Why Kenyan start-ups are attracting foreigners

Posted on July 24, 2015 12:00 am

Kenya is currently one of the most attractive and fastest-growing country according to a Bloomberg report published few months back, and foreigners are beginning to spot opportunities to found their start-ups in the country.Starting today, Kenya is hosting Global Entrepreneurship Summit for two days and chief guest is US President Barack Obama.What we are seeing in Kenya is real increase in entrepreneurship and mobility, especially among younger entrepreneurs.However, it is not easy to set up a start-up across the country.While some hubs, like NaiLab and iHub, are keener to globalize and attract foreigners, others have a lot of red tape and legal barriers.For many years, Kenya wasn’t the most accommodating place for foreign start-up entrepreneurs either, with complicated visa processes and quotas on foreign employees, as well as a lack of public funding. However,that seemed to have changed over the last ten years and accelerated in the last two years thanks to business minded government of President Uhuru Kenyatta.Despite varying difficulty levels of doing business in the country’s 47 counties, many foreigners are still willing to realize their start-up goals in East Africa’s largest economy.

Contador Harrison has this belief that the more difficult it is to do things, the more resourceful one become and the more success chances are.The advantages of setting up in Kenya are its huge market, solid infrastructure and world-leading mobile payments solutions industry.The infrastructure is insanely good, the opportunity are seriously large. Business starts ups can actually do a lot with the really fast broadband speed.Foreigners can also set up a company in Kenya even without permanent residence through an investor visa or consultant visa. Kenya is among the biggest start-up market in sub saharan Africa and the leading “mobile-first” market in Africa.There’s a lot of innovation coming up in Kenya, which is particularly useful in introducing products to other emerging mobile-first markets.There are foreign start-ups across many different industries, such as, e-commerce, education, business-to-business, mobile payments driven commerce and hardware which saw the setting of assembly plants for Tablets and other devices in northern rift valley part of the country town of Eldoret two days ago.

Aerial view of Nairobi, the Kenyan capital
Aerial view of Nairobi, the Kenyan capital – Photo:Ville Makinnen

Foreign start-ups in Kenya are mostly concentrated in Nairobi, although there is a small number of start-ups in other cities like Kisumu, Nakuru and Mombasa.Foreigners do not need a visa to set up and can later obtain work visas through their own company.However, setting up in Kenya is heavily dependent on hiring agents,lawyers or partnering with Kenyans due to their ability to manage many start-up restrictions.”In Kenya, there is always a way,” a Kenyan friend recently told me.Local competition is so fierce and the international people rarely understand the local market.Companies with global aspirations that want to start out in Kenya should try out as the country holds language advantages,as all media is in English and little bit of Swahili.Favorable taxes, transparency and a preexisting entrepreneurship culture have earned Kenya the reputation as top place for foreign start-ups in East and Central African region.Kenya is also multicultural with a 10 percent foreign population, which is advantageous as an entrepreneur.Since President Uhuru Kenyatta took power, processing applications for start-ups is quick and easy, and everything can be done online.However, the cost of living in Kenya is higher than that of most other places in East Africa, and foreign employers in selected sectors may also need a local partner to register for a business.Start-ups are uncommon outside Nairobi and other areas prevailing culture do not produce many assertive and risk-taking workers.

Nairobi has a stable and well-educated engineering workforce, and some of the most active users on social media and high penetration of e-commerce.Kenya has a geographical advantage and with strong ties to several countries in East and Central African region makes Kenya very centrally positioned as a starting point for expanding into other parts of Africa.Generally, the environment has been hassle-free and welcoming for expats despite the persistent terror threats.Although I couldn’t independently verify, a blud told me Kenya provides tax incentives and easier work permit processes for tech start-ups especially those that have local ownership.However, a new start-up environment means consumers still have very simple demands despite seeing a boom in social media, as well as a lack of sustainable talent.There’s not enough available talent pool versus the amount of companies that are in Kenya.Kenya’s free market mechanism means that everybody is treated the same in the market have also been attracting investors from Europe and North America.The best thing about Kenya is that anything is possible.Worst thing about Kenya is that anything is possible.The Kenyan tech scene also has high levels of English proficiency and people are generally welcoming to foreigners.Current start-up trends for both locals and foreigners are payments solutions, e-commerce and mobile.The foreign start-ups in Nairobi tend to work on a global scale and global idea rather than an Kenyan idea.

On unrelated story,#ContadorHarrison stand in solidarity with our brothers, sisters from Kenya on rejecting #CNN pigeonholing and formulaic conception #SomeoneTellCNN

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