Title: New AML Law in Kenya: Extensive Disclosure Obligations for Companies and LLPs 🇰🇪
The Kenyan government’s new Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act came into effect on September 1, 2023. The legislation introduces significant disclosure obligations for companies, branches, limited liability partnerships (LLPs), and foreign LLPs to boost transparency and accountability in the local business sector. Below, we outline the changes that impact companies and LLPs under this new law.
New Disclosure Requirements: Beneficial Ownership and Nominee Arrangements 📄
The Act sets important deadlines to comply with these disclosure requirements, including the registration of beneficial ownership and nominee arrangements:
- Existing Entities and New Registrations: All existing entities and new companies/LLPs must maintain and lodge registers of beneficial owners, nominee directors, and nominee partners with the Registrar prior to registration.
- Timeline for Submission: Entities and individuals must submit these documents within 60 days of the Act’s implementation, with the option of a 30-day extension.
- Failure to Comply: Failure to comply may result in the Registrar striking the entity off the register.
- Record Keeping: Companies and LLPs are obligated to keep records of former beneficial owners indefinitely.
New Appointment Requirements for Private Companies and Foreign LLPs 💼
Starting September 1, 2023, private companies and companies limited by guarantee with a paid-up capital less than KES 15,000,000 (approx. US$94,681) have the option to:
- Appoint a company secretary or a resident director.
- Designate a contact person who is a natural person with permanent residence in Kenya, if they do not appoint either.
Additionally, foreign LLPs intending to carry on a business in Kenya must:
- Register under the Limited Liability Partnerships Act.
- Have a local registered office.
- Appoint at least one local representative as a natural person with a permanent residence or a Kenyan citizen who ordinarily resides in Kenya.
Implications for Businesses ⚙️
With the new requirements, businesses must review their current ownership structures, identify their beneficial owners and nominee arrangements, and update their records accordingly before the stipulated deadlines to maintain compliance. This regulatory burden poses challenges; however, it is expected to enhance transparency and accountability in the Kenyan business sector.
For more information on the new AML requirements and how your business can comply, contact:
- Christopher Kirathe
- Milly Mbedi
- Lavine Sange