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Expats Under Article 18 Residency Can Own Business in Kuwait

Company Ownership Prohibited for Expats Under Articles 20, 22, and 24

publish time

31/08/2024

publish time

31/08/2024

Expats Under Article 18 Residency Can Own Business in Kuwait

KUWAIT CITY, Aug 31: The Ministry of Commerce and Industry has decided to reopen the ministry's automated systems, allowing expats with Article 18 residency to allow companies or institutions as partners or managing partners, and to be registered in the commercial register once again.

The sources clarified that the ban implemented by the Ministry of Commerce last month, which prohibited expats from owning companies unless they held Article 19 residency, remains in effect for individuals with residency under Articles 20, 22, and 24. Specifically, domestic workers holding these residencies must either divest their ownership in companies if they are shareholders or transfer their residency to Article 19.

The sources anticipate that the Ministry’s systems will resume processing requests and procedures for the exempted group of expats this week. Once the systems are reactivated, existing commercial entities with shareholders holding Articles 18 and 19 residencies will be allowed to establish and renew their status, as well as make amendments to all companies and institutions, in line with the procedures in place before the ban was imposed.

Additionally, the sources noted that the lifting of the "restriction" will also allow the acceptance of applications for the establishment of new companies that include residents holding Article 18 residency, under the previous regulations governing non-Kuwaiti ownership in companies and institutions.

Temporary Suspension of Partner Incompatibility Clause

Sources revealed that under a new directive, the clause concerning the incompatibility of partners with existing and new licenses, where one of the partners or managers falls under Article 18, will be temporarily suspended. This suspension will remain in effect until further notice, specifically until new regulatory controls are issued.

The sources also mentioned that coordination is currently underway with the Public Authority for Manpower to review the regulations governing non-Kuwaiti ownership of companies and commercial institutions. Joint committees are being formed to develop final guidelines for re-establishing the conditions for non-Kuwaiti ownership. These guidelines are expected to include a binding legal deadline for disposing of properties that do not comply with the forthcoming instructions

Regulatory Measures Under Review

Sources revealed that according to information provided by the Public Authority for Manpower, around 10,000 expatriate workers in the private sector, mostly holding Article 18 work permits, have acquired the status of partner or managing partner in approximately 45,000 licenses for existing companies and institutions. These numbers highlight the need for regulatory measures to ensure the rights of all parties involved, including current shareholders, who have obtained commercial licenses under the existing regulatory and legal procedures.

The sources emphasized that the government, particularly the Ministry of Commerce and the Public Authority for Manpower, is committed to organizing commercial licenses with updated controls. In line with this commitment, they plan to enforce the provisions of various laws related to labor and foreign investment. Consequently, new partner controls for expatriate workers holding residency under Article 18 will be established with appropriate mechanisms