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Register A Transport Company In Kenya

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In this article, we will go through the legal requirements and the process of compliance for the purpose of
registering a transport business in Kenya. To request for company registration for your transport business,
you’ll need to fill the order form that can be found at the end of this article.

Naming Your Company

The first step you need to make is to come up with your company name suggestion. Please note that if
you use abbreviations on your company name, then you will need to also give an explanation on what it
stands for.

Company name search is performed via eCitizen and it usually takes up to 2 working days or less. Once
your name search is successful, it will be reserved for 30 days. You will need to register your company
within that period to avoid losing your company name.

Company Requirements
To register a transport limited company, you will need to collect your requirements that can be used to
prepare Form CR1, Form CR2, Form CR8 and Nominal Share Capital documentation.

To register a limited company for your transport business, you will need at least 1
person (director/shareholder) to register and must be above 18 years of age. You will also need to collect
the following information and documents;
 Company Name – you will need to come up with up-to 2 company name suggestions that
we can help you to check its availability. If you have already performed your own name
search, all you will need to provide us is the company name reservation letter that you were
issued upon completion of your name search.
 Nature of Business – list your primary and secondary business activities that you would like
your transport business to do – for example; public/private transportation, general supplies,
medical transport, transport consultancy etc.
 Director(s) details – we will require the following details from each of the directors;
1. Full names of directors (As shown on ID or Passport)
2. Occupation – for example, consultant, businessman, businesswoman
3. Postal address – you will need to provide a postal address for each of the
company director(s).
4. Residential address – you will need to give us your house number or LR
number, house name or building name, street/road name, town.
 Shares allocation – you will need to decide on how to allocate the shares. If your company
will have only a sole director, then you can allocate 100% share ownership. But if you have
additional directors, then you can split the share ownership such as Director 1 – 60%,
Director 2 – 20%, Director 3 – 20%. Remember that the total number of shares available by
default is 1,000 shares.
  Proof of Identity documents – Company Registry has introduced a new rule that requires all
company director(s)/shareholder(s) who are registering a new company to provide the
following documentation as proof of their identity;
1. Copy of KRA PIN Certificate (iTax Version) – for Kenyan citizens, if you are a
foreigner, you won’t be required to provide this document. Please note that
company PIN registration will require at least 1 director to have their personal
KRA PIN.
2. Copy of ID/Passport – make sure you scan both the front and back side of the
ID.
3. Photo – coloured photo of each director/shareholder with a clear background.
Duration
It usually takes around 2 weeks to process a company registration and also this depends on company registry
workload and working times. To avoid any delays, you will need to make sure that you have prepared all requested
requirements including proof of identity documents.
Company PIN
It is one of the most important document that you will need to obtain. Without it, your transportation business won’t
be able to open a business bank account, make tax returns, import vehicles and many others. This document can
only be obtained once the company registration process is complete. We only offer company PIN registration for
Premium Plan customers.
Bank Account
If you are looking to open a business bank account for your company, you will need to simply provide your
certificate of incorporation, memorandum (Form CR2), Form CR1, Form CR8, Company PIN, personal KRA PIN,
ID/Passport, passport photos and personal details for each of the director(s)/shareholder(s). Some banks might
request for board resolution, trading license, a copy of VAT certificate etc.
Cost of Company Registration
We understand everyone has different needs when it comes to setting up their company. So we offer two
company registration packages that you can select from;

1. Lite Plan Package – Ksh. 20,000 – Includes Name Search, Certificate of Incorporation and Memorandum.
2. Premium Plan Package – Ksh. 40,000 – Includes Name Search, Certificate of Incorporation,
Memorandum, Company KRA PIN, Logo Design, Business Card Design, Website Design (Includes Tablet &
Smartphone Designs), 1 Year Domain name (.COM or .CO.KE), 1 Year Web Hosting (250MB Diskspace,
2500MB Monthly Bandwidth), Up-to 25 Company Email Accounts, 1 Month Free Access to Online Business
Coaching Program.
Register Your Transport Company Today!
Are you ready to start trading with your transport company? Let’s get you registered today!

