KENYA Trends and Developments Contributed by: Sammy Ndolo, Brian Muchiri and Damaris Muia, Kieti Law LLP
prepare reports detailing its performance regard - ing these climate change responsibilities, as well as the actions it has taken, is currently taking, or plans to take to meet these responsibilities in the future. The Impact of ESG on Corporate Strategy and Investment The growing emphasis on ESG has profoundly impacted corporate strategy and investment in Kenya. Companies increasingly recognise that strong ESG performance can enhance their reputation, attract investment, and mitigate risks associated with environmental and social issues. Domestic and international investors are placing greater weight on ESG factors in their invest - ment decisions, leading to increased demand for transparent and comprehensive ESG report - ing. This trend is expected to continue, with ESG considerations becoming integral to Kenya’s corporate governance and risk management. Strengthening Anti-Money Laundering and Beneficial Ownership Regimes Legislative reforms: The Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Bill, 2025 The prevention of money laundering and terrorist financing has been a key priority for the Kenyan government. To combat these illicit activities, the government has implemented robust anti- money laundering (AML) legislation that requires companies to enhance transparency and disclo - sure. The National Assembly recently passed the Anti-Money Laundering and Combating of Ter - rorism Financing Laws (Amendment) Bill, 2025, to strengthen Kenya’s anti-money laundering and terrorism financing regulatory framework. Once enacted, the Bill will amend ten Acts of Parliament and expand the scope of Anti-Money Laundering and Combating of Terrorism over - sight to traditionally non-financial sectors, such
as real estate, legal, and accounting services, which have historically been vulnerable to illicit financial flows. Beneficial ownership disclosure requirements One of the most significant AML measures is the Companies (Beneficial Ownership Informa - tion) Regulations, which mandate companies to disclose their beneficial owners. This disclo - sure requirement helps to prevent the misuse of corporate structures for illicit activities and enhances transparency in corporate ownership. Beneficial owners are individuals who ultimately control or benefit from a company, regardless of their direct ownership stake, and include a natural person who meets any of the following conditions: • holds at least 10% of the issued shares in the company either directly or indirectly; • exercises at least 10% of the voting rights in the company either directly or indirectly; • holds a right, directly or indirectly, to appoint or remove a director of the company; or • exercises significant influence or control, directly or indirectly, over the company. Amendments to the Companies Act and the Limited Liability Partnership Act have further strengthened anti-money laundering measures by extending disclosure requirements to include nominee shareholders and partners, respective - ly. Nominee shareholders hold shares on behalf of others, while nominee partners act as partners in a limited liability partnership on behalf of oth - ers. By requiring disclosure of these individu - als, the government aims to prevent the use of nominees to conceal the true beneficial owners of companies and facilitate illicit activities.
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