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August 25, 2022

Kenya exempts foreign investors from obtaining KRA PIN under certain circumstances

  • The First Schedule to the Tax Procedures Act (TPA) requires a person to provide a Kenya Revenue Authority (KRA) Personal identification Number (PIN) for specified transactions and activities which include opening accounts with financial institutions and investment banks.

  • The TPA, however, also empowers the KRA to exempt any person from the requirement for PIN registration on any transaction listed in the First schedule to the TPA under certain circumstances.

  • Foreign investors including fund managers who seek to make passive investments in Kenya should evaluate if they qualify for exemption from PIN registration to avoid unnecessary administrative and compliance costs.

Executive summary

The First Schedule to the TPA provides a schedule of transactions and activities for which a KRA PIN is required beforehand. Under the schedule, a KRA PIN is required when opening an account with any financial institution or an investment bank in Kenya.

However, section 12 (5A) of the TPA provides that the KRA may, upon receipt of an application made by or on behalf of any person or class of persons, exempt such person or class of persons from the requirement for a PIN for any of the transactions specified in the First Schedule to the TPA.

In our experience, the grounds for exemption include but are not limited to the following:

  • If the foreign investor does not have a Permanent Establishment (PE) in Kenya

  • The income generated from Kenya is mainly passive, i.e., dividends and interest income

Where the foreign investor satisfies the KRA that their activities qualify for exemption, they are granted a private ruling which they can provide to banks or other financial institutions to open a bank or investment account in Kenya without being required to provide a KRA PIN certificate.

Detailed discussion


The introduction of a mandatory requirement to provide a KRA PIN when opening a bank or investment account in Kenya presented an administrative challenge to foreign investors who sought to participate in the local capital market. This is because while the law provides for the possibility of a foreign investor appointing a tax representative to account for their taxes in Kenya, the risk associated with being a tax representative discourages many prospective tax agents from taking such a role.

It then follows that the foreign investors had to register a company or a branch in Kenya to be able to obtain a KRA PIN. The administrative and compliance costs of operating a company or a branch discouraged investors from participating in the local capital market.

The law was thus amended to provide the opportunity of being granted an exemption which eliminates the administrative and compliance burden and, in a bid, to encourage foreign investors to participate in the local capital market.

Some of the foreign investors who should explore exemption include nonresident persons who are engaged in the following activities:

  • Buying and selling government bonds

  • Buying and selling corporate bonds

  • Trading in other investment securities listed at the Nairobi Securities Exchange (NSE)

Based on our experience, some of the foreign investors who are likely to receive this exemption include the following persons:

  • Fund managers

  • Investment banks

  • Banks

  • Insurance companies

  • Family offices

  • Other financial sector players


For additional information with respect to this Alert, please contact the following:

Ernst & Young (Kenya), Nairobi

Ernst & Young Société d’Avocats, Pan African Tax – Transfer Pricing Desk, Paris

Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London

Ernst & Young LLP (United States), Pan African Tax Desk, New York


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