Kenya offers numerous opportunities for entrepreneurs looking to venture into the export business. Exporting goods not only contributes to the growth of the national economy but also allows businesses to tap into international markets. However, before embarking on the journey of exporting, it is essential to navigate the regulatory landscape and complete the necessary steps for business registration. The primary regulatory bodies include the Kenya Revenue Authority (KRA), the Kenya Bureau of Standards (KEBS), and the Export Processing Zones Authority (EPZA).
1. Business name registration
The first step in establishing an export business in Kenya is registering a business name with the Business Registration Service (BRS). This can be done online through the eCitizen portal or in person at the BRS offices. Choose a unique and relevant business name that reflects the nature of your export activities. The registration process typically involves submitting the proposed business name, completing the registration forms, and paying the prescribed fees.
2. Obtain a Personal Identification Number (PIN)
Once the business name is registered, the next step is to obtain a Personal Identification Number (PIN) from the Kenya Revenue Authority (KRA). The PIN is a unique identifier used for tax purposes and is required for all businesses operating in Kenya. The application for a PIN can be done online through the iTax portal. It is important to provide accurate information and documentation, such as a copy of the Certificate of Business Registration and the owner’s identification documents.
3. Open a business bank account
Having a dedicated business bank account is essential for managing financial transactions related to the export business. Choose a reputable bank and provide the necessary documentation, including the Certificate of Business Registration, the PIN certificate, and any additional documents required by the bank. A business bank account facilitates international transactions and helps in keeping accurate financial records.
4. Register for Value Added Tax (VAT)
For businesses involved in export activities, registration for Value Added Tax (VAT) is mandatory. VAT registration is also done through the iTax portal, and it requires the submission of specific documents, including the PIN certificate, Certificate of Business Registration, and business bank account details. Once registered for VAT, the business is required to comply with VAT filing and payment obligations.
5. Obtain an export license
To legally engage in export activities, businesses must obtain product-specific registrations/licenses and certificates, depending on the nature of the products to be exported. The application process involves submitting the required documents, such as the Certificate of Business Registration, a valid tax compliance certificate, and any additional documents specified by the relevant authority.
6. Compliance with quality standards
Ensuring the quality and safety of exported goods is crucial for international trade. The Kenya Bureau of Standards (KEBS) is responsible for setting and enforcing standards for goods. Exporters must adhere to these standards to access international markets. It is advisable to obtain the relevant product certifications and comply with the applicable quality and safety regulations. KEBS provides certification services, and businesses can apply for product certification through their offices.
7. Customs documentation and procedures
Exporters need to understand the customs documentation and procedures involved in international trade. The KRA oversees customs matters in Kenya, and exporters must comply with the regulations outlined by the Customs and Border Control Department. Key documents include the Single Administrative Document (SAD), the Certificate of Origin, and the Commercial Invoice. Familiarize yourself with the Harmonized System (HS) codes for your products, as they determine the applicable customs duties and taxes.
8. Registration with the Export Processing Zones Authority
For businesses seeking additional incentives and benefits, registration with the Export Processing Zones Authority (EPZA) is an option. The EPZA promotes export-oriented investment by providing a conducive environment for manufacturing and processing goods destined for export. Registration with EPZA can lead to tax incentives, duty exemptions, and other favorable conditions. However, this step is optional and depends on the business’s specific needs and preferences.
9. Obtain a sales contract from a buyer
A sales contract or sales agreement is a fundamental requirement when engaging in international trade. This document serves as a formal agreement between the exporter and the buyer, outlining crucial details related to the sale of goods. As per the Kenya Revenue Authority, the document should describe the goods being sold, the terms and conditions of the sale, and the price to be paid.
10. Have a clearing agent
Every exporter should also have a customs and clearing agent who is registered and licensed. The involvement of a customs and clearing agent streamlines the complex process of customs clearance and ensures compliance with all relevant regulations.
11. Declaring the consignment
Every exporter should also provide the clearing agent with a commercial invoice, certificate of origin (where applicable), permit(s) relevant to the consignment, license for restricted goods (where applicable), company or individual PIN certificates, purchase orders or contracts, and packing lists. Once verified, the declared consignment for export, and exit of the consignment through a border point, KRA will process and issue a Certificate of Export.
