Why Foreigners in Kenya Should Consider Setting Up a Family Trust

Why Foreigners in Kenya Should Consider Setting Up a Family Trust

Date: 28 June 2025
From: CM Advocates LLP – Private Wealth and Estate Planning Team

A Strategic Move for Long-Term Wealth Security in Kenya

For foreign nationals investing, living, or working in Kenya, managing your assets—especially land, businesses, shares, or real estate—can pose both legal and practical challenges. Ownership restrictions, nominee arrangements, and succession risks often expose foreign investors to uncertainty and potential disputes.

A family trust is your solution.

Setting up a family trust in Kenya offers a legally secure, tax-efficient, and confidential structure for holding and managing your wealth. Thanks to forward-looking legal reforms, trusts can now own property and investments in their own name, giving you full control and long-term stability—without needing proxies or complex holding structures.

At CM Advocates LLP, we support international private clients, family offices, and foreign investors with sophisticated, tailor-made trust structures that comply with local and global standards for governance, tax, and estate planning.

Why a Family Trust Makes Sense for Foreigners in Kenya

1. Legal Ownership Without Proxies or Nominees
A registered family trust is a separate legal entity that can own property and hold investments in Kenya under its own name. This eliminates the need to rely on nominee arrangements or joint ventures that could be subject to disputes or regulatory scrutiny.

2. Asset Protection from Legal and Commercial Risk
Assets placed in a trust are shielded from personal liabilities, lawsuits, and creditor claims. This separation is particularly useful for expatriates or foreign investors facing cross-border risks or operating in multiple jurisdictions.

3. Simplified Succession Planning
Avoid inheritance conflicts or probate delays. A trust ensures your assets pass directly to your chosen beneficiaries—whether family members abroad or locally—without court intervention or contestation.

4. Flexible and Confidential Wealth Management
Trusts allow you to retain control through appointed trustees while maintaining privacy over your personal and family affairs. Unlike wills, trust structures are not made public.

5. Tax Efficiency and Reliefs
Kenyan law offers potential stamp duty and capital gains tax exemptions on property transfers into a trust. Properly structured, your trust may also benefit from optimized income and withholding tax treatment.

6. Supporting Family Members or Dependents
Trusts are ideal for securing the future of dependents—whether spouses, children, elderly parents, or persons with disabilities—through controlled, long-term distribution plans.

7. Cross-Border Flexibility
Whether you plan to relocate, invest further, or retire elsewhere, a Kenyan trust can operate internationally, with beneficiaries and trustees across multiple jurisdictions, subject to compliance.

8. Protection from Local Legal Complexities
Foreign ownership of certain properties or assets in Kenya can be restricted or require local participation. A trust structure helps navigate these complexities, ensuring your investments remain protected and properly managed.

9. Continuity and Succession for Family Enterprises
Family trusts can own and operate businesses, real estate portfolios, or investment vehicles in Kenya with continuity beyond the founder’s lifetime, making them ideal for legacy planning.

Family Trust vs. Will: Why Trusts Provide Superior Protection

Aspect	Family Trust	Will
Legal Ownership	Trust owns assets during your lifetime	Ownership transfers only after death
Probate Requirement	No probate required – immediate transfer to beneficiaries	Must go through the Kenyan probate courts (can take years)
Privacy	Confidential – not disclosed to the public	Public once probated
Control	Allows control over distributions (age, education, health, etc.)	Less flexible; distributions made as per will's fixed terms
Asset Protection	Shields assets from lawsuits or creditors	Assets vulnerable until probate is finalized
Tax Advantages	May benefit from exemptions (stamp duty, CGT)	Asset transfer may attract taxes
Cross-Border Planning	Easier coordination with foreign structures	Complicated when dealing with multiple jurisdictions
Long-Term Succession	Enables generational wealth preservation	Only transfers once; no built-in governance for continuity

Conclusion: A family trust functions as a living legal structure—during your lifetime and beyond—enabling control, privacy, and asset protection unmatched by a will.

Using Family Companies Alongside a Trust for Active Trading or Investments

For foreign nationals engaged in business, trading, or investment activities in Kenya, a family trust can be paired with a family-owned company or family investment company for optimal structuring.

How it works:

• The company serves as the trading or investment arm (e.g., buying and selling goods, managing projects, earning rental income).

• The trust owns the shares in the company and governs how the proceeds are distributed to family members or reinvested.

This layered structure provides:

• Corporate flexibility for day-to-day commercial operations.

• Legal separation between business and personal wealth.

• Tax optimization, especially for dividends or income planning.

• Multigenerational succession, by avoiding fragmented ownership of shares.

• Governance stability, as trustees oversee how wealth is deployed or preserved.

CM Advocates LLP regularly establishes Private Investment Companies (PICs) and Special Purpose Vehicles (SPVs) held under family trusts to help foreign entrepreneurs protect, scale, and pass on their enterprises seamlessly.

