Estonian Company Run from Kenya: Tax Rules

Some entrepreneurs who live in Kenya form or buy an Estonian private limited company (OÜ), often as e-residents, and run it from Nairobi or Mombasa. That works, but Kenyan income tax does not look only at where a company was founded: a body of persons is resident in Kenya if the management and control of its affairs was exercised in Kenya in the year of income, and a place of management is a permanent establishment. Estonia and Kenya have no tax treaty. This guide sets out these rules with the official text, and what we do on the Estonian side.

The guide is general information, not tax advice. How your company and you are taxed depends on the facts of your case; ask a Kenyan tax adviser before you form or buy the company. We read the Income Tax Act (Cap. 470) in the consolidated version of 1 July 2026 published by Kenya Law, the official law reporting body, with the Finance Act 2026, and the Estonian Ministry of Finance's list of tax treaties, on 24 October 2026.

In Estonia: an Estonian company is Estonian

A company established under Estonian law is resident in Estonia for tax purposes (Income Tax Act § 6). Its profit is taxed when it is distributed, not while it stays in the company — the guide how Estonia taxes company profit explains the rule. The company keeps its Estonian duties wherever its owners live: accounts, an annual report to the commercial register and, if its address is abroad, a contact person in Estonia.

In Kenya: the company side

Management and control in Kenya. A body of persons is resident in Kenya if it is a company incorporated under a law of Kenya, if the management and control of its affairs was exercised in Kenya in the year of income, or if the Cabinet Secretary has declared it resident by notice in the Gazette (Income Tax Act, section 2(1), "resident").
What is taxed. Income tax is charged on all the income of a person, resident or non-resident, which accrued in or was derived from Kenya (section 3(1)).
A place of management is a permanent establishment. A permanent establishment includes a fixed place of business through which business is wholly or partly carried on, and that includes a place of management (section 2(1), "permanent establishment").
Rate. A resident company pays Sh 6 in each Sh 20 of income, that is 30 per cent, from the year of income 2021; a non-resident company with a permanent establishment in Kenya pays the same from the year of income 2024 (Third Schedule, Head B, paragraph 2).

An Estonian OÜ is incorporated in Estonia. If you live in Kenya and the management and control of its affairs is in fact exercised there, Kenya can treat the company as resident; and its income from Kenya is taxable there in any case. Your Kenyan tax adviser answers that with the facts of your case.

In Kenya: the owner side

Who is a resident individual. An individual is resident if they have a permanent home in Kenya and were present in Kenya in the year, or, without a permanent home, were present for 183 days or more in the year, or in that year and each of the two preceding years for periods averaging more than 122 days a year (section 2(1), "resident").
No controlled foreign company rule. The Act as we read it has no rule that adds the retained profit of a foreign company to its Kenyan owner's income.

How an owner living in Kenya is taxed on what the Estonian company pays out is a question for your Kenyan tax adviser.

No tax treaty between Estonia and Kenya

No treaty. Kenya is not on the Estonian Ministry of Finance's list of tax treaties in force, signed or initialled.
What that means. There is no treaty rule on a company resident in both countries, on a permanent establishment or on the tax on dividends and board fees — each country applies its own law. See board member fee or dividend from abroad for the Estonian side.

What to decide before you form or buy the company

Where the company is managed and controlled. That is the fact the Kenyan residence rule looks at.
Where the income comes from. Income derived from Kenya is taxed there whoever owns the company.
How profits reach you. Without a treaty, each country applies its own rules to dividends and board fees.

The two company forms side by side — founding document, capital, share transfer and the company tax: Estonian OÜ or Kenyan private company.

What we do on the Estonian side

for your own company, a written analysis of its tax residence and permanent establishment under these rules — an analysis, not tax advice;
online formation for an e-resident — €950 Registered address and contact person service for one year are included., or formation by power of attorney — €1,250;
a ready-made company bought remotely — €1,200 Registered address and contact person service for one year are included.;
accounting — from €150 / month and the annual report — from €450;
the registered address and contact person after the first 12 months — €350 / year.

Our accounting covers the Estonian company's Estonian obligations. Kenyan tax returns and Kenyan tax advice are not included. Owners in other countries: Estonian company run from abroad compares the rules side by side.

Prices exclude VAT. All communication takes place by email.

Ready to start? A new Estonian company — online for e-residents or by power of attorney; Kenyan tax advice is not included. Order.

Official sources

The laws this article names, by the name of their official text, as read on 9 October 2026. For the Estonian acts we read the English translation in Riigi Teataja; the legally binding text is the Estonian one.

Income Tax Act — Riigi Teataja, English translation

Sources are named in the text, without links. To see which of our services your company needs, open the Business Navigator.

Frequently asked questions

Is my Estonian company taxed in Kenya if I run it from Kenya?

It can be. A body of persons is resident in Kenya if the management and control of its affairs was exercised in Kenya in the year of income (Income Tax Act, section 2(1)), and income tax is charged on income which accrued in or was derived from Kenya (section 3(1)), at 30 per cent for a company (Third Schedule, Head B, paragraph 2). A place of management is also a permanent establishment. In Estonia the company stays resident because it was established under Estonian law (Income Tax Act § 6). Estonia and Kenya have no tax treaty, so each country applies its own law. Ask a Kenyan tax adviser before you form or buy the company; we handle the Estonian side.

Estonian company run from Kenya: what is taxed where