Kuwait has introduced new rules to combat commercial concealment and strengthen restrictions on arrangements used to circumvent licensing requirements or statutory foreign ownership requirements.

Decree-Law No. 78 of 2026 concerning the Combating of Commercial Concealment was published in the Official Gazette on 9 August 2026. The law will come into effect six months from the date of publication and introduces significant criminal, financial and regulatory consequences for businesses and individuals involved in prohibited arrangements.

What has changed?

Broader rules on commercial concealment

The law covers arrangements that enable a person or company to carry out an economic activity that they are not legally permitted to conduct, whether independently or together with another person. It also covers arrangements designed to circumvent statutory foreign ownership restrictions.

This is particularly relevant to businesses using ownership or nominee arrangements where the underlying structure may not reflect the ownership permitted under applicable Kuwaiti law.

Stricter licensing and operating restrictions

A person may not conduct an economic activity in Kuwait without the required licence or operate beyond the scope of that licence through an arrangement with another person.

It is also prohibited to enable another person to conduct such activities, including by allowing the use of a trade name, licence, approval or commercial registration.

Significant penalties

Violations may result in:

• Imprisonment for one to three years.
• Fines between KWD 10,000 and KWD 100,000, or an amount equivalent to the profits derived from the violation, whichever is greater.
• Cumulative fines depending on the number of persons involved or unlawful activities carried out.

Personal liability of management

Individuals responsible for the actual management of a legal entity may be personally liable where they knew about the violation, contributed to it, or where the violation resulted from a breach of their management duties.

The legal entity may also be jointly and severally liable for financial penalties and compensation where an employee commits the violation in the entity’s name or for its benefit.

Further consequences following conviction

Upon conviction, the court is required to order the confiscation of funds or profits derived from the offence, as well as the tools, equipment and other means used to conduct the unlawful activity.

Other consequences may include the permanent closure of the relevant premises, revocation of the relevant licence, and in the case of an offending foreign national, deportation following completion of the sentence.

Settlement and enforcement

The law introduces a settlement mechanism that allows the Minister of Commerce and Industry, or his delegate, to settle offences before a final judgment, subject to payment of the prescribed settlement amount, remedying the violation and regularising the legal status. Settlement is not available in cases of recidivism.

Designated Ministry of Commerce and Industry officials will also have judicial enforcement powers, including the ability to conduct inspections and obtain relevant data, information and documents.

What should businesses consider?

Businesses operating in Kuwait should consider reviewing their existing:

• Ownership and shareholder arrangements.
• Licensing and commercial registration structures.
• Management and operational arrangements.
• Use of trade names, licences and commercial approvals.
• Arrangements involving foreign ownership restrictions, including any nominee or similar arrangements.

The review should consider whether the business’s activities, ownership structure and operating arrangements remain within the requirements of applicable Kuwaiti law before the new law comes into effect.

How ASAR Can Help

ASAR can assist businesses in Kuwait with reviewing their ownership and operating structures, assessing licensing and commercial registration arrangements, and identifying any changes that may require attention in light of the new law.

ASAR’s Kuwait team advises clients on regulatory compliance, corporate structuring, licensing and foreign investment matters. For further information, please contact ASAR Kuwait at asar@asarlegal.com.