LAND OWNERSHIP BY NON-CITIZENS (FOREIGNERS) IN KENYA

(Property Law: series 4)

While Kenya welcomes foreign investment, stringent laws limit non-citizens to 99-year leasehold tenure. Key legislation includes the Constitution of Kenya 2010, the Land Act 2012, the Land Registration Act 2012, and the Land Control Act Cap 302. Agricultural land ownership is highly restricted, though leasing for investment purposes is possible. Recent court rulings have significantly heightened the importance of thorough due diligence, making professional legal counsel indispensable for any foreign investor navigating Kenya’s dynamic land sector. For non-citizens, understanding the nuances of land ownership and transfer is paramount, as the legal landscape is distinct and subject to specific regulations designed to safeguard national interests.

Overview of Kenya’s Land Tenure System

Land ownership in Kenya is a fundamental aspect of property rights, governed by various land laws that dictate how land is acquired, transferred, developed, and utilized. There are two primary forms of land tenure which is the freehold and Leasehold tenure. Freehold Title grants the owner perpetual land ownership, making it the most secure form of land tenure in Kenya. It comes with minimal restrictions, allowing for full control over land use and development, subject only to local zoning laws and environmental regulations. Freehold land remains under the owner’s name indefinitely unless sold or transferred, and it does not require periodic renewal or lease extension, making it ideal for generational inheritance.  

Leasehold Title grants ownership rights over land for a specified period, typically 99 years. Historically, it could be for 999 years before the 2010 Constitution reduced the maximum lease term. Leasehold land is commonly found in urban areas, government-owned land, and land managed by county governments. It involves fixed-term ownership, requiring renewal upon expiry, and leaseholders must pay annual land rent to the government or relevant authority. Leasehold tenure provides access to prime urban land, promoting structured property development and land use under government oversight.  

The fundamental distinction between freehold and leasehold for non-citizens is not merely about the duration of ownership but reflects a deeper policy choice in Kenya to control and manage land as a national resource. By limiting non-citizen ownership to leasehold, the government retains ultimate reversionary interest and control over land use and development in the long term. This structured tenure system for non-citizens is a deliberate policy to manage foreign engagement with a vital national asset. It ensures that foreign investment contributes to Kenya’s development goals within a defined timeframe, allowing the state to periodically reassess and reallocate land resources as national priorities evolve.  

Legal Framework for Non-Citizen Land Ownership

The Constitution classifies it into public land, private land, and community land. Article 40 guarantees the right of ownership of land to “any person” in Kenya, whether a citizen or a non-citizen. Article 65(1) states that a non-citizen may hold land on a leasehold tenure only, and any such lease, however granted, shall not exceed ninety-nine years. This sets a clear, non-negotiable limit on the duration of land ownership for foreigners.[1] If a provision of any agreement, deed, conveyance, or document purports to confer on a non-citizen an interest in land greater than a ninety-nine-year lease, the provision shall be regarded as conferring a ninety-nine-year leasehold interest, and no more. This means that any freehold interest acquired by a non-citizen automatically converts to a 99-year leasehold by operation of law by Section 8 of the Sixth Schedule of the Constitution 2010. This conversion occurs automatically and requires no additional formalities.  

The interplay between Article 40 and Article 65 reveals a nuanced constitutional intent. While Article 40 broadly grants property rights to all, Article 65 acts as a specific limitation for non-citizens, demonstrating that the general right is not absolute when it comes to the nature of land tenure for foreigners. This constitutional design is a sophisticated mechanism. It allows for foreign investment by granting ownership rights while maintaining ultimate state control and a defined reversionary interest. The automatic conversion clause is a strong legal safeguard against attempts to bypass the 99-year limit, highlighting the constitutional priority given to land as a national resource and ensuring that the state’s sovereignty over land is not indefinitely alienated to non-citizens.

The Land Act, 2012, Section 12(5) allows the National Land Commission (NLC) to allocate land to foreign governments on a reciprocal basis, in accordance with the Vienna Convention on Diplomatic Relations. Upon expiry, termination, or extinction of a lease granted to a foreigner, the land shall vest in the government. This underscores that, unlike citizens, non-citizens do not enjoy an automatic right of renewal or extension of a lease upon its expiry.   Section 12A introduced specific restrictions on “controlled land,” prohibiting transactions in such land to “ineligible persons” (non-citizens, foreign governments, or corporate bodies with non-citizen shareholders) without prior written approval of the Cabinet Secretary.  

The Land Registration Act establishes the legal procedures for land registration, including the issuance of freehold and leasehold titles. It applies to the registration of interests in all public, private, and community land. The Land Registration Act’s reiteration of the 99-year leasehold limit in Section 107(3) signifies legislative alignment and reinforces the constitutional mandate.[2]

The Land Control Act primarily governs land transactions, particularly agricultural land, preventing unlawful sales, subdivisions, and unauthorized transfers. Sections 6 and 9 restrict ownership by non-citizens of agricultural land or land within designated “land control areas.” Any dealing in agricultural or controlled land that purports to sell, transfer, lease, or charge such land with a non-citizen without the specific consent of the Land Control Board is void.  

Exceptions for Foreigners to Own Agricultural Land

1. Through an application for exemption by the President under Section 24 of the Land Control Act. These exemptions are discretionary and, if approved, are published in the Kenya Gazette.  
2. Through owning shares in a public company that owns agricultural land. This is sometimes noted as a potential “loophole” that foreigners exploit by incorporating public companies where they are shareholders to gain capacity to own agricultural land.  

As established by Article 65(1) of the Constitution and reiterated in Section 107(3) of the Land Registration Act, non-citizens are strictly limited to holding land on a leasehold basis for a maximum period of 99 years. This fundamental limitation means that perpetual ownership, as enjoyed by citizens through freehold titles, is not available to non-citizens.  

Any attempt by a non-citizen to acquire freehold land will result in its automatic conversion to a 99-year leasehold interest by operation of law, as stipulated by Article 65(2) and Section 8 of the Sixth Schedule of the Constitution 2010. This conversion does not require any additional formalities or legal procedures; it happens automatically the moment a non-citizen purports to acquire a freehold interest.  

Furthermore, unlike Kenyan citizens, non-citizens do not have an automatic right to lease renewal upon expiry. Section 12(7) of the Land Act explicitly states that upon expiry, termination, or extinction of a lease granted to a foreigner, the land shall vest in the government. While renewal is possible, it requires a formal application and compliance with land use regulations, including proof of land use compliance and payment of renewal fees.  

The consistent legal emphasis on the 99-year leasehold for non-citizens, coupled with the non-automatic renewal, creates a structured investment horizon. This policy encourages productive use of land within the lease term, as the incentive for renewal is often tied to compliance and proper utilization. By making lease renewals conditional on factors like proof of land use compliance, the government incentivizes foreign investors to develop and utilize the land productively throughout the lease term. This prevents land speculation or holding large tracts of undeveloped land indefinitely. The lack of automatic renewal also ensures that the state can regain control of the land after a set period, allowing for reallocation if national priorities or land use needs change. This is a deliberate policy tool designed to attract foreign capital for specific developmental purposes (e.g., real estate, tourism, industrial projects) by offering substantial, but not perpetual, rights. It safeguards national interests by ensuring that land remains a dynamic resource subject to state oversight and potential reallocation, fostering a sense of accountability for foreign land users and aligning foreign investment with Kenya’s long-term development agenda.

At A.O.WANGA ADVOCATES we are happy to assist you with all matters relating to property purchase and ownership.

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[1][1] Constitution of Kenya, Article 65.

[2] The Land Registration Act, 2012 (No. 3 of 2012), Section 107(3).