NAIROBI, KENYA – The Kenyan government has initiated a significant policy overhaul aimed at regulating the influx of foreign workers while strategically positioning the nation as a premier hub for digital and remote services. Announced on Thursday, 20 November 2025 EAT, by the Cabinet Secretary for Investments, Trade and Industry, Lee Kinyanjui, the move seeks to balance the protection of the local labour market with the need to attract specialized international talent in the burgeoning digital economy.

The new framework introduces stricter vetting and justification requirements for companies seeking to hire expatriates, emphasizing skills transfer to Kenyan nationals. This policy shift is designed to address concerns about local unemployment and ensure that foreign expertise contributes directly to building domestic capacity. At the same time, the government is actively promoting labour mobility agreements to expand employment opportunities for Kenyans abroad, with CS Kinyanjui noting that approximately 400,000 Kenyans secured jobs overseas in 2025 alone.

A Strategic Pivot to the Digital Economy

Central to the government's new strategy is a pronounced shift towards digital services, a move intended to leverage global trends in remote work and technology. Kenya has introduced a new "Class N" work permit, specifically designed for digital nomads—foreign nationals employed by companies based outside Kenya who wish to work remotely from the country. To qualify for this permit, applicants must demonstrate a guaranteed annual income of at least $24,000 from non-Kenyan sources, a figure revised down from an initial proposal of $55,000 to enhance the country's competitiveness.

This initiative is part of a broader national effort to cement Kenya's status as a "Silicon Savannah." The government's Digital Master Plan (2022-2032) aims to digitize the majority of public services and lay 100,000 kilometers of fiber optic cable to create a robust digital infrastructure. These efforts are supported by significant international partnerships, including a $390 million World Bank-funded Kenya Digital Economy Acceleration Project that commenced in 2024.

Implications for East African Integration and Foreign Investment

The policy changes also carry significant weight for the East African Community (EAC). A new "Class R" permit has been created exclusively for citizens of EAC member states, allowing them to live, work, and conduct business in Kenya without any application or annual fees. This move aligns Kenya with regional partners like Rwanda and Uganda and is expected to deepen economic integration and foster collaboration within the bloc.

However, the stricter regulations on traditional expatriate employment and recent tax changes could present challenges for foreign companies. The Finance Act 2025 removed a long-standing tax incentive that allowed for a partial deduction of employment income for certain expatriates, increasing their personal tax liability. Analysts suggest this could deter foreign direct investment, as companies may face higher operational costs if they need to bring in specialized foreign talent. Business leaders have urged the government to strike a careful balance between generating revenue and maintaining a conducive environment for investment.

Navigating the New Landscape

The government's dual approach—tightening rules for on-site foreign labour while opening doors for remote digital talent—reflects a strategic adaptation to a changing global economy. CS Kinyanjui's ministry is tasked with raising the manufacturing sector's contribution to GDP from 7 percent to 20 percent by 2030, a goal that requires both local capacity building and targeted foreign expertise.

The emphasis on digital services is further underscored by new regulations for the digital economy, including the Virtual Asset Service Providers Bill 2025 and a Significant Economic Presence (SEP) tax targeting non-resident technology firms. As these policies are implemented, businesses and foreign professionals will need to navigate a more complex regulatory environment. The Directorate of Immigration Services has already begun issuing permits under the new classifications. The long-term success of this strategy will depend on the government's ability to effectively implement the new regulations, foster genuine skills transfer, and create a globally competitive digital ecosystem that attracts innovation and investment while providing tangible opportunities for Kenyans.