Phasing Regulated Activities Into a Kenyan Company: One Entity or a Holding Structure?

A common plan for a foreign tech company entering Kenya is to start with one activity that needs no licence, usually software or consultancy, and add a regulated line such as payments, digital lending or telecoms once the business has traction. The practical question is whether to keep growing inside the same Kenyan company or hive each regulated activity off into its own licensed entity.

A Single Company Can Lawfully Do All of It

Nothing in Kenyan company law stops one company from carrying on several activities, regulated or not. Section 28 of the Companies Act, 2015 makes a company’s objects unrestricted unless its articles specifically limit them. Kenya’s sector licensing statutes are written in terms of the activity, not the corporate vehicle: section 24 of the Kenya Information and Communications Act says no person may operate a telecommunication system without a licence, and the Central Bank of Kenya (Non-Deposit Taking Credit Providers) Regulations, 2026, which revoked the 2022 Digital Credit Providers Regulations, bar any person from establishing a non-deposit taking credit business without a licence or registration from the Central Bank. A single Kenyan company can, in principle, hold a telecoms licence, a non-deposit taking credit licence and a payment service authorisation all at once, so long as it satisfies each regulator separately.

But Each Licence Is Still Applied for Separately

Being allowed to hold multiple licences in one company does not shorten the path to getting the second one. A non-deposit taking credit licence under regulation 6 of the 2026 Regulations (which sets a minimum initial capital of KES 20 million), a payment service provider authorisation under sections 12 and 13 of the National Payment System Act, and a telecoms licence under sections 24 and 25 of the Kenya Information and Communications Act are each their own application, with their own vetting of directors, shareholders and capital. Having an existing, unrelated business inside the same company does not create a shortcut; if anything, it adds a line the regulator will ask about, since, for example, the 2026 Regulations ask an existing business that moves into credit for a high-level brief of its business strategy.

Why Groups Still Ring-Fence Each Licence in Its Own Entity

Despite the legal freedom to combine activities, many groups that plan to hold more than one regulated licence split them into separate companies under a common holding structure. The reasons are practical rather than statutory. A problem, a default, or an enforcement action in one regulated line stays inside that company’s own liabilities rather than exposing the software business or another licensed line sitting in the same entity. A single-purpose licensee may also present a simpler picture to a regulator than one carrying an unrelated trading history. And if the group later wants to sell, restructure, or bring in a separate investor for just the regulated line, a standalone entity is far easier to carve out than a division of a company that also runs the original software business.

Consider a company that starts by selling software to Kenyan retailers, then wants to add a buy-now-pay-later credit product for the same customers. If the credit product sits inside the original company, a regulatory problem with the credit book, a licence suspension, an enforcement notice, sits on the same balance sheet as the software revenue, and the same directors face fit-and-proper scrutiny for both. If the credit product sits in a separate, purpose-built subsidiary, the software business keeps trading and keeps its own clean regulatory history regardless of what happens to the credit licence. The trade-off is that the group now runs two sets of accounts, two annual returns, and, if neither company has a company secretary or a resident director, two contact person obligations.

The Practical Cost of Splitting Too Early

Each additional Kenyan company means its own incorporation cost, its own annual return, its own beneficial ownership filing under section 93A of the Companies Act, and, where it has neither a company secretary nor a resident director, its own contact person under section 243A; see our guide to the contact person rule. Shared staff, shared premises, or one company providing services to another within the group also need proper intercompany agreements so each entity’s own accounts reflect what it actually does. Splitting before there is a genuine second regulated activity to license usually just multiplies this overhead for no present benefit.

Sequencing Each Regulated Activity

Start in a single company for the unregulated activity. Incorporate a second, purpose-built entity when you are actually ready to submit a specific regulated licence application, not before, unless the particular regulator’s own rules require the licensee to carry on no other business, which varies by sector and should be checked against that regulator’s own regulations before you commit to a structure. If you already hold one licence and are adding a second regulated activity, weigh the ring-fencing benefit of a new entity against the cost of running two Kenyan companies before deciding, rather than defaulting to either approach.

Frequently asked questions

Can one Kenyan company legally hold both a fintech licence and a telecoms licence?
Yes, nothing in the relevant statutes prevents it. Each regulator assesses its own licence application on its own merits, regardless of what else the company does.

Does an existing software business slow down a later fintech licence application?
Not automatically, but expect to disclose it. For example, the 2026 credit provider regulations ask an existing business entering credit for a high-level brief of its business strategy.

When should we actually set up a separate company for a new regulated activity?
There is no fixed rule. Weigh the ring-fencing benefit, keeping one licence’s risk away from the rest of the group, against the ongoing cost of a second Kenyan company, and check whether the specific regulator requires a single-purpose licensee.

Does splitting activities into separate companies avoid regulatory scrutiny?
No. Regulators generally look through corporate structure to the group’s ultimate beneficial owners and controllers regardless of how many entities sit between them and the licensed activity.

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.