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It’s Not Cheap to Start a Business in Kenya

Do you believe the math?

A new report reveals the cost of doing business in each African county. Some countries, like Rwanda, allow companies to start business free for two years. In Equatorial Guinea, a country with an GDP per capita of $870, it costs $2,321 to start operations.

What about Kenya?

In terms of the cost of doing businesses, Kenya falls somewhere in the middle. It costs around $352 to get a venture up and running in the Silicon Savannah. But, according to research published in 2019 , “24 percent earn between Sh10,000 and Sh25000, ten percent earns between Sh25,000-Sh40,000 and another three percent earns between Sh40,000 and Sh55,000 per month,”. This means that most Kenyans earn less per month than what it costs to start a business.

And what happens once you have your business registered legally? Many who’ve grown their companies from the ground in Kenya will tell you that proper business registration comes with a number of unexpected costs. If you’re selling food or drinks, you have to invest in manufacturing equipment and samples before your business even begins to earn money to receive clearance from the Kenya Bureau Of Standards (KEBS).

When compared with other African nations Kenya may have a median level of cost when it comes to business registration, but other regulatory hurdles make establishing a legitimate business with all of the right documentation difficult and expensive.

Despite this discrepancy, Kenyans hustle on. In 2019/2020 Kenya reported 73302 registered business names, 44128 registered private companies and 424 Limited Liability Partnerships.

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