Local report: The 'delivery' sector... between legislative chaos and conflicting public policies

The Kuwaiti Constitution places significant emphasis on the government’s general policy, containing a direct provision that assigns the Council of Ministers the responsibility for formulating and monitoring that policy, in addition to overseeing state interests. It also charges ministers, each within their respective jurisdictions, with implementing these policies.

The constitutional legislator recognized that managing the state’s multifaceted and diverse affairs—particularly in the early stages of the modern state’s formation—must be governed by a coherent general policy. This policy ensures the coordination and integration of executive actions to achieve desired objectives, while simultaneously avoiding overlaps and contradictions in laws and decisions that could harm state and individual interests and disrupt the executive and legal systems.

Recently, the Ministry of Commerce and Industry issued a new regulation to govern delivery platforms and their applications in Kuwait, sparking negative and cautious reactions from stakeholders. Electronic platforms and delivery companies argue that the regulation was promulgated without meaningful dialogue involving the exchange of views and presentation of commercial realities. Meanwhile, restaurant companies fear that their daily sales could suffer if platform and delivery operations are hindered by the implementation of the regulation.

The implications of this “new” decision are more complex than the relationship between electronic applications, delivery companies, restaurants, and consumers. This sector specifically reached a volume of approximately $880 million in 2024, with projections indicating growth to $1.434 billion by 2032, reflecting its vitality as a key driver of the local economy.

On the other hand, major electronic application companies represent a facet of foreign investment in the country, whether direct or indirect. A Saudi company and two Chinese and German companies have decided to invest financially and technologically in this sector. Thus, they constitute a significant part of the state budget’s tax revenue sources, alongside some Kuwaiti companies that are classified as small and medium-sized enterprises (SMEs) seeking a supportive environment to expand and thrive.

This economic and commercial circle intersects with the activities of several government entities. The Ministry of Finance is responsible for tax collection under Law No. (157) of 2024 concerning the tax on multinational entities, which imposes a 15% tax on the profits of large multinational corporations operating in the country. This law applies fully to global companies in the consumer order and delivery sectors in Kuwait.

The Foreign Investment Promotion Authority also plays a key role in this circle. It facilitated the establishment of a wholly owned subsidiary in Kuwait by a Chinese giant with a market capitalization of 2.1 billion dinars. Undoubtedly, such a substantial investment decision in the Kuwaiti market resulted from thorough studies of the applicable legislation, regulatory decisions, and annual sales volumes.

The Ministry of Commerce is equally important in this context, given its prior connections and responsibilities toward local companies. Its role lies in enhancing the activity of small and medium-sized enterprises, which form the backbone of any national economy and add value to the economic engine, serving as a fundamental component of any general government policy.

In addition to the aforementioned entities, the Competition Protection Authority acts as a regulatory government body. Last January, it issued a guideline for the consumer order delivery services sector via platforms and smart applications, based on studies and complaints, establishing strict rules for agreements and practices to achieve balance among participants in the sector.

Therefore, a sector of this magnitude—measured by its financial value, the involvement of government entities, the commercial network of operators, and the scale of consumers—requires legislative and regulatory stability. The first regulatory framework was issued in January 2026, granting a one-year grace period for compliance. Yet, approximately six months later, a new regulation was issued that effectively overturned the principles of the first framework, imposing a renewed two-month deadline for compliance. This undoubtedly has caused confusion within the sector, which was on the verge of aligning its operations with the initial decision, only to be confronted by another decision that interferes directly with its core operational and profitability activities. This necessitates not merely compliance adjustments, but a comprehensive review of the business models underpinning the relevant companies, all within a deadline not exceeding two months.

This leads to legitimate questions: Did the Ministry of Commerce and Industry coordinate with its counterpart government entities during the preparation of the regulation and before its issuance? What is the impact of fixing commission rates on companies’ revenues, and consequently, on the tax liabilities owed to the Ministry of Finance? More importantly, will global companies remain in Kuwait, or will they decide to scale down their operations or exit the market, following the example of global airlines that closed their offices and suspended direct flights to and from Kuwait?

Returning to the government’s general policy, is the treatment of the consumer delivery sector part of the government’s broader policy, or is it an isolated ministerial action that failed to consider the sector’s economic value, the repercussions of the new regulation, and the stance of both global and local companies toward it?

What is required is not an immediate reversal and cancellation of the decision, as this would create greater confusion than the current situation. Rather, the most appropriate course is to review the decision and its impacts, studying them more broadly while taking into account the views of government entities and the observations of companies operating in the sector, and clarifying the government’s general policy in this regard. Until such reviews are completed, postponing the implementation scheduled for early September next year is the most suitable option.