INVESTING IN LAND IN KENYA AS A FOREIGNER
The Land Registration Act (LRA), Act no. 3 of 2012 and the Lands Act (Act no. 6 of 2012) in the constitution of Kenya comprise of provisions of law that regulate landholding by non-citizens.
Under the provision of these laws, non-citizens can’t possess property under the freehold tenure. Non-citizens can only posses land under a leasehold tenure, that’s for a period of 99 years.
The Kenyan constitution provides that in the event that a non-citizen holds a title that claims to grant him/her an interest in land that is greater than a lease of 99 years then the government shall regard the provision granted to that person a 99 year leasehold interest and not more than that.
What happens when a 99 year lease expires?
In the constitution of Kenya section 3 of the Land Registration Act, it is stated that a non-citizen cannot be granted a further extension after the expiry of the 99 year term. The aggregate number of years that may be granted cannot exceed 99 years. This is in line with the Constitutional provision that restricts the maximum tenure on land that should be granted to foreigners to a term not exceeding 99 years.
After a leasehold title expires, the Land commission shall revert the land back to the immediate past leasehold owner thus pre-emptive rights be allocated provided that the said lessee is a Kenyan citizen and that the land is not required by the national or county government for public use. Otherwise, If the land is required for public purposes then the national government, or county government, as the case may be, and thereafter, may possess the land and it would be offered to the general public by way of a competitive process.
Companies & Corporate Entities
The constitution is clear as day in its provision that a body corporate shall be regarded only if it’s wholly owned by one or more Kenyan citizens. A couple of non-citizens have made attempts in forming companies in order to be able to hold freehold property in Kenya.
For a company to own freehold property, the company must be fully owned by one or more Kenyan citizens.
Ownership of Freehold property through a Trust
A trust is an arrangement where the owner of property transfers it to the ownership of another person, on condition that the trustee uses the property only for the benefit of others -the beneficiaries.
The constitution prevents a non-citizen from owning freehold property under a trust and provides that any property held in trust shall be regarded as being held by a Kenyan citizen only if all the beneficial interests of the trust are held by people who are citizens.
In the constitution of Kenya under the Land Control Act, The Land Control Board will not consent to any transfer of Land that is Agricultural to a non-citizen.
However, the Act provides that a non-citizen can only own land if it’s an initial grant from the government. This is also possible in the event where the non-citizen has obtained a presidential exemption to acquire the agricultural land.
The greatest exemption is that a public company can own agricultural land even if some of its shareholders are foreigners. On the contrary, in order for a private company to own agricultural land, all of the shareholders must be Kenyan citizens.
Land investments for commercial purposes
It is allowed for non-citizens to invest in Land for the purposes of income generation as well as making revenue.
It is important to note that non-citizens can only invest in property for commercial purposes and not for the purpose of generating personal income.
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