For over three centuries, Kuwait was home to a people and rulers who were immune to oppression and injustice. Kuwait was a haven, and later a homeland, for all those seeking security, freedom, and work. With the advent of economic prosperity, the government facilitated employment for expatriates, especially those with expertise, without significant restrictions.
Subsequently, the government required a national partner for every commercial business, particularly large-scale ventures, so that citizens could benefit financially and learn the secrets of their trades. These partnerships resulted in the formation of massive industrial and commercial institutions, some of which achieved global reach, and a significant number of which are still operating.
The number of these companies would have been much higher had it not been for the ban imposed on individuals of certain nationalities from returning to Kuwait due to their governments’ stance on the Iraqi invasion of Kuwait. Some of these individuals played a pivotal role in managing these companies.
However, the ban at the time prompted several Kuwaiti partners, most of whom were “shadow partners” with no real involvement in the dayto- day management, to act swiftly and assume leadership. Some of them went on to achieve great success in industrial and commercial businesses. I dare say that the Arab partners who were prevented from returning to Kuwait received fair compensation for their investments, although most of them, especially the Palestinians, did not expect to receive much of what they were entitled to.
This discussion is prompted by the issuance of the Commercial Cover-up Law, which contains numerous flaws and has created difficulties for all parties involved, whether Kuwaiti citizens or non-Kuwaiti partners. I believe that some articles of the law urgently need to be reviewed before its implementation at the beginning of 2027.
Perhaps it would be best to postpone the law’s implementation until its economic and social impacts have been studied, as Lawyer Omar Al-Essa suggests. It is essential to issue clear regulations that ensure the fight against commercial concealment without harming the national economy or a large segment of citizens and residents who have played a vital role in Kuwait’s industrial, commercial, and investment progress. I fully understand the necessity of issuing this law in line with international requirements, while ensuring the clarity of its provisions, the fairness of its application, the proportionality of penalties to the offense, and the provision of legal avenues for modifying the status of some businesses.
The sudden implementation of the law could trigger significant capital flight from Kuwait at a time when we need to attract investment, revitalize the private sector, and diversify our sources of income. Low-income and middle-income earners and retirees who rely on returns from small businesses may be negatively impacted, potentially losing vital sources of income due to business closures, layoffs, and the inability to meet existing financial obligations.
The Ministry of Commerce and Industry and the Kuwait Chamber of Commerce and Industry (KCCI) may need to propose amendments to the law based on a survey of business owners from both sides of the legal spectrum, taking into account the perspectives of small business owners and entrepreneurs, as well as legal and economic experts.
Undoubtedly, the law will have negative consequences, some of which can be mitigated by establishing clear implementation criteria, providing a sufficient transition period, and regulating voluntary disclosure and rectification processes.
Penalties should be graduated and proportionate to the scale of the business and the resulting damage. I agree with what Lawyer Al-Essa said, “The success or failure of the law should not be measured by the number of establishments that close or by the amount of money that leaves Kuwait, but rather by the law’s ability to stop commercial cover-ups and transform unregulated activities into legal and transparent investments that support the economy and preserve citizens’ sources of income.”
By Ahmad alsarraf
email: [email protected]
