Do you need to register a business to freelance in Kenya? The short answer: not immediately, but eventually yes if you’re serious about it. Many successful Kenyan freelancers operate for years as individuals with just a KRA PIN. Others register from day one. Here’s when registration makes sense, what it costs, and how to do it properly.
Do You Need Business Registration?
Legal Requirement
Technical answer: If you’re earning income from business activities, you should register
Practical reality: Many freelancers in Kenya operate as individuals without business registration for years
When you MUST register:
- Earning over Ksh 5 million/year (VAT registration becomes mandatory)
- Want to bid for tenders (most require registered business)
- Need business bank account (most banks require certificate)
- Want to hire employees (requires registered business)
- Entering contracts requiring business entity
- Want limited liability protection
When registration optional (but recommended):
- Earning Ksh 500k-5 million/year
- Working with corporate clients (they prefer registered businesses)
- Want to build long-term business brand
- Need to open business payment accounts
When you can wait:
- Just starting out (first 6-12 months)
- Earning under Ksh 300k/year
- Testing if freelancing is viable for you
- Working through platforms only (Upwork, Fiverr handle contracts)
Types of Business Registration
Option 1: Operate as Individual (No Registration)
What it means:
- You work under your own name
- No separate business entity
- Just need KRA PIN
- Report income as self-employment
Pros:
- Free (no registration costs)
- Simple (no paperwork beyond taxes)
- Fast (start immediately)
- Suitable for beginners
Cons:
- Personal liability (your personal assets at risk if sued)
- Harder to get business loans
- Some clients won’t work with unregistered
- Can’t hire employees formally
- Informal appearance
Best for:
- Beginners (first year)
- Side hustlers
- Testing remote work
- Platform workers (Upwork, Fiverr)
- Low-risk services (writing, data entry)
Tax implications:
- Report income as “Business/Self-Employment”
- Pay income tax, NHIF, NSSF
- Same tax rates as registered business
Option 2: Sole Proprietorship
What it is:
- Simplest registered business form
- You and business are legally same
- Trade under business name
- Registered with County Government
Registration:
- Register business name with County Government
- Get business permit/license
- Register with KRA (use business PIN or personal PIN)
Pros:
- Affordable (Ksh 2,000-15,000 depending on county)
- Simple to set up (1-2 weeks)
- Full control (you’re the only owner)
- Tax-efficient (no corporate tax)
- Can open business bank account
- Professional appearance
Cons:
- Unlimited liability (personal assets at risk)
- Harder to get large loans
- Difficult to bring in partners later
- Business dies with you (no succession)
Best for:
- Established freelancers (1-3 years in)
- Earning Ksh 500k-3 million/year
- Solo operators planning to stay solo
- Service businesses (writing, design, consulting)
Costs:
- Business name registration: Ksh 2,000-5,000 (county dependent)
- Business permit: Ksh 3,000-10,000/year (depends on county and business type)
- KRA registration: Free
- Total first year: Ksh 5,000-15,000
- Annual renewal: Ksh 3,000-10,000
Option 3: Limited Company (Private Limited - Ltd)
What it is:
- Separate legal entity from you
- Company can own assets, sue, be sued
- You’re director/shareholder
- Registered with Business Registration Service (BRS)
Types:
- Private Limited Company: Most common for small businesses
- Minimum 1 director, maximum 50 shareholders
- Can’t sell shares publicly
Pros:
- Limited liability (personal assets protected)
- Easier to get business loans
- Can bring in partners/investors
- Professional image (especially with corporates)
- Can transfer ownership
