Selling services to a client in Nairobi or Mombasa is an ordinary services export from India: you invoice the Kenyan client, list each invoice on your monthly EDF with "Kenya" in the country column, and realise the full value within 9 months of the invoice date. The two Kenya-specific points to plan for are possible tax withholding by the client and charges deducted along the payment route, because both can leave you receiving less than the invoice amount. Agree how those will be handled before work starts.
Key takeaways
- Most Indian exporters invoice Kenyan clients in US dollars; check with your bank before invoicing in Kenyan shillings.
- Payments usually arrive by SWIFT wire, often through intermediary banks that may deduct charges.
- Kenyan clients may withhold tax on payments to non-resident service providers; the details and any treaty relief are for your CA.
- India and Kenya have a DTAA, which matters if tax is withheld.
- Each invoice is one Part 2B row with Kenya as the country; realisation is due within 9 months of each invoice date.
Choosing the invoice currency
US dollars are the practical default for most Indian exporters billing Kenyan businesses. Kenyan companies that buy from abroad are generally used to paying in dollars, and Indian banks handle USD receipts routinely.
Invoicing in Kenyan shillings (KES) is possible in principle, but ask your bank first whether it can receive and convert KES smoothly, since not every Indian bank deals in every currency. Invoicing in Indian rupees depends on a permitted settlement route and changes your realisation window to 12 months; it is uncommon for Kenya work.
Whatever you choose, use the same currency on the invoice and in Part 2B of your EDF.
How the money travels
A typical payment goes from the client's Kenyan bank, by SWIFT, to your bank in India. Depending on the banks involved, the payment may pass through one or more intermediary or correspondent banks, often in the US for dollar payments. Each may deduct a fee.
| Point to agree | Why it matters | What to do |
|---|---|---|
| Who bears bank charges | Intermediary deductions reduce what arrives | State "all bank charges outside India to the client's account" on the invoice if agreed |
| Your bank details | Missing details cause delays and returns | Show account number, SWIFT code and intermediary bank details your bank provides |
| Payment reference | Helps your bank match the payment | Ask the client to quote the invoice number |
| Purpose of payment | Affects the purpose code on your FIRA | Ask the client to describe the service clearly |
Even with clear instructions, small deductions happen. Our guide to bank charges deducted abroad explains how they affect your export value.
Withholding tax and the DTAA
Kenya, like many countries, can require businesses to withhold tax on certain payments made to non-residents, including some service fees. Whether it applies to your invoice, at what rate, and whether the India–Kenya DTAA reduces it depends on the nature of the service and the client's assessment. Do not assume either way.
If your client says it will withhold:
- Ask in writing which provision and rate it is applying.
- Ask your CA whether the DTAA offers relief and whether a tax residency certificate from India would help.
- Collect the client's certificate or receipt for any tax withheld.
- Keep it for your Indian tax return, where you may be able to claim credit for foreign tax paid.
Our explainers on withholding tax and foreign tax credit and Form 67 cover the Indian side. This is general information, not legal or tax advice, and Kenyan rules in particular should be checked with a qualified adviser.
Putting Kenyan invoices on the EDF
Each invoice to a Kenyan client is a row in Part 2B: recipient's name and address, Kenya as the country, invoice number and date, currency, amount, net realisable value, description, SAC code, and contract reference. Field 1.17, country of final destination, is Kenya if it is your only destination that month; otherwise ask your bank how it wants a multi-country month shown.
The NRV deserves thought. If you expect intermediary charges, you can reflect them in the NRV. Withheld tax is a different matter: the client has paid the tax to its government rather than to you, and how your bank treats that shortfall when closing the EDPMS entry is a question to put to the bank directly. Tell the bank about the withholding when the payment arrives, share the tax certificate, and ask how it wants the shortfall shown.
A worked example
Ember Health IT Pvt Ltd, a Hyderabad company, is building a clinic management system for a healthcare group in Nairobi. The contract is in US dollars, with milestone billing.
In December 2026 Ember invoices USD 22,000 for the second milestone, dated 11 December. The invoice states that bank charges outside India are for the client's account and asks the client to quote the invoice number. Ember's December EDF, due by 30 January 2027, lists the invoice in Part 2B with Kenya as the country, USD 22,000 as the amount and a software development SAC code.
The client pays in March 2027. It withholds tax on the payment, which its finance team had flagged in advance, and sends a withholding certificate. The amount credited in India is lower than the invoice. Because the invoice is above ₹10 lakh at Ember's book rate, Ember sends its bank the invoice, the FIRA, the withholding certificate and a matching instruction explaining the difference, and asks how the bank wants the shortfall recorded. Ember's CA uses the certificate when preparing the company's foreign tax credit claim.
Realisation timing
Payments from Kenya are usually well within the 9-month realisation window, but approvals for foreign payments and correspondent banking can add time. Track each invoice from its own date. If a payment is genuinely delayed, ask your AD bank for an extension with reasons before the deadline passes.
Frequently asked questions
Should I invoice Kenyan clients in USD or KES?
USD is the usual choice and is easy for Indian banks to handle. If a client wants to pay in Kenyan shillings, check with your bank first whether it can receive and convert that currency smoothly.
Will a Kenyan client deduct tax from my invoice?
It may, depending on the service and Kenyan rules on payments to non-residents. Ask the client in writing whether it will withhold, at what rate, and under which provision, and check DTAA relief with your CA.
How do I show withheld tax on the EDF?
The invoice amount stays as invoiced in Part 2B. When the payment arrives short because of withholding, tell your bank, share the tax certificate and ask how it wants the shortfall treated when it closes your EDPMS entry.
What country do I enter on the EDF for a client in Nairobi?
Enter Kenya as the recipient's country in Part 2B. In field 1.17, enter Kenya if it is the only destination that month; otherwise ask your bank how to fill it for a mixed month.
Does India have a tax treaty with Kenya?
Yes, India and Kenya have a double taxation avoidance agreement. It can matter if tax is withheld on your payments; your CA can advise whether it reduces the withholding and how to claim credit in India.
Bottom line
Kenya work runs smoothly once currency, bank charges and withholding are agreed up front. List each invoice with Kenya as the country, watch the 9-month window, and prepare your monthly declaration with our free EDF form generator.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.