By Registering a sole proprietorship in Kenya costs less than Ksh 1,000, takes about an hour of your time, and can be done entirely from your phone. There is no lawyer required, no visit to Sheria House, and no middleman needed despite what the Facebook groups and WhatsApp agents charging Ksh 5,000 to Ksh 10,000 would have you believe.
This guide walks you through every step of the 2026 process, from name search to certificate download, plus what to do after registration to stay legally compliant.
What Is a Sole Proprietorship and Who Is It For?
A sole proprietorship ( registered in Kenya as a Business Name ) is the simplest legal business structure available. One owner, full control, no partners, no shareholders. You and the business are legally the same entity, meaning all profits are yours but all debts and liabilities are also personally yours.
It is the right structure for:
Freelancers and consultants formalising their work
Creators and influencers who need a business name for brand deals and payments
Small traders, retailers, and service providers
Anyone starting out who wants to test a business before committing to a full limited company
It is not the right structure if you plan to bring in investors, have multiple co-owners, want to separate personal assets from business liabilities, or are bidding for large government or corporate contracts that require a limited company. If that describes you, read our guide to registering a limited company instead.
What You Need Before You Start
Gather these before opening eCitizen, having them ready prevents your session from timing out mid-application:
National ID (you must be 18 or above) or Passport for non-citizens
KRA PIN — mandatory. If you do not have one, register at itax.kra.go.ke first. The process is free and takes about 20 minutes.
Passport photo — a clear, recent digital photo of yourself (JPG or PNG)
3 to 5 business name ideas in order of preference — the system checks availability starting from your first choice
Physical business address — a P.O. Box is not accepted. You need a street address, building name, and county. Your home address works.
Description of business activity — a one or two sentence description of what your business does (e.g. "Provision of graphic design and digital marketing services")
M-Pesa or a debit/credit card to pay the registration fee
The Total Cost
The registration fee is Ksh 900, with a small processing fee bringing the total to approximately Ksh 950. That is the complete government cost paid through eCitizen. No hidden charges, no additional BRS fees on top of that.
In 2026, BRS merged the name search and registration into a single step, saving you money and cutting processing time down to just one day, previously these were separate payments and separate queues.
Step-by-Step: The eCitizen Registration Process
Step 1 — Create or Log Into Your eCitizen Account
Go to ecitizen.go.ke and log in. If you do not have an account, register using your National ID number and KRA PIN. The account is tied to your identity, use your real details.
Once logged in, navigate to Business Registration Service (BRS) from the services dashboard. The BRS portal URL is brsv2.ecitizen.go.ke.
Step 2 — Start a New Business Name Application
Inside BRS, select "Make Application" then choose "Business Name Registration", this is the sole proprietorship route. Do not select "Company Registration", that is for limited companies and has a different process and higher fees.
Step 3 — Submit Your Business Names
Enter your preferred business names in order of priority. The system checks availability automatically. You need to submit up to three unique business names for approval.
Tips for choosing a business name:
Pick a name broad enough to grow with you. "Wanjiru Foods" gives you more room than "Wanjiru's Mandazi Stall" if you later expand into catering or retail.
Avoid names that are too similar to existing registered businesses, the system will flag these.
You cannot use words like "Kenya," "National," "Government," "Bank," or "Insurance" without special approval.
Avoid names that are offensive, misleading, or that imply a connection to a government body.
Step 4 — Fill In the BN2 Form
The BN2 is your statutory declaration form, the core registration document. Fill in:
Proprietor details — these auto-populate from your eCitizen account. Upload your passport photo here.
Business activity — describe what your business does clearly and accurately. This affects what permits you may need later.
Business address — physical address including county, sub-county, road/street, and building. No P.O. Boxes.
Postal address — this can be a P.O. Box
Once you have filled in the form, the system generates a copy for you to sign. Download it, sign it physically or digitally, scan or photograph it clearly, and upload it back. This signed copy is your legal declaration that the information is correct. A blurry or unsigned BN2 is the most common reason for application rejection, take your time here.
Step 5 — Pay the Registration Fee
Payments can be made via M-Pesa, debit card, or credit card through the eCitizen platform. For M-Pesa, the system generates a payment reference. Go to M-Pesa, select Lipa na M-Pesa, Pay Bill, Business Number 222222, and use the reference number as the account number. Payment confirms automatically within a few minutes.
Step 6 — Wait for Approval and Download Your Certificate
Processing time after payment is 1 to 2 business days for certificate issuance. You will receive an SMS or email notification when your certificate is ready.
Log back into eCitizen, go to BRS, navigate to "My Applications" or "Completed Applications", and download your BN2 Certificate of Registration. This is your official proof of business registration. Save it somewhere safe, you will need it to open a business bank account, apply for an M-Pesa Till or Paybill, and sign contracts.
