Kuwait’s New Anti-Commercial Concealment Law: Key Compliance Points

Decree-Law No. 78 of 2026 Regarding the Combat of Commercial Concealment was published in the Official Gazette on 9 August 2026 and will enter into force six months from that date. The Decree-Law defines “Commercial Concealment” as enabling any person, whether a natural or legal person, to engage in any economic activity that he/she is prohibited from engaging in pursuant to the laws or legislation in force in the State of Kuwait, whether for his own account or in partnership with others, or circumventing the ownership percentages legally prescribed for foreigners, thereby enabling such person to engage in the economic activity in violation of the provisions of the Decree-Law. The main points can be summarised as follows:

Scope of the prohibition:

The law prohibits any person, whether a natural or legal person, from engaging in any economic activity within the State of Kuwait for his own account or in partnership with others unless he/she has obtained the necessary license from the competent authority, or from exceeding the scope of the license granted to him, where such activity is carried out through a person who has enabled him to engage in such activity. It is also prohibited for any natural or legal person to enable any person to violate this prohibition through commercial concealment, including allowing such person to use the trade name, license, approval issued to him, commercial register, or any other means enabling him to engage in the economic activity in violation of the provisions of the Decree-Law. “Economic Activity” is defined as any commercial, investment, industrial, agricultural, service, or professional activity, or any activity of an economic nature aimed at generating profit and which requires, for its practice, obtaining the necessary licenses or approvals from the competent authorities.

Penalties for commercial concealment:

Without prejudice to any more severe penalty prescribed by the Penal Code or any other law, whoever violates the prohibition stipulated in Article Two shall be punished by imprisonment for a term of not less than one year and not exceeding three years, and a fine of not less than (KWD 10,000) ten thousand Kuwaiti Dinars and not exceeding (KWD 100,000) one hundred thousand Kuwaiti Dinars, or an amount equivalent to the value of the profits obtained, whichever is greater, or by either of these two penalties. Fines shall be multiplied according to the number of persons in violation or the number of violations involving economic activities. Separately, whoever obstructs or prevents the competent ministry’s employees who have the capacity of judicial officers from performing their duties (including refusing to provide the required information or documents, or providing incorrect or misleading data) shall be punished by imprisonment for a term not exceeding six months and a fine not exceeding (KWD 10,000) ten thousand Kuwaiti Dinars, or by either of these two penalties.

Corporate liability, confiscation and repeat offences:

The person responsible for the actual management of the violating legal person shall be subject to the same penalties if it is established that he/she was aware of the violation, or if the violation occurred as a result of his failure to perform the duties imposed upon him by virtue of his management, or that he/she contributed to the commission thereof. The legal person shall be jointly and severally liable for the payment of any financial penalty or compensation awarded if the violation was committed by any of its employees in the name of or for the benefit of the legal person.

Without prejudice to the rights of bona fide third parties, the court shall, in the event of conviction for any of the offences stipulated in the Decree-Law, order the confiscation of the funds or profits resulting from the offence, as well as all tools, equipment, and means used in the violating activity, together with the permanent closure of the establishment and cancellation of the license. The court may order the deportation of the violating foreigner after execution of the penalty, and the final judgment shall be published through the prescribed means. The penalty shall be doubled in the event of recidivism within five years from the date of issuance of the final judgment of conviction.

Competent employees designated by a decision of the Competent Minister or his designee shall have the capacity of judicial officers for the purpose of detecting offences committed in violation of the provisions of the Decree-Law and the decisions implementing it. They shall have the authority to conduct inspections and oversight, and to detect and document violations committed by persons or entities suspected of engaging in economic activities in violation of the Decree-Law. Such persons or entities shall provide all facilities, data, information, and documents requested by these employees for the performance of their duties.

The Decree-Law shall come into force six months after the date of its publication in the Official Gazette (i.e. in February 2027). The Competent Minister shall issue the decisions necessary for its implementation. Any provision that conflicts with its provisions is repealed.

How can we help?

The Corporate team in Kuwait regularly advises on licensing, structuring, compliance and regulatory matters affecting businesses operating in the country. If you require further information on how the new Anti-Commercial Concealment Law may affect your business arrangements or require assistance in regularizing existing structures before the law comes into force, then please feel free to contact us.