be worked through more efficiently and cost-effectively with the support of a Professional Employer Organisation (PEO) such as Bradford Jacobs, especially through our Employer of Record (EOR) framework.

This can be best utilised when businesses are just beginning their expansion process and require more information before committing to incorporating an entity and fully establishing themselves in that market.

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Country EOR Guide - Bradford Jacobs

Download our Guide to Kenya

Learn all about expanding into Kenya and see what we can do to make your expansion easier.

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Download our Guide to Kenya

Learn all about expanding into Kenya and see what we can do to make your expansion easier.

Country EOR Guide - Bradford Jacobs
DOWNLOAD GUIDE

Hiring Staff
in Kenya

The Republic of Kenya’s economy is in the top two in East Africa with the International Monetary Fund (IMF) predicting that Gross Domestic Product (GDP) will grow to US$151 billion by 2028, as the country targets increased industrialisation through its Kenya Vision 2030 agenda and vies for regional supremacy with Ethiopia.

Kenya also faces strong competition in the region from Tanzania and Angola to attract Foreign Direct Investment (FDI), which is vital for upgrading agriculture production, infrastructure, manufacturing and diversifying its economic landscape. The agriculture sector, including forestry and fisheries remains an important component of the economy, alongside mining, energy generation, construction and real estate, financial services and tourism.

The World Bank, which rates Kenya as a lower middle economy, noted a strong recovery after the pandemic with growth of 7.5% in 2022, and predicted growth of 5% in 2023. Kenya has an increasingly important relationship with the European Union, with the economic bloc being their second largest trading partner and taking €1.2billion of exports in agricultural produce.

Attracting Foreign Direct Investment (FDI) is vital for Kenya’s intention to develop and upgrade its infrastructure and manufacturing and industrial output as part of the Kenya Vision 2030 programme. Kenya can also build on sub-Sahara’s most impressive power sector, with a well-developed utilities structure and renewable resources from geothermal, wind and solar power.

Country:
The Republic of Kenya
Local Currency:
Kenyan Shilling (KES)
Time Zone:
GMT+3
Country Dial Code:
+254
Tax Year:
January 1 – December 31
VAT:
16%
National Minimum Wage:
KES 15,120 (€98, US$108)
Taxpayer Identification Numbers:
Personal Identification Number (PIN), also known as Kenya Revenue Authority (KRA) PIN, is unique 11-digit number needed for employment, business and investment
Main trading partners:
India, China, UAE, South Africa, Saudi Arabia, US, Japan, UK, Netherlands, Uganda, Tanzania, Pakistan and EU.

Hiring Staff
in Kenya

The Republic of Kenya is in the top tier of East Africa economies, although facing increased competition from No. 1 Ethiopia, plus Tanzania and Angola. Kenya holds an important strategic position in the region, aided by the trading bonus of having the region’s largest port, Mombasa, on its Indian Ocean coastline.

The International Monetary Fund (IMF) estimated Kenya’s Gross Domestic Product (GDP) at US$118 billion in 2022 and predicted it will expand to US$151 billion by 2028, with Kenya determined to cement its position among East Africa’s front-running industrial powers.

Manufacturing supplies both local and export markets, while Kenya’s services sector has established Nairobi as the financial hub for the region. The traditional sector of agriculture remains a significant economic strength and proved resilient during the pandemic when the economy contracted by only 0.3%.

The World Bank, which rates Kenya as a lower middle economy, noted a strong recovery after the pandemic with growth of 7.5% in 2022, and predicted growth of 5% in 2023. Kenya has an increasingly important relationship with the European Union, with the economic bloc being their second largest trading partner and taking €1.2billion of exports in agricultural produce.

Attracting Foreign Direct Investment (FDI) is vital for Kenya’s intention to develop and upgrade its infrastructure and manufacturing and industrial output as part of the Kenya Vision 2030 programme. Kenya can also build on sub-Sahara’s most impressive power sector, with a well-developed utilities structure and renewable resources from geothermal, wind and solar power.

Country:
The Republic of Kenya
Local Currency:
Kenyan Shilling (KES)
Time Zone:
GMT+3
Country Dial Code:
+254
Tax Year:
January 1 – December 31
VAT:
16%
National Minimum Wage:
KES 15,120 (€98, US$108)
Taxpayer Identification Numbers:
Personal Identification Number (PIN), also known as Kenya Revenue Authority (KRA) PIN, is unique 11-digit number needed for employment, business and investment
Main trading partners:
India, China, UAE, South Africa, Saudi Arabia, US, Japan, UK, Netherlands, Uganda, Tanzania, Pakistan and EU.

