Kenya: Public Benefits Organizations Regulations, 2026

The Public Benefits Organizations Regulations, 2026 (Regulations) were finally gazetted pursuant to Legal Notice No. 43 in Kenya Gazette Supplement No. 67 of 18 March 2026. The Regulations operationalise the Public Benefits Organizations Act (Cap. 134) (PBO Act), which repealed the Non-Governmental Organisations Co-ordination Act, 1990 (NGO Act), and complete the long-anticipated transition from the non-governmental organisation regime under the NGO Act to the public benefits organisation regime under the PBO Act.

The Regulations took effect on 18 March 2026, subject to parliamentary scrutiny under the Statutory Instruments Act. They remain in force unless annulled by Parliament.

The practical impact for organisations lies in a number of technical but material changes requiring immediate attention. This update highlights the key areas of practical significance under the Regulations, which mark a shift towards a more structured and compliance-driven regulatory framework.

• Transition of NGOs registered under the repealed NGO Act to PBO status

The Regulations require NGOs registered under the repealed NGO Act to submit prescribed information and documentation to the PBO Authority for purposes of issuance of a certificate or permit (as applicable) confirming their status as public benefit organizations (PBOs) under the PBO Act.

Timeline: The Regulations do not prescribe a specific timeline. Accordingly, the transition period of 13 May 2026 (under the PBO Act as extended by Gazette Notice No. 6255 of 16 May 2025) applies. Non-compliance triggers a notice, after which failure to comply within 30 days results in the loss of PBO status.

Key impact: NGOs registered under the repealed NGO Act are deemed to be PBOs under the PBO Act. This position has been reinforced by a recent High Court decision (see our previous newsflash), which confirmed that transition occurs automatically by operation of law and that a requirement for fresh re-registration is unconstitutional. Notwithstanding this, the Regulations introduce a structured transition process, for purposes of ensuring recognition under the new PBO framework.

• Governance and compliance obligations

The Regulations operationalise governance and compliance requirements for PBOs, including (a) localisation requirements (at least one-third Kenyan resident directors); (b) formal governance processes and approvals; (c) preparation of audited accounts and annual reporting; (d) maintenance of up-to-date records, including asset registers; and (e) notification of material changes (including changes to the constitution, officials and banking arrangements).

The Regulations also introduce enhanced regulatory oversight, including inquiry powers, mandatory disclosures on funding sources and electronic filings.

Key impact: A governance framework has been introduced by the Regulations, where previously there was a regulatory vacuum following promulgation of the PBO Act without any Regulations underpinning its operationalisation.

As a result of the Regulations, governance and compliance requirements are now more structured and enforceable, with the PBO Authority positioned as an active, ongoing regulator with increased visibility over operations.

• International organisations – An activity-based test

Unlike the repealed NGO Act, international organisations are not required to register as PBOs in order to carry out public benefit activities. However, in order to enjoy the benefits that accrue under the PBO Act, registration under the PBO framework is required.

In this context, the Regulations clarify and operationalise an activity-based distinction between organisations that directly implement activities in Kenya and those that operate indirectly (for example, through grant-making or coordination). Organisations that elect to operate within the PBO framework and directly implement activities in Kenya will be required to register as PBOs, whereas those that operate indirectly may instead seek exemption from registration and operate under a permit.

Key impact: This is an activity-based test rather than a structural one. Organisations operating through local partners but retaining operational control may fall within direct implementation, with implications for licensing requirements, governance obligations, and funding disclosures.

• Bestowment of PBO status – An alternative entry route

The Regulations operationalise the bestowment of PBO status for entities already incorporated under other legal regimes (e.g. companies limited by guarantee, trusts or societies). Such entities may be recognised as PBOs based on their activities, subject to meeting a number of prescribed conditions, and may be bestowed with PBO status on the basis of an application in the prescribed form, including all required information.

Key impact: Bestowment provides a practical alternative to establishing a new PBO, allowing entities to retain their existing legal form while accessing statutory benefits and enhancing credibility with donors and development partners, many of whom require or prefer PBO-registered entities. This is particularly relevant for corporate foundations, donor vehicles, family offices and other impact-driven structures.

• Enforcement timelines – A technical inconsistency with practical consequences

The Regulations introduce a 30-day notice period prior to the suspension or cancellation of a PBO registration under the PBO Act. However, the PBO Act contemplates a shorter timeline of only 21 days.

Key impact: This creates ambiguity between the PBO Act and the Regulations. Organisations should not assume a guaranteed grace period, as a strict application of the PBO Act could support earlier enforcement action. To the extent of any inconsistency, the PBO Act will prevail.

• Suspension now has immediate operational consequences

While the PBO Act empowers the PBO Authority to order an organisation to halt its operations, the Regulations prescribe, operationalise and expand the practical consequences of suspension. A suspended organisation is restricted from, among other things, withdrawing funds (save for statutory obligations), undertaking activities, projects or investments, borrowing or lending funds, disposing of assets, or effecting governance changes.

Key impact: Suspension now extends beyond halting operations to a freeze on the organisation’s financial and asset base, effectively operating as a comprehensive operational and financial lockdown. This represents a material departure from the NGO regime, which did not provide for an equivalent interim suspension framework with automatic asset and funding restrictions.

• Public Benefits Organizations Disputes Tribunal

The Regulations prescribe timelines for appeals to the Public Benefits Organizations Disputes Tribunal. However, recent High Court jurisprudence has declared the provisions of the PBO Act establishing the Tribunal unconstitutional.

Key impact: In practice, disputes are likely to continue to be resolved through the courts pending further legislative or judicial developments, and organisations should monitor developments in this area.

• Incentives under the PBO Act

The Regulations do not address the incentives available to PBOs under the PBO Act, including tax exemptions and other fiscal benefits. 

Key impact: While the Regulations operationalise the registration and compliance framework, access to statutory incentives remains governed by the PBO Act and other applicable laws, including tax legislation. In practice, organisations will still need to engage with relevant authorities, such as the Kenya Revenue Authority, to access these benefits.

Summary of the key procedural requirements, timelines and costs under the Regulations.