Effective 21st of January 2024, an amendment was affected to Article 24 of ‘Kuwait’s Commercial Law’ and Article 31 of the ‘Public Tender’s Law’ through Law No. 1 of 2024 and officially published in the official gazette of Kuwait, ‘The Kuwait Alyowm’.


Prior to the latest amendment:

All international entities were obliged to work with a Kuwaiti partner or entity which made it mandatory for the Kuwaiti partner or entity to own at least 51% of the company’s share and to operate through a local agent. In accordance with the commercial code, such appointed agents were given preferential treatment with regards to termination of the agency as well as other matters which often deterred foreign investors from engaging through them.


The only exception that was available for such foreign investors was through the ‘Foreign Direct Investment’ through the entity ‘Kuwait Direct Investment Promotion Authority’ (KDIPA) which has its own protocols to be followed and also provided a tax-free window of ten (10) years.


What the new amendment means:

The modified article stipulates that ‘as an exemption from the provisions of Article 23 clause (1), a foreign company may establish its branch in Kuwait and commence business therein without the need for a local agent through the Law No. 1 of 2024 which amends Article 24 of the Commercial Law and Article 31 of the Public Tenders Law. This amendment permits foreign companies to incorporate a business or open a branch in Kuwait to conduct commercial activity.


What’s forthcoming:

It is anticipated that further regulations shall be set forth by law that shall outline the process of establishing a branch as well as the procedure and protocols to be followed. It is expected of the relevant ministry to issue resolutions to the amended law and provide a practical guide on its implementation.


This amendment marks a significant milestone for foreign companies desirous of investing and operating in the State of Kuwait making way for more foreign investment in Kuwait.


How NEN Law Firm can assist:

Once the resolutions are published (yet to be published) by the relevant ministry, Alwagayan & Alsaif (NEN) law firm shall be able to guide and assist foreign companies from any jurisdiction in providing legal assistance in setting up a branch of a foreign company in Kuwait.


Interested ADVOC members can contact NEN Law Firm by emailing Vinson Vaz, the head of the International Department to vinson@nenlawfirm.com


Published by Alwagyan & Alsaif (NEN) Law Firm, Kuwait