The Main Sectors of the Kenyan Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Manufacturing and Industry

Manufacturing is a key focus for the Kenyan government, and the Kenyan Association of Manufacturers identifies advanced technology, developing an IT-focused workforce, foreign investment and domestic growth as part of the package to move the economy forward.

Special Economic Zones, industrial parks and clusters are part of the developing manufacturing landscape, where direct and joint-investment opportunities include textiles and clothing, fertiliser and agro-processing, electronics, components for the automotive sector, plastics, chemicals and pharmaceuticals, with metals and engineering equipment featuring both in the export and the domestic markets.

This sector supports Kenya’s economy in the areas of logistics, energy, financial and ICT services, in addition to social development in health, education, water supply and sanitation. The finance sector has transformed Nairobi into a financial services hub for the region and as an offshore base for international financial services.

The World Bank identified the services sector as driving predicted growth of 5% in 2023, particularly through financial services, tourism and transportation, and contributing 80% of the increase in total GDP.

Kenya’s Ministry of Tourism and Wildlife highlights eco and cultural tourism, beach holidays, safaris and sporting activities as the leading attractions for overseas visitors and a major contributor to foreign exchange revenues.

The Ministry released stats showing that just under 1.5 million foreigners visited in 2022, a 70% increase over 2021, and generated €1.8 billion (US$1.95 billion) … an 83% growth over the previous year. Around 37% were holidaymakers, 27% visited family and friends, with 27% visiting for business, meetings, conferences and exhibitions. International flight arrivals reached 62,000 in 2022, 32% more than 2021 and only 13% down on pre-COVID figures.

Mining

Natural resources include gold, titanium and gemstones, with localised artisanal mining playing a significant role in the sector and employing around 100,000 workers. Kenya is a major transit hub for natural resources being transported from the Great Lakes region to global destinations.

However, despite the introduction of the Mining Act in 2016 that updated legislation from 1940, productivity remains low and has largely stagnated since the government introduced a moratorium in 2019. This was to streamline the sector, properly map mineral resources and ensure the validity of permits.

Kenya’s capital city, Nairobi, is the regional business and finance hub for East Africa. The United Nations Economic Commission for Africa (UNECA) acknowledges that Kenya’s finance sector is well-developed in comparison with other sub-Saharan and regional economies. The system includes commercial banks, non-banking financial institutions, insurance companies, savings and credit agencies and a stock exchange, the Nairobi Securities Exchange.

The national bank is the Central Bank of Kenya (CBK) – and not to be confused with the commercial National Bank of Kenya. The CBK is responsible for formulating monetary policy. It also promotes financial stability and provides an effective and efficient payment, clearing and settlement system; formulates and implements foreign exchange policies; holds and manages foreign exchange reserves; issues currency and advises the government.

This is a critical sector for the country, with the Central Bank of Kenya (CBK) assessing that it accounts for over 20% of GDP, employs 40% of the population overall and 70% in rural areas, plus contributing over 60% to export revenues. However, the CBK states the sector is under-developed and suffers from poor productivity and loses around 40% of crops every year with a potential value of €460 million (US$500 million).

Kenya’s wheat, rice and corn production is expected to increase in 2023-24 to capitalise on higher global prices.  Other profitable export crops include avocado, macadamia, French beans, mango and general greenhouse produce such as cucumbers, tomatoes, capsicum and strawberries.

The Main Sectors of the Kenyan Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Manufacturing and Industry

Manufacturing is a key focus for the Kenyan government, and the Kenyan Association of Manufacturers identifies advanced technology, developing an IT-focused workforce, foreign investment and domestic growth as part of the package to move the economy forward.

Special Economic Zones, industrial parks and clusters are part of the developing manufacturing landscape, where direct and joint-investment opportunities include textiles and clothing, fertiliser and agro-processing, electronics, components for the automotive sector, plastics, chemicals and pharmaceuticals, with metals and engineering equipment featuring both in the export and the domestic markets.

This sector supports Kenya’s economy in the areas of logistics, energy, financial and ICT services, in addition to social development in health, education, water supply and sanitation. The finance sector has transformed Nairobi into a financial services hub for the region and as an offshore base for international financial services.

The World Bank identified the services sector as driving predicted growth of 5% in 2023, particularly through financial services, tourism and transportation, and contributing 80% of the increase in total GDP.

