Banking, Money and Taxes in Kenya

Opening a bank account is a priority for most expats relocating to Kenya. Fortunately, banking in Kenya is easy and efficient, and banks can be found in most major towns and cities.

Although the process is straightforward, certain steps and documents will be required to open a bank account, such as presenting a copy of an employment contract and proof of a local address. 

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Money in Kenya

The official currency in Kenya is the Kenyan Shilling (KES), which is subdivided into 100 cents.

• Notes: KES 5, 10, 20, 50, 100, 200, 500 and 1,000

• Coins: 50 cents (rarely used), KES 1, 5, 10 and 20

When moving to Kenya, expats will have to exchange currency for the local shillings. Money can be exchanged upon arriving in international airports, in bureaux de change and certain banks in major cities. Some hotels may offer local currency, but the rate may not be so favourable.

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Banking in Kenya

Many large international banks have branches in Nairobi or have a partnership with a local bank. This can make transferring money between a home country and Kenya easier. Expats using their home banks should just inform them of their relocation.

The largest banks are Absa Bank Kenya and Standard Chartered Kenya, which are international, and KCB Bank Kenya, Co-operative Bank of Kenya and Equity Bank Kenya, which are local. All banks follow the guidelines and management issued by the Central Bank of Kenya (CBK).

It's useful to have cash on hand in Kenya. Bank card payments are common, especially with Visa and Mastercard, although some areas, markets and shops only accept cash payments.

Banking hours in Kenya are mainly from 9am to 3pm, Monday to Friday, though some banks may open earlier and close later. Banks may close earlier, around midday, on Saturdays and close on Sundays.

Opening a bank account

When opening a bank account in Kenya, one of the main things to look out for is account fees. We suggest visiting different banking websites and researching their services and account types to check if a fixed monthly amount is charged or an individual fee for each transaction.

After finding a suitable bank, visit the nearest branch in person and they will assist with setting up the account. Processing the necessary documents shouldn't take long, and within a day or so, the account should be activated.

Opening an account at any of Kenya's banks is straightforward, though required documents vary across different banking institutions. It's important to check if a Kenya Revenue Authority (KRA) PIN or tax number is needed, or if a local phone number is enough. 

Expats will generally need to present identification, such as their passport, along with proof of Kenyan address. This can be a utility bill or similar statement that shows the expat's name and address.

Credit cards and ATMs

ATMs are easily found in Kenya's big cities and several banks have effective online banking services. Restaurants and shopping malls in major cities will have credit card facilities, but charges can be high. It is often better to pay with a local debit card or in cash.

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Taxes in Kenya

Expats should be aware of the tax implications when working in Kenya. Kenya Revenue Authority manages all tax-related matters in the country and their website is comprehensive, offering several online services and tax guides. Still, for expats not clued up on accounting and tax processes, it’s best to enlist the services of tax specialists. As tax regulations are subject to change, these specialists will be familiar with the latest guidelines.

Income tax is on a graduated scale based on how much one earns. The rate varies at 5 percent increments from 10 to 30 percent for the highest earnings. Non-cash benefits also tend to be taxed. Expat employees regularly receive generous employment packages and have benefits such as housing, utilities, furniture, a company car and school fees of dependants. 

One of the main questions that expats have regarding tax in their host country is what it means to be considered a resident for tax purposes. In Kenya, this includes anyone with a permanent home in the country as well as those without a permanent home, but being present for at least 183 days in one tax year. It also includes residents without a permanent home, but who have resided in Kenya during the tax year and previous two years for at least 122 days a year. 

Expats considered residents for tax purposes are liable to tax on income generated both in Kenya and abroad. Non-residents are only taxed on income earned in and derived from Kenya.

Kenya has double-taxation treaties with several countries, including Canada, the United Kingdom, South Africa, Germany and the United Arab Emirates. Expats must find out if their home country is a party to a double-taxation agreement, which exempts them from certain taxes abroad.

Getting a tax number

Expats working in Kenya and considered residents for tax purposes should obtain a tax number or KRA PIN.

Once an expat's work permit has been processed, they will receive what is called an Alien Card. This will allow them to register with the KRA and obtain a KRA PIN. Visiting the KRA website, expats will easily find instructions and an online form. They will need to provide their Alien ID card, basic information and company details. After this has been processed, expats will get their tax number.

This number can be used when filing self-assessment tax returns, due at the end of June each year. While employers are responsible for deducting from their employees’ incomes for tax, employees must submit these tax returns. For this, we recommend asking for support from a tax advisor.