- Perpetual existence (outlives founder)
- Tax benefits (certain deductions)
Cons:
- Expensive to register (Ksh 10,000-50,000+)
- Annual compliance requirements (annual returns)
- More paperwork (board resolutions, AGMs)
- Accounting requirements (must keep proper books)
- Auditing may be required (if turnover high enough)
- Takes longer to set up (2-4 weeks)
Best for:
- Serious businesses (planning 5+ year growth)
- High earners (Ksh 3 million+/year)
- Businesses with employees
- Seeking investors/partners
- High-risk businesses (legal liability concerns)
- Software companies, agencies, consultancies
Costs:
- Business name search: Ksh 100
- Name reservation: Ksh 100
- Company registration: Ksh 10,000-12,000
- Stamp duty: Ksh 3,000 (Ksh 100k share capital)
- KRA PIN: Free
- Lawyer (optional but recommended): Ksh 15,000-30,000
- Total first time: Ksh 15,000-50,000
- Annual compliance: Ksh 5,000-20,000 (annual returns, accounting)
Option 4: Partnership
What it is:
- Two or more people co-own business
- Registered with County Government
- Partners share profits and liabilities
Types:
- General Partnership: All partners liable
- Limited Partnership: Some partners have limited liability
Best for:
- Two freelancers combining skills
- Husband-wife teams
- Co-founders
Note: Not common among freelancers, most go sole proprietor or Ltd
When to Register: Decision Framework
Register immediately if:
- Client requiring registered business to work with you
- Applying for tender requiring business certificate
- Need business bank account for client payments
- Hiring team members
- High liability risk (legal exposure)
Register within 6-12 months if:
- Earning consistent Ksh 50,000+/month
- Multiple ongoing clients
- Want to scale beyond solo operation
- Corporate clients prefer registered businesses
- Want business brand separate from personal identity
Can wait (operate as individual) if:
- Still in first 3-6 months
- Earning under Ksh 300,000/year
- Testing viability of freelancing
- Working exclusively through platforms
- Want to keep costs minimal
Our recommendation for most Kenyan freelancers:
- Months 1-12: Operate as individual with KRA PIN
- Year 2-3: Register sole proprietorship
- Year 4+: Consider Limited Company if scaling
Exception: If earning Ksh 100k+/month from month 1, register sole proprietorship immediately
Registering Sole Proprietorship (Step-by-Step)
Step 1: Choose Business Name
Guidelines:
- Unique (not similar to existing)
- Reflects what you do
- Easy to spell and pronounce
- Not offensive or misleading
Examples for freelancers:
- “Kamau Content Services”
- “Nairobi Digital Solutions”
- “Akinyi Graphics Studio”
- “Mwangi Web Development”
Check availability:
- Search existing names: eCitizen business portal
- Google the name (see if domain available)
Step 2: Get Business Name Certificate
Where: County Government Trade Office or eCitizen portal
Documents needed:
- Copy of ID
- KRA PIN certificate
- Filled application form (get at county office)
Process (In-person at County):
- Visit County Trade Office (City Hall or county headquarters)
- Fill business name registration form
- Pay registration fee
- Submit documents
- Certificate issued (same day to 1 week, depends on county)
Process (Online via eCitizen):
- Go to ecitizen.go.ke
- Create account (if new)
- Select County Government → Business Permits/Licenses
- Choose your county
- Fill application form
- Upload documents
- Pay via M-PESA
- Certificate emailed/downloadable
Cost: Ksh 2,000-5,000 (varies by county)
Timeline: 1-7 days
Step 3: Get Business Permit/License
Required: All businesses need operating license from county
Documents needed:
- Business name certificate
- Copy of ID
- KRA PIN
- Business premises details (address, rental agreement if applicable)
- Passport photo
Process:
- Visit County Trade Office (or eCitizen)
