Kuwait’s Minister of Commerce and Industry has issued Ministerial Resolution No. 8 of 2026, introducing a more structured and transparent framework governing the withdrawal of industrial plots by the Public Authority for Industry (PAI).
The resolution, which entered into force on 5 May 2026, is particularly relevant for:
- Industrial operators;
- Companies leasing industrial plots from PAI;
- Investors; and
- Parties involved in M&A transactions involving industrial assets.
The new framework formalises the circumstances in which industrial plots may be withdrawn, while also introducing defined enforcement procedures, appeal rights, and significant penalties for non-compliance.
Key changes under the new framework
Under the resolution, industrial plots may be withdrawn in several circumstances, including where:
- an industrial plot or licence was obtained through false or misleading information or other unlawful means
- industrial activity ceases for six months
- production capacity is reduced or changed without PAI approval
- industrial register information is not updated
- plots are used outside their permitted purpose
- plots are sub-leased, transferred or usage rights are granted to a third party without approval
- environmental, safety, or lease obligations are breached
- the lease term expires
The resolution also establishes a formal withdrawal and appeal process for industrial plots. Withdrawal is implemented through a resolution issued by the Minister of Commerce and Industry, and proceedings may only be initiated by PAI one month after publication of the relevant resolution in the Official Gazette.
Affected parties may appeal within 30 days, with enforcement suspended pending determination of the appeal. If the appeal is rejected, the lessee must vacate the plot within one month, subject to a possible extension of up to six months upon approval by the Director General of PAI.
The framework also introduces significant financial penalties for delays in handing over withdrawn plots, which may escalate to as much as 100% of annual usage fees per month depending on the duration of the delay.
Why this matters
The resolution is expected to affect how businesses manage operational compliance relating to industrial plots in Kuwait.
It is also likely to become increasingly relevant in financing transactions, corporate restructurings, and M&A due diligence exercises involving industrial assets leased from PAI, particularly where operational use, licensing compliance, or third-party arrangements are involved.
Businesses operating from industrial plots may wish to review:
- lease arrangements;
- operational compliance procedures;
- industrial register records; and
- any subleasing, usage rights, or arrangements involving third parties.
How ASAR can help
ASAR advises clients on the regulatory, operational, and transactional matters involving industrial assets in Kuwait, including compliance reviews, risk assessment, leasing considerations, and M&A due diligence.
For more information, please contact our team at: asar@asarlegal.com
