The Ministry of Investment, Trade and Industry has published the draft Business Laws (Amendment) Bill, 2025 (the “ draft Bill”) proposing to amend multiple statutes, including the Companies Act. 2015 (Cap.486, Laws of Kenya) (“Companies Act”). Notably, it proposes to amend section 974 of the Companies Act, which determines the registration requirements for foreign companies operating in Kenya.
What Section 974 of the Companies Act Currently Provides
Currently, section 974 of the Companies Act generally requires a foreign company to be registered before carrying on business in Kenya. It sets the threshold for when activities amount to “carrying on business” as including but not limited to offering debentures in Kenya or being a guarantor for debentures offered in Kenya.
Key Changes Proposed by the Draft Bill
- Legal standing preserved despite non-registration: the draft Bill proposes a new proviso to section 974 (1) clarifying that a foreign company is not precluded from suing, being sued, enforcing rights or incurring obligations in Kenya under written law by reason only of non-registration.
- New test for “carrying on business in Kenya”: the draft Bill proposes to replace section 974 (2) with a non-exhaustive list of activities that would constitute carrying on business in Kenya. These activities include:
- being a party to an employment contract in Kenya;
- holding of shareholder or board meetings or conducting internal affairs of the foreign company in Kenya;
- establishing or maintaining an office/agency in Kenya for the transfer, exchange or registration of the securities of the foreign company;
- lending money or providing any credit facilities to a person in Kenya;
- creating, or acquiring any, debts within Kenya or any mortgage or security interests in any property within Kenya, credit facility, charge or security from a person in Kenya;
- securing or collecting any debt or enforcing any mortgage or security interests within Kenya;
- acquiring an interest in property in Kenya;
- providing fintech services to a Kenyan resident/institution via a payment network domiciled outside Kenya;
- entering into a commercial agreement with a licensed Kenyan entity for provision of fintech, payment infrastructure, or data processing services;
- conducting marketing, promotional or brand awareness activities through a digital platform accessible in Kenya where there is no physical presence or direct sales operations established in Kenya;
- conducting digital marketing, promotional or brand awareness activities in Kenya without a local presence; or
- using Kenyan-based third-party service providers for support functions without a local presence.
What This Means in Practice
The proposed amendments would broaden and clarify the registration requirements for foreign entities particularly, digital platforms, fintechs and payment processors and other service providers. At the same time, codifying the legal standing for unregistered entities will reduce litigation risk where capacity to sue or enforce rights might otherwise be questioned in line with the High Court’s ruling in Bruton Gold Trading LLC v Amadi (t/a Amadi Associates Advocates) & 6 others [2025] KEHC 12657 (KLR)
Status of the Draft Bill
The draft Bill is still under consideration by the Cabinet Secretary awaiting final inputs and eventual approval for Gazettement and presentation to parliament.
For more information on the proposed changes, their implications and for updates on the draft Bill, get in touch with the ENS team below:
Mahesh Acharya, Partner | Kenya
Duane Wekesa, Associate | Kenya
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Read the original publication at ENS
