Exporting guide to Kenya

Overview

Kenya is a relatively mature market economy and a regional financial hub, with strong links to the UK. It boasts a well-educated, English-speaking and productive labour force. UK firms say staff retention rates are high. It’s an increasingly open, competitive and easy place to do business.

Strong links with the UK

Kenya’s legal system and government structure are similar to the UK. Many UK firms already have a presence in the Kenyan market. Kenya has agreements in place to protect UK companies’ interests and minimise their tax exposure. English is Kenya’s official language and there is a large expat base.

Access to other markets

Kenya is usefully positioned on strategic trade routes, providing access to landlocked neighbouring countries. It has excellent flight and sea connections.

Improved investment environment

The Kenyan government has put pro-market policies in place and is making tax and labour reforms to help investors. There are numerous incentives on offer for foreign investors. The government works constructively with the private sector through various channels and now has more capacity to address issues faced by investors.

Distribution in Kenya

Kenya: at a glance

Economic growth

-0.3%

Actual figure (IMF, 2020)
The UK is -9.3% (IMF, 2020, actual figure)

GDP per capita

$2,111

Actual figure (IMF, 2019)
The UK is $43,121 (IMF, 2019, actual figure)

Currency

Kenyan shilling

Business language

English

Time zone

GMT +3

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Opportunities for exporters

Diversification has kept Kenya’s economy stable and boosted growth in recent years. There’s a wealth of opportunities for investors who are looking to develop businesses, especially in underdeveloped sectors. There are potential suppliers, distributors and equity partners in all sectors – although thorough due diligence is advised.

Check for trade barriers

Trade barriers, such as tariffs or taxes, can raise costs, cause delays, or even stop you from exporting. Check for any issues that may impact your business when exporting.

See current trade barriers

See resolved trade barriers

Check duties and customs

Find information on how to export goods from the UK. View the duties, rules, restrictions, and the documents you need for your products.

See current duties and customs procedures

Doing business in Kenya

Preparing to export

VAT

The standard VAT rate in Kenya is 16%. A reduced rate of 8% applies to petroleum products, excluding liquefied petroleum gas. Some goods and services are zero-rated.

Corporate tax

The corporation tax rate for resident companies in Kenya is 30%. Non-resident companies pay a rate of 37.5%.

Standards

The Kenya Bureau of Standards (KEBS) is responsible for the preparation, adoption and application of standards for both imported and domestically manufactured products. All products must have a test certificate from an ISO/IEC 17025 accredited laboratory.

Payment terms

You should always make sure you give and receive receipts and invoices whenever conducting transactions, to avoid potential disputes.

Intellectual property

Intellectual property (IP) rights are territorial and rights granted in the UK do not provide protection elsewhere. You should consider getting IP protection abroad if you want to trade overseas or sell to overseas customers via the internet.

The Intellectual Property Office provides practical information to help you protect, manage and enforce your IP abroad. Further support for British businesses can be found through a network of IP attachés, based in key UK export markets.

Routes to market

If you’re new to the market, it’s a good idea to have a local representative, working either on a commission basis or as an importer or distributor.

Joint venture partnerships and acquisitions are an option for companies with more advanced knowledge of the Kenyan market.

Trade barriers

Check for any reported barriers to trading with Kenya.

Report any trade barriers that are affecting your business so we can help fix them.

Operating in Kenya

Challenges

If you’re doing business in Kenya, it’s important to be aware of the unique challenges the market poses, which include:

  • strong competition from the east, especially on price
  • potentially high business costs, especially taxes
  • bureaucracy
  • corruption
  • counterfeiting
  • risk of security threats

Bribery and corruption

Kenya ranks 144 out of 180 countries in Transparency International’s Corruption Perception Index 2018.

Kenya’s government has introduced anti-corruption reforms, including a Bribery Act in 2016. However, there are risks to look out for. We recommend that you:

  • check the background of potential business partners to avoid issues like inappropriate use of political connections by local business partners, and fraudulent conduct by local finance providers
  • be selective when looking at public procurement opportunities. These can be subject to corrupt practices like mismanagement of public funds by government officials. Choose public procurement contracts carefully and look for positive indicators such as involvement of the World Bank
  • conduct due diligence on human rights risks in your supply chain. Abuse of workers’ rights in supply chains is an issue in Kenya
  • follow local regulations and be prepared to say no. You may be asked for small bribes to speed up routine government processes.

Read guidance on what the UK bribery act means for your business and how you can reduce risk.

Next steps

DIT can advise you on doing business abroad, and help put you in touch with other people who can help such as lawyers and distributors.