Kuwait Decree-Law No. 78 of 2026 on combating commercial concealment establishes rules against arrangements that hide the real beneficiary or effective manager of an economic activity. The decree-law was issued on 2 August 2026 and provides a framework for licensing, ownership transparency, inspection and criminal liability.
What is commercial concealment?
Commercial concealment may arise when a person enables another to conduct an economic activity without the required licence or by using another person’s name, licence or commercial registration. It may also include sham arrangements designed to circumvent ownership rules or to give an ineligible person effective control over the activity.
Examples of potentially risky arrangements
- A licence holder hands full control of the business to another person operating for that person’s own account.
- The registered owner remains on paper while another person exclusively controls income, expenses and profits.
- A third party’s commercial registration is used to enter contracts or collect revenue.
- Management agreements disguise the actual beneficial owner or controller.
The presence of a foreign manager or employee does not by itself establish concealment. The legal assessment depends on the licence, contracts, authority, banking arrangements, accounting records and the reality of management and control.
Penalties
The law provides for imprisonment from one to three years and a fine from KWD 10,000 to KWD 100,000, or an amount equivalent to the proceeds where that is greater, or either penalty. Fines may be multiplied according to the number of offenders or unlawful activities.
Consequences may also include confiscation, permanent closure, cancellation of the licence, publication of the final judgment and deportation of a convicted foreign offender after the sentence is served, subject to the statutory conditions and third-party rights.
Corporate and management responsibility
A person responsible for actual management may be liable where knowledge, participation or a failure to perform management duties is established. A legal entity may be jointly liable for financial penalties and compensation where the offence was committed in its name or for its benefit.
Compliance checklist
- Match the actual business activity to the licence.
- Identify and document shareholders and beneficial owners.
- Record managers’ and authorised signatories’ powers.
- Review bank accounts and revenue-collection channels.
- Terminate sham arrangements and correct the legal position.
Legal notice: This page is an educational summary, not an official translation. The legal characterisation depends on the actual documents, control and conduct in each case.