MUKAMBA & COMPANY ADVOCATES

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Two very different tools, solving two very different problems — and one restriction that applies to both

31 August 2026 | By Eugene Mukamba, Advocate

Foreign investors weighing how to hold Kenyan property tend to assume the choice between a trust and a company is about tax, or prestige, or what their lawyer back home is used to.

It is usually none of those — it is about what you actually intend to do with the property.

The Restriction That Applies to Both, Equally

Neither structure lets you escape Article 65 of the Constitution. A company is treated as a Kenyan citizen, capable of holding freehold land, only if it is wholly owned by Kenyan citizens — a single foreign shareholder is enough to make it a non-citizen company for land purposes.

A trust is treated the same way: only where the entire beneficial interest is held by citizens does it escape the leasehold ceiling.

A foreign-owned company and a foreign-benefiting trust both sit under the same 99-year leasehold cap. Neither is a shortcut around the other.

Where a Company Is Clearly the Better Tool

• You intend to actively operate a business on the property — hospitality, manufacturing, agriculture for commercial sale — rather than simply hold it.
• You have multiple investors and want the limited liability protection and clear share-transfer mechanics the Companies Act, 2015 provides.
• You expect to raise further investment, bring in partners, or eventually sell the operating business rather than the underlying land itself.
• You need the property to generate active trading income — a registered family trust structure is explicitly not meant to be used for trading.

Where a Trust Is Clearly the Better Tool

• The property is being held for the long-term benefit of a family, not for active commercial trading.
• Your priority is a clean succession plan — avoiding your leasehold interest getting caught in cross-border probate on death.
• You want governance and decision-making rules for multiple family beneficiaries that a company’s shareholder structure is not designed to express as flexibly.

The Combination That Often Works Best

For foreign investors running an active business on Kenyan land, the practical structure is often a Kenyan-registered company that holds the leasehold interest and operates the business, with its shares ultimately held by a trust for succession purposes.

That combination lets each tool do the job it is actually built for — the company for operations and liability, the trust for continuity — without asking either one to do something Kenyan law does not permit it to do.