Please only fill this form if you have your payment and requirements ready to begin your registration today.
Nameyour full name

Phoneyour phone no.

Emaila valid email

email
Company Name Suggestionmore details

Registration Packagepick one!

Select An OptionLite Plan - Ksh. 20,000Premium Plan - Ksh. 40,000

Registration Datedate to begin registration

date_range
Payment Optionpick one!

Select An OptionLipa Na MpesaBank TransferPayPalWorldremit

Requirementsupload your documents

cloud_upload Click Here To Upload Your Requirements Form

by submitting your order for company registration, you agree to our terms of service
SubmitOrder

FAQs
After registering my company, how can I apply for Business Permit?
To operate your transport business in Kenya, you will need to acquire a business permit from the respective county
of operations. The rates varies from county to county and also it’s determined by the number of employees you have
and the size of your business premises.
Currently, we do not offer business permit registration service at the moment. If you are looking to
register for business permit in Nairobi County, you will find this article useful.
 How To Apply For Business Permit In Nairobi County
For those looking to operate their companies in other counties, we recommend that you visit your local
county office to apply for your business permit.

How can I open my business bank account once I have registered my company?
Once you have registered your company, you’ll obtain certificate of incorporation, memorandum (Form
CR2), Form CR1, Form CR8, Company PIN. These documents will assist you to open a business bank
account.

Can I upgrade my existing transport business to limited company?

Yes you can. All you need to provide us is your business certificate for your sole proprietor or partnership
business.

How can I register a foreign transport  company?

If you are looking to register a transport foreign company, please refer to ‘how to register a foreign
company‘ article that will contain more information that you might find useful.
Kenya News Facts and lifehacks

FACTS AND LIFEHACKS

How to invest in Matatu business in Kenya

 Wednesday, July 18, 2018 at 8:39 AM by  Nixon Aswani

The matatu business in Kenya has an origin that dates back to 1934. During those days,
the entire country only had a fleet of 13 buses, which operated on 12 routes. The buses
were owned by Overseas Transport Company (OTC), a company based in London. The
buses were later called the Kenya Bus Services (KBS), and as their fleet grew so did their
popularity. OTC enjoyed a monopoly in the Kenyan transport industry until 1970.
Source: howtodiys.com
Source: UGC

The matatu business in Kenya started enjoying profitability a year after locals formed the
Country Bus Owners Association and Matatu Owners Association. With the surge in rural-urban
migration requiring a sturdy vehicle due to poor terrain, the buses from KBS enjoyed a steady
run, but the market kept growing. The government tried to introduce the Nyayo Bus in 1986 to
help split the rising demand to no avail.

It was not until the liberalization of commuter services in 1991 that the matatu business
flourished in Kenya. With KBS no longer the only mode of public transport, mini-buses and 14-
seaters hit the market and made it hard for the once dominant company to enjoy its monopoly.
The company was renamed Kenya Bus Services Limited, and the original owners sold 95% of its
shares to local investors.

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The fall of KBS made it possible to run matatu business in Kenya in a time where minivans were
the preferred mode of transport. However, the unregulated nature of the matatu industry
coupled with gangs and cartels who extorted matatu owners and made it hard for most people
to survive in the industry. Not to mention, these new vehicles did not observe traffic laws and
often caused tragic road accidents.

