ARTICLES & UPDATES

𝑫𝒂𝒕𝒆: August 2, 2026
𝑱𝒖𝒓𝒊𝒔𝒅𝒊𝒄𝒕𝒊𝒐𝒏: Kuwait
𝑰𝒔𝒔𝒖𝒊𝒏𝒈 𝑨𝒖𝒕𝒉𝒐𝒓𝒊𝒕𝒚: Council of Ministers

𝑺𝒖𝒎𝒎𝒂𝒓𝒚:

The Council of Ministers has issued Decree-Law No. 78 of 2026 concerning Combating Commercial Concealment, based on the proposal of the Minister of Commerce and Industry and following the approval of the Council of Ministers.

The Decree-Law establishes a comprehensive legal framework to combat commercial concealment and regulate economic activities in Kuwait. It aims to prevent unauthorized persons from engaging in economic activities, prevent the circumvention of legally prescribed foreign ownership percentages, strengthen market regulation, and promote transparency, equal opportunities, and compliance with applicable licensing requirements.

The Decree-Law consists of fourteen articles addressing the definition and prohibition of commercial concealment, criminal penalties, liability, confiscation, recidivism, conciliation, reporting rewards, enforcement powers, and implementation measures.

𝑲𝒆𝒚 𝑪𝒉𝒂𝒏𝒈𝒆𝒔:

1. Definition and Prohibition of Commercial Concealment (Articles 1 and 2)

The Decree-Law defines commercial concealment as enabling any any natural or legal person (individual or legal entity) to engage in an economic activity that they are prohibited from conducting under the laws or legislation in force in Kuwait, whether for their own account or in partnership with others, including avoiding legally prescribed foreign ownership percentages.

It prohibits any person from engaging in an economic activity without obtaining the necessary license from the competent authority or beyond the limits of the license granted. It also prohibits enabling another person to violate this prohibition through commercial concealment, including by allowing the use of a trade name, license, approval, commercial register, or any other means that enables the person to conduct the economic activity in violation of the Decree-Law.

2. Criminal Penalties for Commercial Concealment (Article 3)

Any person who violates the prohibition under Article Two may be punished with imprisonment for a period of not less than one year and not exceeding three years, together with a fine of not less than KWD 10,000 and not exceeding KWD 100,000, or an amount equivalent to the value of the profits obtained, whichever is greater, or either of these penalties.

Fines shall be multiplied according to the number of violating persons or violating activities.

3. Penalties for Obstructing Enforcement (Article 4)

A person who violates the prohibition under Article Eleven may be punished with imprisonment for a period not exceeding six months and a fine not exceeding KWD 10,000, or either of these penalties.
Fines shall be multiplied according to the number of violating persons or violating activities.

4. Liability of Actual Managers and Legal Entities (Article 5)

The person responsible for the actual management of a violating legal person may be subject to the same penalties applicable to the violation where it is established that the person was aware of the violation, failed to perform the duties imposed by virtue of their management, or contributed to the occurrence of the violation.

The legal entity shall also be jointly liable for financial penalties or compensation where the violation is committed by an employee in the name of or for the benefit of the legal entity.

5. Confiscation, Closure, License Cancellation and Deportation (Article 6)

Upon conviction, the court shall order the confiscation of the funds or profits resulting from the crime, together with the tools, equipment and means used in the violating activity, without prejudice to the rights of bona fide third parties.

The establishment shall be permanently closed and its license cancelled. The violating foreign national shall be deported after execution of the penalty, and the final judgment shall be published through the prescribed means.

6. Doubling of Penalties for Recidivism (Article 7)

The penalties prescribed for crimes under the Decree-Law shall be doubled where the offender commits another such crime within five years from the date of the final judgment in the relevant crime.

7. Conciliation (Article 8)

The competent Minister or his delegate may enter into conciliation in crimes covered by the Decree-Law before proceedings are initiated, during the consideration of the case, or before a final judgment is issued.

Conciliation requires payment of an amount not less than half of the maximum prescribed fine, removal of the violation, and correction of the legal status. Conciliation results in the termination of the criminal proceedings.

Administrative deportation measures may still be taken where required by the national interest, and conciliation is not permitted in cases of recidivism.

8. Financial Reward for Reporting Commercial Concealment (Article 9)

A person who is not one of the offenders and who contributes to the discovery of a commercial concealment crime by providing reliable evidence may be granted a financial reward determined by the competent Minister.

The reward shall not exceed 10% of the value of the fines collected and shall be distributed equally where there is more than one reporting person, provided that a final conviction is issued on the basis of the evidence provided.

9. Judicial Officers and Enforcement Powers (Article 10)

Employees designated by the competent Minister or his delegate shall have the status of judicial officers for detecting crimes committed in violation of the Decree-Law and its implementing decisions.

They may conduct inspection and supervisory activities and detect and record violations committed by persons or entities suspected of conducting economic activities in violation of the Decree-Law. Such persons or entities are required to provide the requested facilities, data, information and documents necessary for the performance of these duties.

10. Prohibition on Obstructing Enforcement (Article 11)

The Decree-Law prohibits any person from obstructing or preventing competent Ministry employees with judicial officer status from performing their duties or exercising their powers.

This includes refusing to provide required information or documents or providing incorrect or misleading information to the competent employees.

11. Implementation and Repeal of Conflicting Provisions (Articles 12 and 13)

The competent Minister shall issue the decisions necessary to implement the provisions of the Decree-Law. Any provision that conflicts with the provisions of the Decree-Law shall be repealed.

12. Implementation and Effective Date (Article 14)

The Prime Minister and the Ministers, each within their respective jurisdiction, shall implement the provisions of the Decree-Law. The Decree-Law shall enter into force six months from the date of its publication in the Official Gazette.

𝑬𝒇𝒇𝒆𝒄𝒕𝒊𝒗𝒆 𝑫𝒂𝒕𝒆:

Decree-Law No. 78 of 2026 was issued at Al-Seif Palace on 2 August 2026 and was published in the Official Gazette on 9 August 2026. Pursuant to its provisions, the Decree-Law shall enter into force six months from the date of its publication in the Official Gazette, i.e., on 9 February 2027.

If you have any questions or would like to learn more about Decree-Law No. 78 of 2026, please contact us at info@arazzaqlaw.com.