New law shines light on Kuwait shadow markets

23/07/2026

New law shines light on Kuwait shadow markets

KUWAIT CITY, July 23: In a decisive legislative move aimed at restructuring the local economy, the new “Commercial Concealment Law” has emerged at the forefront of the structural reforms underway in Kuwait. The draft law seeks to address long-standing and deep-rooted distortions that have hindered the efficiency of the local market and limited its ability to achieve sustainable, natural growth. The step has been widely welcomed and has sparked extensive discussions among economists and investors interviewed by the daily. Economic and real estate expert Qais Al-Ghanim affirmed that the state is taking serious and effective steps to address structural imbalances in the national economy. However, he emphasized the importance of involving private-sector experts in the drafting of the law. He stressed that it is the government’s responsibility to establish balanced legal frameworks that protect the economy without harming the private sector or restricting its growth.

Al-Ghanim explained that the government is currently working to attract foreign investment to Kuwait. Vital sectors and operational businesses, such as grocery stores, auto repair shops, and laundries, face real challenges and difficulties in their management. Daily skilled labor work highlights the role of experienced expatriates as real partners who contribute both capital and expertise to the management and operation of businesses. Expatriates currently manage a significant share of the small business sector. He highlighted the need for regulations that govern commercial relationships between citizens and residents, which would positively contribute to the economic and business environment. Al-Ghanim concluded by noting the government’s ongoing efforts to create an attractive investment environment and draw foreign capital in order to diversify sources of national income.

Meanwhile, economic expert and food security consultant Mohammed Al-Furaih affirmed that the government’s approval of the draft decree-law on combating commercial concealment represents a significant strategic step that directly serves the national economy. He explained that the draft law seeks to address long-standing distortions in the local market. One of the most serious distortions is the illegal practice of some expatriate workers managing and operating companies and shops for their own benefit while paying the citizen who holds the licenses minimal annual sums. The strict implementation of this law would create broad opportunities and open new avenues for employment and investment for Kuwaiti youth, particularly in the small and medium-sized enterprises (SMEs) sector.

Al-Furaih dismissed concerns that the law could negatively affect capital flows, emphasizing that combating commercial concealment would not undermine efforts to attract foreign direct investment (FDI). He noted that Kuwait already has a comprehensive and independent legislative framework that regulates and supports foreign investment. Al-Furaih said the Kuwait Direct Investment Promotion Authority (KDIPA) ensures that serious investors enter the market through official channels, creating added value for the economy and preventing unregulated or informal business practices. In addition, economic expert and former head of the Kuwait Contractors Association, Dr. Salah Boursli, expressed support for the new anti-commercial concealment law, affirming that it represents a strategic and serious step toward curbing the “shadow economy” and eliminating the structural distortions affecting the local market. Dr. Boursli explained that the primary beneficiary of implementing this law will be the national economy, followed by Kuwaiti youth and entrepreneurs. The law would directly contribute to creating a fair and transparent investment environment. It would open broad prospects for the growth and success of national small and medium-sized enterprises. The law’s positive impact would extend to consumers by ensuring the quality of goods and services, as commercial establishments would be subject to direct government oversight and required to comply with official quality standards.

By Najeh Bilal Al-Seyassah/Arab Times Staff