The Council of Ministers has issued the Law No. 118 of 2023 on the Incorporation of Companies for the Construction and Economic Development of Cities and Residential Areas.
Noteworthy features of this law include the following:
- Establishing a public-private partnership (PPP) regime parallel to the mainstream PPP framework enshrined in Law No. 116 of 2014 with respect to the construction of cities and residential areas. This represents the latest development in expanding the powers of the Public Authority for Housing Welfare (“PAHW”) to undertake PPP projects in the urban development sphere.
- Widening the authorities of the PAHW (LINK TO https://www.pahw.gov.kw/home_en) by enabling it to, among other things, a) establish specific public joint stock companies for specific urban development projects with a mixed shareholding structure, b) launch special tenders to choose the investor to invest in the project company, and c) issue construction permits with respect to projects taking place on PAHW-allocated lands.
- Requiring the constitutional documents of project companies to be Shari’ah compliant, which may raise concerns with respect to the type of financing to be obtained for the urban development
We stand ready to assist prospective clients from both the private and public sectors seeking more guidance on the above law. Our in-depth legal expertise in the PPP sector makes us the ideal choice to support our clients with their needs.
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