Outsourcing software development to India from Kenya
India is two and a half hours ahead of Nairobi and does business in English. This guide covers how Kenyan and East African companies can set up the work, the contract, payments, tax and data protection, with a plan for the first 30 days.
Why Kenyan companies look to India
There are three common reasons to look abroad: a skill you cannot hire locally fast enough, a team you need for a fixed period, or a build you want a partner to run from start to finish. India is a practical option for all three.
- A working day that overlaps. Most of your day is also the Indian team’s day, so questions get answered the same afternoon.
- English as a working language. English is one of Kenya’s two official languages, with Kiswahili, and the working language of most Indian IT teams.
- Flexible ways to engage, from one developer on a monthly contract to a whole team or a fixed-scope project.
- Invoices in US dollars, so you can pay by international transfer without a rupee conversion on your side.
If you are comparing partners, start with how to choose a software development company in India. This guide covers what is specific to working from Kenya.
Working hours and overlap
Kenya runs on East Africa Time (EAT, UTC+3) and India on Indian Standard Time (IST, UTC+5:30). Neither changes its clocks, so India is two and a half hours ahead all year.
| In Nairobi (EAT) | In India (IST) | Good for |
|---|---|---|
| 09:00 | 11:30 | Your day starts; the Indian team is already working |
| 09:30 | 12:00 | A daily stand-up that suits both sides |
| 13:00 | 15:30 | Reviews, demos and decisions |
| 15:30 | 18:00 | End of the shared window on a 9-to-6 day |
On a 9:00 to 18:00 day at both ends, that gives six and a half shared hours, 09:00 to 15:30 in Nairobi. Plan meetings and reviews inside that window, and use the rest of the Indian day for focused work.
Holidays differ too. Kenya’s national days are Madaraka Day (1 June), Mashujaa Day (20 October) and Jamhuri Day (12 December), and Indian festival holidays such as Diwali move from year to year. Share both calendars every January.
Choose how you will engage
| Model | What you get | Works best when | Effred’s terms |
|---|---|---|---|
| Staff augmentation | One or more people in your team, in your stand-ups and tools | You have a tech lead who directs the work | From one person, billed monthly |
| Dedicated team | A full squad, with engineers, QA and a lead, working only on your product | You have a long roadmap and want the same people on it | From three people, billed quarterly |
| Project outsourcing | An agreed scope delivered by the partner’s team | The scope can be written down and tested | Paid discovery, then a fixed estimate for the first release |
| Contract-to-hire | Work together first, then move the person to your payroll | A key hire you want to see working first | A three-to-six-month trial |
| Build–operate–transfer | A team set up and run in India, then transferred to your own entity | You want your own centre in India in the long run | 12 to 36 months; you will need an Indian entity to transfer into |
It often pays to start small, with one or two augmented engineers or a short discovery, and grow once the working rhythm is proven.
Contracts, payments and tax
Currency and Indian GST
Agree the invoice currency up front. Effred bills in INR, USD, AED, GBP or EUR; from Kenya, USD is usually the simplest. Under India’s IGST Act, a service supplied from India to a client outside India, with the place of supply outside India and payment received in convertible foreign exchange, is an export of services and zero-rated, so a qualifying invoice carries no Indian GST.
Kenyan withholding tax and the tax treaty
KRA’s withholding tax table lists 20% on management and professional fees paid to non-residents. The India–Kenya tax treaty, in force since 30 August 2017, caps tax in Kenya on fees for management, professional and technical services at 10% of the gross amount where an Indian resident is the beneficial owner (Article 13). Its definition includes “the provision of services of technical or other personnel”, which can cover staff augmentation. India then allows the Indian supplier a deduction for the tax paid in Kenya, up to the Indian tax on that income (Article 24).
Ask your tax adviser how this applies to your contract, what evidence you need to apply the treaty rate, whether Kenyan VAT applies to services bought from abroad, and whether invoices are quoted net or gross of withholding. Put the answer in the contract.
Visits to Kenya
Under the same treaty, an Indian company can have a permanent establishment in Kenya if its people provide services there for more than 90 days in any 12-month period on the same or connected projects (Article 5). Short visits for workshops or go-lives are common; long stays on site need planning with your advisers.
Clauses to insist on
- IP assignment. Under India’s Copyright Act, 1957, an assignment that does not state a territory is presumed to cover India only, and one without a period lasts five years. Ask for a worldwide assignment for the full term of copyright, in writing and signed.
- Your accounts. Code, cloud and app store accounts in your company’s name from day one.
- Disputes. Agree the governing law and an arbitration seat. India and Kenya are both parties to the New York Convention on enforcing foreign arbitral awards.
- Exit. Notice periods, a handover plan and the return of all data when the contract ends.
Data protection: Kenya’s rules and India’s
If the Indian team will see personal data about your customers or staff, Kenya’s Data Protection Act, 2019 applies to the transfer.
- A ground for the transfer. Personal data may leave Kenya only on the grounds in section 48, such as proof to the Data Commissioner of appropriate safeguards, or where the transfer is necessary for a contract with the data subject.
- Safeguards in writing. Under regulation 41 of the Data Protection (General) Regulations, 2021, safeguards can be a legal instrument binding the recipient that gives protection essentially equivalent to Kenyan law. Transfers made this way must be documented: date and time, recipient, justification and a description of the data.
