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
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