A subsidiary is a company of which another company is its holding/ parent company. It is a separate legal entity from the parent but may be wholly-owned by the parent corporation through shareholding, to the effect that it the holding company owns all the shares in the subsidiary or it may be partly owned by the parent company to the effect that the parent company owns majority of the shares in the subsidiary.

When incorporating a subsidiary company in Kenya, the procedure involves that of incorporating a limited liability company accompanied by additional documents from the holding company.

Steps:

1. Reservation of the company’s name with the Registrar of Companies . A subsidiary company may be registered in the name of the holding company or it may adopt a new name which is subjected to a Name Search to ensure that the name is available for reservation and is not in use by another Company
2. Filling the Company Registration Form . This is to indicate the type of company being incorporated; whether the company is to be a private or a public company, whether the liability of the members of the company is to be limited, and if so whether it is to be limited by shares or by guarantee. This form also indicates that the company is a subsidiary of holding company as well as the proposed location of the registered office of the company.

• Notice of Residential Address of Directors which discloses the residential address of the intended directors of the company being lodged for incorporation
• Memorandum and Articles of Association
• Statement of Nominal Capital and Initial Shareholding; this is provided for in a prescribed form which indicates the amount of nominal capital the company has
• A copy of the personal identification number (PIN) certificate of each person proposed to be a director;
•  A copy of the identity card or passport of each such person;
• A passport size photograph of each such person;
• A copy of the person’s passport (for foreign citizen) and a passport size photograph

In addition to requirements above, the following will also be required for registering a subsidiary of an already existing foreign company:

1. Copy of memorandum and article of association of the existing foreign company (Must be translated in to English).
2. Copy of certificate of incorporation of existing foreign company (in English).
3. Proof of Identification of all the Directors of the subsidiary branch, which are passport or Identity Card
4. Passport sized photo of the intended Directors of the subsidiary
5. Shares allocation in the subsidiary (share allocation between existing company and new directors’ shares)
6. Where a Director is a foreigner, KRA PIN Certificate for foreigner; to comply you will need to show an Alien ID card which can only be obtained by you physically being in Kenya and applied at the Kenya Department of Immigration.

Upon successful incorporation of the subsidiary, the registrar of Companies will be issue a certificate of incorporation. Upon receipt of this certificate, the Subsidiary Company will acquire a Company PIN which will enable the business to comply with taxation and open a business bank account.

Further Requirements after Registration.

1. Obtaining a KRA PIN for purposes of tax
2. Leasing of office space
3. Obtaining Business Licenses and Permits including; permits form the Local County Council, Manufacturing and Quality Standard Licenses from the Kenya Bureau of Standards, an Environmental Licenses from the National Environmental Management Authority where necessary.
4. Bank Account Opening