BEYOND THE BELT AND ROAD

A Business Guide by Mukamba & Company Advocates, Nairobi

During President Ruto’s April 2025 state visit to Beijing, seven Chinese companies signed investment commitments worth roughly KES 126 billion, about USD 920 million, spanning manufacturing, steel, and construction materials, building on more than USD 12 billion in Belt and Road-financed infrastructure already delivered in Kenya, including the Standard Gauge Railway and the Nairobi Expressway.

That is the headline version of China-Kenya economic relations: state-to-state deals, mega-infrastructure, government ribbon-cuttings.

Underneath that headline is a quieter, more durable story: individual Chinese manufacturers, having built or supplied Belt and Road projects, now incorporating their own Kenyan companies to own factories, land leases, and equipment directly, rather than operating purely as contractors on someone else’s infrastructure project.

Rongtai Steel’s expansion in Machakos County, part of the April 2025 commitments, is a live example of exactly this pattern: a Chinese manufacturer with a genuine, asset-owning Kenyan operating company, not just a construction contract.

Why Ownership, Not Just Contracting

A Chinese firm that only ever holds Kenyan construction or supply contracts remains, legally and commercially, an outsider to the assets it builds.

A Chinese manufacturer that incorporates a Kenyan company and has that company own the factory land lease, the plant, and the equipment holds something fundamentally different: a Kenyan legal person with its own balance sheet, its own bankable assets, and its own standing before Kenyan courts, regulators, and counterparties.

This distinction matters increasingly as Chinese manufacturers move from purely BRI-linked infrastructure work toward direct manufacturing investment aimed at Kenya’s own affordable-housing and infrastructure demand, precisely the shift Rongtai Steel’s Lukenya expansion represents.

The Legal Position on Land, Specifically

This is where a Chinese manufacturer’s Kenyan structure needs particular care. Article 65 of the Constitution of Kenya, 2010 prohibits non-citizens from owning freehold land, Kenya’s highest and indefinite form of land title.

Foreign nationals and foreign-owned companies may only hold land on leasehold tenure, capped at a maximum of 99 years.

Critically, this restriction applies to the company, not just the individual: a Kenyan-incorporated company with any foreign shareholding at all is treated as a foreign company for land ownership purposes, limited to leasehold interests, while a company that is wholly Kenyan-owned may hold freehold land on the same terms as a Kenyan citizen.

For agricultural land specifically, the restriction is tighter still: foreign ownership of agricultural land is heavily restricted, generally requiring special approval from the Cabinet Secretary responsible for lands or the relevant Land Control Board, regardless of the leasehold cap.

What This Means for a Manufacturing Structure

The Legal Position on Incorporation

The underlying company registration process is unaffected by the land ownership rules. Kenyan company registration is governed by the Companies Act, No. 17 of 2015, administered by the Business Registration Service through the eCitizen platform.

A Chinese national or Chinese-incorporated company may hold up to 100% of a Kenyan private limited company’s shareholding, with only one director and one shareholder required, and no minimum paid-up capital before incorporation.

Common Mistakes

A Practical Example

A Chinese steel manufacturer expanding its Kenyan operations, similar to the Rongtai Steel investment announced in April 2025, incorporates a wholly Chinese-owned Kenyan subsidiary to hold a 99-year leasehold interest in industrial land in Machakos County, construct its plant, and hold the manufacturing equipment directly in the Kenyan entity’s name.

The structure gives Kenyan banks, suppliers, and off-takers a genuine local counterparty with real, bankable assets, while the leasehold structure complies fully with Article 65’s constitutional restriction on foreign freehold ownership.

Frequently Asked Questions

Can a wholly Chinese-owned company ever hold freehold land in Kenya?

No. Any company with foreign shareholding, wholly or partially, is treated as a foreign company for land purposes and limited to leasehold tenure under Article 65 of the Constitution.

Is 99 years a meaningful enough term for a manufacturing investment?

For most industrial and manufacturing purposes, yes, though the fixed horizon should be factored into long-term financing and asset planning rather than treated as equivalent to indefinite ownership.

Does BRI-related contracting experience simplify the process of incorporating a Kenyan subsidiary?

Not legally, the incorporation and land acquisition process is the same for any foreign investor regardless of prior contracting history, though established relationships with Kenyan counterparties can be commercially useful.

Why Work With Mukamba & Company Advocates

We advise Chinese manufacturers on structuring Kenyan entities correctly around the leasehold restrictions, from incorporation through land lease due diligence and, where relevant, Land Control Board approvals for agricultural or agro-industrial sites, so the investment holds real, bankable assets rather than existing purely as a contracting relationship.

Final Thoughts

Belt and Road built the roads and the railway. What comes after is a different kind of investment: Chinese manufacturers owning their own Kenyan factories, land leases, and equipment directly.

Getting the leasehold structure right from the outset is what turns a construction relationship into a genuine, asset-owning Kenyan business.

The information in this article is for general information purposes only and does not constitute legal advice for any individual case. It does not create an attorney-client relationship. For advice specific to your situation, contact Mukamba & Company Advocates directly.