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Employment in Nairobi

At a Glance:

  • Nairobi is Kenya’s main business hub; however, corruption and lack of transparency can influence the work environment negatively.
  • Most expats in Nairobi work as embassy staff or foreign assignees; IGOS and NGOS offer employment opportunities as well.
  • Most expenditures in Nairobi will go to healthcare, housing, and schooling.
  • Hiring a tax consultant can be a good idea, especially if you are drawing incomes from multiple sources.

Nairobi, at the Center of Kenya’s Economy

As the largest and most dynamic economy in East Africa, Kenya is the growth engine of the region. In turn, Nairobi is Kenya’s busiest business hub. More and more people start working in Nairobi as the labor force keeps shifting to the urban areas.

Generally speaking, however, plenty of employment in Kenya still depends on agriculture. Although the service sector contributes a far higher percentage of the GDP, most Kenyans are involved in farming or cattle-herding. Some toil at subsistence level, others work in huge agri-business operations. However, things are different for those working in Nairobi, but more on this below.

The country produces coffee, tea, flowers, fruits, and vegetables for the export market. Since the manufacturing sector is small, Kenya imports a lot of essential resources and equipment, like iron, oil, chemicals, vehicles, machinery, and consumer goods. This partly explains why Kenya has accrued a hefty foreign debt.

Many Kenyans — especially if working in Nairobi — also earn a living in the service industry. Tourism is a major field of employment, but communications is a key market, too, and one in which Kenya leads the East African community. The “mobile revolution” is transforming life in lots of African states.

Challenges and Opportunities

In recent years, Kenya witnessed a substantial GDP growth, with the work force in Nairobi playing a not insignificant role in this development. Unfortunately, Kenya is facing several challenges which could impede its economic growth.

Overreliance on exports leaves Kenya vulnerable to crises afflicting its trading partners — the Eurozone is one example. A high inflation rate in Kenya has led to rising food prices, though it seems to have stabilized for now at just under six percent.

Kenyans are apprehensive about several political issues as well. Corruption and a certain lack of transparency are issues you might be confronted with when working in Nairobi.

A more pressing concern was the presidential election in March 2013. The last electoral process in 2007 caused severe social and ethnic tensions to erupt. Violence disrupted the lives of many people, not only among those living and working in Nairobi. Fortunately, the electoral process in 2013 was largely peaceful again.

However, the Kenyan economy needs to grow yet more strongly and attract more foreign investors in order to combat widespread poverty and the huge household deficit. If the Kenyan nation can weather such potential crises, the country’s expanding economy will offer new chances to its expanding population of both locals and expats.

The Pivot of the Economy and Jua Kali

The prospect of employment opportunities makes quite a few Kenyans succumb to the lure of the capital. As mentioned above, agriculture plays a smaller role in Nairobi than in other parts of the country. However, dairy and poultry farming, and horticulture are still common job sectors, here. Nairobi is also home to the Nairobi Coffee Exchange, where the coffee harvest is auctioned off weekly to exporters.

The industry for petroleum refinement and re-export of oil-based goods is obviously located on the coast. Nonetheless, Nairobi’s manufacturing sector provides some jobs. In fact, the factories produce, for instance, cement, textiles, and processed foods. Companies like Bamburi Cement (construction materials), Unga Group (flour), and East African Breweries (beer) are some of Nairobi’s larger employers. Incidentally, neighboring Uganda has the second-highest alcohol per capita consumption in Africa (according to a WHO report), so brewing is a lucrative business in the region.

There is, too, a large informal industry, called jua kali. This expression derives from the Swahili for “hot sun”. While working in Nairobi as an expat, you will see street hawkers with makeshift open-air stalls. Jua kali is an essential source of income for the poor segment of an urban population growing more rapidly than the official labor market.

Nairobi’s Hospitality Sector Hub

For the most part, those working in Nairobi’s service sector are the driving force in the local business world. It provides for the city’s highly qualified elite, as well as the rising urban middle-class. Nairobi is a national travel and transport hub and the center of Kenya’s hospitality industry. International hotel chains like Hilton are based in the city, and Nairobi houses the headquarters of Kenya Airways. With various international trade shows hosted at the Kenyatta International Conference Centre, Nairobi is also an important destination for business travel in Africa.

Furthermore, Nairobi’s finance and real estate industries employ plenty of people. Insurance companies, large banks such as Kenya Commercial, and micro-finance organizations abound in East Africa’s commercial center. In the booming communications market — with companies such as Safaricom — numerous residents working in Nairobi address the needs of the local population. Retail, education, healthcare, and community services require an increasing number of personnel.

New Projects for an Improving Economy

To sustain economic growth, create new jobs, and provide a higher standard of living, Kenya needs to keep investing in health, education, and infrastructure, and to revamp its local travel and tourism sector. From a business and trade point of view, Nairobi must increase contact and cooperation with both countries in Africa and around the world, especially with regards to travel and jobs.

