The pitfalls of the commercial concealment law
Kuwait, both its people and its ruling system, has not been known for injustice or oppression for three centuries. This land has served as a sanctuary and, consequently, a homeland for anyone seeking safety, freedom, and honest work. With the advent of material prosperity, the government facilitated employment for expatriates, particularly those with expertise, imposing virtually no significant restrictions. This policy subsequently encouraged Kuwaiti citizens to partner with foreigners in their activities, especially large-scale ventures, to benefit financially and to learn the secrets of their professions. These partnerships resulted in massive industrial and commercial institutions, some of which achieved global reach, and a significant proportion of them remain active today.
Had it not been for the despicable Saddam invasion, and the subsequent post-liberation ban on the return of individuals of specific nationalities due to their home governments’ disgraceful stance on the invasion—some of whom played pivotal roles in managing these companies—the number of such entities today would be much higher. However, the ban at the time prompted many Kuwaiti partners, most of whom were “silent partners” with no real involvement in daily management, to move quickly and assume leadership. They have since become models of industrial and commercial success.
I can firmly assert, as I have indicated in several articles, that Arab partners who were “banned” from returning to Kuwait generally received fair compensation for their investments. Most of them, particularly their Palestinian brothers, did not expect to recover much of their rights.
In this context, the issuance of the “Commercial Concealment Law” has introduced a series of flaws and even hardships for all parties involved in the relationship, whether citizens or non-Kuwaiti partners. This has created a necessity to reconsider the law’s provisions before it takes effect with the start of 2027, and perhaps to delay its implementation until its economic and social impacts are studied, as lawyer Omar Al-Aiesh suggests. Clear regulations must be issued to combat commercial concealment without harming the national economy or a large number of citizens and residents who have played a vital role in the country’s industrial, commercial, and investment progress.
We call for this, fully aware of the necessity to enact such legislation in line with international requirements, ensuring clarity of provisions, fairness in application, proportionality of penalties, and the availability of legal pathways to rectify situations. A sudden implementation could drive significant capital to leave the country at a time when we need to attract it, stimulate the private sector, and diversify income sources. Moreover, harming individuals with low and middle incomes, as well as retirees who rely on returns from small activities, could lead to the loss of vital income sources for them, resulting in the closure of establishments, layoffs, and defaults on existing financial obligations.
This may require action by the Ministry of Commerce and Industry and the activation of the stagnant waters of the Chamber of Commerce to propose amendments to the law after consulting a group of businessmen from both parties concerned by the law, as well as hearing the views of small business owners and project holders, alongside legal and economic experts. There is no doubt that the law has negative effects, some of which can be avoided, the expected shock mitigated, clear implementation standards established, a sufficient transitional period proposed, and voluntary disclosure and rectification procedures organized, with graduated penalties that consider intent, the scale of activity, and the resulting damage.
Finally, as Mr. Al-Aiesh mentioned, the success or failure of the law should not be measured by the number of establishments closed or the volume of capital leaving, but by its ability to stop concealment and transform unregulated activities into legal and transparent investments that support the economy and preserve citizens’ income sources.
Ahmed Al-Sarraff