Legal Framework in Kenya: Built for the Future

Kenya’s modern trust regime—updated under the Trustees (Perpetual Succession) (Amendment) Act, 2021 and the Perpetuities and Accumulations (Amendment) Act, 2021—allows:

• Full legal registration of family trusts as separate entities

• Ownership of real estate and shares in the trust’s name

• Operation like a corporate entity—able to sue, be sued, and enter contracts

• Perpetual succession without need for re-registration after the founder’s passing

CM Advocates LLP is uniquely positioned to help you navigate this modern trust landscape, offering strategic guidance on both local compliance and international trust integration.

How to Set Up a Family Trust in Kenya as a Foreigner

1. Define Your Goals
Clarify what you want to achieve—asset protection, succession, tax planning, or cross-border flexibility.

2. Work with a Trust and Estate Planning Expert
A specialized legal advisor will help you draft the trust deed, structure your trust optimally, and handle regulatory filings.

3. Register the Trust
Trusts are registered with the Business Registration Service (BRS) and receive a certificate of incorporation—usually within 14 to 60 days.

4. Transfer Your Assets
Assets such as property, company shares, or bank holdings are formally transferred into the trust. Our legal team will assist in obtaining relevant tax exemptions and compliance clearances.

How CM Advocates LLP Can Help Foreign Investors

At CM Advocates LLP, our Private Wealth, Family Law, Family Business & Global Mobility Advisory Services Practice Group offers a comprehensive and integrated platform tailored to the legal and strategic needs of foreign nationals, expatriates, and international families operating or residing in Kenya.

Whether you're investing in real estate, running a family business, planning intergenerational wealth transfer, or managing a multi-jurisdictional estate, we provide the following key services:

• Tailored trust structuring for foreigners to securely own, manage, and transfer assets in Kenya

• Integration with family-owned companies or holding structures, especially for clients involved in trade or investment operations

• End-to-end registration and compliance services for family trusts, investment companies, and related structures

• Cross-border tax planning and asset protection strategies, including double taxation treaty analysis, FATCA/CRS compliance, and income planning

• Succession planning and family governance support, including trust governance, succession charters, and family constitutions

Our solutions are delivered with a deep commitment to confidentiality, long-term continuity, and generational success. We are trusted advisors to high-net-worth individuals (HNWIs), ultra-high-net-worth families (UHNWIs), trustees, fiduciaries, and international private banks.

We also offer a holistic range of supporting services, including:

• Family Law: Matrimonial property disputes, divorce, custody, guardianship, and adoption matters

• Succession and Probate: Local and international wills, probate, inheritance dispute resolution

• Family Business Advisory: Succession planning, governance frameworks, shareholder agreements

• Global Mobility: Immigration, investor permits, residence and citizenship planning

• Tax Advisory: Cross-border tax planning, CRS/FATCA compliance, tax dispute resolution

• Estate Planning: Wills, powers of attorney, curatorship, mental capacity protection

• Real Estate Structuring: Property due diligence, investment structuring, succession integration

• Private Client Concierge: Family constitutions, philanthropic planning, and international legal coordination

Get in Touch or Request our Family Trust Guide for Foreign Investors in Kenya

General Inquiries Email: privatewealthlawyers@cmadvocates.com

Writer Email: cmaina@cmadvocates.com
Phone: +254 716 209 673
Website: www.cmadvocates.com

Reviving Time-Barred Debts in Kenya: What Creditors Need to Know

Reviving Time-Barred Debts in Kenya: What Creditors Need to Know

By Cyrus Maina - CM Advocates LLP

In the world of credit and commercial transactions, timing is everything. When debts remain unpaid for extended periods, creditors may find themselves constrained not by financial risk—but by the law itself. In Kenya, once a debt crosses a certain age, it may become unenforceable in court, even if genuinely owed.

But there’s a silver lining. With proper legal strategy, even so-called time-barred debts can be revived and recovered.

At CM Advocates LLP, we provide proactive, globally informed legal solutions that help creditors reclaim dormant debts while staying fully compliant with Kenyan law. This article outlines how the law treats old debts, how they can be lawfully revived, and the tactical steps creditors can take to recover what is rightfully theirs.

Understanding the Limitation Period

Under Section 4(1)(a) of the Limitation of Actions Act (Cap. 22, Laws of Kenya), a creditor must bring an action founded on contract—such as a loan, supply agreement, or service fee—within six years from the date the cause of action arose.

If no legal action is initiated within this period, the claim becomes statute-barred, meaning a court will likely dismiss any attempt to enforce the debt—regardless of its merit or size. This provision is intended to ensure legal certainty and prevent indefinite exposure to litigation.

Can a Time-Barred Debt Be Revived? Absolutely.

Fortunately, Kenyan law offers creditors a critical second chance. Section 23(3) of the Limitation of Actions Act provides that where a debtor:

• Acknowledges the debt in writing, or
• Makes a part payment towards the debt—

whether before or even after the expiration of the six-year limitation period, a new limitation period commences from the date of such acknowledgment or payment.

This legal provision means that a time-barred debt is not automatically extinguished—but merely dormant until action is taken. With the right strategy, it can be legally reactivated and pursued afresh.