As of 2014, there are various projects in the pipeline. For example, in November 2013, work began on a new Nairobi-Mombasa railway. It is a project financed with 5.2 USD billion by the Chinese government and is expected to be completed by 2017. It is hoped the railway encourages further growth through cheaper and faster transportation, and generates employment in supporting sectors.

A refurbished road network should also come as a great relief to plenty of employees working in Nairobi. It’s not only about the boredom of getting stuck in a traffic jam. Experts estimate that hundreds of thousands of dollars per day are lost due to traffic congestion! This figure takes into account fuel costs and losses in productivity.

All these plans could be a convenient chance for foreign experts who are interested in working in Nairobi. However, you should take into account that such mega projects are mostly tackled in cooperation with Chinese businesses, which are currently making inroads into the African market.

Expat Employment in Nairobi

Fields of Employment

Many expats working in Nairobi are employed as embassy staff or as foreign assignees in multinational companies. Global players like BASF, Google, Heineken, and Toyota send experts and management staff on intra-company transfers to their East African headquarters.

Expatriates may also find employment in certain other fields. At times, this can implicitly depend on their ethnicity and nationality. For instance, the executive staff of a few companies in horticulture, finance, and travel seems like a relic from the colonial period, with upper management still being mostly white Kenyans.

Nairobi’s large South Asian community, on the other hand, could provide business contacts and opportunities for expatriates from India and Pakistan. Indian IT companies are active in Kenya’s flourishing and highly competitive ICT market. Bharti Airtel from New Delhi, the world’s fourth-largest mobile provider, operates in 17 African nations, with almost eight million customers in Kenya alone — making up for 25% of the market.

Expats interested in working here should also consider the chambers of commerce of Kenya’s trading partners as starting points for their job search. The main imports come from the Middle East (Saudi Arabia, UAE), and South and East Asia (China, India, Japan). Leading export partners outside Africa are, among others, the Netherlands, the UK, and the USA. Most leisure tourists arrive from the USA and Europe (Germany, Italy, UK), though increasingly more are coming from Asia and the Middle East. If you know the export business or the tourism industry of these countries really well, your expertise might be welcome.

The Role of IGOs and NGOs in Nairobi

A large number of expatriates work for an IGO or NGO in Nairobi. Kenya serves as the administrative center and base of operations for aid organizations in East Africa, especially for matters related to Somalia and Sudan.

The most important IGO in Nairobi is the United Nations. The UN maintains offices in the CBD and in a large complex in Gigiri, near the Canadian High Commission and the new US embassy. These buildings house aid schemes like the UNEP (United Nations Environment Programme), the UNHCR (refugee agency), the World Food Programme for Somalia, and the World Health Organization.

The United Nations employs over 3,000 people in Kenya, 2,000 of whom work in Nairobi. About 30% of the UN staff is made up of foreign residents, so around 900 members of Nairobi’s expat community are directly employed by the United Nations, and many more are indirectly affiliated.

Other organizations employ expatriates, too. The World Bank office in Kenya — to cite just one example — was headed by a Dutch national until May 2013 when he was replaced by a new country director from Senegal.

IGOs and NGOs do not only provide jobs to expats and locals alike. They are also a major source of foreign currency for Kenya.

What You Need to Know about Work Permits

Before starting your new job in Nairobi, you need to have a work permit together with your visa. As soon as you have a confirmed job offer, your employer applies directly to the Department of Immigration in Nairobi on your behalf. Apart from providing the necessary documents, you will not be involved much — or at all — in this process. However, you should still know some key facts about work permits for Kenya.

Combined work and resident permits are often called “passes”, and they come in a variety of categories. Class D applies to regular employees, foreign assignees, expats on intra-company transfers, as well as UN aid workers and employees of similar humanitarian organizations. Please note that you always need a work permit for Kenya, even if you want to work as an unpaid intern or volunteer with a local NGO.

When recruiting an expat, the company does not only need to prove that there was no suitable local candidate available for the position, they also have to train a Kenyan employee on the job, so that he or she could theoretically take over when the expat leaves.

Be Ready for Immigration Struggles

Apart from the rules above, there have been a number of proposed and partially implemented changes to Kenya’s immigration laws since Jane Waikenda became the Director of Immigration in 2013 and Gordon Kihalangwa took over the position in 2014. Some of these are beneficial and aim to reduce corruption within the department, others, however, are aimed at hindering immigration to Kenya.

Given the lack of transparency at the moment and a lot of conflicting information (between press-statements and government websites), talking to your closet Kenyan embassy is highly recommended in order to get accurate, up-to-date details.

According to recent changes in Kenya’s immigration laws, no more class A work permits will be issued to people under 35 who earn 24,000 USD a year or less. This should not affect most skilled expatriates moving to Nairobi as expat salaries for Kenya are normally more generous.

It has been suggested that certain kinds of self-employed professionals, e.g. doctors and lawyers, can no longer obtain work permits for Kenya. People with these qualifications need to opt for regular employment or enter a joint venture with Kenyan partners.