Common Mistakes That Get Applications Rejected
Using a P.O. Box as the physical address. The system requires a physical location. Use your home address if you work from home.
Uploading an unsigned BN2 form. The signed declaration is mandatory. An unsigned form is an automatic rejection.
Blurry passport photo. The photo must be clear and recent. A phone camera in good light works fine, do not upload a pixelated scan of an old photo.
Business name too similar to an existing one. If your first two name choices are taken, having five options ready prevents you from having to restart the application.
Typos in your KRA PIN or ID number. These are painful to correct after submission. Double-check before you hit submit.
What to Do After Registration
Getting the certificate is just the beginning. A registered business name without the following is incomplete from a compliance standpoint.
1. Register Your Business on iTax (KRA)
A sole proprietorship does not get a separate corporate KRA PIN. The business is an extension of you, you use your personal KRA PIN for all tax obligations related to the business.
However, you need to update your KRA profile to reflect your new business name and activity. Log into itax.kra.go.ke, go to Registration → Taxpayer, and add your business details. This ensures your tax obligations are correctly categorised.
2. Understand Your Tax Obligations
Your tax structure as a sole proprietor depends on your annual turnover:
Turnover below Ksh 1 million/year — you are in the presumptive tax bracket. You pay a small annual levy through your Single Business Permit. No monthly income tax returns required at this level.
Turnover between Ksh 1 million and Ksh 25 million/year — you qualify for Turnover Tax (TOT) at 1.5% of gross monthly sales. TOT is filed and paid monthly via iTax by the 20th of the following month. It is a final tax, no additional income tax on that income.
Turnover above Ksh 5 million/year — you are required to register for VAT and charge 16% on taxable goods and services. VAT returns are filed monthly.
Withholding tax — if your clients are companies or government entities, they are required to deduct 5% withholding tax from professional payments before paying you. Ensure they have your KRA PIN so the withholding certificates are correctly attributed to your record.
3. Get a Single Business Permit from Your County
A Single Business Permit (SBP) is issued by your county government and authorises you to operate a business within that county. It is not optional, operating without one can result in fines or closure notices.
The cost varies by county, business type, and business size. In Nairobi, a home-based service business typically pays between Ksh 5,000 and Ksh 10,000 per year. Apply through your county government's portal or offices. Nairobi residents can apply through eservices.nairobi.go.ke.
Renew your SBP every year, it runs January to December regardless of when you first apply.
4. Open a Business Bank Account
With your BN2 certificate, you can now open a business bank account separate from your personal account. This is strongly recommended, mixing personal and business finances is the most common accounting mistake small business owners make, and it creates real problems at tax time.
Most Kenyan banks require: your BN2 certificate, your National ID, your KRA PIN, a passport photo, and an initial deposit. Some banks also ask for a utility bill or lease agreement for your business address.
5. Set Up M-Pesa for Business
With a registered business name you can apply for:
M-Pesa Paybill — for receiving payments with account number references (good for e-commerce, invoicing, and schools)
M-Pesa Till (Buy Goods) — for point-of-sale payments (good for retail and food businesses)
Apply through Safaricom Business or visit a Safaricom Shop with your BN2 certificate, National ID, and KRA PIN.
6. Register on eTIMS
If you are providing goods or services to other businesses or government, you need to be on eTIMS (Kenya Revenue Authority's electronic invoicing system) to issue compliant invoices. From January 2026, businesses can only claim your services as a tax-deductible expense if you issue an eTIMS receipt. Register at etims.kra.go.ke.
The Agents Warning
Beware of online agents on Facebook or X charging Ksh 5,000 to Ksh 10,000 to do this for you. The system is designed for the common mwananchi to use. Save your money.
The only scenario where paying an agent makes sense is if you are genuinely time-constrained, have had an application rejected and do not understand why, or are a foreign national navigating additional requirements. For a straightforward Kenyan citizen registering a sole proprietorship, the eCitizen portal is self-service and designed to be used without help.
When to Upgrade to a Limited Company
A sole proprietorship is an excellent starting point but there are clear signals that it is time to move to a limited company:
A client or partner specifically requires you to be a registered company to sign a contract
You want to bring in a co-founder or business partner with an equity stake
You want to separate your personal assets from business liabilities, a sole proprietorship offers no protection, meaning your personal property can be claimed to settle business debts
Your annual turnover exceeds Ksh 5 million and the tax and compliance structure of a company becomes more advantageous
You are planning to raise investment
Converting is straightforward: deregister your business name using Form BN6 on eCitizen, then register a limited company through the same BRS portal. Your business history and relationships carry over, only the legal structure changes.
Our guide to registering a limited company in Kenya covers that process in full.
Have questions about the registration process? Drop them in the comments and we will answer them. The eCitizen portal occasionally changes its interface, if a step looks different from what is described here, the underlying process is the same even if the buttons have moved.
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