ESTABLISHING A RECRUITMENT AGENCY IN KENYA
Establishing a recruitment/employment agency in Kenya is a lucrative but highly regulated venture. To navigate the complex legal landscape, one must comply with the stringent requirements set by the Ministry of Labour and Social Protection. The following is a comprehensive guide on the legal framework, requirements, and procedures for registering a recruitment agency in Kenya.
The primary legislation governing recruitment and employment services in Kenya includes The Labour Institutions Act, 2007, Part VII (Sections 55–60) which specifically deals with the registration and regulation of employment agencies. Labour Institutions Act, 2007 and the Labour Institutions (Private Employment Agencies) Regulations, 2016, which outlines the process, requirements for registering and costs for registering recruitment agencies. The Companies Act, 2015 governs the initial formation of the agency as a legal corporate entity.
To register a recruitment agency in Kenya, you must comply with Part VII of the Labour Institutions Act, 2007 and the Labour Institutions (Private Employment Agencies) Regulations, 2016. According to the regulations, to register a private employment agency in Kenya, the entity must be a limited liability company with at least one Kenyan shareholder, a minimum share capital of five (5) million shillings, a company secretary, and a physical office of at least 225 square feet. The leadership of the agency must meet specific educational and professional standards, including an O-level certificate for directors and a business-related degree with three years of experience for the manager. Compliance requirements include obtaining a tax compliance certificate, valid police clearance for all directors. After approval of the application for registration, the agency is required to pay the registration fees, execute a 1.5-million-shilling bank or insurance guarantee to secure the repatriation and wages of workers in the event of default for foreign recruitments and register as a member in a recognized association of private employment agencies.
The application for registration of a private employment agency is usually made to National Employment Authority (NEA) and is done online through www.neaims.go.ke portal.
The table below lists the specific requirements for registration of an private employment agency:
| NO. | REQUIREMENTS | CONDITION/ADDITIONAL INFORMATION |
| 1. | Application letter for registration as a private Employment Agency | The letter should be drafted on the company’s letterhead. |
| 2. | Copy of the certificate of Incorporation as an LLC. | Certificate is obtained upon incorporation and should to be certified by a commissioner for oaths |
| 3. | Company Articles and memorandum of association | AOA & MOA are obtained upon company incorporation and should be certified by a commissioner for oaths |
| 4. | Company CR12 for the current year | It is obtained upon company registration and should be certified by a commissioner for oaths |
| 5. | The company must have a minimum share capital of Ksh. 5,000,000 (Five Million). | Companies with a minimum share capital of 5m are required to have a registered company secretary. |
| 6. | A copy of county Government trading License(s). (Unified business permit/Single business permit) | It is obtained from the local county government upon incorporation of the company and must be certified by a commissioner for oaths |
| 7. | Company PIN certificate and Tax compliance certificate for the current year. | They are obtained from Kenya revenue authority upon company registration |
| 8. | Registered and fully equipped physical office covering not less than 225 square feet. | Provide proof either by a valid Lease or Tenancy agreement authenticated and certified by a Commissioner for Oaths. |
| 9. | Company director(s) must submit the following documents: Copies of ID/Passport Bio data.Passport size photographs. current police clearance certificate.Valid work permit if the director is a foreigner.Certified academic certificates. | The ID/Passport, police clearance certificate and work permit must be certified by a Commissioner for oaths. The academic certificate must be certified by the Directorate of quality assurance at the Ministry of Education |
| 10. | Company’s manager must submit the following documents: Degree certificate in a business-related field.Employment contract/Letter of appointment.Copy of ID. | Degree must be certified by the Directorate of quality assurance at the Ministry of Education |
Under Section 55(2) of the Labour Institutions Act, it is a statutory requirement that no person shall carry out business as an employment agency or charge any fees for procurement of employment unless they are registered. Operating without a valid certificate is an offense. And any person found guilty is liable to a fine not exceeding fifty thousand shillings (Ksh. 50,000.00) or, to imprisonment for a term not exceeding three (3) months or to both.
The Application Process and Requirements
To register a recruitment agency in Kenya, one must first incorporate a company with the Business Registration Service under the Companies Act, 2015, ensuring recruitment is listed as an objective in the Memorandum of Association. The next step is to apply for registration certificate from the Director of Employment at the National Employment Authority (NEA) supported by documents such as the Certificate of Incorporation, CR12, county business permit, office lease agreement, KRA pin, academic certificates, identity documents, and a tax compliance certificate. According to Section 56(1), an application for registration of an employment agency must be made to the Director in the prescribed form. It is also important to note that the approval is not automatic, the Authority must be satisfied with two primary conditions under Section 56(2):
- That the applicant must be “qualified to own and manage an employment agency.” This usually requires proof of professional background and integrity through a vetting process.
- That the physical office where the business will operate is inspected to ascertain its suitable for conducting recruitment activities.
The Director through the Authority may refuse to grant an application made under this Act and give reasons for his refusal. In the event the application is granted, a certificate of Registration will be issued upon the payment of the fees. A registration certificate issued under the Regulations is valid for a period of one year and shall expire on the 30th June each year.
Once the Director is satisfied, a certificate of registration is issued. Under Section 55(5), this certificate is specific and must detail the name of the authorized person/entity, the specific premises where the business is conducted, the validity period (licenses are typically renewable annually) and the scope of business, including whether the agency is authorized for local recruitment or foreign placement.
While the Act grants the Director power to prescribe fees, the current administrative costs are generally categorized by the nature of the agency and stipulated in the Second Schedule of the regulations. Fees for an initial application for registration of an agency dealing with recruitment for local/Kenyan labour market is Ksh. 125,000 while that of an agency dealing with recruitment for foreign labour market Ksh. 500,000. Regulation 8 provides that for a foreign contract of employment, it shall specify the party responsible for the payment of the (a) visa fee; (b) airfare; and (c) medical examination: Provided that reasonable administrative costs may be charged by the agent in respect of trade test, occupational test and the administrative fees shall not exceed the job seeker’s proposed one month’s salary.
Registered agencies are held to high transparency standards. Under Section 57, every operator must retain all recruitment records for at least three years. Produce these records on-demand to an Employment Officer. Agencies are prohibited from charging job seekers fees higher than those prescribed by regulations. Section 57(2) strictly forbids unauthorized rewards or payments for procurement of employment.
Powers of the Regulatory Body
The law grants Employment Officers significant oversight powers to ensure the protection of the public. Under Section 58, an officer may enter agency premises without notice at reasonable times, conduct searches if they suspect an offense has been committed and seize documents or books that may serve as evidence of illegal activity. Furthermore, under Section 56(6), the Director has the power to cancel or vary a registration certificate after due inquiry if the agency fails to comply with the Act. The process, from company incorporation to the issuance of the NEA license, typically takes between 2 to 4 months, depending on the speed of the vetting and inspection phases.
In conclusion, registering a recruitment agency in Kenya is a rigorous process designed to curb human trafficking and labor exploitation. Prospective owners must ensure they have significant capital and a clean legal record before embarking on this journey.
At A.O. WANGA ADVOCATES we help our clients navigate this rigorous process by compiling the full application for them, obtaining certifications, submitting the application for registration and securing the insurance guarantee with reputable insurance firms. For assistance, please contact us on info@aowangaadvocates.com or +254794600191
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