However, theft, accidents, and even physical abuse have significantly reduced. Government or
independently registered transport companies, as well as SACCO's, have also helped in hiring
vetted professionals to the industry. You can earn a good amount of money on a daily basis
with a white 14-seater operating on a particular route, but with a few modifications, that
amount can be doubled.
Source: memoirsofapatriotickenyan.wordpress.com
Source: UGC

After president Uhuru Kenyatta allowed the use of graphic design on matatus, nganyas took to
the center stage. The creative aspect of these vehicles makes them a tourist attraction and a
favorite for many youths across the country. Despite their exorbitant fees at times, they are
considered more useful than most of their counterparts in the matatu business. However, for
any of them to earn you more than a regular matatu, you have to spend more on its
customization.
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Very soon, the government is going to do away with all 14-seaters in the transport industry.
Buses and minibusses will be the only vehicles allowed to operate on most Kenyan roads
legally. Not to mention, public transport also has competition from the standard gauge railway.
The Matatu business in Nairobi is exceptionally competitive considering the capital city is
always up-to-date with the latest trends. The competitive nature of matatus along Nairobi roads
can be attributed to the desire to impress and thus lure the most customers. When starting,
you can either spend big and expect greater rewards or start small and grow

How to start a matatu business in Kenya

1. Buy the right car

Beginning a matatu business in Kenya is capital-intensive, but with the right decisions, you are
guaranteed to reap the benefits. For starters, the minimum capital for acquiring a pre-owned
public service vehicle is around Ksh.500,000. Such a car has been on the road for six to eight
years. A 33-seater bus will cost you around Ksh.2.7 million. However, be sure to replace the
engine (around Ksh.300,000) to ensure the car’s durability.

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It is always advisable to purchase a new vehicle as opposed to its second-hand counterpart to

avoid an early kick out from the matatu business. The make of the vehicle you choose to
purchase can also make or break your business. Nissan, Toyota, and Isuzu are the best brands
for Kenya seeing new spare parts are readily available. These three brands are also almost
custom-made for Kenyan roads. For the 14-seater, a Toyota Shark is the best bet for
guaranteed profits in the Matatu business in Kenya.

2. Body Branding

After acquiring your vehicle, make sure that all the paperwork is correctly done after which you
can start your hunt for a driver and conductor. For most people, a new vehicle with no
additions is enough. However, the matatu industry is growing more competitive by the day, and
only the best vehicles are taking home the lions share. You can see it in this article of the latest
matatu trends in Kenya.

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Body branding is a significant factor to consider when trying to determine the profitability of
the matatu business industry. The seats have to be replaced with custom designs to ensure
comfort, and your vehicle could also attract more passengers with additions such as charging
systems. Most designers know the specifications required to make a bus stand out and will
guide you through the entire process.
3. Music

Source: hse.co.ke
Source: UGC

One thing all the fancy matatus have in common is loud music. However, while nganyas have
the best and loudest sound systems, there are other vehicles with excellent sound quality as
well. A good music system will cost you an upwards of Ksh.150,0000. Loud music is also used as
a tactic by touts and drivers to attract passengers in boarding areas. Not to mention, it is an
excellent way to keep your cents entertained on their voyage.

You can get body branding and sound system installation services from the likes of Choda
Fabricators, Moha Graffics, and Lithium to mention a few. They also offer services such as
strengthening your chassis to make the vehicle roadworthy while installing state-of-the-art
entertainment features such as plasma TVs to entertain the customers. Depending on how
flamboyant your vehicle is, you can earn as much as Ksh.19,000 on routes such as Ongata
Rongai.
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6. Sacco

Joining a Savings and Credit Cooperative Organization is mandatory for any success when
investing in matatu businesses. Sacco’s are an efficient way of ensuring that your matatu
business gets off the ground with minimal expenditure on your end. However, if the loan option
does not appeal to you, purchasing the vehicle alone can also work. However, you are required
to come up with ten percent as the deposit.

You can also pay the rest cash, but the best option is taking advantage of negotiated interest
rate loans for effortless vehicle acquisition. Banks such as NIC Bank and KCB can cover the
remaining 90% and even improve your credit score if your payment is consistent. Other loan
facilities also help but be sure to check the interest rates and the authenticity of the company
offering the loans.

Sacco’s also helped add security to the public transport industry in Kenya. They allow
passengers to report some of the issues that are affecting them when traveling especially if the
driver and tout are involved. Crew members are now professional, and while some matatus still
have rogue attendants, most of them have better money management skills. Sacco’s deduct a
portion of their salary for savings.