Strategic Use of Demand Letters

A well-structured demand letter is not just a formality—it is a powerful recovery tool.

At CM Advocates LLP, our demand letters are crafted with a blend of legal precision and strategic persuasion, and tailored to accomplish three objectives:

1. Invite the debtor to settle the matter amicably, without escalation or litigation;
2. Prompt a written acknowledgment or part payment, thereby reviving the enforceability of the debt;
3. Apply calibrated commercial pressure, signaling that the creditor is represented by seasoned counsel and prepared to escalate the matter, if necessary.

These letters form a core part of our Rapid Recovery Program, which is designed to accelerate recoveries and preserve commercial relationships wherever possible. We also work with reputable private investigation firms to locate debtors and trace assets, ensuring even evasive debtors can be reached and held accountable.

Insolvency Pressure: A Tactical Option When Necessary

Where appropriate, and particularly for corporate debtors, creditors may lawfully consider the option of winding-up proceedings under the Insolvency Act, 2015.

Similarly, for individual debtors, bankruptcy proceedings may be considered as a pressure point. While these are serious and last-resort measures, their mere mention in a demand can often serve as a catalyst for settlement, particularly for debtors seeking to avoid reputational damage, asset exposure, or regulatory consequences.

This tactic aligns with our Corporate Restructure Suite and litigation strategy aimed at converting crises into opportunities for resolution and recovery. As part of our cross-border insolvency strategy, we also support enforcement of international arbitral awards and foreign court judgments under both reciprocal treaties and common law doctrines.

How CM Advocates LLP Can Help

At CM Advocates LLP, we are trusted by banks, non-bank financial institutions, PE firms, global law firms, and high-net-worth individuals for our exceptional capability in debt recovery, restructuring, and cross-border enforcement. Our services include:

• Legal assessment of the debt’s enforceability and limitation status;
• Drafting and issuing formal demand letters, structured to prompt acknowledgment or settlement;
• Negotiating debt settlement agreements and moratoriums;
• Asset tracing, enforcement litigation, and post-judgment execution strategies;
• Initiating insolvency or restructuring proceedings, where appropriate;
• Recognition and enforcement of foreign judgments and arbitral awards, including UNCITRAL, New York Convention and common law mechanisms.

Our approach blends deep knowledge of Kenyan enforcement frameworks with global enforcement strategy and local precision—ensuring we deliver strategic recovery and sustainable outcomes.

Next Steps: Engage Us to Recover Dormant Debts

If you are holding a debt that may be statute-barred—or approaching limitation—do not assume that recovery is off the table. With strategic legal advice, you may have more options than you think.

To initiate a recovery process or receive tailored advice, please reach out to our Debt Recovery & Restructuring team for a confidential consultation. Let us help you turn time-lapsed claims into actionable recovery.

📧 Debt Recovery Email: drri@cmadvocates.com or cmaina@cmadvocates.com
📧 General Firm Contact: law@cmadvocates.com
📞 Phone: +254716209673
🌐 Contact Page: https://cmadvocates.com/en/contact-us

CM Advocates LLP – Your Strategic Legal Partner in Debt Recovery and Cross-Border Enforcement

 

From 501(c)(3) to PBO: A U.S. Nonprofit's Guide to Legal Setup in Kenya

For U.S.-Based Nonprofits Expanding into Kenya

Establishing Nonprofit Operations in Kenya: Legal Structuring and Compliance Guidance

Introduction

As a U.S.-registered 501(c)(3) nonprofit organisation with aspirations to expand internationally, Kenya offers a strategic and enabling jurisdiction for mission-aligned growth. The country is a major hub for international NGOs, philanthropic foundations, humanitarian initiatives, and development agencies operating across Africa.

At CM Advocates LLP, we provide a proven, structured pathway for U.S.-based nonprofits seeking to establish a compliant and operationally sound footprint in Kenya. Through our specialist Charities, Not-for-Profit Organisations & Social Enterprises Practice Group, we guide organisations through every legal, regulatory, and structural milestone required for sustainable operations.

Legal Pathways for U.S. Nonprofits in Kenya

We recommend a phased legal structuring approach that supports both rapid operationalisation and long-term compliance. Our two-stage model balances flexibility, legal clarity, and cost-efficiency while ensuring alignment with Kenyan statutory frameworks.

Stage 1: Branch Office Registration

Your 501(c)(3) organisation can initially register as a Branch Office under Part XXXVII of the Companies Act, 2015, thereby securing immediate legal presence in Kenya while preserving continuity with your U.S. governance and identity.

Advantages:

• Fast-track entry into the Kenyan market (within ~30–45 working days)

• Enables you to open local bank accounts, enter into leases, hire staff, and sign contracts

• Maintains structural and legal linkage to your U.S. incorporated entity

• Minimises restructuring while fulfilling urgent programmatic needs

Requirements include:

• Certified copy of your 501(c)(3) Certificate and Certificate of Incorporation

• Notarised Constitution or Articles of Association

• Board resolution authorising establishment of a Kenyan branch

• Full list of directors with residential addresses and passport copies

• Three preferred names for reservation

• Appointment of a local representative (we can support)

• A Kenyan registered address (we can provide one temporarily in Mombasa if needed)

All foreign documents must be properly notarised and apostilled or legalised in accordance with international conventions.

