For years, many investors have bought and sold Kenyan businesses without ever touching a Kenyan share register.
The deals were papered in London, Dubai or Mauritius.
The value was in Kenya.
The tax position was…murky.
Finance Bill 2026 is designed to change that.
What is an “indirect transfer”?
Instead of selling shares in a Kenyan company, an investor sells shares in an offshore company that holds the Kenyan business.
On paper, the transaction happens abroad.
In reality, what is being sold is Kenyan value.
Until now, Kenya’s tax law has not always clearly captured these exits, especially for complex PE, VC and sector structures.
What is the Bill trying to do?
The Bill proposes to:
• Treat gains made by nonresidents on offshore shares that “derive their value” from Kenyan assets or operations as taxable in Kenya.
• Apply a 15% capital gains tax rate to those gains.
• Look through common offshore holding structures used to own Kenyan subsidiaries.
In plain language: if the business you are selling is really Kenyan, Kenya wants a slice of the upside when you cash out.
Why does this matter for investors and founders?
• Offshore exits involving Kenyanfocused groups are more likely to face Kenyan tax, even if no Kenyan shares change hands.
• PE, VC and corporate deal teams will need to price in potential Kenyan CGT at term sheet stage, not as an afterthought.
• Structures set up mainly to keep exits “outside” Kenya’s tax net will offer less comfort; substance and value will matter more than where the holding company is incorporated.
Done well, clearer rules can also reduce surprises by replacing ad hoc disputes with more predictable outcomes.
If you are an investor, founder or board member with a Kenyan story and an offshore structure, are you rethinking your exit planning in light of these proposals?