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7. Licensing, Insurance, and Regulations

Nowadays, the National Transport and Safety Authority (NTSA) is in charge of inspecting and
delivering a verdict on the roadworthy nature of your vehicle. It is also responsible for checking
if a public service vehicle is equipped with the right equipment such as fire extinguishers,
seatbelts, and speed governors. NTSA also validates your PSV insurance, the driver and tout’s
documentation, and Sacco membership.

All drivers should have valid drivers and PSV licenses as well as a certificate of good conduct
issued by the Directorate of Criminal Investigations. Remember to make an insurance for your
vehicle as well as your crew through a reputable PSV Insurance company. Your car also requires
a variety of licenses to be deemed operational. The application process can be lengthy
considering the thorough background checks conducted lately, but once the process is
complete your vehicle will be ready for the road.

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A permit from the county government to operate your matatu along a specified route should
be the first license on your mind. The license costs about Ksh.35,000 annually depending on the
capacity of passengers your vehicle can hold. Other permits include TLB, advance tax, music
copyright, and vehicle inspection which roughly cost Ksh.50,000.

8. Daily Fees

As earlier mentioned, the matatu industry is filled with cartels who control it and demand a
certain fee on a daily basis depending on the route. As such, be sure to conduct some research
regarding the route you wish your new cash cow to traverse. Corruption is also a problem in
Kenya, and most matatus are often wrongfully extorted by police officers.

9. Maintenance and other expenses

A matatu business plan is needed if you are to have any success in the matatu business in
Kenya. To learn how to manage matatu business in Kenya, you have to write down all the
expenses incurred since the matatu was acquired as well as daily costs. Do not be surprised if
your driver and tout introduce you to new words such as kanju, karao, crackdown, wire,
operation, kamjesh, mungiki, and brake failure to mention a few. While these terms indicate
extra expenses, some of them are excuses by fraudulent drivers to siphon money from your
business.

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Wear and tear is guaranteed on Kenyan roads prompting regular visits to the mechanic for your
vehicle. However, with the right car model and a careful driver, chances are your vehicle will
outlast new matatus on your route even after being in the game for a while. The best way to
ensure your vehicle is always in top condition is by finding an experienced and reliable
mechanic for regular maintenance and repair.
Set apart a minimum of Ksh.10,000 for repairs, but always keep in mind that some
maintenance jobs will require more money. Not to mention, make sure that the spare parts you
use for your vehicle are the recommended version considering they guarantee longevity. Some
mechanics conduct faulty maintenance jobs when unsupervised so if you do not know them
yet, ensure your presence is felt during repairs.

10. Matatu business in Kenya profit margins

One of the most significant discouragements for most people when it comes to the matatu
business in Kenya is the high chance of theft from your driver and conductor. The matatu
business has a lot of cash handling making its profitability very risky. However, with a trusted
crew, you can make a killing in this business. If the matatu you purchased is a bus or minibus,
you should expect an upward of Ksh.7,000 every day.

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This figure should be arrived at after the crew has been paid and the vehicle fueled for the next
day. However, you can make more or less than this figure depending on the route and capacity
of your car. The best way to ensure the profit margin does not fluctuate too much is tasking the
crew a certain target every day. Goals to work towards a fixed amount every day motivates
them considering they want to finish as early as possible and hopefully make some extra buck.

Sound management is vital for success in this business, and any chances of profits are
dependent on a hands-on approach. A lot of money is lost throughout the day, some
legitimately, the rest in unappealing ways. In the matatu industry, every tout or driver is their
brother’s keeper. As such, if a colleague helps load your matatu at the stage, you are obligated
to give them at least Ksh.50 as the conductor.

