Salient provisions of the Public Benefits Organizations Regulations, 2026

Kenya’s Public Benefits Organizations Regulations, 2026 introduce significant clarification on the operation and regulation of Public Benefits Organizations (PBOs) under the Public Benefits Organizations Act, 2013. The Regulations establish a framework for determining eligibility for PBO status, set out registration and operational requirements, prescribe rules for international PBOs, and clarify the limits within which PBOs may undertake economic activities. Organisations operating on a not-for-profit basis should review their structures and activities to determine whether registration or compliance action is required.

What are the key changes under Kenya’s Public Benefits Organizations Regulations, 2026?
On 18 March 2026, the Government enacted the Public Benefits Organizations Regulations, 2026 (the Regulations) to  operationalise the Public Benefits Organizations Act, 2013 (the Act).

The Regulations seek to provide clarity on the registration, governance and regulation of Public Benefits Organizations (PBOs) under the supervision of the Public Benefits Organizations Authority (PBO Authority).

The Regulations introduce greater certainty for organisations operating in the not-for-profit sector and provide practical guidance on qualification, registration and ongoing compliance obligations.

Public Benefit Test for PBO Registration in Kenya
The Regulations establish a public benefit test, which determines whether an organization qualifies for registration as a PBO.
The PBO Authority will consider whether:
   ● the activity constitutes a public benefit activity under the Act;
   ● the activities fall within the areas specified under the Sixth Schedule to the Act;
   ● beneficiaries of the activities are identifiable;
   ● the benefit directly supports the public benefit purpose and is not incidental; and
   ● the activities do not provide private benefit to directors, immediate family members or close business associates of office bearers.

Organisations considering registration should assess their activities against this test before applying for PBO status.
Notably, it is an offence to operate a PBO that does not undertake a public benefit activity.

Registration Requirements for Public Benefits Organisations
The Regulations make registration mandatory for organisations operating as PBOs.
Key provisions include:
   ● registration requirements for organisations seeking PBO status;
   ● procedures through which entities incorporated under other legal frameworks (including companies limited by guarantee and charitable trusts) may obtain PBO status; and
   ● procedures governing registration of international PBOs.

Registration and Exemption Rules for International Public Benefits Organisations
The Regulations distinguish between organisations that directly implement public benefit activities and those undertaking indirect implementation.
International PBOs may require registration where they:
   ● directly implement programmes or activities in or from Kenya;
   ● collect membership subscriptions;
   ● undertake fundraising activities; or
   ● engage directly with beneficiaries.

Organisations operating in the following ways may instead qualify for exemption as exempt international PBOs:
   ● collaborating with local partners and stakeholders to achieve its objectives in Kenya or from Kenya; 
   ● providing financial grants or assistance to other organizations to enable them to achieve their objectives in Kenya; 
   ● providing policy guidance to implementing partners and service providers to ensure effective delivery of their public benefit activities; or
   ● providing technical assistance to other organizations in Kenya in furtherance of their public benefit activities.

International organisations should therefore carefully assess their operating model before determining the appropriate registration pathway.

Reporting and Governance Obligations for PBOs
Registered PBOs must:
   ● submit annual reports to the PBO Authority; and
   ● notify the Authority of changes affecting their structure and operations.

The Regulations also establish a framework for recognising forums of PBOs.
To qualify, a forum must:
   ● consist of at least ten registered PBOs; and
   ● comprise organisations undertaking related activities or operating within the same geographical area.

Economic Activities by Public Benefits Organisations
The Regulations clarify circumstances under which a PBO may undertake economic activities.
PBOs must ensure that:
   ● all relevant licences and approvals are obtained;
   ● activities are undertaken in the best interests of the organization;
   ● sound business practices are applied; and
   ● proceeds are used exclusively to advance public benefit activities.

Government Fees for Registration
The Regulations prescribe fees applicable to various services, including:
   ● PBO registration – KES 25,000;
   ● bestowment of PBO status – KES 20,000;
   ● international PBO registration – KES 45,000;
   ● exemption applications for international PBOs – KES 75,000; and
   ● recognition of PBO forums – KES 10,000.

Organisations should consider these costs when planning registration and operational structures.

Outstanding Areas Requiring Further Guidance
While the Regulations provide substantial clarity, they remain silent on the practical application of several benefits under the Second Schedule to the Act, including:
  ● tax exemptions and incentives;
  ● direct government financing;
  ● procurement preferences;
  ● access to policy participation mechanisms; and
  ● government-supported training opportunities.

Further guidance from the PBO Authority would assist organisations in understanding how these benefits may be accessed and implemented.

Implications for Organisations Operating in Kenya
Organisations operating on a not-for-profit basis should consider:
  ● undertaking a public benefit assessment;
  ● reviewing whether current structures qualify for PBO registration;
  ● assessing international operating models;
  ● strengthening compliance and reporting processes; and
  ● monitoring future guidance issued by the PBO Authority.

Conclusion
The Public Benefits Organizations Regulations, 2026 represent a significant step towards clarifying the operational framework for not-for-profit organizations in Kenya. Organizations should review their structures, activities and compliance procedures to determine whether registration, exemption or broader governance changes may be required.

Early engagement with the new framework will be important in managing compliance obligations and ensuring operational continuity.

While the Regulations establish clearer registration and governance structures, further guidance on statutory incentives and benefits will likely be critical in determining the long-term attractiveness of the PBO framework.

This alert serves the purpose of general guidance and is not intended to constitute specific legal advice. For legal advice concerning this alert, please contact our Partner, Shitul.Shah@CMS-DI.com. 

*Contributors
    ● Winnie Githiri - Senior Associate
    ● Brian Gatuguti - Senior Associate
    ● Monica Ngugi – Company Secretary
    ● Dennis Karuri – Company Secretary
    ● Titus Guandaru – Head of Company Secretarial Practice