Kenya’s Ministry of Tourism and Wildlife highlights eco and cultural tourism, beach holidays, safaris and sporting activities as the leading attractions for overseas visitors and a major contributor to foreign exchange revenues.

The Ministry released stats showing that just under 1.5 million foreigners visited in 2022, a 70% increase over 2021, and generated €1.8 billion (US$1.95 billion) … an 83% growth over the previous year. Around 37% were holidaymakers, 27% visited family and friends, with 27% visiting for business, meetings, conferences and exhibitions. International flight arrivals reached 62,000 in 2022, 32% more than 2021 and only 13% down on pre-COVID figures.

Mining

Natural resources include gold, titanium and gemstones, with localised artisanal mining playing a significant role in the sector and employing around 100,000 workers. Kenya is a major transit hub for natural resources being transported from the Great Lakes region to global destinations.

However, despite the introduction of the Mining Act in 2016 that updated legislation from 1940, productivity remains low and has largely stagnated since the government introduced a moratorium in 2019. This was to streamline the sector, properly map mineral resources and ensure the validity of permits.

Kenya’s capital city, Nairobi, is the regional business and finance hub for East Africa. The United Nations Economic Commission for Africa (UNECA) acknowledges that Kenya’s finance sector is well-developed in comparison with other sub-Saharan and regional economies. The system includes commercial banks, non-banking financial institutions, insurance companies, savings and credit agencies and a stock exchange, the Nairobi Securities Exchange.

The national bank is the Central Bank of Kenya (CBK) – and not to be confused with the commercial National Bank of Kenya. The CBK is responsible for formulating monetary policy. It also promotes financial stability and provides an effective and efficient payment, clearing and settlement system; formulates and implements foreign exchange policies; holds and manages foreign exchange reserves; issues currency and advises the government.

This is a critical sector for the country, with the Central Bank of Kenya (CBK) assessing that it accounts for over 20% of GDP, employs 40% of the population overall and 70% in rural areas, plus contributing over 60% to export revenues. However, the CBK states the sector is under-developed and suffers from poor productivity and loses around 40% of crops every year with a potential value of €460 million (US$500 million).

Kenya’s wheat, rice and corn production is expected to increase in 2023-24 to capitalise on higher global prices.  Other profitable export crops include avocado, macadamia, French beans, mango and general greenhouse produce such as cucumbers, tomatoes, capsicum and strawberries.

Commercial Laws in
Kenya

Tax and Labour Authorities

The Kenya Revenue Authority (KRA):  The agency responsible for assessing, collecting and accounting for all revenues due to the government.

The Ministry of Labour and Social Protection (MLSP):  This includes the State Department of Labour, which was formed following reorganisation in 2016. It includes the Department of Labour; Directorate of Occupational Safety and Health Services; Office of the Registrar of Trade Unions; National Productivity and Competitiveness Centre; Department of National Human Resources Planning Development.

The Central Organisation of Trade Unions:  Founded in 1965, it is the umbrella organisation of 45 trade unions.

Kenya’s Employment Act and the Regulation of Wages and Conditions of Employment Act permit both written and verbal contracts. Oral contracts must be transferred to written form if employment exceeds three months or if the job cannot reasonably be expected to be completed within three months.

Whether contracts are open-ended, fixed-term, full- or part-time, employees are entitled to all benefits regulated either by legislation, their contract or any applicable Collective Bargaining Agreements. Employees must be given their contract or agreement within two months of starting work. It is usual for contracts and all documents to be in English.

Commercial Laws in
Kenya

Tax and Labour Authorities

The Kenya Revenue Authority (KRA):  The agency responsible for assessing, collecting and accounting for all revenues due to the government.

The Ministry of Labour and Social Protection (MLSP):  This includes the State Department of Labour, which was formed following reorganisation in 2016. It includes the Department of Labour; Directorate of Occupational Safety and Health Services; Office of the Registrar of Trade Unions; National Productivity and Competitiveness Centre; Department of National Human Resources Planning Development.

The Central Organisation of Trade Unions:  Founded in 1965, it is the umbrella organisation of 45 trade unions.

Kenya’s Employment Act and the Regulation of Wages and Conditions of Employment Act permit both written and verbal contracts. Oral contracts must be transferred to written form if employment exceeds three months or if the job cannot reasonably be expected to be completed within three months.

Whether contracts are open-ended, fixed-term, full- or part-time, employees are entitled to all benefits regulated either by legislation, their contract or any applicable Collective Bargaining Agreements. Employees must be given their contract or agreement within two months of starting work. It is usual for contracts and all documents to be in English.

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