Kenya is also at the centre of this shift. The Finance Act, 2025 incentives for the Nairobi International Financial Centre (NIFC) are being designed to pull in institutional capital. It introduced preferential corporate tax rates for certified startups and large investors and a dividend withholding tax (WHT) exemption tied to local reinvestment.

Together with the NIFC’s one-stop shop facilitation, Kenya is positioning itself as the gateway to East Africa’s deal flow, supported by sectoral depth across technology, infrastructure and a mature startup ecosystem.

Why Nairobi and why now

The Finance Act, 2025 introduced a tiered corporate tax incentive for entities certified by the NIFC Authority. To qualify, entities must demonstrate a substantive presence in Nairobi, including physical offices and adequate staffing, and engage in designated financial or related activities such as banking, fund management, venture capital, fintech, capital markets, advisory services, green finance or carbon trading.

Companies certified by the NIFC Authority under the Category A licence will qualify for a reduced corporate tax rate of 15% for the first 10 years and 20% for the subsequent 10 years. To qualify for the preferential tax rate, such a company must:

• commit at least KES 3 billion (~ USD 23.2 million) in its first three years of operation;
• be a holding company with at least 70% of its senior management being Kenyan citizens; and
• operates its regional headquarters in Kenya with at least 60% of senior management being Kenyan citizens.

Dividends paid by such a company to its shareholders are exempt from WHT if the company reinvests at least KES 250 million annually in Kenya.

NIFC-certified startups are licensed as Category B, and such startup will enjoy a 15% corporate tax rate for the first three years and 20% for the subsequent four years.

The reduced corporate tax, directly coupled with the dividend WHT exemption, could unlock millions in upstream savings for private equity and venture capital funds.

Lessons for the NIFC from Mauritius and Rwanda

As African economies deepen their capital markets, international financial centres like Mauritius and Kigali are positioning themselves as the front-runners for cross-border investment. This push has earned them top rankings in Africa by the Global Financial Centres Index.

Mauritius remains one of the most established international financial centres in Africa, with a deep ecosystem of fund managers, service providers and over 45 double taxation treaties. This has made it highly attractive for holding companies and international funds by offering certainty on repatriation, protection from double taxation, and confidence in long-term structuring. In Kenya, the double taxation agreement (DTA) network is fragmented, with only 15 DTAs in force, while DTAs with key markets are still pending operationalisation. To compete, the Government should prioritise expanding and activating Kenya’s DTA network.

Comparatively, the Kigali International Financial Centre (KIFC) offers one of Africa’s most aggressive incentive regimes, including no forex exchange control, no restrictions on foreign ownership or assets, 100% repatriation of profits and tax incentives for investors structuring their investments through the KIFC. The KIFC has also forged partnerships with global financial institutions, legal firms and fintech leaders to deepen its ecosystem and attract anchor investors. Kenya can emulate Rwanda’s branding and partnerships.

Unlike Mauritius or Kigali, the NIFC’s edge is not just fiscal but transactional proximity to East African deal flows and market depth. Nairobi is already East Africa’s hub for fintech, infrastructure, agri-tech and green finance. The branding should emphasise Nairobi’s role as the financial hub for the Common Market for Eastern and Southern Africa, East African Community and African Continental Free Trade Area, positioning the NIFC as the natural gateway for regional fund managers and corporates.

Final word

Africa’s private capital market is entering a new phase of maturity, driven by rising institutional confidence, deeper investor participation and regulatory reforms. Within this context, Kenya, through the NIFC framework, offers a compelling value proposition: a predictable legal environment and preferential tax incentives, all anchored in a market with real deal flow and sectoral depth.

While Mauritius and Kigali remain competitive on tax and compliance optics, the NIFC’s differentiator lies in proximity to East Africa’s growth pipeline and access to a sophisticated domestic investor base.

For fund managers and investors, the strategic question is no longer whether Nairobi belongs in the conversation, but how to structure for maximum advantage under the NIFC regime. Unlike many incentive regimes that look good on paper but deliver little in practice, the NIFC framework could turn Nairobi from a cost centre into a competitive advantage when structured well.