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If somewhere along the way you pick say five passengers for a fare of Ksh.30 to their
destination, you should pay Ksh.30 to the tout who helped you find those passengers. Around
Ksh.6,000 is always set apart for refueling while Ksh.1,500 is reserved as stage fee for the
respective Sacco where the matatu is registered. You can also boost your profits by cutting
down on manageable costs. To avoid hefty fees paid due to the unroadworthy nature of a
vehicle, make sure your vehicle has the following.

 Good working brake system

 Good suspension, which ensures the stability of the vehicle
 Well treaded tires/not worn-out
 Functioning speed regulator/governor
 Recommended seats, windows, and mirrors
 Properly insured.

Challenges of matatu business in Kenya

1. Cop harassment

The matatu business has many advantages such as high profitability and the ability to enlarge
your company to unprecedented heights if the vehicles are appropriately managed. However,
once the car is on the road, drivers are always on the lookout for police. There have been
numerous cases regarding corruption in the Kenyan transport industry, but people have seen it
for so long it is almost the norm.

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Harassment from police is almost guaranteed even when your vehicle meets all the rules.

2. Trust-related business

The success of your matatu business is almost wholly dependent on the driver and tout you
choose. For your business to last longer, you need trustworthy personnel. It is sad that most
matatu owners take home less than half of the total profits made every day due to conniving
employees. If you cannot get people you trust to operate your vehicle, just register it to a long-
distance Sacco; drivers do not pick and drop off passengers on the way.

3. Wear and tear

Competition from matatus for the fastest is partly to blame for the wear and tear seen in
Kenyan matatus. A matatu can be introduced on a particular route and look old before two
years are over. Two years is the time set apart for recouping the money used in purchasing the
matatu and making it roadworthy. Most drivers do not own the vehicles, which they drive with
little care and leave in bad condition.
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Before you know it, your vehicle is in the garage, and it has not even made enough money to
ensure its repair is seamless. The roads are also partly to blame for the quick wear and tear
experienced on public service vehicles. As such, ensure the route you pick for your matatu is
not only profitable but also car-friendly. A careful driver also comes in handy.

4. Sophistication

One of the biggest challenges any matatu owner faces is the sophisticated nature of the matatu
industry. An office job might seem stressful enough, but it is nothing compared to constant calls
from your crew regarding the welfare of your vehicle. One minute the vehicle is under lockup
the next you lose an exorbitant amount of money to prevent your matatu from being
impounded. Accidents will also give the faint-hearted matatu owner sleepless nights.

Carjacking in the matatu industry is not as common as it was a few years ago. While vehicles are
still lost through carjacking, technology has made it easier to track your matatu everywhere it
goes. Such features not only help you add some security to your investment but also enable
you to track the routes taken by your driver.

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5. Gangs
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The matatu business in Nairobi is yet to reach its full potential due to the gangs that control
various boarding stations within the city. The same can be said of other parts of the country,
but Nairobi is worst hit. Each stage is owned by a tribal gang, which protects the interests of all
matatus operating on that route. The Kikuyu, Gusii, and Luo are some of the communities that
have the most significant share in the matatu industry.

The figure collected from every matatu is commensurate to the fare the vehicle charges to its
destination. These cartels are also responsible for determining the bus fare especially during
peak hours and acting as the eye out on matatus aiming to earn money from routes they are
not meant to operate on. They also help eliminate unfair competition and maintain order.
Jogoo Road, Thika Road, and Mombasa Road are examples of where matatus cannot simply
drop off and pick passengers without paying a toll.

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6. Unpredictability

One week your crew might present you with a constant flow of money only to disappoint you in
the next. In some instances, it might be the weather or even public holidays or issues with a
certain Sacco. If the Sacco demands all vehicles cancel work for a few days, everyone is
supposed to oblige. A Sacco might be the least of your worries if it is your first six months in the
matatu industry.

For your first car, make sure that another reliable source of income is present for at least a
year. More vehicles do not guarantee profits and sunny days. Anything can happen in the
transports sector. As such, until you are familiar with every loophole, ensure securities are in
place before going all out on your matatu business in Kenya.

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