By Benadeta Mwaura - Reporter
Kenya , June 11, 2026 - The Treasury has proposed exempting foreign investors from the requirement to obtain a Kenya Revenue Authority (KRA) Personal Identification Number (PIN) when opening Central Depository and Settlement Corporation (CDSC) accounts to trade on the Nairobi Securities Exchange (NSE), in a move aimed at boosting capital market participation.
Treasury Cabinet Secretary John Mbadi said the proposal forms part of amendments to the Tax Procedures Act under the 2026/27 budget framework, designed to improve tax administration efficiency, strengthen compliance systems, and support broader digitisation of government services.
Presenting the Budget Statement in Parliament on June 11, Mbadi said the existing requirement for foreign investors to obtain a KRA PIN before accessing CDSC accounts has been identified as a structural barrier limiting participation in Kenya’s capital markets.
“Currently, foreign investors are required to obtain a KRA PIN before opening Central Depository and Settlement Corporation accounts to participate in trading at the Nairobi Securities Exchange,” he said.
“In order to improve the attractiveness of Kenya’s capital markets to foreign portfolio investors, the Bill proposes to exempt foreign investors from the requirement to obtain a KRA PIN solely for purposes of opening Central Depository and Settlement Corporation accounts.”
The Treasury argues that easing this requirement will simplify onboarding procedures for foreign portfolio investors and enhance Kenya’s competitiveness as a regional investment destination, particularly at a time when governments across emerging markets are competing for global capital inflows.
Mbadi emphasized that the proposed changes are not intended to weaken tax compliance, noting that income earned by non-resident investors at the NSE is already subject to withholding tax, which is treated as a final tax obligation in Kenya.
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This means foreign investors are not required to file annual income tax returns locally, even as their investment income is taxed at source.
The proposal is part of a broader set of reforms contained in the Finance Bill 2026, which seeks to modernise tax administration while simultaneously making Kenya’s financial markets more attractive to international investors.
If approved by Parliament, the removal of the KRA PIN requirement is expected to reduce administrative friction, speed up account opening processes, and potentially increase foreign participation in the Nairobi Securities Exchange.
Improved access for foreign portfolio investors could also enhance liquidity in the local market, deepen price discovery, and support the long-term development of Kenya’s capital markets.
The move aligns with the government’s wider economic strategy of positioning Nairobi as a regional financial hub, while also leveraging capital market reforms to support growth and investment inflows.
As global financial conditions remain tight, policymakers are increasingly focusing on regulatory simplification and market accessibility as key tools for attracting external capital and stabilising domestic investment flows.