Setting Up a Corporate Finance Boutique in Kenya

Foreign corporate finance boutiques are increasingly opening in Nairobi to originate and execute deals across East Africa. Setting one up is not just an incorporation exercise. The firm’s activities decide which Capital Markets Authority (CMA) licence it needs, the licence decides what vehicle it can use, and its people may need individual registration with the Institute of Certified Investment and Financial Analysts (ICIFA). This guide sets out the legal steps in the order that avoids rework.

Step 1: Map the activities before choosing a structure

Start with a list of what the boutique will actually do: research and advice, advice on capital raising or M&A, introducing investors, negotiating terms, handling subscription monies, underwriting or placing securities. Each activity points to a licence category under section 23 of the Capital Markets Act (Cap. 485A). Advice concerning securities points to an investment adviser licence. Persuading investors to subscribe, handling money or placing securities can move the firm towards a dealer, stockbroker or investment bank licence, which carry much heavier capital and governance requirements. Our article on advising or dealing in securities explains where the lines fall.

Some boutique work may sit outside the CMA regime altogether, for example advice that does not concern securities as defined in the Act. Mapping the activities first shows how much of the business actually needs a licence.

Step 2: Choose a vehicle that can hold the licence

Under regulation 13(a) of the Capital Markets (Licensing Requirements) (General) Regulations, 2025, an investment adviser must be a company or limited liability partnership incorporated or registered in Kenya. A foreign firm that wants the licence therefore needs a Kenyan entity, not a branch of the foreign company. The choice between a subsidiary and other forms also has tax consequences, covered in our article on how Kenya taxes a branch compared with a subsidiary.

Ownership and board composition should be settled with the licence in mind. The CMA’s fit and proper test in regulation 56 applies to every director, the chief executive officer and key personnel, so the people named at incorporation should be people the firm is prepared to put before the regulator.

Step 3: Build the licence application

An investment adviser application under regulation 12 needs, among other things, evidence of adequate financial resources, a business plan, professional indemnity insurance of at least KES 500,000, an approved registered office, staff able to provide the services, and a proposed independent auditor. Advisory representatives must have at least three years’ relevant experience and be members of a professional body. Our guide to the investment adviser licence under the 2025 Regulations covers the full list.

The CMA may grant approval in principle, which allows the firm to set up and recruit but not to operate, and which lapses after six months if the remaining requirements are not met. Planning that period is covered in our article on approval in principle.

Step 4: Check the people

ICIFA registration. The Investment and Financial Analysts Act (Cap. 542) makes it an offence under section 20 to practise as a certified investment and financial analyst without registration and a practising certificate or annual licence. Section 20(1A) also requires anyone who becomes Chief Investment Officer or head of the investment function in a firm in the practice of investment and financial analysis to be registered and hold both a practising certificate and an annual licence. See our articles on when ICIFA registration is needed and heading an investment function.

Foreign staff. Non-citizen staff need the appropriate permit under the Kenya Citizenship and Immigration Act, 2011 before they start work in Kenya. Lead times for permits should be built into the launch plan.

Fee models. Registered analysts are subject to ICIFA’s professional misconduct rules in section 26 of the Act, which include rules on fees and on sharing fees with people who do not hold practising certificates. A boutique that plans to charge on a success basis, or to pay introducers, should take advice on its fee model before anyone registers.

Step 5: Tax and group arrangements

Most boutiques are part of a wider group, with mandates, staff and fees moving between entities. Intra-group service agreements need to reflect what each entity actually does, and pricing must be at arm’s length. The VAT treatment of services billed to group companies abroad depends on where they are used or consumed. Our articles on transfer pricing for foreign-owned subsidiaries and VAT on advisory services billed to foreign group companies cover both points.

Step 6: Operating compliance from day one

• Marketing. Regulation 55 of the 2025 Regulations prohibits marketing securities to the Kenyan public unless licensed under the Regulations, so launch campaigns should follow the licence, not precede it.
• Reporting. A licensed investment adviser files monthly capital adequacy reports and management accounts, and audited accounts within three months of year end, under regulation 15.
• Data protection. Client and investor data is personal data under the Data Protection Act, 2019, with registration, processing and cross-border transfer rules to follow.
• Records and conditions. Keep the licence, every CMA condition notice and the current business plan in one compliance file. Our article on ongoing CMA obligations sets out the full calendar.

Boutiques planning regional work should also read our comparison of investment adviser licensing in Kenya, Uganda, Tanzania and Rwanda.

Frequently asked questions

This article is general information on Kenyan law as at its publication date, not legal advice. Reading it does not create an advocate and client relationship.