Contractors operating or wanting to undertake construction operations in Kenya are required by law to register through the National Construction Authority (NCA), which is constituted under Act No. 41 of 2011 Laws of Kenya.
The National Construction Authority (NCA) is mandated to clear builders and contractors to eliminate rogue contractors and malpractices in Kenya’s building and construction industry. The authority, which has recently started inspecting construction and building projects around the country to ensure high quality of work and close projects posing health risks and collapse hazards, is expected to provide the regulatory framework for registration and renewal of contractors.
Qualification as a contractor in Kenya
Register with Registrar of Companies: Each contractor is required to hold a certificate of incorporation from the Registrar of Companies in Kenya. This will mean they register as a legal company in the country as a limited liability, sole proprietorship or as a partnership company.
The National Construction Authority will also require that one of the technical directors of the registered company has a technical qualification, has skills or possesses experience in a field related to construction. All the directors must also forward their CVs to the National Construction Authority.
Valid PIN, VAT and Income Tax compliance certificates, and Bank Account:Contractors applying to operate in Kenya must also prove tax compliance by submitting these documents to National Construction Authority.
The bank account should be opened under name of the contractor company and evidence for the bank account is required.
Foreign contractors are issued with permission to operate for a specific period and will be required to prove that they are in the country to undertake that project. They may not undertake another project after the one specified is completed and will need to submit an affidavit with the authority that this will not happen.
Foreign contractors wanting to operate in Kenya are also required to submit a commitment to transfer skills to locals as determined by National Construction Authority.
A Certificate of Registration is issued on registration as a contractor in Kenya.
Contractor classification/grades
NCA regulations allow a contractor to register in one or more categories according to the class of construction works to be undertaken. The NCA categories, from NCA1 to NCA 7, are determined by the value of the projects as well as whether they are for building or for roads and other civil works.
Registration fees
In order to register, local contractors in Kenya will be required to pay a fee of Ksh10,000 – 50,000 depending on their NCA category. License renewal costs are between Ksh5,000 and Ksh10,000. Between Ksh5,000 and 10,000 will be required for annual license renewal.
Foreign contractors wanting to register with NCA to operate in Kenya are required to pay a registration fee of Ksh100,000 and must undertake only tenders they win. Those registering under a temporary registration will need to commit to sub-contracting ‘not less than 30% of the value’ of the contract to local contractors.
Application documents are available from NCA website. http://www.nca.go.ke/index.php/contractors-center/contractors-resource-center
