ON Jan 30, 2017, the Government of Kuwait unveiled the country’s Vision 2035 and National Development Plan, branded as the “New Kuwait”. Such plan intends to transform Kuwait into a financial, cultural, and institutional leader in the region by 2035. Further, increasing direct foreign investment by 300% and attracting more than 400 million Kuwaiti Dinars to information technology, services, and renewable energy in the short term. In order for Kuwait to meet the objectives of New Kuwait, in particular expanding the role of the private sector and attracting foreign investment, it requires the Kuwait government to speed-up promulgation of new laws to modernize the business environment.
With an increasing focus on privatization and foreign direct investment over the past few years, Kuwait has already taken steps towards making the necessary changes to its laws. The most important of these laws govern Agency, Commercial, Companies (which will be discussed in further detail below), Tenders and Intellectual Property.
Companies conducting business in the State of Kuwait were governed by Law No. 15 of 1960 for over 50 years before such law was replaced by Law No. 25 of 2012. Law No. 25 introduced regulations in connection with holding companies, shareholder agreements and non-profits. In 2013, Law No. 97 was issued, and later Law No. 1 of 2016. The most recent amendment to the Companies Law is Law No. 15 of 2017, which focuses on limited liability companies. Such amendments are as follows: (a) Article 96 item 3 provides a company the ability to add or replace the full address of the head office of the company; (b) Article 97 now reads that the LLC may operate without the full capital being transferred to the company and timing of such payments shall be determined through the executive by-laws; (c) Article 98 now permits the value of the memberships interest to be determined in the articles of incorporation, so long as the interests are not divisible; and (d) Article 147 provides that the minimum capital of the company shall be determined by executive by-laws, as well as the amount of capital to be paid at incorporation.
With Kuwait working diligently to improve its laws that directly impact local business and foreign investment, we can expect to see many more updates in the near future.
By Najmah Brown, Esq.