This structure ensures your nonprofit is operationally ready, while providing the necessary legal basis for further localisation and regulatory engagement.

Stage 2: Public Benefit Organisation (PBO) Registration

To fully integrate within Kenya’s nonprofit ecosystem and access the benefits of formal recognition, we guide clients through the transition to or direct registration as a Public Benefit Organisation (PBO) under the Public Benefit Organizations Act, 2013, governed by the recently published Draft PBO Regulations, 2025.

Benefits of PBO status:

• Eligibility for tax exemptions, including income tax, VAT, capital gains tax, and stamp duty

• Official registration and recognition by the Public Benefit Organizations Regulatory Authority (PBORA)

• Enhanced transparency, legal standing, and donor/public trust

• Capacity to legally receive local and international funding, grants, and donations

• Ability to engage in economic activities aligned with your charitable objectives under regulated conditions

Key legal and regulatory features include:

• One-third of the board must comprise Kenyan nationals residing in Kenya

• The organisation must fall under one or more of 29 designated public benefit sectors (such as health, education, youth development, environmental protection, humanitarian relief, or legal aid)

• Mandatory filing of annual returns and audited accounts

• Requirements for governance disclosures, material change notifications, and compliance inspections

• PBOs may generate income, provided proceeds support their public benefit purposes and meet governance criteria

Our team handles the end-to-end transition, including constitution redrafting, board restructuring, stakeholder liaison, and engagement with PBORA to secure registration and exemptions.

Supporting Legal & Regulatory Services

CM Advocates LLP offers a full suite of legal, regulatory, and operational advisory services to ensure your nonprofit is comprehensively supported and future-ready:

• Preparation and filing of tax exemption applications (Income Tax, VAT, CGT, and Stamp Duty)

• Immigration & expatriate staffing support, including work permits and special passes

• Drafting of employment contracts, volunteer agreements, and HR compliance manuals

• Real estate advisory for leasing, acquisition, or licensing of premises

• Data protection compliance under Kenya’s Data Protection Act and GDPR standards

• Trademark and copyright registration to protect your brand and program materials

• Legal support in setting up nonprofit income-generating subsidiaries or hybrid models

• Governance training for boards and officers on fiduciary responsibilities, conflict of interest, and compliance

• Representation before regulatory bodies and, where necessary, before courts or tribunals in Kenya

Our mission is to ensure your nonprofit is legally secure, operationally agile, and structurally aligned with both U.S. standards and Kenyan statutory frameworks.

Regional Coverage & Local Support

CM Advocates LLP is uniquely positioned with offices in Nairobi, Mombasa, and across the region, including Uganda, Tanzania, Rwanda, South Sudan, Zambia, and Ethiopia. We offer dedicated on-ground support through our Mombasa-based consultants, ensuring face-to-face coordination, filings, and seamless liaison with Kenyan authorities.

Whether you are initiating pilot programs, establishing a field office, or planning long-term country presence, our regional expertise ensures cross-border alignment and practical implementation.

Getting Started

We provide clearly scoped engagement terms with flexible structuring options. Whether you are ready to begin with a name reservation or would prefer a scoping consultation, we are happy to support.

Please contact us for:

• Engagement letter and registration checklist

• Estimated timelines and regulatory roadmaps

• Strategic advice on legal structuring, governance, and risk management

Contact:
Cyrus Maina
Practice Lead – Charities & Not-for-Profit Organisations
📧 cmaina@cmadvocates.com or law@cmadvocates.com 
🌍 www.cmadvocates.com

CM Advocates LLP
Nairobi | Mombasa | Kampala | Kigali | Dar es Salaam | Juba | Addis Ababa | Lusaka

Strengthening Ties: The U.S.–Kenya Bilateral Treaty and Strategic Investment Opportunities

 Strengthening Ties: The U.S.–Kenya Bilateral Treaty and Strategic Investment Opportunities

By Cyrus Maina

Executive Summary
The U.S.–Kenya bilateral relationship is rooted in a shared commitment to economic resilience, sustainable development, and enhanced private sector collaboration. Through strategic frameworks like the Trade and Investment Framework Agreement (TIFA) and the Strategic Trade and Investment Partnership (STIP), both countries are actively shaping a modern investment landscape that prioritizes innovation, inclusivity, and regulatory transparency.

Kenya’s position as a regional economic hub offers U.S. investors access to expansive markets across East and Central Africa. Backed by ongoing legal reforms, a young and skilled workforce, and a pro-business regulatory environment, Kenya presents exceptional opportunities across sectors such as renewable energy, agri-tech, ICT, healthcare, real estate, and fintech.

