Kuwait Companies Required to Disclose Ultimate Beneficial Ownership from 1st April 2023

The Ministry of Commerce and Industry (“MOCI“) in Kuwait has issued Resolution 4/2023 (“Resolution 4/2023”) in the Kuwait Gazette on 8 January 2023. This Resolution has been introduced in an attempt to contribute to the country’s business environment, enhance its economic position to meet international standards, and develop effective regulatory mechanisms relating to the data of ultimate beneficial owners (“UBO”) in Kuwaiti entities.

Resolution 4/2023 mandates that all corporate entities in Kuwait, except for companies fully owned by the state or state-owned companies, disclose their ultimate beneficial owners. The resolution defines UBOs as natural persons who directly or indirectly own 25% or more of a Kuwaiti company, possess voting shares equal to or exceeding 25% of the company’s voting shares, or have the ability to control the company in any manner.

What’s new?

Resolution 4/2023 requires companies in Kuwait to maintain a register of their UBOs, which must include details such as how the UBO became associated with the company and, if applicable, the date on which the UBO ceased to be associated with the company, from a corporate viewpoint.

What does this mean for companies in Kuwait?

Under Resolution 4/2023, companies in Kuwait must disclose information about their UBOs within (60) days of the effective date of Resolution 4/2023, also upon (i) incorporation; (ii) registration at the Commercial Registry Department at the MOCI; (iii) renewal of the commercial license; (iv) any changes to the memorandum and articles of association of the company, or whenever requested by the Commercial Registry Department.

Failure to comply with the disclosure requirements could result in obstacles to obtaining or renewing an MOCI license. Companies subject to Law No. 106 of 2013, as amended, regarding Combatting of Money Laundering (“AML“), will face criminal penalties for non-compliance.

The effective date of Resolution 4/2023 is April 1, 2023.

It remains to be seen how the resolution will affect foreign UBOs in Kuwait, the level of UBO disclosure required, and the tax implications of the resolution.

How can we help?

Al Tamimi & Company’s Kuwait office is well-versed in advising on Corporate Commercial and Corporate Structuring matters, as well as supporting clients in meeting compliance and regulatory obligations in Kuwait. We are available to offer additional information on this recent development, and can assist your organization in adjusting to the new regulatory landscape. To learn more about the details of this alert, please reach out to one of our key contacts.