Foreign investors and businesses often ask: “If a foreign company is not registered in Kenya, can it still sue in Kenyan courts?” This is a vital concern for international lenders, suppliers, and investors who transact with Kenyan entities. The answer depends on the interpretation of the Companies Act, 2015 and how the Kenyan courts have ruled in recent years.

The Law: Companies Act, 2015 on Foreign Companies

Under the Companies Act, 2015, particularly Section 974, a foreign company shall not carry on business in Kenya unless it is registered. This provision is directed at regulating business registration in Kenya for foreigners, ensuring compliance and accountability for foreign companies with ongoing operations.

However, the law does not expressly prohibit a foreign company from suing in Kenya without registration. The legal debate has centered on whether a company that is not registered locally but incorporated abroad has the locus standi (legal standing) to sue in Kenya.

Strict Court Decisions: No Locus Standi Without Registration

Several Kenya court decisions on foreign companies have taken a strict approach, barring unregistered companies from suing where their activities amounted to “carrying on business in Kenya.”

  • In Root Capital Inc v Tekangu Farmers Co-operative Society Ltd [2016], the High Court ruled that a foreign company not registered in Kenya could not enforce its rights against a Kenyan co-operative.
  • In Stichting Rabo Bank Foundation v Ava Chem Ltd [2024], the court held that a foreign lender who had advanced funds to a Kenyan entity was in fact “carrying on business in Kenya” and, lacking registration, had no legal capacity to sue.

These cases highlight the litigation risks for foreign investors in Kenya who engage in repeated or continuous transactions without complying with the Companies Act 2015 foreign company registration requirements.

Recent Judicial Shift: Access to Justice for Foreign Companies

More recent jurisprudence, however, suggests a shift in the Kenyan courts’ interpretation.

In Bruton Gold Trading LLC v Anne Atieno Amadi & 6 others (HCCC E211/2023, ruling delivered in 2025), the High Court held that the company’s legal personality derived from its foreign incorporation, and that Section 974 was not intended to bar access to Kenyan courts. The judge emphasized that a one-off transaction by a foreign company does not necessarily amount to “carrying on business in Kenya.”

This ruling aligns with the constitutional right of access to justice and recognizes that foreign companies have legal rights in Kenya even without local registration, depending on the nature of their transactions.

Practical Guidance for Foreign Investors

For international companies and diaspora investors considering business in Kenya, the situation remains unsettled in law.

  • If your company has continuous operations in Kenya—such as lending, trade, or service provision—you should register your foreign company in Kenya under the Companies Act, 2015. This reduces litigation risk and ensures compliance with Kenyan company law for foreign investors.
  • If your company is involved in a one-time deal or isolated contract, you may still be able to sue in Kenya without local registration, as the Bruton case demonstrates. However, opposing parties may still raise preliminary objections relying on the stricter line of cases, and outcomes may differ depending on the judge.

Conclusion

The question “can foreign companies sue in Kenya without registration?” does not yet have a settled answer. Earlier cases struck out such claims, while recent judgments recognize the validity of foreign incorporation. The safer path for any company planning sustained commercial activities in Kenya is to ensure foreign company registration.

Looking for Legal Support in Kenya as a Foreigner?

At F.M. Muteti & Co. Advocates, we provide tailored legal advice to foreign investors in Kenya, international lenders, and diaspora clients on foreign company registration, compliance with the Companies Act, 2015, and litigation strategy. Whether you are considering carrying on business in Kenya or seeking to enforce your rights in court, our Nairobi and Mombasa offices are ready to assist.

Contact us today to safeguard your investments and navigate the complexities of Kenyan company law for foreign investors with confidence.