CM Advocates LLP, a leading full-service East African law firm, is uniquely positioned to support U.S. companies at every stage of the investment lifecycle. With deep sector-specific expertise, regional insight, and multidisciplinary legal teams, the firm offers tailored solutions to navigate complex regulatory landscapes, unlock growth opportunities, and ensure long-term operational success.

CM Advocates LLP is also a trusted advisor in dispute resolution, public-private partnerships, investment compliance, and cross-border structuring—enabling clients to mitigate risk, secure competitive advantages, and scale sustainably across the region.

Next Steps for U.S. Investors
To successfully capitalize on Kenya’s strategic opportunities, U.S. businesses should:

1. Engage Legal and Sector Experts Early: Consult advisors like CM Advocates LLP to align entry strategies with local regulations.

2. Conduct Comprehensive Due Diligence: Evaluate legal, fiscal, and sector-specific conditions to validate viability.

3. Secure Licenses and Investment Certificate: Collaborate with KenInvest and key agencies to benefit from fiscal and operational incentives.

4. Register a Suitable Entity and Mobilize Talent: Choose the optimal legal structure and initiate immigration, HR, and local staffing processes.

5. Protect Intellectual Property and Ensure Compliance: Register IP with KIPI and comply with Kenya’s employment and tax laws.

6. Launch and Scale: Implement go-to-market strategy and leverage CM Advocates LLP’s regional footprint for growth across EAC and COMESA markets.

Our Services for U.S. Companies

• Legal Structuring: Establishment of companies, branches, LLPs, and representative offices aligned with tax and governance objectives.

• Licensing & Regulatory Compliance: Navigation of approvals from EPZA, SEZA, NEMA, CBK, IRA, and other regulators.

• Immigration Strategy: End-to-end support for Class D & G work permits, dependent passes, and labor law compliance.

• Tax and IP Advisory: Strategic tax planning, treaty optimization, and IP registration through KIPI.

• Real Estate & Infrastructure: Transaction support including due diligence, leasing, joint ventures, and development advisory.

• Social Enterprise & Non-Profit Setup: Governance, registration, and compliance for NGOs, trusts, and hybrid models.

• ICT & Fintech Compliance: Data protection, cybersecurity law, digital finance, and CBK sandbox readiness.

• Cross-Border Expansion: Market entry and operational structuring across the EAC and COMESA regions.

Contact Information – CM Advocates LLP
Head Office Nairobi
I&M Bank House, 7th Floor
2nd Ngong Avenue
Nairobi, Kenya
Email: cmaina@cmadvocates.com or law@cmadvocates.com
24 Hour Support: +254 716 209 673
Website: www.cmadvocates.com
LinkedIn: CM Advocates LLP
For U.S. investor inquiries, please reference "U.S.–Kenya Investment Article" in your subject line for expedited assistance.

Smart Succession: Using Family Companies to Protect Your Wealth

 Estate Planning Made Practical: The Power of Family Companies

Effective estate planning ensures that wealth is preserved, protected, and passed on seamlessly to future generations. Among the various tools available, family-owned companies—typically structured as private limited liability companies—have emerged as a strategic solution, particularly for high-net-worth individuals and business families seeking a structured and controlled method of succession.

What Is a Family-Owned Company?

A family-owned company is a private limited company where majority ownership and control are retained within the family, often spanning multiple generations. It may hold a range of assets including real estate, investments, and business interests, which are distributed through shares held by family members.

Under Kenya’s Income Tax Act (Cap. 470), particularly in the context of tax exemptions, a “family-owned company” aligns with provisions in Paragraph 36 of the First Schedule, which exempts certain transfers of property between family members and family companies or trusts.

In practice, the Kenya Revenue Authority (KRA) treats a family company as one whose shareholding is primarily held by persons related by blood, marriage, or adoption.

Important Distinction: Unlike family companies, family trusts in Kenya are restricted from engaging in commercial or trading activities or dealing with land for investment purposes—unless expressly authorized. Section 3(1) of the Trustees (Perpetual Succession) Act (Cap. 164) provides:

“The trustees of a trust shall not, except with the written consent of the Cabinet Secretary, engage in any trade or business or deal with land for speculative purposes.

 As such, family-owned companies are the preferred estate planning vehicle where assets include active businesses, income-generating property, or land intended for resale, leasing, or development. Unlike trusts, companies can legally trade, develop property, and hold land for investment without special ministerial approval, as allowed under the Companies Act, 2015.

Benefits of Using a Family Company in Estate Planning

Centralized Asset Management

Transferring family wealth or business interests into a company centralizes asset ownership under a single legal entity. This simplifies administration and minimizes fragmentation of property among beneficiaries.

Continuity and Control

Shareholding and directorship structures can be tailored to allow the founder to retain control during their lifetime, while facilitating a smooth succession through share transfers to family members.

Avoidance of Probate

Assets held under the company are not subject to probate if shares are pre-distributed or held in trust. This reduces delays and disputes during estate administration.

