Why Foreigners in Kenya Should Consider Setting Up a Family Trust

by | Jun 29, 2025 | African Legal News

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