"The Ministry of Commerce: 'Combating Commercial Concealment' and 'Beneficial Ownership' Are Linked to the Integrity of the Commercial and Economic Environment"

Speakers at an awareness seminar organized by the Kuwait Chamber of Commerce and Industry on Monday affirmed that the law and recent decisions regarding the beneficial owner and the fight against commercial concealment aim to enhance transparency, leading to a fairer and clearer market, while also protecting the national economy from the use of entities and licenses as cover for engaging in activities that violate the law.

The speakers at the seminar, which was attended by a number of business owners and individuals interested in economic and legal affairs, emphasized the importance of enhancing transparency in the business environment and raising the level of compliance with the provisions of Decree-Law No. 78 of 2026 concerning the fight against commercial concealment, alongside the beneficial ownership identification system. They described these two as integrated tools for protecting the market, uncovering actual ownership and control over economic activities, and promoting fair competition.

Deputy Minister of Commerce and Industry (Acting) Marwa Al-Juaidan, speaking at the seminar, stated that combating commercial concealment and the beneficial ownership system are directly linked to the integrity of Kuwait’s commercial and economic environment. She explained that the ministry views the system through three main pillars: transparency, compliance, and accountability.

Al-Juaidan noted that Kuwait has developed the beneficial ownership system over the past years, transitioning from a registration and disclosure phase to more advanced stages involving verification and auditing of data accuracy. This aims to create an accurate and up-to-date database that identifies the individual who actually owns, controls, or benefits from a legal entity.

In this context, she highlighted Kuwait’s tangible progress, noting that the beneficial ownership system has moved from limited registration levels at the beginning of its implementation to registration rates exceeding 98 percent among targeted entities. This achievement resulted from awareness campaigns and the development of electronic systems.

She pointed out that beneficial owner transparency serves as a crucial tool in combating the misuse of companies and legal entities. It also complements national efforts in combating money laundering and terrorist financing, as well as international requirements related to transparency.

Al-Juaidan clarified that the law on combating commercial concealment and the beneficial ownership system do not operate in isolation. The former addresses the legality of ownership, control, and economic practice, while the beneficial ownership system helps identify the real person behind the entity.

She added that curbing commercial concealment serves the interests of compliant traders, as it helps eliminate unfair competition and restores competition to its natural foundations based on product and service quality and competence. This also clarifies the role of ownership and control in enhancing the ability of Kuwaiti companies to obtain financing and enter into regional and international partnerships, amid growing requirements for beneficial owner knowledge in commercial and financial transactions.

She stated that transparency in ownership and control underscores Kuwait’s commitment to strengthening its national system for combating money laundering and terrorist financing in line with standards issued by the Financial Action Task Force (FATF).

For his part, Abdullah Al-Haraz, Director of the Kuwait Business Center Department, presented the legislative and regulatory framework for combating commercial concealment during the seminar. He explained that addressing the phenomenon did not begin with the 2026 law; rather, it was preceded by provisions in the Commercial Law No. 68 of 1980, the Commercial Premises Licenses Law No. 111 of 2013, and the Companies Law No. 1 of 2016, before Decree-Law No. 78 of 2026 established a more direct framework for dealing with commercial concealment.

Al-Hariz explained that commercial concealment involves enabling an individual to engage in an economic activity they are not legally permitted to conduct, or circumventing prescribed ownership percentages by using another person, a trade name, a license, a commercial registration, or other means.

He noted that the suspicion of concealment can be determined through several fundamental questions: “Who is the person? What activity are they conducting? Are they legally authorized to carry out this activity? Who enabled them? And by what means?”

Al-Hariz pointed out that the primary penalties for violating the law include imprisonment for one to three years and a fine ranging from 10,000 Kuwaiti dinars (approximately $33,000 USD) to 100,000 dinars (approximately $330,000 USD), or an amount equivalent to the profits obtained, whichever is greater, or one of these two penalties.

For his part, Emad Al-Zaid, Deputy General Manager of the Kuwait Chamber of Commerce and Industry, said at the seminar that the law combating commercial concealment has received widespread and exceptional attention from economic and legal circles, reflecting the importance of the legislation and its direct impact on a broad segment of business owners. He noted that the Chamber conducted an initial study of the law to identify its key characteristics.

Al-Zaid clarified that the law responds to a gap that had accumulated over the years between declared ownership and the actual, stable ownership of economic enterprises. It has shifted the handling of commercial concealment from the realm of civil prohibition to criminalization and penalties, while simultaneously achieving the law’s main objective, which is to enhance the state’s capacity for supervision, financing, and revenue collection.