Flexibility and Customization

A well-drafted shareholder agreement can define governance structures, voting rights, dividend policies, and dispute resolution mechanisms to maintain harmony and clarity within the family.

Potential Tax Efficiency

Certain transfers involving family-owned companies may qualify for tax exemptions under Kenyan law:

• Stamp Duty Exemption: Section 117 of the Stamp Duty Act (Cap. 480) allows for exemption of stamp duty on transfers between related parties or into a family company/trust, subject to approval by the Cabinet Secretary for the National Treasury.

• Capital Gains Tax Exemption: Paragraph 36 of the First Schedule to the Income Tax Act exempts transfers between spouses, between former spouses (in divorce settlements), and transfers to immediate family or family trusts.

It is essential to apply for and obtain formal exemption certificates from the relevant authorities to benefit from these reliefs.

Key Considerations and Pitfalls

Exclusion of Certain Personal Assets

Some assets—such as personal bank accounts, household items, insurance policies, and annuities—typically fall outside the company’s structure and require separate estate planning tools.

Governance Challenges

Operational decisions (e.g., property use, dividend distribution) require board or shareholder approval. If structures are unclear, disputes may arise over control and expectations.

Shareholding Structure

How shares are distributed has significant implications:

• Shares may be held by beneficiaries, with the founder remaining a director.

• A dual-class structure may be adopted: voting (control) shares for the founder and non-voting shares for other family members.

• Shares may also be held by a family trust, which holds them for the benefit of named beneficiaries. This enhances asset protection, succession planning, and long-term control.

✅ Trust Ownership of Shares: Holding company shares through a family trust ensures succession is managed by trustees—avoiding legal transfer issues, probate, or intestacy—and facilitates structured dividend and voting rights distribution.

Integration with Wills, Trusts and Other Tools

A family company should complement—not replace—traditional estate planning instruments such as wills and trusts.

• A will can direct the disposition of shares to heirs.

• Alternatively, shares can be transferred to a family trust, enabling trustees to manage them on behalf of beneficiaries, including minors or future generations.

The trust deed must clearly define:

• Beneficiary rights and entitlements;

• Trustee powers over company shares;

• Governance roles.

If third parties (e.g., professional investors, in-laws, or partners) also hold shares, a shareholders’ agreement is essential to define:

• Rights and obligations of the trust;

• Voting and veto powers;

• Dividend and transfer policies;

• Exit mechanisms and dispute resolution procedures.

📄 Why a Shareholders’ Agreement Matters: When a family trust co-owns a company with non-family shareholders, a robust agreement ensures the family’s interests are protected and succession goals are preserved, even if trustee decisions diverge from those of family members.

Compliance and Ongoing Management

The company must comply with corporate governance obligations, file annual returns, and maintain accurate records.

The Companies Act, 2015 allows shareholders to define:

• Share transfer mechanisms;

• Successor director appointments;

• Dispute resolution processes.

These can be set out in the shareholders' agreement or the company's constitution.

Conclusion: A Powerful Yet Complementary Tool

A private family company is a powerful estate planning instrument when structured properly and used alongside other tools such as wills, trusts, and powers of attorney. It is particularly effective where the estate includes active businesses, real estate investments, or trading operations.

• A family company is especially ideal for land intended for speculative investment, resale, or development, given the restrictions on trust dealings with land under the Trustees (Perpetual Succession) Act.
•  Shares in such a company can be wholly or partially held through a family trust, offering enhanced protection, flexibility, and continuity. If third-party shareholders are involved, a comprehensive shareholders’ agreement is crucial to safeguard family influence and define trust participation.

Note: Professional legal and tax advice is essential. Improper structuring may lead to unintended consequences, negating the benefits of the estate plan.

Need Help Planning Your Estate or Structuring Your Wealth?

Whether you are a high-net-worth individual, a Kenyan in the diaspora, a foreign entrepreneur, or a diplomat planning retirement in Kenya, proper estate and succession planning is critical to protect your legacy across generations and borders.

CM Advocates LLP offers discreet, strategic, and comprehensive legal solutions through our Private Wealth, Family Law, Family Business & Global Mobility Practice.

We support clients in:

• Registering and structuring family trusts for intergenerational wealth;

• Forming family-owned companies with succession-ready frameworks;

• Structuring wealth for privacy, protection, and tax efficiency;

• Planning for retirement in Kenya (property ownership, residency permits);

• Managing cross-border estates (including for dual citizens and foreign nationals);

• Drafting/updating wills, family constitutions, and shareholder agreements;

• Navigating family law issues (prenups, matrimonial property, separation);

• Establishing philanthropic structures like private foundations and endowments.

Whether your assets span multiple jurisdictions or you are planning a Kenya-based estate, our team blends deep local knowledge with global best practices—so you can structure for the future with confidence.

