Nominee Director Kenya: What It Is, Legal Requirements, and How to Appoint One

A nominee director can provide the local presence foreign investors need while maintaining operational control. This guide explains how nominee directorship works in Kenya, the legal framework, and how to protect your interests.

What is a Nominee Director in Kenya?

A nominee director (sometimes called a local director or resident director) is a person appointed to the board of a Kenyan company to satisfy legal or practical requirements. The nominee holds the legal position of director but acts according to the instructions of the beneficial owner or foreign parent company.

Nominee directors are commonly used when:

• Foreign investors need local representation for banking or compliance
• A company requires a director with a Kenyan KRA PIN
• Practical day-to-day management needs local presence
• Investors want to maintain privacy around their involvement

Is a Resident Director Legally Required?

Kenyan company law does not strictly mandate that all companies must have a Kenyan resident director. The Companies Act 2015 requires only that a private company have at least one director, with no specific residency requirement.

However, practical challenges often make a local director necessary:

Banking Requirements

Most Kenyan banks require at least one company director to:

• Be physically present for account opening
• Have a Kenyan KRA PIN
• Be available for KYC verification
• Act as a signatory on the account

For 100% foreign-owned companies without a local director, opening a corporate bank account can be extremely difficult or impossible.

Tax and Compliance Matters

A local director simplifies ongoing interactions with:

• Kenya Revenue Authority (KRA)
• County government licensing
• Regulatory bodies
• Company registry filings

Work Permit Considerations

For foreign directors without Kenyan work permits, having a local director provides continuity of management during permit processing.

Nominee Director vs. Beneficial Owner: Legal Distinctions

Understanding the distinction is critical:

Aspect	Nominee Director	Beneficial Owner
Legal status	Registered director	May not be a director
Public record	Name appears on CR12	Declared to Registrar separately
Control	Exercises delegated authority	Ultimate control and ownership
Liability	Jointly liable with other directors	Limited to shareholding
Fiduciary duty	To the company	As shareholder

Risk and Liability for Nominee Directors

This is a critical consideration. Under Kenyan law, nominee directors have the same legal responsibilities and liabilities as any other director.

Directors' Duties

The Companies Act 2015 imposes statutory duties on directors, including:

• Acting within powers
• Promoting the success of the company
• Exercising independent judgment
• Exercising reasonable care, skill, and diligence
• Avoiding conflicts of interest
• Not accepting benefits from third parties
• Declaring interest in proposed transactions

Personal Liability Risks

Directors can be personally liable for:

• Breach of fiduciary duties
• Fraudulent or wrongful trading
• Tax evasion or non-compliance
• Environmental damage
• Health and safety violations
• Employment law breaches

What Protections Should Be in a Nominee Agreement

A comprehensive nominee agreement should include:

1. Pre-dated Resignation Letter

The nominee should provide an undated resignation letter that can be executed immediately if the beneficial owner wishes to remove them. This prevents the nominee from refusing to resign.

2. Power of Attorney

A limited power of attorney allows the beneficial owner to execute documents and act on the company's behalf when the nominee is not available.

3. Indemnity

The beneficial owner should indemnify the nominee against liabilities arising from their role, except for fraud or willful misconduct.

4. Instructions and Restrictions

Clear documentation that the nominee must act only on written instructions from the beneficial owner for major decisions.

5. Confidentiality

Provisions preventing the nominee from disclosing the arrangement or company information.

6. Fee Structure

Clear terms on compensation for the nominee's services.

Beneficial Ownership Disclosure Requirements

The Companies Act 2015 (as amended by the Companies (Beneficial Ownership Information) Regulations 2020) requires all companies to maintain a register of beneficial owners.

Who is a Beneficial Owner?

A beneficial owner is any natural person who:

• Ultimately owns or controls 10% or more of the company's shares
• Exercises control over the company's management
• Has the right to appoint or remove directors

Disclosure Requirements

Companies must:

• Maintain a register of beneficial owners
• File beneficial ownership information with the Registrar of Companies
• Update within 14 days of any changes
• Make the register available for inspection

Important: The nominee director arrangement does not exempt you from beneficial ownership disclosure. The true owners must still be declared to the Registrar.

Due Diligence in Selecting a Nominee Director

Choose your nominee carefully. Consider:

• Professional standing: Is the nominee a qualified professional with reputation to protect?
• Experience: Do they understand the responsibilities of directorship?
• Availability: Will they be accessible when needed for signatures or meetings?
• Conflicts: Do they have any conflicts of interest with your business?
• References: Can they provide references from other companies they have served?
• Indemnity coverage: Do they have professional indemnity insurance?

BaseKenya Local Directorship Service

BaseKenya provides professional nominee director services for foreign investors:

What We Offer:

• Qualified, experienced nominee directors
• Comprehensive nominee agreements with all protections
• Pre-dated resignation letters
• Appropriate powers of attorney
• Indemnity arrangements
• Bank account opening support
• KRA compliance assistance

Pricing:

From $99 per month

This fee covers the professional services of the nominee director, including attendance at necessary meetings and execution of required documents.

Our Commitments:

• We act only on your written instructions
• We maintain strict confidentiality
• We provide immediate resignation upon request
• We ensure full compliance with disclosure requirements
• We maintain appropriate insurance coverage

The Appointment Process

Appointing a BaseKenya nominee director typically involves:

1. Consultation: We understand your specific requirements
2. Documentation: We prepare the nominee agreement and related documents
3. Due diligence: We conduct appropriate KYC on beneficial owners
4. Appointment: We file the necessary forms with the Registrar of Companies
5. Banking: We support the corporate bank account opening process
6. Ongoing: We remain available for required director actions

Frequently Asked Questions

Can the nominee steal my company?

A properly structured nominee agreement with pre-dated resignation letter and powers of attorney makes this extremely difficult. Choose a reputable professional nominee to minimize this risk.

Will the nominee interfere in my business?

A professional nominee should not interfere. The nominee agreement should specify that the nominee acts only on your instructions for major decisions.

Can I remove the nominee at any time?

Yes, with a properly structured agreement. The pre-dated resignation letter allows immediate removal if necessary.

Does using a nominee affect my ownership percentage?

No. The nominee director holds no shares (unless specifically arranged otherwise). Your ownership remains unchanged.

Is nominee directorship legal?

Yes, provided all beneficial ownership is properly disclosed to the Registrar as required by law.

Considering a nominee director for your Kenyan company? Contact BaseKenya to discuss our local directorship services.