- Fill business license application
- Pay license fee
- Submit documents
- May require physical inspection (especially if physical premises)
- License issued
Cost:
- Home-based business: Ksh 3,000-5,000/year (depends on county)
- Office-based: Ksh 5,000-15,000+/year (depends on county and business type)
Note: Many counties now classify online/remote work businesses as “home-based” with lower fees
Nairobi County fees (example):
- Online service provider: ~Ksh 5,000/year
- Larger offices: More expensive
Renewal: Annual (before expiry date)
Step 4: Register Business with KRA
Options:
- Use your existing personal KRA PIN for business income (simplest)
- Register separate business PIN (more professional)
To register separate business PIN:
- Login to iTax (itax.kra.go.ke)
- New Registration → Business
- Select “Sole Proprietor”
- Fill details:
- Business name
- Business address
- Business phone
- Nature of business
- Upload business certificate
- Submit
- Business PIN issued
Cost: Free
Why separate PIN:
- Clearer business vs personal separation
- Professional on invoices
- Easier accounting
Why use personal PIN:
- Simpler (one PIN for everything)
- Less paperwork
- Common for small sole proprietors
Either works: Choose based on preference
Step 5: Open Business Bank Account (Optional)
Why:
- Separate business and personal finances
- Professional appearance
- Easier accounting
- Required for certain payments (tenders, corporate clients)
Required documents:
- Business certificate
- Business permit
- KRA PIN (business or personal)
- ID copy
- Proof of physical address
Kenyan banks offering business accounts:
- KCB Bank
- Equity Bank
- Co-operative Bank
- NCBA Bank
- Absa Bank
Typical costs:
- Opening: Ksh 0-1,000
- Monthly maintenance: Ksh 0-500
- Transaction fees: Per bank
Recommendation: Equity or Co-op Bank (lower fees, good digital banking)
Alternative: Keep using personal M-PESA/bank account (common for small freelancers)
Registering Limited Company (Step-by-Step)
Step 1: Choose Company Name
Requirements:
- Must end with “Limited” or “Ltd”
- Unique (search eCitizen first)
- Not vulgar or undesirable
Examples:
- “Kamau Digital Solutions Limited”
- “Nairobi Creative Studios Ltd”
- “Tech Innovators Kenya Limited”
Reserve name:
- Go to BRS portal (brs.go.ke) or eCitizen
- Search name availability
- Reserve for 30 days
- Cost: Ksh 100
Step 2: Prepare Company Documents
Documents needed:
- Memorandum of Association (MOA): Company constitution
- Articles of Association (AOA): Internal rules
- Form CR1: Company registration form
- Directors’ details: ID copies, KRA PINs
- Shareholders’ details: ID copies, KRA PINs, shares allocated
Who prepares:
- Lawyer (Ksh 15,000-30,000) - recommended
- Company secretary (Ksh 10,000-20,000)
- DIY (template online, risky if errors)
Step 3: Register Company
Where: Business Registration Service (BRS) portal (brs.go.ke) or eCitizen
Process:
- Login to BRS portal
- Create account (if new)
- Complete registration form
- Upload documents (MOA, AOA, CR1)
- Pay registration fee
- Submit
- Certificate of Incorporation issued (digital)
Cost:
- Registration fee: Ksh 10,000-12,000
- Stamp duty: Ksh 3,000 (for Ksh 100,000 share capital)
Timeline: 3-14 days (if documents correct)
Step 4: Post-Registration Steps
1. Get KRA PIN:
- Register company for KRA PIN via iTax
- Submit Certificate of Incorporation
- PIN issued within days
2. Get Stamp Duty Certificate:
- Pay stamp duty (Ksh 3,000 for small company)
- Via iTax
3. Register for VAT (if applicable):
- Mandatory if turnover Ksh 5 million+/year
- Optional below that
4. Open company bank account:
- Certificate of Incorporation
- KRA PIN certificate
- MOA, AOA
- Directors’ IDs
- Board resolution (to open account)
5. Annual compliance:
- File annual returns every year (due within 42 days of AGM)
- Cost: Ksh 5,000
- Penalty for late filing
Should You Use a Lawyer?
