Where Is Your Company Really Managed? The M-Kopa POEM Case

Imagine this:

• Your board meets on Zoom.
• The Chair logs in from Nairobi.
• The CFO dials in from London.
• The CEO joins from New York.

The question is: Where is your company really managed?

The M-Kopa Case

In M-Kopa LLC v. Kenya Revenue Authority, the Tribunal had to decide where the company's Place of Effective Management (POEM) was located.

KRA's position:

M-Kopa, though incorporated abroad, was effectively run from Kenya because several directors and executives were based in Nairobi and many meetings happened in Nairobi.

M-Kopa's position:

Strategic decisions were made outside Kenya and the board retained control abroad.

The Tribunal's Decision

• In 2017, only one out of four full board meetings was held in Kenya.
• Most directors lived outside Kenya.
• While management was operationally active in Nairobi, the real decision-making happened abroad. (All decisions that were made by the board committees required the approval of the board of directors.)
• The location where a company's board regularly convenes and makes decisions may often be its place of effective management, provided the board retains and exercises its authority to govern the company and substantially make the essential management and commercial decisions.

Result: M-Kopa's POEM was not in Kenya, so it was not a Kenyan tax resident for that year.

Lessons for Today's Remote-First Businesses

• POEM is about substance, not registration. Where decisions are actually made carries more weight than where you are incorporated.
• Board matters more than operations. Tax authorities look at board-level decisions not just where executives sit.
• Residency is assessed annually. Every year stands on its own facts.

This shows us that POEM is about substance over form. In a remote world, it's easy for tax residency to drift without anyone noticing.