Investor Protections Under Kenya’s Investment Promotion Act for Life Sciences Investors

Kenya’s Investment Promotion Act is often cited as the source of legal protection for foreign investors, including life sciences investors bringing capital, technology, and multinational supply relationships into the country. That reputation does not survive a direct reading of the Act itself. The real protections a life sciences investor should be relying on sit in a different, older statute, plus the Constitution, plus Kenya’s international treaty commitments, and an investor who has only read the Investment Promotion Act has not yet found them.

What the Investment Promotion Act Actually Contains

The Investment Promotion Act, Chapter 485B of the Laws of Kenya, establishes the Kenya Investment Authority, sets out investment certificate procedures, and creates a framework for facilitating and registering investment. Read section by section, the Act is substantively silent on the protections an investor would actually want in place before committing capital: it contains no expropriation clause, no repatriation-of-profits guarantee, no currency convertibility provision, no national treatment standard, and no dispute-resolution mechanism specific to investor claims against the state. It is a facilitation and registration statute, not a protection statute, and an investor who assumes otherwise because of its name is working from a mistaken premise.

Where the Real Protections Actually Come From

The substantive protections a foreign investor in Kenya relies on come from the Foreign Investments Protection Act, Chapter 518, a considerably older statute dating to 1964. Section 7 of that Act addresses repatriation, providing for the transfer of profits, capital, and loan interest out of Kenya at the prevailing exchange rate. Section 8 addresses compulsory acquisition, providing that property will not be compulsorily taken except in accordance with the compensation provisions that now sit in Kenya’s Constitution. This is the statute an investor’s diligence should actually focus on, not the Investment Promotion Act, when the question is what happens to invested capital if Kenya’s political or regulatory environment shifts.

The Constitutional Backstop

Article 40 of Kenya’s 2010 Constitution independently guarantees the right to property and requires prompt payment of full and fair compensation where property is compulsorily acquired, with a right of access to court to challenge both the acquisition and the compensation offered. This constitutional provision operates independently of, and post-dates, the 1964 Act’s own compensation cross-reference, and gives an investor a direct constitutional avenue in addition to whatever the Foreign Investments Protection Act itself provides.

International Treaty Protections

Kenya has been a member of the International Centre for Settlement of Investment Disputes since 2 February 1967, giving qualifying investors access to ICSID arbitration for investment disputes with the Kenyan state, subject to the underlying treaty or contract actually providing for it. Kenya has also concluded bilateral investment treaties with a number of jurisdictions relevant to life sciences investment specifically, including the United Kingdom, Germany, the Netherlands, China, and Switzerland, the last of which is the home jurisdiction of major pharmaceutical multinationals including GSK, Bayer, Novartis, and Roche. A life sciences investor structuring through, or already headquartered in, one of these jurisdictions should check whether the applicable BIT gives an additional layer of treaty-based protection beyond Kenya’s domestic law.

What This Has Looked Like in Practice

Two ICSID cases illustrate how this framework actually functions when a dispute arises. Cortec Mining Kenya Limited and others brought a claim against Kenya under the UK-Kenya bilateral investment treaty, registered as ICSID Case No. ARB/15/29; the tribunal ultimately declined jurisdiction, a decision upheld on annulment review in March 2021, illustrating that treaty access is not automatic and turns on the specific facts of how the underlying investment was established. More recently, Travizory Border Security SA brought a claim against Kenya under the Switzerland-Kenya bilateral investment treaty, registered as ICSID Case No. ARB/25/54 on 16 December 2025; this case remains pending and its underlying facts are not yet public. Neither case is a life sciences dispute specifically, but both demonstrate that Kenya’s BIT network produces real, tested arbitration activity rather than protections that exist only on paper.

What This Means for a Life Sciences Investor

The practical takeaway is to stop treating the Investment Promotion Act as the source of legal protection and instead build diligence around the Foreign Investments Protection Act’s repatriation and compensation provisions, Article 40 of the Constitution, and whichever bilateral investment treaty, if any, connects the investor’s home jurisdiction to Kenya. Where no BIT applies, that gap itself is a material fact for a structuring decision, and may argue for routing the investment through a jurisdiction that does have a Kenya BIT, subject to the usual treaty-shopping and substance considerations that come with that kind of structuring.