Kenya Unveils New Regulatory Framework For Public Benefit Organizations

The Draft Public Benefit Organizations Regulations, 2025 

Executive Summary 

The Cabinet Secretary for Interior and National Administration has published the Draft Public Benefit Organizations Regulations, 2025 (the “Regulations”) pursuant to the Public Benefit Organizations Act, No. 18 of 2013 (“PBO Act”). The PBO Act, enacted in 2013, sought to streamline the registration, operation and governance of public benefit organizations in Kenya. However, the Act’s implementation faced delays due to administrative and legislative hurdles. With the publication of the PBO Regulations in June 2025 and their enforcement timeline set for May 2026, the non-profit sector finally has a clear roadmap for compliance and operational standards. 

These draft regulations mark a transformational regulatory shift, ushering in a comprehensive framework that governs the registration, governance, accountability and oversight of Public Benefit Organizations (PBOs) operating in Kenya. 

Importantly, this legislative development completes the long-delayed transition from the repealed NGO Coordination Act (No. 19 of 1990) to the PBO Act framework.  

The regulator designated under the PBO Act and the draft regulations is the Public Benefit Organizations Regulatory Authority (PBORA). PBORA is responsible for: 

• Registration and deregistration of PBOs; 
• Maintaining the official register of PBOs; 
• Oversight of compliance, including inspections, audits, and governance assessments; 
• Recognition of forums and federations; 
• Issuance of permits, certificates and approvals under the Act; and 
• Promoting self-regulation and coordination within the PBO sector. 

PBORA plays a pivotal role in advancing the objects of the Act and fostering an enabling environment for public benefit work in Kenya. 

At CM Advocates LLP, we recognize that this is not merely a legal update, it is a strategic inflection point for local and international NGOs, faith-based groups, foundations, charitable trusts, humanitarian entities and development partners to: 

• Realign their operations; 
• Enhance compliance; 
• Institutionalize governance best practices; and 
• And ultimately secure legal legitimacy and long-term sustainability. 

Key Regulatory Features of the draft PBO Regulations 

1. Structured Registration Processes 

The Regulations provide for differentiated compliance framework across four core registration categories: 

• National PBOs (Regulations 7–8): Entities incorporated and operating in Kenya. 
• International PBOs (Regulations 11–12): Foreign organizations seeking to operate directly within Kenya. 
• Bestowment of PBO Status on entities incorporated under other laws (Regulations 9–10): For entities incorporated under other Kenyan laws seeking recognition as PBOs. 
• Exemption from Registration for international organizations operating indirectly in Kenya (Reg. 13–14). 

Key Compliance Requirement: All PBOs, regardless of category must have at least one-third of their directors as Kenyan nationals residing in Kenya. 

2. Enhanced Public Benefit Test 

To qualify as a PBO, an organization must: 

• Engage in activities from one or more of the 29 public benefit categories listed in the Sixth Schedule of the Act (e.g., education, health, environment, peacebuilding, youth or legal aid); 
• Deliver demonstrable benefit to identifiable sections of the public; 
• Avoid offering private benefit to its directors or their associates; and  
• Have purposes that are wholly charitable in nature and align with the overarching objectives of public benefit. 

3. Governance, Reporting and Compliance Obligations 

The draft regulations impose robust governance and reporting obligations on all PBOs, aimed at enhancing transparency and accountability: 

• Annual Returns: Must be filed by 31 March each year using Form 16, along with audited financial statements for the preceding financial year. 
• Record Keeping: PBOs must maintain detailed books of account, asset registers, board resolutions and operational progress reports. 
• Material Change Notifications: Any change in name, constitution, board composition, geographical focus, banking or authorized agent must be filed within 30 to 60 days using Form 17 (Regulation 28). 

 - Penalties for non-compliance include suspension, cancellation or deregistration. 

4.  Recognition of Forums and Federations 

The Regulations promote sectoral self-regulation by formalizing: 

• Self-Regulatory Forums (Regulation 21–22): A forum must comprise at least 10 PBOs with related objectives. Recognition is subject to the criteria set out in the regulations including submission of constitutive documents, evidence of geographic reach, meeting minutes, membership lists, office-bearer details and a code of conduct. 
• Federations of Forums (Regulation 23–24): A federation must consist of at least five recognized forums. Recognition is subject to the criteria set out in the regulations including submission of a constitutive documents, reserved name, membership evidence, meeting minutes, office-bearer details, forum recognition certificates and a code of conduct. 

