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Saturday , October 23 2021

‘Justice’ suspends registration of real estate by foreigner-owned companies

KUWAIT CITY, July 8: While the government is striving to attract foreign investments to the country, and the Kuwait Stock Exchange is making strenuous attempts for further promotion on global market indices, the Ministry of Justice suspended the registration of real estate in the name of listed real estate companies until proven that foreigners do not own them, reports Al-Qabas daily. Although some companies have been prohibited from registration, hundreds of real estate were registered through the Ministry of Justice over the past decades since its establishment without any restrictions, according to law No. 74/1979 regulating the ownership of real estate by non-Kuwaitis. However, it seems the ministry suddenly woke up during the last period and decided to stop the registration under the pretext of applying the same law. This raises the question about the safety of applying the law. Either the ministry was wrong in its application of the law in the past or it is intransigent in implementing it now.

According to real estate sources, the proof required of the foreign ownership of the listed companies changes from one moment to another, It can be through the daily trading of stock on the stock exchange. A foreign investor can buy the stock in the morning and sell it before the end of trading. His name appears with the Kuwait Clearing Company as the owner of the stock until the completion of the settlement cycle.

The sources asked, “How can a Kuwaiti public shareholding company, which is licensed by the Ministry of Commerce and Industry and the Capital Markets Authority and its articles of incorporation are registered with the Ministry of Justice itself, be deprived of owning real estate in Kuwait just because of the presence of foreign owners on the owners’ list, even temporarily?!” They warned that the wrong application of the law and the intransigence of some employees in its application is pushing these companies out of the Kuwaiti market. The sources said they wondered what should be done if a real estate company is deprived of buying and selling real estate in Kuwait. They stressed that these practices also prevent companies from competing in auctions of real estate owned by government agencies, thus preventing the companies from competing in those auctions and depriving public money of benefiting from higher prices.

The sources revealed that the Fatwa and Legislation Department responded earlier to the question presented by the Ministry of Justice in this regard, stressing that the ministry should register the property in the name of the company unless it was proven that foreigners own it, which throws the consequences of proof on the ministry itself and not the company. They expressed their astonishment concerning the lack of any link between the Ministry of Justice, the Kuwaiti company and the Clearing House to follow up on the ownership of listed real estate companies.

The sources called on the government to reconsider the law on non-Kuwaiti ownership of real estate, in line with the great developments witnessed by the Commercial Companies Law, the Capital Markets Authority and the Direct Investment Promotion Authority of Kuwait. They insisted that the wrong application of the non-Kuwaiti ownership law harms Kuwaiti real estate companies, and may thus negatively affect their performance, business results and shareholders, adding that it may also negatively affect the plans of the Kuwait Stock Exchange for further promotions on global indices.

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