📧 For personalized legal advice, contact us today:
cmaina@cmadvocates.com or privatewealthlawyers@cmadvocates.com

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Land Title Revocations Must Go Through Court, High Court Affirms

Only Courts Can Revoke or Cancel Title Deeds in Kenya – Legal Update and Strategic Implications

Date: 24 June 2025
From: CM Advocates LLP – Real Estate, Banking & Finance Practice Group

Legal Position Reaffirmed: Title Revocation is a Judicial Function

In the recent decision of Republic v Land Registrar Murang’a & Another; Kamonye (Exparte Applicant) (Judicial Review E001 of 2023) [2024] KEELC 4892 (KLR) (19 June 2024), the High Court firmly reiterated that the power to cancel a certificate of title is exclusively vested in the courts. The ruling invalidated actions by the Land Registrar to unilaterally revoke a title, declaring them ultra vires and unconstitutional.

This landmark judgment adds to a growing body of jurisprudence safeguarding landowners from administrative overreach and reinforces the principle that title revocation must follow due process through judicial proceedings. The ruling has far-reaching implications for landowners, developers, and investors navigating Kenya’s real estate landscape.

 Section 80 of the Land Registration Act – The Legal Foundation

Section 80 of the Land Registration Act, Cap. 300, forms the statutory backbone for judicial control over title rectification:

“80. Rectification by order of Court

(1) Subject to subsection (2), the court may order the rectification of the register by directing that any registration be cancelled or amended if it is satisfied that any registration (other than a first registration) was obtained, made or omitted by fraud or mistake.

(2) The register shall not be rectified to affect the title of a proprietor, unless the proprietor had knowledge of the omission, fraud or mistake or substantially contributed to it by any act, neglect or default.

(3) Where the court has ordered any rectification of the register, it shall direct the Registrar to give effect to the order.”
— Land Registration Act, No. 3 of 2012

Powers of the Land Registrar: Rectification vs. Revocation

While the Land Registrar plays an essential role in land administration, their powers are limited to rectification—not revocation—of titles. The distinction is crucial:

What the Registrar Can Do (Section 79 LRA):

• Rectify the register to correct errors or update particulars that:

  • Do not materially affect the rights or interests of a proprietor;

  • Are necessary to give effect to court judgments;

  • Address clerical mistakes or omissions made during registration.

Examples include:

• Typographical corrections in names or parcel numbers;

• Updating property boundaries in line with surveyed data;

• Reflecting change of user or amalgamations already approved.

❌ What the Registrar Cannot Do:

• Cancel a title on grounds of fraud, illegality, or unlawful allocation;

• Declare a title null and void;

• Act unilaterally to remove a registered proprietor without a court order.

Such actions constitute revocation, which falls solely within the jurisdiction of the High Court under Section 80 of the Land Registration Act. Any attempt by the Registrar to revoke a title without judicial authority is unlawful and susceptible to judicial review.

How CM Advocates LLP Protects and Enhances Your Property Rights

At CM Advocates LLP, our Real Estate, Banking and Finance Department is widely recognized as a market leader in defending, structuring, and unlocking value in proprietary interests across Kenya and the region. We combine sectoral depth, technical excellence, and a client-first approach to deliver both preventative and responsive legal solutions for our clients.

As outlined in our [Real Estate Banking & Finance Group Profile], we serve a diverse and sophisticated clientele—ranging from high-net-worth individuals and diaspora investors to large-scale developers, institutional landowners, and international financiers. Our client relationships are built on trust, discretion, and consistent delivery of commercially astute legal services.

We offer a comprehensive suite of advisory, transactional, and litigation support services, including:

• Judicial review and injunctive relief applications to protect clients from unlawful administrative action, including title revocations, adverse listings, or arbitrary cancellations;

• Title rectification, reconstruction, and conversion support, ensuring full compliance with statutory frameworks while preserving valid land rights;

• Compliance advisory with land laws, including the Sectional Properties Act, Ardhisasa registration system, and Ministry of Lands digitization protocols;

• Strategic representation in matters involving the National Land Commission (NLC)—whether before inquiries, tribunals, or judicial forums;

• Real estate development and joint venture advisory, including due diligence, JV structuring, shareholder agreements, project permitting, and compliance;

• Real estate joint venture transactions, including co-development frameworks between landowners and developers, exit planning, and registration of interests;

• Structuring of ownership vehicles, such as Special Purpose Vehicles (SPVs), family-owned companies, family investment companies, and trusts, for optimal tax efficiency, asset protection, and estate continuity;

• Conveyancing transactions, covering the sale, purchase, and conversion of titles across residential, commercial, and agricultural property classes;

• Negotiation and perfection of commercial leases, including retail, industrial, hospitality, and mixed-use arrangements, with attention to tenant protections, compliance, and enforcement;

• Wealth structuring and estate planning, including wills, inter vivos transfers, and legal instruments for generational estate management;

• Strategic tax advisory on Capital Gains Tax (CGT), stamp duty, VAT implications on property, and cross-border tax planning for foreign or dual-resident clients.

Backed by a multidisciplinary team, local insight, and deep regulatory experience, we empower our clients to secure, optimize, and grow their real estate assets while mitigating risk and preserving legacy.