Each body whether a forum or federation, must submit a code of conduct, proof of membership, and governance documents as part of their recognition application. 

5.  Stricter Grounds for Deregistration and Suspension 

The Regulations set out defined and stringent grounds under which a PBO may be deregistered or suspended. These include: 

• Operating outside the approved scope of its public benefit mandate; 
• Violating its own constitution or governance principles; 
• Engaging in economic crimes; and 
• Failing to operate or submit returns for a period exceeding one year. 

In the event of deregistration and dissolution, the regulations mandate the transfer of remaining assets to another registered PBO in good regulatory standing with similar objectives (Regulation 34–35). 

6.  Income Generation by PBOs 

The Regulations allow PBOs to engage in economic activities if: 

• Licensed by the relevant regulatory authority; 
• All proceeds from the activity are applied strictly toward the organization’s public benefit objectives; and 
• Sound risk management and financial controls are in place (Regulation 36). 

7.  Regulatory Fee Structure 

The draft Regulations introduce a structured fee regime, as set out in the First Schedule, covering key applications and statutory filings. The proposed fees are as follows: 

Application/Action  | Fee (KES) 
Name Search and Reservation  | 2,000 
National PBO Registration  | 20,000 
International PBO Registration  | 40,000 
Bestowment of PBO Status  | 22,000 
Exemption for Foreign PBOs  | 75,000 
Filing of Annual Returns  | 4,000 
Notification of Material Changes  | 15,000 
Certified Copy of Registration Certificate  | 5,000 

Implications for Charities, NGOs and Development Partners 

The introduction of the new regulatory framework marks a significant shift in the legal and operational landscape for PBOs. This regulatory overhaul will reshape how PBOs operate, fundraise, govern and engage with stakeholders. All existing and prospective PBOs are advised to: 

• Reassess their compliance status under the new framework; 
• Amend governance structures to align with residency, board composition and public benefit requirements; 
• File relevant applications or transition documents within the prescribed timelines to avoid deregistration or suspension; and 
• Engage early with legal counsel to update/revise constitutions, tax exemptions and fiduciary documentation to meet the new compliance thresholds. 

How CM Advocates LLP Can Support Your Organization 

Our Charities and Not-for-Profit Organisations Practice Group is one of the most experienced in the region, offering deep sectoral insight combined with a strong international outlook. We provide comprehensive legal support across all stages of an organisation’s lifecycle. Our key service offerings include: 

✅ Full service PBO registration or exemption applications 
✅ Constitution drafting and governance structuring 
✅ Annual returns preparation and filing 
✅ Tax exemption applications (income tax, VAT, CGT and stamp duty) 
✅ Risk and compliance audits 
✅ NGO subsidiary and income-generating structuring 
✅ Immigration and HR support for expatriate staff 
✅ Regulatory representation before relevant Authorities 
✅ Board advisory and training on fiduciary duties and liability mitigation 
✅ Entity structuring and establishment advisory for foreign charities, faith-based institutions, endowments and philanthropic institutions 
✅ Real estate and property advisory including acquisition, leasing and conveyancing for institutional and operational premises 
✅ Labour, employment and HR advisory including policy drafting, dispute resolution and restructuring 
✅ Corporate governance audits, restructuring of boards and compliance with governance codes 
✅ Trademark and service mark registration and protection of charitable brand identity 
✅ Legal representation in disputes including judicial review, civil claims and alternative dispute resolution 

Our regional presence in Uganda, Tanzania, Rwanda, South Sudan, Zambia and Ethiopia combined with US and EU partner networks, allows us to support international and faith-based entities with cross-border legal needs. 

Contact Us Today 

Cyrus Maina
Practice Lead – Charities and Not-for-Profit Organisations
cmaina@cmadvocates.com or commercial@cmadvocates.com 

🌐 www.cmadvocates.com 

⚠️ This Client Alert is issued for general information only and should not be construed as legal advice. For tailored counsel, contact CM Advocates LLP