Kenya is advancing legislative reforms to increase transparency in trust ownership as part of efforts to tackle financial crimes like money laundering and terrorism financing. The Trust Administration Bill, 2026, currently before Parliament, seeks to mandate public disclosure of ultimate beneficiaries and the registration of trusts in a centralized database.

Sponsored by Majority Leader Kimani Ichung’wah, the Bill aims to overhaul the existing trust regulation framework to address weaknesses highlighted by the Financial Action Task Force (FATF), which placed Kenya on its grey list in 2024 due to gaps in anti-money laundering compliance.

Key Provisions of the Bill

  • Trusts must register ownership details in a national database to gain legal recognition.
  • Trustees are required to maintain accurate, up-to-date records of beneficial owners for at least seven years.
  • Information will include trustee residences and assets managed by financial institutions or designated non-financial businesses.
  • Authorities such as the Financial Reporting Centre and reporting institutions will have access to this data.
  • Penalties for non-compliance include fines up to Sh1 million for individuals and Sh3 million for corporate entities.

The Bill aligns with international standards, particularly FATF Recommendation 25, which calls for transparency in beneficial ownership of trusts. It also introduces administrative and criminal sanctions to enforce compliance.

Implications for Kenya’s Financial Sector

By improving transparency, the reforms aim to curb misuse of trusts for illicit activities while enhancing their credibility for legitimate purposes such as wealth management and charitable activities. The Financial Reporting Centre supports the Bill, stating it will close existing regulatory gaps and help Kenya meet global anti-money laundering requirements.

Failure to implement these reforms risks continued international scrutiny, higher transaction costs, and reduced investor confidence. The move also follows similar transparency efforts targeting beneficial owners of companies engaged in government contracts to prevent corruption.

Global Context

Kenya’s initiative mirrors global trends where countries like the UK, EU member states, and South Africa have established trust registries or mandatory disclosure rules. These measures facilitate law enforcement access to information on settlors, trustees, protectors, beneficiaries, and controllers to prevent abuse of corporate structures.