For Sole Proprietorship:
- Not necessary (process simple)
- DIY sufficient
- Save money
For Limited Company:
- Highly recommended
- Documents complex
- Mistakes costly to fix later
- Lawyer ensures compliance
- Cost: Ksh 15,000-50,000 (full company registration service)
What lawyer does:
- Name search and reservation
- Prepare MOA, AOA
- File registration
- Get all certificates
- Advise on structure
- Register KRA PIN
Worth it if: Serious about building company, not familiar with process, can afford it
Maintaining Your Business Registration
Sole Proprietorship
Annual requirements:
- Renew business permit/license (every year)
- Cost: Ksh 3,000-10,000
- Deadline: Before current permit expires
- Process: County government (similar to initial application)
Tax obligations:
- File annual income tax returns (June 30 every year)
- Pay taxes as usual (no change)
- Keep business records
No other major requirements
Limited Company
Annual requirements:
1. Annual Returns:
- File with BRS every year
- Due: Within 42 days of Annual General Meeting (AGM)
- AGM must be held once per year
- Cost: Ksh 5,000
- Late penalty: Ksh 10,000+ (increases with delay)
2. Annual General Meeting (AGM):
- Hold within 6 months of financial year end
- Minute the meeting
- Approve financial statements
- Appoint/reappoint directors
3. Tax returns:
- Corporate tax return (if company making profit)
- VAT returns (if VAT registered)
- PAYE for employees (if any)
4. Accounting:
- Maintain proper books
- Financial statements (balance sheet, P&L)
- Auditing (if turnover above Ksh 5 million)
5. Statutory registers:
- Register of directors
- Register of shareholders
- Register of charges
- Keep at registered office
Ongoing costs:
- Annual returns: Ksh 5,000
- Accountant/bookkeeper: Ksh 5,000-20,000/year
- Auditor (if required): Ksh 30,000-100,000/year
- Company secretary: Ksh 10,000-50,000/year (optional for small companies)
Total annual compliance: Ksh 20,000-150,000+ (depends on size and whether you need auditor)
Costs Summary
Operating as Individual
- Setup: Ksh 0 (just KRA PIN)
- Annual: Ksh 0 (beyond taxes)
- Best for: Beginners, low income
Sole Proprietorship
- Setup: Ksh 5,000-15,000
- Annual: Ksh 3,000-10,000
- Best for: Established freelancers
Limited Company
- Setup: Ksh 15,000-50,000
- Annual: Ksh 20,000-150,000
- Best for: Serious businesses, scaling
Benefits of Registration
Business credibility:
- Clients trust registered businesses more
- Required for corporate/government tenders
- Professional appearance
Financial benefits:
- Business bank account access
- Easier to get business loans
- Build business credit history
- Separate business finances
Legal benefits:
- Limited liability (Ltd company)
- Legal protections
- Can sue and be sued as business
- Dispute resolution clearer
Growth opportunities:
- Can hire employees
- Can bring in partners/investors
- Can sell business (Ltd company)
- Can franchise/license brand
Tax benefits:
- Clearer deductions
- Business expenses documented
- VAT recovery (if VAT registered)
Common Mistakes to Avoid
1. Registering too early:
- Spending money before income established
- Better: Test first, register when stable
2. Registering wrong type:
- Ltd company when sole proprietor sufficient
- Extra costs and compliance for no benefit
3. Ignoring renewals:
- Business permit expires → penalties
- Annual returns late → penalties
- Keep calendar reminders
4. Poor record keeping:
- No receipts for business expenses
- Personal and business mixed
- Nightmare during tax time
5. Wrong business name:
- Too similar to competitor
- Misspelled
- Domain name not available
- Think long-term before choosing
6. No business bank account:
- Everything through personal M-PESA
- Hard to track business income/expenses
- Unprofessional for large clients
7. Forgetting KRA PIN:
- Register business but don’t update KRA
- Tax issues later
Quick Start Guide
If earning under Ksh 300k/year:
- ✅ Get KRA PIN only
- ✅ Operate as individual
- ✅ File taxes annually
- ✅ Save registration costs for later
If earning Ksh 300k-1M/year:
- ✅ Register sole proprietorship
- ✅ Get business permit from county
- ✅ Update KRA
- ✅ Consider business bank account
If earning Ksh 1M+/year or scaling:
- ✅ Register Limited Company
- ✅ Hire lawyer to help
- ✅ Set up proper accounting
- ✅ Business bank account mandatory
- ✅ Plan for compliance costs
This month:
- ✅ Decide: Individual, sole proprietor, or limited company
- ✅ If registering: Start name search
- ✅ Budget for registration costs
Next month:
- ✅ Complete registration process
- ✅ Get all certificates
- ✅ Open business bank account (if applicable)
Ongoing:
- ✅ Renew permits annually
- ✅ File returns on time
- ✅ Keep proper records
Business registration isn’t scary - it’s just paperwork. Start simple (individual with KRA PIN), register sole proprietorship when income is steady, and consider Limited Company only when seriously scaling. Most Kenyan freelancers do perfectly fine as registered sole proprietors for years. Don’t let registration intimidate you, but also don’t ignore it forever. The right time to register is when the benefits outweigh the costs for your specific situation.