Company closures in Kenya have continued to rise at a faster pace than new registrations, with official data showing more firms opting to shut down operations in the year to June 2025.
Figures from the Business Registration Service (BRS) reveal that 2,260 companies applied to cease operations, both voluntary and forced, marking a 24.3 percent increase from the 1,817 that closed in the previous year ending June 2024.
At the same time, registrations of new businesses edged up slightly, with 138,000 companies cleared to operate compared to 136,209 the year before—a marginal growth of 1.3 percent.
“Despite the dissolution of business entities, it is important to highlight that the rate of new company registrations far exceeds the dissolved entities,” BRS said in a statement.
The agency, however, did not explain the slight rebound in registrations, even as concerns mount over a difficult business climate characterised by rising taxation and escalating operating costs.
From March 2024, firms have been required to deduct 1.5 percent from workers’ gross pay and match it under the affordable housing levy. Employers are also obligated to match employee contributions to the National Social Security Fund (NSSF), with the higher rates introduced in February this year hitting businesses that employ top earners hardest.
The additional costs have piled pressure on companies already struggling with reduced sales as households cut back on spending during tough economic conditions.
Many firms that have wound up cited tax disputes with the Kenya Revenue Authority, low customer demand, and rising operational expenses as the main triggers for closure.
Under Section 897 of the Companies Act, any business that intends to close must make a formal application to BRS, including reasons for the decision.
Kenya’s business climate was more favourable two years ago, when registrations grew 9.21 percent to 145,284 while closures dropped 7.2 percent to 2,030.