- Sensitive data needs consent. Kenya’s definition of sensitive personal data is wide: health, biometric and genetic data, but also property details, marital status and family details. HR and customer records often include it, and it may leave Kenya only with the person’s consent and confirmed safeguards (section 49).
- Sub-processors. The ODPC’s guidance note on cross-border transfers expects onward transfers to need your prior written authorisation, so the contract should list who else may see the data.
- Registration. The ODPC’s registration guidance covers data controllers and data processors outside Kenya that process personal data of people in Kenya. Entities below both thresholds, KES 5 million turnover and ten employees, are exempt, except in listed sectors such as financial services, health, education and telecommunications. Ask your Indian partner whether it needs to register as your processor.
On the Indian side, the Digital Personal Data Protection Act, 2023 exempts an Indian company processing data about people outside India, under a contract with a company abroad, from most of its duties, but not from the duty to protect that data with reasonable security safeguards (sections 17 and 8). Your contract should set the security standard either way.
The simplest arrangement is often the safest: keep production data in your own cloud account, give the Indian team access through your accounts, and use masked or made-up data for development and testing.
This guide is general information, not legal or tax advice. Check the current position with a Kenyan data protection lawyer and your tax adviser before personal data or money moves.
Communication that works across the border
- One channel per purpose: chat for quick questions, the ticket board for work, email for decisions you need on record.
- A stand-up inside the shared window, 15 minutes, every working day.
- Working software every two weeks, shown on a real environment, not in slides.
- A short written update every week: done, next, risks and budget.
- Named contacts and an escalation path on both sides, up to a director.
A 30-day start plan
- Days 1–3: briefA 30-minute call on skills, seniority, budget and your working hours, or a discovery kick-off for a project. With Effred, a shortlist of three to five vetted profiles usually follows within three working days.
- Days 4–7: interview and contractInterview the people yourself. Sign the contract, NDA, IP assignment and data processing terms, and take tax advice on withholding.
- Days 7–14: onboardingAccounts through your sign-in, repositories and tools set up, and a first piece of work agreed. Effred usually gets people started within one to two weeks, depending on notice periods.
- Days 15–30: first sprintA stand-up every day in the shared window, a demo at the end of the sprint and a review of what to change: hours, tools, people or scope.
- Day 30: check the paperworkFirst invoice, the withholding position, the transfer records Kenyan law asks for, and a decision on whether to grow the team.
To talk it through, see Effred for Kenyan and East African companies, read about hiring engineers through Effred or custom software development, or book a call. How we work with the other regions is on our Worldwide page.
Common questions
What is the time difference between Kenya and India?
India is two and a half hours ahead of Kenya all year: Kenya is on EAT (UTC+3), India on IST (UTC+5:30), and neither changes its clocks. On a 9-to-6 day at both ends you share six and a half hours, 9:00 to 15:30 in Nairobi.
Do Kenyan companies withhold tax when paying an Indian software company?
Usually, yes. KRA lists 20% on management and professional fees paid to non-residents, and the India–Kenya tax treaty caps it at 10% for fees for management, professional and technical services. Ask your tax adviser how it applies to your contract.
Can a team in India work with personal data from Kenya?
Yes, if the transfer meets Kenya’s Data Protection Act, 2019: a ground under section 48, a written agreement with appropriate safeguards, records of each transfer, and consent for sensitive personal data.
How quickly can we start with developers from India?
With Effred, a shortlist of three to five vetted profiles usually arrives within three working days of a 30-minute brief, and people usually start within one to two weeks.
Sources
- timeanddate.com — Nairobi time zone (EAT, UTC+3, no daylight saving) (opens in a new tab)timeanddate.com
- timeanddate.com — India time zone (IST, UTC+5:30, no daylight saving) (opens in a new tab)timeanddate.com
- Constitution of Kenya, 2010, articles 7 and 9 — Kenya Law (opens in a new tab)new.kenyalaw.org
- Data Protection Act, 2019, sections 2, 48, 49 and 50 — Kenya Law (opens in a new tab)new.kenyalaw.org
- Data Protection (General) Regulations, 2021, regulations 40 to 42 — Kenya Law (opens in a new tab)new.kenyalaw.org
- ODPC — Guidance Note on Registration of Data Controllers and Data Processors (opens in a new tab)odpc.go.ke
- ODPC — Guidance Note on Cross-border Data Transfers (2026) (opens in a new tab)odpc.go.ke
- Kenya Revenue Authority — Withholding Income Tax rates (opens in a new tab)kra.go.ke
- Income Tax Department, India — India–Kenya Double Taxation Avoidance Agreement (articles 5, 13 and 24) (opens in a new tab)incometaxindia.gov.in
- CBIC — IGST Act, 2017, section 2(6) (export of services) (opens in a new tab)taxinformation.cbic.gov.in
- CBIC — IGST Act, 2017, section 16 (zero-rated supply) (opens in a new tab)taxinformation.cbic.gov.in
- The Copyright Act, 1957, section 19 — Copyright Office, Government of India (opens in a new tab)copyright.gov.in
- Digital Personal Data Protection Act, 2023, sections 8 and 17 — MeitY (opens in a new tab)meity.gov.in
- UNCITRAL — status of the New York Convention on foreign arbitral awards (opens in a new tab)uncitral.un.org
Spotted something out of date or unclear? Email info@effred.com and we will look at it.