Doing business in Kenya
Expats who have found success doing business in Kenya bring several key skills to the boardroom table: patience, respect for cultural differences, tolerance for uncertainty, and an ability to build personal relationships with business partners.
Additionally, and arguably more importantly, foreigners who have done well have realised there's little that can be done to avoid the corruption and ethnic division that undermine Kenya’s economy. Businesses have only recently had staff from different ethnic groups, and resulting cultural differences can still be a hindrance rather than a source of strength.
Pervasive corruption often poses an ethical dilemma for the expat businessperson: to pay the bribe or to stand firm on one’s principles? One study found that 80 percent of firms expected to make informal payments to get things done. Without this lubrication deals might never get off the ground, or they make take so long to happen the initiative is lost to faster moving competitors.
But for those who can get through the red tape and cultural pitfalls, Kenya is a dynamic land of business opportunity, with a rapidly expanding IT and telecoms sector, and increasingly strong connections to both eastern and western business communities.
Business culture in Kenya is governed by harambee, a concept involving mutual assistance, responsibility and community. Harambee also relates to the Kenyan’s group-orientation, in contrast to the individualism of western cultures. From this it follows that respect for family, community and even ancestors is key.
Kenya is largely a hierarchical society, in which deference to seniority is quite rigid, and in which senior employees will seldom consult with those of lower status. Social standing is important, and official titles should be included in names when introducing or addressing someone.
Blunt statements are to be avoided as they may appear rude. The downside is that this can make it hard to decipher people’s true meaning or intentions, as outright refusal is very rare. Instead, evasive or subtle remarks may need to be interpreted. It's important expats control their emotions, and avoid displaying anger or using any profanity.
Meetings should begin on time; although, there is little chance of an end time being adhered to. The Kenyan concept of time is traditionally fluid, and expat businesspeople valuing punctuality are likely to be frustrated.
Tradition and history are greatly respected, and you should introduce a deal by fully covering the background to it and the people involved. Invite questions and only proceed once the deal's pedigree is thoroughly established. Kenyan businesspeople have a low tolerance for risk, so decision-makers tend to proceed cautiously, committing only once all possible information has been considered; which may require a long time frame and patience on the part of the expat businessman.
Business success is closely correlated with interpersonal success. So it is vital to invest time in getting to know someone and understanding their culture and background. Building a relationship should always take priority over adhering to a deadline.
Starting a business in Kenya is a fairly convoluted but navigable process, registration takes up to three months to complete and involves 11 different procedures. The registration process is also quite expensive. All in all, the World Bank ranks Kenya in a distant 125th place out of 183 countries for ease of starting a business.
Kenya companies must have two directors, one of whom must be Kenyan, so it will be necessary find a suitable partner before getting one’s business off the ground.
The following broad steps then follow:
Business language: English
Hours of Business: 9am to 5pm weekdays
Dress: Formal, suits or smart casual.
Gifts: Expected and appreciated
Gender equality: Patriarchal business environment
Additionally, and arguably more importantly, foreigners who have done well have realised there's little that can be done to avoid the corruption and ethnic division that undermine Kenya’s economy. Businesses have only recently had staff from different ethnic groups, and resulting cultural differences can still be a hindrance rather than a source of strength.Pervasive corruption often poses an ethical dilemma for the expat businessperson: to pay the bribe or to stand firm on one’s principles? One study found that 80 percent of firms expected to make informal payments to get things done. Without this lubrication deals might never get off the ground, or they make take so long to happen the initiative is lost to faster moving competitors.
But for those who can get through the red tape and cultural pitfalls, Kenya is a dynamic land of business opportunity, with a rapidly expanding IT and telecoms sector, and increasingly strong connections to both eastern and western business communities.
Business culture in Kenya
Business culture in Kenya is governed by harambee, a concept involving mutual assistance, responsibility and community. Harambee also relates to the Kenyan’s group-orientation, in contrast to the individualism of western cultures. From this it follows that respect for family, community and even ancestors is key.
Kenya is largely a hierarchical society, in which deference to seniority is quite rigid, and in which senior employees will seldom consult with those of lower status. Social standing is important, and official titles should be included in names when introducing or addressing someone.
Blunt statements are to be avoided as they may appear rude. The downside is that this can make it hard to decipher people’s true meaning or intentions, as outright refusal is very rare. Instead, evasive or subtle remarks may need to be interpreted. It's important expats control their emotions, and avoid displaying anger or using any profanity.
Meetings should begin on time; although, there is little chance of an end time being adhered to. The Kenyan concept of time is traditionally fluid, and expat businesspeople valuing punctuality are likely to be frustrated.
Tradition and history are greatly respected, and you should introduce a deal by fully covering the background to it and the people involved. Invite questions and only proceed once the deal's pedigree is thoroughly established. Kenyan businesspeople have a low tolerance for risk, so decision-makers tend to proceed cautiously, committing only once all possible information has been considered; which may require a long time frame and patience on the part of the expat businessman.
Business success is closely correlated with interpersonal success. So it is vital to invest time in getting to know someone and understanding their culture and background. Building a relationship should always take priority over adhering to a deadline.
Starting a business in Kenya
Starting a business in Kenya is a fairly convoluted but navigable process, registration takes up to three months to complete and involves 11 different procedures. The registration process is also quite expensive. All in all, the World Bank ranks Kenya in a distant 125th place out of 183 countries for ease of starting a business.
Kenya companies must have two directors, one of whom must be Kenyan, so it will be necessary find a suitable partner before getting one’s business off the ground.
The following broad steps then follow:
- Perform a name search of the Registrar of Companies with help of a lawyer
- Get the Memorandum and Articles, and a Statement of the Nominal Capital stamped
- Pay stamp duty at bank
- Sign the Declaration of Compliance (Form 208) before a Commissioner of Oaths or notary public.
Doing Business in Kenya: Fact Facts
Business language: English
Hours of Business: 9am to 5pm weekdays
Dress: Formal, suits or smart casual.
Gifts: Expected and appreciated
Gender equality: Patriarchal business environment
Do’s and don’ts of business in Kenya
- Do – take your time over greetings and enquire about the person’s health and family.
- Don’t – start eating until the eldest member has; and don’t leave food on the plate
- Do - convey respect to an elder or key business associate by clasping his wrist with your other hand while shaking hands.