Take Action Today

We urge clients to remain vigilant and legally proactive. Let us help you:

• Review and respond to any adverse land registry actions;

• Protect your title through legal injunctions or court declarations;

• Structure secure land ownership models for future transactions.

📞 Contact us:
Email: cmaina@cmadvocates.com or RBF@cmadvocates.com
Phone: +254 716 209 673
Website: www.cmadvocates.com

 

Understanding the Matrimonial Property Act: What Every Spouse Should Know

Introduction

Navigating the end of a marriage can be emotionally challenging and legally complex. One of the most critical aspects for spouses undergoing separation or divorce in Kenya is understanding their rights and obligations under the Matrimonial Property Act, 2013. This legislation governs the ownership and division of property acquired during the marriage and aims to ensure equitable distribution between spouses.

At CM Advocates LLP, we empower clients with knowledge and legal insight to make informed decisions when navigating matrimonial property disputes. This guide outlines the key provisions of the Act, recent judicial interpretations, and practical considerations for spouses in Kenya and beyond.

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What is Matrimonial Property?

The Act defines matrimonial property as any asset acquired during the marriage, including:

• The matrimonial home(s)

• Household goods and effects

• Property jointly owned and acquired during the marriage

• Property separately acquired but used and improved by both spouses

It also includes assets acquired before the marriage but improved substantially during the union.

Blended families may also introduce complexities in property classification, particularly where stepchildren, prior marital obligations, or multiple homes are involved. Clarity in asset ownership and planning is essential.

Ownership Principles under the Act

Section 6 & 7: Contribution-Based Ownership

The law emphasizes that property is owned based on the contribution of each spouse. Section 7 provides that ownership is dependent on contribution and property shall be divided equitably—not necessarily equally—upon divorce.

Types of Contribution

Contribution is broadly defined and includes both monetary and non-monetary contributions, such as:

• Domestic work and management of the home

• Child care

• Companionship and emotional support

• Farm work or involvement in a family business

In blended family arrangements, emotional and caregiving contributions made by a stepparent or support for children from previous relationships may also factor into the equitable distribution of assets.

Judicial Interpretation and Key Case Law

Kenyan courts have provided critical guidance on how matrimonial property should be divided:

• Echaria v Echaria [2007] eKLR: Established that non-financial contribution alone is insufficient unless clearly proven.

• P K M v N N M [2017] eKLR: Reiterated that division should be equitable, not equal.

• T M v R K [2020] eKLR: Confirmed that indirect contributions such as moral and emotional support are valid considerations in property division.

These cases reflect the courts' approach to promoting fairness by recognizing the totality of a spouse’s efforts.

Separate vs. Joint Ownership

• Joint Property: Acquired and registered in both names, typically shared unless one proves sole contribution.

• Separate Property: Registered in one spouse's name; however, the other can claim a beneficial interest if contributions (financial or non-financial) are proven.

For blended families, ensuring clarity in separate vs. joint property ownership is especially important to avoid confusion or unintended claims between spouses and stepchildren.

Safeguarding Interests: Legal Tips for Spouses

1. Keep Records: Document all financial and non-financial contributions.

2. Consider a Pre- or Post-Nuptial Agreement: These are legally recognized in Kenya and can clarify property rights upfront.

3. Engage in Estate and Asset Planning: Especially where family businesses or trust-held assets are involved.

4. Seek Legal Advice Early: Before, during, and after marriage, particularly when acquiring high-value or cross-border assets.

5. Utilize Family Trusts for Protection: Setting up a properly structured family trust can shield individual or family assets from potential division in the event of a divorce. When correctly established, trusts can ensure that wealth intended for children, future generations, or specific family members remains protected and insulated from matrimonial claims.

6. Plan for Blended Family Dynamics: Draft estate plans and settlement agreements that account for children from previous marriages, shared parenting responsibilities, and any inherited or pre-marital property that must be preserved across family branches.

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Role of Mediation and Settlement

Rather than resorting to prolonged litigation, parties can opt for mediation to settle disputes. Court Annexed Mediation (CAM) has proven effective and confidential, with rising success rates in Kenya. Settlement agreements backed by expert legal advice can prevent property disputes and ensure enforceable terms.

How CM Advocates LLP Can Help

As a leading law firm specializing in Family Law and Private Wealth, we provide:

• Advisory on ownership rights and contribution

• Structuring of prenuptial and postnuptial agreements

• Representation in matrimonial property disputes and negotiations

• Integration of property planning with trusts, succession, and family business frameworks

• Cross-border asset tracing and multi-jurisdictional family law advisory

• Establishment and governance of family trusts to protect high-value and legacy assets

• Guidance on estate planning and property protection strategies tailored for blended families

Conclusion

Understanding the Matrimonial Property Act is crucial for safeguarding your financial interests in marriage and beyond. Whether you're entering marriage, considering divorce, or restructuring family assets, CM Advocates LLP offers expert guidance tailored to your unique situation.

For confidential family law support or legal consultation, contact us today.

📧 Email:  Email: cmaina@cmadvocates.com
🌐 Website: www.cmadvocates.com