Work permits are issued for two years, and may not be renewed; the idea being that the Kenyan trainee then takes over the expat’s job (according to statements made by Waikenda in late 2013).  More information on visas and work permits can be found in our Moving to Kenya Country Guide.

As some of the above measures were introduced not too long ago, it remains unclear how serious an impact this will have on expat assignments and general job prospects. Some multinationals and foreign investors have already voiced complaints on the increased difficulty in getting work permits for foreign employees.

 If you have any further questions on this topic, contact the nearest Kenyan mission or the Department of Immigration. Enquiries can be made to:

Department of Immigration Services

Nyayo House

P. O. Box 30191 – 00100

Nairobi, Kenya

+254 (0) 20-2222022

Immigration Kenya@Twitter

Nairobi Expats: Cost of Living and Taxes

When you find employment in Kenya or go on an intra-company transfer to Nairobi, there are some things to keep in mind. As with any relocation, you should have a close look at your salary and the local cost of living you can expect in your new home.

Low Cost of Living, but a High Inflation Rate

Nairobi is hardly the most expensive destination worldwide: It ranked as #104 out of 207 cities in the Mercer Cost of Living Survey 2015. But, the living expenses for expatriates are nevertheless worth considering.

If your salary is going to be paid in a foreign currency, the exchange rate is going to influence your real income. A strong US Dollar, for instance, means that you have a higher disposable income while you are living in Nairobi — most expenses are paid in Kenyan shillings (KES) after all.

Unfortunately, the country’s high inflation rate has devalued the Kenyan shilling in the recent past. Though inflation seems to have abated for the time being, it remains difficult to list reliable information on prices for necessities such as food or toiletries. Due to the aforementioned inflation and fluctuating prices, figures like these are quickly outdated.

Where Most of Your Money Will Go

Generally speaking, several items are always going to take huge chunks out of your expat budget.

  • Public healthcare and social security in Kenya often do not meet expats’ expectations. You will pay a negligible amount of monthly contributions to Kenya’s national pension fund and healthcare plan; however, you should have your own provisions to rely on. Therefore, you need to lay aside some money for your retirement fund. Your employer should provide you with a private insurance policy for medical care. It’s worth checking this plan very carefully, to see if the insurance fits your individual needs and for example also includes your family.
  • Rental housing in upmarket neighborhoods is fairly expensive. Expats spend about one third of their income on accommodation, i.e. rent, utilities, security, etc. However, the worst of the real estate bubble in Nairobi, especially in the upscale residential areas, seems to be over for now, with prices even dropping in 2015.
  • Education at international schools in Kenya is a costly endeavor. Many companies include an education allowance in the remuneration package for expats with kids. If this is the case for you, make sure that your employer pays the fees directly to the school. Otherwise, the allowance might become taxable under Kenyan law.

Learn More about Taxation in Kenya

As far as tax in Kenya is concerned, you first need to determine if you are a fiscal resident. In some cases, there are different regulations and tax rates for residents and non-residents. The rule of thumb for fiscal residency is the time you spend in Kenya. If you reside in Nairobi (or any other Kenyan city) for 183 days per tax year or more, you normally count as a resident for the Kenya Revenue Authority.

Fiscal residents pay tax on all employment income, including overtime pay, bonuses, commissions, financial benefits, allowances, and some other benefits in kind. If you have employment income from foreign sources or profits on business activities across borders, you have to pay taxes on it, but only if you’re a resident. Other than that, it is just income accruing in or derived from Kenya that needs to be taxed.

If you collect any interest, dividends, royalties, or technical service fees which accrue abroad, you may or may not be subject to taxation according to Kenyan law depending on the country in which they were accrued. Kenya has treaties and agreements with some countries regarding such taxes, so the advice of a tax consultant is highly recommended.

There is no inheritance tax, gift tax, estate tax, or wealth tax. However, while Kenia suspended the capital gains tax for many years, it was  reintroduced in 2015.

Easy Taxation for Expats

If your job is your only source of income while you are living in Nairobi, taxation is quite easy. Just check if your employer files monthly PAYE tax reports for you. The company then deducts all taxes and social security contributions directly from your salary as withholding tax. If the company does not take care of this, you have to file such reports yourself, at least once during each quarter. In this case (and/or if you have several sources of income in Kenya), it’s probably best to contact a tax accountant.

A tax consultant can easily calculate your taxable income, inform you about potential deductions, and tell you which benefits in kind are subject to taxation. Tax accountants can also be of help if you would like to know more about double taxation treaties.

At the moment, Kenya has tax relief treaties with Canada, Denmark, France, Germany, India, Norway, South Africa, Sweden, the UK, and Zambia. Other agreements are under negotiation or signed, but not yet in force. Such tax agreements do not only prevent you from possibly taxing the same income twice; in some cases, they even provide a slightly lower tax rate on selected sources of income in Kenya.

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    Wish I had discovered InterNations before I relocated to Kenya. It's really helpful on both a private and a professional level.

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    Expats on InterNations gave us valuable hints for finding an appropriate school in Nairobi for our two children.

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