The Central Bank of Kenya (CBK) is the institution responsible for the registration and licensing of all financial entities dealing with currency exchange, including forex bureaus. Below is a detailed step-by-step guide on the registration and licensing process for a forex bureau in Kenya.
Step 1: Name Reservation
- Application to the Registrar of Companies:
- Submit at least three proposed names for the bureau to the Registrar of Companies.
- The names must include terms such as “Forex Bureau,” “Foreign Exchange Bureau,” or “Bureau de Change.”
- Approval from Central Bank of Kenya:
- Once a name is reserved by the Registrar, write to the Central Bank of Kenya to seek approval for the reserved name.
- Company Registration:
- After the CBK approves the name, register the company with the Registrar of Companies.
- Obtain the Certificate of Incorporation, CR12, and the company KRA PIN.
Step 2: Application to CBK
- Submit a formal application to the Director, Bank Supervision Department, CBK by completing the FORM/CBK/FXD1.
- Attach the Following Documents:
- Certified copy of the applicant’s statement of affairs.
- Certified copy of the Memorandum and Articles of Association.
- Certified copy of the Certificate of Incorporation.
- Feasibility Study, including:
- Financial projections for three years (balance sheet, profit and loss account, and cash flow statements).
- Organizational structure, physical location, and postal address.
- Evidence of minimum core capital of USD 60,000 or its equivalent in Kenya Shillings (must exist before operations begin and maintained throughout).
- Bank statements of the bureau’s shareholders and directors for the six months preceding the application.
- Completed fit and proper forms for the shareholders, directors, and principal officers.
- Credit reports from a licensed credit reference bureau for shareholders, directors, and principal officers.
- A declaration confirming:
- None of the directors or shareholders has been declared bankrupt.
- No involvement in the management of a collapsed institution.
- No conviction for criminal offenses involving fraud, money laundering, tax evasion, or dishonesty.
- Declaration confirming that no directors or shareholders hold similar roles in other forex bureaus.
- An undertaking to comply with the CBK Act, regulations, and guidelines for forex bureaus.
- Pay the Application Fee:
- Submit a non-refundable application fee of Kshs 20,000 via banker’s cheque payable to the Central Bank of Kenya.
Step 3: Review by the Central Bank
- The Central Bank of Kenya will review the application within 90 days from the date of submission.
- If additional information is required, CBK will communicate this to the applicant.
- Upon satisfaction of all requirements, the CBK will issue a Letter of Intent.
Step 4: Fulfill Post-Approval Requirements
After receiving the Letter of Intent, the applicant must:
- Pay the license fee of Kshs 65,000 via banker’s cheque.
- Transfer a non-interest-bearing deposit of USD 30,000 to the CBK’s offshore account.
- Invite the Central Bank of Kenya to inspect the bureau’s premises.
Step 5: Issuance of License
- Upon fulfilling all requirements, the CBK will:
- Issue the applicant with a license to operate a forex bureau.
- Alternatively, if the application is declined, CBK will inform the applicant in writing, providing reasons for rejection.
- Applicants may appeal the decision within 30 days of notification.
Important Notes
- Timeline: The entire process can take up to 90 days, depending on the completeness of the application and adherence to requirements.
- Compliance: Licensed forex bureaus must operate in strict compliance with the CBK Act, guidelines, and instructions.
- Costs:
- Application Fee: Kshs 20,000 (non-refundable).
- License Fee: Kshs 65,000.
- Capital Requirements: USD 60,000 minimum core capital and USD 30,000 non-interest-bearing deposit.
By adhering to these guidelines and fulfilling all requirements, you can successfully establish a licensed forex bureau in Kenya.
